As the year comes to a close, we took a moment to reflect on the key trends we saw in the green building market in 2023.
The construction and real estate sector continued to navigate a difficult market this year, with widespread inflation and interest rates, a continued increase in energy costs as well as political uncertainty at global level leading to unstable markets across many regions. As we look to 2024, however, the construction industry is set to recover from the economic slowdown and structural changes, bringing in new opportunities for all of us in the sector.
Lets take a look at some of the key trends we saw this year in the construction and green building industries.
Green spending grows globally
Global sustainable finance product issuance totalled $717bn in the first half of 2023, with predictions that it will exceed 2022’s total volume by the end of the year. The World Bank Group delivered a record $38.6 billion in climate finance in fiscal year 2023 supporting efforts to end poverty on a liveable planet. Whilst this is a promising start, there is still much to do within the sector with many countries not meeting their targets leading to a greater gap between developing and richer countries.
Embodied carbon comes under scrutiny
Embodied carbon came under the heat with a report that more than half of construction professionals don’t measure embodied carbon. In the UK, a report disclosed that embodied carbon emissions in the UK built environment have not reduced at the pace required to reach net zero and they will have to reduce embodied carbon emissions by 17% in order to reach their targets. In parallel to this, the EDGE Green Building Standard has now moved away from embodied energy as an indicator on the EDGE Materials category to embodied carbon as the numeric indicator. Embodied carbon will be expressed as kgCO2e/m2 (of useful internal floor area). This change will help EDGE projects to disclose relevant indicators to taxonomies or other international standards and frameworks.
The ‘new normal’ across the energy market
2022 saw an energy crisis globally as the conflict between Russia and Ukraine led to instability across the global energy market and sent prices soaring. Whilst 2023 saw natural gas and electricity prices ease, globally the energy market faces a ‘new normal’ as instability and volatile price increases continued as the conflict persisted. This has motivated many countries to increasingly turn to renewables such as solar and wind to reduce reliance on imported fossil fuels. A new report finds that renewables are set to account for over 90% of global electricity expansion over the next five years, overtaking coal to become the largest source of global electricity by early 2025.
The push for decarbonisation continues
Whilst COP28 came under scrutiny with reports of fossil fuel negotiations behind closed doors, there was still a strong focus on decarbonising the built environment. The Governments of France and Morocco, together with the UN Environment Programme (UNEP), launched the Buildings Breakthrough, which will see countries joining forces to accelerate the transformation of the sector. The new initiative aims to strengthen international collaboration to decarbonize the building sector and make clean technologies and sustainable solutions the most affordable, accessible and attractive option in all regions by 2030.
As we look to the year ahead, at Sintali, we are confident that by working together we can continue to transform the built environment and make sure every building on this planet is green. The challenge ahead of us is immense, but together, with good will and commitment for change, we know we can achieve high impact.
We wish you all happy holidays and look forward to a fruitful year ahead!
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