Decarbonizing buildings requires billions in additional investment to meet climate goals

Siemens Financial Services (SFS) has released an in-depth new study titled "Smart Financing for Decarbonizing Buildings", which assesses the "investment gap" between current levels of investment for the renovation of offices, hospitals and schools and the actual level needed to meet the targets of accelerated decarbonization by 2050.

The latest in a series of three papers on financing decarbonisation, this study focuses on buildings – which account for 45% of France's final energy consumption – as a main target of energy efficiency initiatives and contributor major potential for achieving carbon neutrality by 2050.

This “deficit” represents a significant gap in each of the 4 countries studied, including: United States ($5,3 billion for offices, $1 billion for hospitals, $3,8 billion for education) ; China ($12,7 billion, $2,7 billion, and $10,8 billion, respectively); India (respectively $0,9 billion, $0,6 billion and $6,2 billion); and Europe (respectively $7,8 billion, $2,2 billion and $5,5 billion).

The study reveals that smart buildings – which incorporate hot desking, occupational health, information access controls, security, infection mitigation and more – are the better suited to ensure more efficient use of commercial and public buildings, significantly reduced energy consumption and emissions, and the transformation of buildings into much more sustainable assets for society.

In order to bridge the gap between current investment levels and required volumes, smart financing methods are being offered by private sector finance. These solutions aim to make the conversion to smart, low-carbon and energy-efficient buildings affordable for owners. These financing tools can facilitate cash flow and align costs with the rate of benefits obtained. Smart finance also has the potential to make the transition to decarbonization budget-neutral, leveraging future savings to pay for current investments.

“Our use of buildings has been disrupted and altered by the pandemic,” says Thierry Fautré, President of Siemens Financial Services France. “Not only can a smarter building stock better cope with this change, it will contribute significantly to a cleaner, greener future. Smart financing solutions can accelerate the pace of transformation, helping building owners achieve zero carbon building stock by 2050.”

For more information, click here.