“More funding is needed for the just transition to sustainable buildings.”

Buildings are the world’s biggest asset class and contribute nearly 40 percent of the greenhouse gas emissions caused by human activity. Yet less than 4 percent of climate philanthropic money goes to funding the transition to sustainable buildings. With its importance – to markets, people, and climate – why does the built environment get so little attention from climate philanthropy?


Last week the first ever Buildings and Climate Global Forum was hosted in Paris by President Macron’s government. Ministries from 70 world governments – nearly 1,500 delegates in total – came together under one banner: kickstart delivery of a worldwide breakthrough to make near-zero emissions and climate resilient buildings the new normal by 2030.

The Forum – which covered the environmental, social, and financial factors needed for this transition – represents a potential tipping point for the built environment. It’s an opportunity to finally see a ‘Buildings Breakthrough,’ nearly nine years after the first ever ‘buildings day’ at COP21 in the same city in 2015. It has been a long journey to get here, and there is further to go.

Buildings are estimated to be worth $326 trillion worldwide, yet their social value is too often forgotten. Housing is a fundamental human right, but the reality is it can also be uncomfortable, unequal, or even damaging to personal health. Approximately 1.8 billion people around the world are either homeless or live in grossly inadequate housing, often without access to basic services like water, sanitation, or electricity. The world has a building stock of dwellings from the past century that burn fossil fuels and leak heat. Tackling building decarbonisation can thus be a win for people too.

We are not, however, on track for a just transition in the built environment, because it has received too little historic attention from policy makers and too little funding from philanthropy. A recent study by ClimateWorks shows that of the $1.7bn spent on climate philanthropy, only $80m is spent on building transition – with limited coordination and co-funding. Nearly 40 percent of emissions but less than 4 percent of the funding. We can change this.

Philanthropy can play a special role in catalysing change in complex systems and sectors. No other sector has the capacity or resource to set in motion the creativity, purpose, and clarity to solve systemic problems – such as the transition of the built environment. That’s why last week, just before the Forum, the IKEA Foundation and Laudes Foundation assembled a group of global climate philanthropies wanting to tackle the buildings challenge.

For both Laudes Foundation and the IKEA Foundation, the built environment is a core part of the work to accelerate corporate transition to meet the 1.5°C global warming limit. Buildings are at the nexus of governance, the real economy, finance, and people – areas the IKEA Foundation is working on to meet the climate targets set in the Paris Agreement in 2015. Laudes has a track record of over four years of significant investments in built environment partners.

Each philanthropy has funded successful initiatives to advance private sector climate action in the buildings space. The Science Based Targets initiative (SBTi) funded by the IKEA Foundation, has begun pilot testing guidance and tools for the buildings value chain. Laudes Foundation’s support to the Carbon Risk Real Estate Monitor (CRREM) has yielded a tool now deployed by professionals managing over €6 trillion in global real estate assets. According to recent surveys in major European markets, around half of all investors use CRREM in their due diligence. What’s more – SBTi and CRREM are strategically aligning their work with the building sector.

‘Philanthropy can play a special role in catalysing change in complex systems and sectors. No other sector has the capacity or resource to set in motion the creativity, purpose, and clarity to solve systemic problems.’

Policies too are finally coming together to increase ambition. The new EU Energy Performance of Buildings Directive (EPBD) is highly anticipated to set a limit on greenhouse gas emissions for all new buildings and the materials they use. The EPBD further supports a ‘renovation wave’ in Europe to save emissions generated by energy use. This is in no small part thanks to significant work by the World Green Building Council (WGBC) ‘BuildingLife’ campaign, which both foundations supported to develop national decarbonisation roadmaps with industry stakeholders, civil society, and government in 10 countries.

Where to from here? Momentum is advancing to reach a “Buildings Breakthrough” by 2030. Twenty-seven countries pledged their commitment to it at COP28 in Dubai and less than six months later nearly three-times as many were signalling its importance at the Global Forum in Paris. It is now time for philanthropic spending to work in step with government and other system actors to meet this rapidly approaching deadline on the horizon.

Together, philanthropy has an established community committed to a just transition for people and planet. Many of that community assembled in Paris to focus on buildings. Now the community is looking for others with the fortified courage and vision to manifest a future built environment that is regenerative, inclusive and zero-carbon.

This joined op-ed was published in Alliance Magazine on Friday 15 March

Liz McKeon is Programme Director for Planet at the IKEA Foundation, overseeing the Foundation’s work on Climate Action and the Global Energy Alliance for People and Planet. She also sits on the board of Alliance Publishing Trust, the publisher of Alliance magazine.

Amol Mehra is the Director of Industry Programmes at the Laudes Foundation, overseeing programmes that deploy philanthropic funding across the built environment, fashion, finance and labour rights.

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Learn more about the programme via the link in our bio πŸ”—

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