Impact Investing AG: takeaways from our third meeting

At the third meeting of our Impact Investing advisory group, the importance of collaboration was once again evident. As one of our core values, collaboration allows all voices to be heard, connecting people faced with similar challenges. This advisory group echoed the importance of moving away from a siloed approach to working and building a stronger relationship between stakeholders of the built environment and ESG ecosystem.

Stepping away from silos also encapsulates our approach to data – connecting not collecting. And, in the context of the built environment, a more joined up, accessible approach to data is crucial to bridge the burgeoning €2.75 trillion investment gap needed to decarbonise Europe’s buildings through renovation.

As many as 215 million buildings within Europe will require some level of renovation before 2050. It’s therefore evident that the longevity of existing assets through retrofitting is critical if we’re to remain within the boundaries of the Paris Agreement. This sentiment was shared by the advisory group, who dug deeper into our two use cases:

Whole life-cycle carbon

One approach when looking to reduce emissions in the built environment is to consider the whole life-cycle carbon of a building. This goes beyond Scope 1 & 2 emissions and into examining the embodied carbon of a building. These Scope 3 emissions relate to materials used in construction as well as the emissions relating to the end-of-life process or demolition. The latter contributes to embodied carbon emissions when the materials are broken down or discarded.

One member of the advisory group went further, discussing the importance of the more nascent Scope 4 emissions, or ‘avoided emissions’. The WBCSD defines these as the ‘positive impact on society when comparing the GHG impact of a solution to an alternative reference scenario where the solution would not be used’. Avoided emissions could therefore provide a useful way of framing the emissions savings resulting from retrofit efforts.

Positive developments

Promising updates have been seen from standards like PAS 2080, which recognises the importance of decarbonising buildings. The standard recently broadened its scope beyond infrastructure to the built environment, with an emphasis on whole life-cycle carbon.

There have also been some important developments from RICs (Royal Institution of Chartered Surveyors). After recognising the lack of good-quality data and lack of transparency around data sources, RICs have designed a Built Environment Carbon Database. The database allows data to be reported, stored and used to inform future carbon assessments and policy.

Accessing data for impact investing decisions

Accessing good-quality data represented a significant headache for one member of our advisory group, who noted the abundance of regional level data but lack of granular asset-level data. The benefits of asset-level data for impact investors could be far reaching, allowing investors to verify the performance of an asset and reduce energy consumption. It could also ensure the investors is aligned with regulations or ESG reporting standards. What’s more, this level of transparency could also generate further financial benefits by building trust among stakeholders.

Open Net Zero

The underlying need for better access to reliable data is also why the latter half of our advisory group meeting involved members using our Open Net Zero (ONZ) service. We believe the ONZ tool can assist investors in accessing relevant data for mobilising impact investments related to the built environment.

The advisory group provided live feedback on the tool, suggesting improvements such as refining search options, including data update timestamps, and providing user feedback functions to help others find relevant datasets.

We now extend an invitation to those with experience in the built environment sector to use our Open Net Zero service and provide feedback on how we can enhance it. Please share your feedback using this sheet. If you’d like to contact us about our impact investing data research or Open Net Zero, please reach out via opennetzero@ib1.org