In collaboration with Accenture Accelerating the Decarbonization of Buildings: The Net-Zero Carbon Cities Building Value Framework BRIEFING PAPER JANUARY 2022 Images: Getty Images Contents Executive summary 3 Introduction 4 1 The role of buildings in combatting climate change 5 2 The Building Value Framework 6 3 Key insights 7 4 Practical application of the framework 9 Conclusion 11 Contributors 12 Acknowledgements 13 Endnotes 15 Disclaimer This document is published by the World Economic Forum as a contribution to a project, insight area or interaction. The findings, interpretations and conclusions expressed herein are a result of a collaborative process facilitated and endorsed by the World Economic Forum but whose results do not necessarily represent the views of the World Economic Forum, nor the entirety of its Members, Partners or other stakeholders. © 2022 World Economic Forum. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system. Accelerating the Decarbonization of Buildings: The Net-Zero Carbon Cities Building Value Framework 2 January 2022 Accelerating the Decarbonization of Buildings: The Net-Zero Carbon Cities Building Value Framework Executive summary The transition to a greener built environment requires a shift in how value is defined and perceived. With over half of the world’s population living in cities and producing over 70% of carbon emissions, cities play a key role in combatting climate change. Construction and the operation of buildings are responsible for 38% of global emissions, and there is an urgent need for solutions to help accelerate the decarbonization of the urban built environment to limit the global temperature rise to below 1.5°C. The Building Value Framework can be applied in diverse contexts across different types of building assets and used at any point in the investment planning and decarbonization timeline. Although some leaders in sustainable buildings have started to consider social and environmental impacts in their decision-making, many obstacles to investment in net-zero buildings still relate to financing, both real and perceived. The World Economic Forum’s Net-Zero Carbon Cities Building Value Framework seeks to accelerate investment by overcoming these barriers. The framework proposes that a more holistic decision-making approach, which recognizes the importance of social and environmental outcomes and system performance, is key to increasing capital flow towards decarbonization solutions. The framework guides decision-makers to connect nonfinancial benefits such as “user satisfaction” and “systemic value efficiency” and correlate them with reducing risk or increasing return on investments. The Building Value Framework has been developed and validated through case studies to understand the investment decisions and evaluate outcomes in real projects. From this process, key insights and a practical checklist (focusing on reducing operational emissions) have emerged to maximize value creation, as illustrated through the presented cases. – First, it is vital to invest in decarbonizing technologies and combine them to optimize impact. For example, the Belgian real estate company Extensa used complementary solar and geothermal technologies to renovate and refurbish an old railway station in Brussels. This project demonstrates how bundling these technologies greatly impacts flexibility and system resilience. – Second, investment in digital can maximize the benefits of decarbonizing technologies. In a case study from Turin, Italy, a municipality, in collaboration with Enel X, a leading smart energy service provider, retrofitted municipal buildings for energy efficiency and on-site renewable generation. Integrating these with a digital platform added value to the project by enabling data-driven management decisions across the municipal system. – Third, investing in city ecosystem services and equipping buildings with distributed renewable power generation, storage and smart energy management solutions can enhance local resilience and accelerate decarbonization across cities without the need for disruptive grid upgrades. The flexibility of the Building Value Framework means it can be used for the retrofit and refurbishment of existing buildings, as well as for the construction of new buildings. It can