Icebreaker One is working on a 10-month programme, funded by Tipping Point Fund on Impact Investing (TPF), to support our Open Net Zero (ONZ) service, putting net zero data at everyone’s fingertips. This project is dedicated to enhancing data infrastructure and practices in sharing impact investment data*. Our chosen use case for the programme is focused on the built environment.
Within the vast Environmental, Social and Governance (ESG) Ecosystem our primary focus has been aligned with our mission as a company, as we focus on the environmental component of ESG. And, through our research, we have been confronted with challenges in the access to, quality, comparability, transparency and therefore trust of environmental data within ESG disclosures. Our research is focussed on the measurable and quantifiable ‘E’ of ESG data.
Problem statement & use case
The following problem statement is a method of framing our efforts around the ways leveraging environmental data can aid organisations’ transition to net zero. From this, our Impact Investing Advisory Group prioritised two use cases that support our initial problem statement.
How can improving the data sharing infrastructure of a company’s energy and water use impact data (scopes 1-3), increase trust and data validation, including by rating agencies.
Primary use case: ‘Increased transparency and comparability of the Environmental data in ESG disclosures is needed in supply chains to better enable impact investment decisions in the commercial built environment.
The use case:
- serves as the basis/the starter for subsequent ESG use cases from different sectors within the UK, EU and USA.
- enables us to leverage our existing networks from previous IB1 projects which are centred around water and energy.
- determines the initial requirements for an online Icebreaker One – Open Net Zero demonstrator
- enables improved impact investment decisions through the use of trusted and comparable ESG data.
- is of relevance for all ESG AG members and the sectors they work in.
- ensures scope 1-3 environmental data is intrinsic.
Rationale for choosing the built environment
- The Impact Investing AG felt the built environment was an important industry to focus on, unsurprisingly as the EU’s Built Environment has the largest climate investment gap of any sector – ‘Europe’s building sector is responsible for 40% of energy consumption, more energy than any other sector, and accounts for 36% of the EU’s energy-related GHG emissions[¹]
- 97% of Europe’s buildings – as many as 215 million – will require some level of renovation before 2050 (²)
- With pandemic recovery investments and climate at the top of the EU’s agenda, now is a unique opportunity and crucial moment to mobilise private finance and investment in renovation (³).
- Today’s choices in the building sector will impact emissions for decades. Companies in the buildings sector are failing to take responsibility for reducing the in-use emissions from the operations of buildings. The longevity of buildings means that making the wrong design, construction, and renovation decisions today will have a lasting impact on society’s ability to decarbonise.
- The built environment sector must fully embrace sustainable development. Interventions in the built environment should avoid short term objectives that may compromise the resilience of future generations. The built environment sector must ensure interventions unlock more value from existing infrastructure (⁴).
- The building sector is also heavily reliant on its value chain to decarbonise. It’s here that we focus on the scope 3 emissions from our problem statement.
The outcome from our first use case will support our second use case: How to access reliable, standardised long-term risk data for the built environment globally.
Use Case Prioritisation
Icebreaker One defines a use case as outlining the tools (such as data) that a specific stakeholder (the primary actor) will need to achieve a specific, focused goal, and what needs to happen for the primary actor to achieve their goal.
Combining the input from our AG members as well as our own in-depth research interviews we produced a longlist of 16 use cases. A central theme ran throughout these use cases – the need to increase the transparency of company ESG data in order to improve impact investment decision making. And, using our 7 point assessment criteria, we then scored the use cases, arriving at our Primary Use Case.
|Impact on accelerating transition to net-zero.||Satisfies the problem statement.||Could be part of a demonstrator for COP28.||Will data availability solve this problem?||What data is available today? (What is not?)||Data quality.||Score|
Retrofit or construction?
According to the Institute for Market Transformation, the commercial real estate market tends to favour new and cutting-edge architecture, but which is better from a carbon reduction perspective—retrofits or new construction? Since the majority of a building’s embodied carbon is accounted for by the foundation, structure, and envelope, it typically makes sense to reuse these parts of a building rather than to demolish (which also emits carbon and air pollution) and rebuild. The carbon payback of new construction and retrofits can vary greatly depending on building type, location, climate, and grid mix but retrofitting a building generally saves 50 to 75 % of embodied carbon.
New buildings that are designed to be more efficient are attractive assets—however, the energy, water, and related carbon savings achieved once a new building is occupied can take a long time to reach the level of embodied carbon that was emitted during construction. A report by the Preservation Green Lab, Skanska, and other partner organisations found that new buildings can take anywhere between 10 to 80 years to pay back the emissions generated from the construction process, even if the new buildings are 30 percent more efficient than average.
One step many businesses can take to achieve net zero is to retrofit their building. The initial scope of this use case is as follows:
|Industry||Building Type||Territory||Company Type||E of ESG Disclosure||(E)SG Scope 3 data|
|Retrofit in the Built Environment.||Commercial offices||Initially UK & Europe )||250+ employees||Perspective data (rather than retro-spective)||Energy, embodied carbon from raw materials such as cement & concrete, chemicals, aluminium, copper, iron & steel and glass products..|
Given the importance of retrofitting buildings to reduce carbon emissions, we have narrowed the scope of our use case even further to focus on commercial retrofit buildings.
“Over 85% of the EU existing buildings will still be in use in 2050. Renovating the existing building stock is an essential action to meet Paris Agreement goals. To ensure assets remain desirable in the future, owners need to plan on the renovation of their assets. Renovation will reduce the carbon emissions of their properties and will enhance the quality of life for occupants.” Ludovic Chambe Head of ESG & Sustainability Services, CBRE, Continental Europe.
ESG initiatives present an opportunity for investors, owners and occupiers to focus on value creation and mitigation of risks. Much of this opportunity is centred around the management, retrofit and refurbishment of existing real estate assets. (Carl Brooks Global Head of ESG, Property Management, CBRE)
PAS2080 updates to include retrofit:
The emphasis on retrofitting is further bolstered by the updates to PAS2080 ( in April this year) the world’s first specification for managing whole-life carbon in infrastructure. The British Standards Institute (BSI), with sponsorship from the Institute of Civil Engineers (ICE) and the Green Construction Board (GCB) has revised and updated the standard to accelerate the ambition and outcomes for decarbonisation. Three of the five new themes from the update relate to the value of retrofitting and also the need to consider the entire value chain and area as follows:
- An integrated approach to the built environment- widening the scope of PAS2080 beyond infrastructure to the built environment.
- Taking a whole-life view – addressing the urgent need to retrofit existing stock and balance capital carbon investment with operational and user benefit.
- Collaboration – highlighting the importance of working together across the entire value chain.
One particular area of contention within our problem statement was Scope 3 emissions with many organisations finding it challenging to quantify and report on Scope 3 emissions. This voluntary disclosure includes waste generation (by source), water (consumption and treatment), business travel, staff commuting, product or service use, leased assets and outsourced operations. It also includes the emissions from mining, extraction, and processing of the raw materials used, as well as those arising from the use and disposal of products produced and sold by the organisation.
As outlined by the World Benchmarking Alliance, the building sector is heavily reliant on its value chain to decarbonise. As a result, it is critically important for companies within the Buildings Benchmark to engage not only with each other but with their suppliers, customers and other external actors in order to achieve emissions reductions.
Research has shown us that within the impact investing field, there are issues with access to, quality and trust of environmental data. According to a global survey from CBRE in November 2022, companies are favouring environmental, social and corporate-governance (ESG) factors more heavily when making decisions on which buildings to lease or buy. What’s more, many are prioritising green-building certifications and features that reduce energy consumption or generate renewable energy, as demonstrated below:
Figure 2: How do you use sustainability certification programs (eg: LEED, BREEAM, NABERS) in your decisions?
Source: CBRE Global ESG Survey, November 2022
Figure 3: How environmental building features impact a Real Estate transaction
Source: CBRE Global ESG Survey, November 2022
Investors and occupiers are more likely to pay a premium for buildings with on-site renewable energy generation and/or smart technology to monitor and adjust energy usage. Enabling investors, occupiers and owners to easily access this information in a transparent and trustworthy manner is the objective of the demonstrator that Icebreaker One is preparing for COP28, November 2023.
Investment & policy gaps
To meet the EU’s 2030 climate target, €3.5 trillion of total investment will be needed this decade to decarbonise Europe’s buildings through renovation. Based on Member States’ current plans, the investment gap to 2030 is estimated at €2.75 trillion[⁵].
The 2022 UN Environment Programme (UNEP) Emissions Gap Report states ‘at the current rate of emissions, we are heading towards a 2.8C warmer world by the end of the century – even with the implementation of the Nationally Determined Contributions under the Paris Agreement. The report also highlights the gaps in several policy scenarios and ways to deliver the emissions cuts of many gigatons of GHGs required. This carbon gap makes the urgency for implementation of meaningful decarbonisation even more compelling, particularly for the built environment sector.’
We are currently running an open consultation and gathering further input from our Impact Investment Advisory Group. The aim is to identify the data required to ensure essential environmental information is gathered at the earliest phase of decision making in retrofitting a commercial building. If you or someone in your network has knowledge in this field and would like to be part of our September focus group, please get in touch via: firstname.lastname@example.org
*The programme is using Global Impact Investing Network’s definition of impact investing: “Impact investments are investments made with the intention to generate positive, measurable, social and environmental impact alongside a financial return.