The influence of buildings on climate change is significant. There is currently a positive shift in the building sector, both the way buildings are designed and how they are supplied with energy. This approach can lead to reduced emissions. Our investments support and encourage these developments. 

Significant influence

The influence of buildings on climate change is significant. According to a United Nations Environmental Programme report , buildings are responsible for more than 40 per cent of global energy use and one third of global greenhouse gas emissions. Global emission reduction targets are unlikely to be met without support for energy efficiency gains of buildings. If we fail to increase energy-efficiency and make use of low-carbon electricity when creating new buildings or retrofitting old ones, we will have great difficulty in keeping the climate change limited to 2°C.

Getting the foundations right

The main source of emissions from buildings comes from energy consumption and the reliance of centralized energy production systems that make use of fossil fuels. However, buildings are increasingly being designed with the ability to produce their own clean and renewable energy locally through sources such as wind turbines and solar panels. When energy consumption and efficiency is taken into consideration during design stages, buildings can help energy be more efficiently used, distributed or stored. And all hope is not lost for existing buildings if energy and emission planning becomes part of any building renovation. By changing the way a building uses energy, and the type of energy it is supplied with, emissions can be dramatically reduced.

Buildings that ‘talk’ to each other

There’s also scope to reduce emissions when buildings collaborate. The Triodos Real Estate Fund, the first sustainable listed property fund in Europe, established a pilot project with six office buildings in the Netherlands. The fund acquires and manages property, mainly commercial real estate, including offices, industrial property and retail shops. The pilot project coupled together the energy from six buildings in the portfolio, all of which have solar panels and when the energy produced in one building occurred at a time when there was no own energy demand, then the energy was shared and supplied to one or more of the other buildings in the pilot. When large amounts of energy were produced, then that additional production could be used directly and spread across all buildings or stored in batteries for later distribution. This clever fit between supply and demand means that the buildings require less energy production from fossil non-renewable resources, which in turn means less CO² emissions.

Investing to stimulate change

The Triodos Sustainable Investment Funds invest in a number of companies that specialize in meeting emission challenges of buildings – from those that produce equipment that save on energy use, to those that manufacture insulation, and those that generate and store renewable power. Examples include:

  • Kingspan, which provides insulation and renewable (solar) power
  • Nibe Industrier, which specializes in heat pumps and other energy-efficiency in buildings
  • Acuity, with LED and smart lighting solutions
  • Solarcity, which offers complete solar systems, including home storage solutions
  • Hannon Armstrong, which offers finance for new energy efficient installations in real estate.
     

The UNEP believes that we need to make the mitigation of greenhouse gas emissions from buildings the cornerstone of every national climate change strategy. For that to become a reality, more and more companies such as these need to be encouraged to enter the market, and to develop more relevant products and services.

Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.