CAGBC Conference Takeaways 2023: Why Carbon is the New Currency

By Mat Loup

Canada Green Building Council (CAGBC)’s annual conference, Building Lasting Change, is one of the flagship events in the calendar for Canada’s engineers, designers and architects. Much of the focus at this year’s event in Vancouver, B.C., was on the business side of sustainability and in particular, carbon.

Although developers have always had to hit certain sustainability targets imposed through building codes or rezoning requirements, the business of carbon now impacts everything from the value of real-estate assets to how banks, investors and lenders assess those assets in terms of risk. In turn, banks, credit unions, pension funds, investors, insurers and tenants must also look at how that significantly impacts their own ESG credentials and targets.

Green buildings are now big business and carbon is the new currency. Low or zero carbon green buildings are a more valuable asset on the balance sheet than a “vanilla” or high carbon building that is now seen as a risk and a potential stranded asset. In terms of greatest impact, the transition focus is on commercial and institutional buildings, because 30% of these largest buildings contribute 80% of building emissions.

Our founder and Chair, Kevin Hydes, identified several key trends and topics across the industry in his gala address:

• ESG — a relatively unknown term three years ago, every company now has a strategy and report or needs one

• Policy vs voluntary — As more regulations and standards roll out for climate resilient design, the pressure increases to comply or face fines. Building owners and designers who are already well-versed in these techniques will be best positioned

• Market compression — the bell curve is being squashed, with leaders and laggards not far apart

• Return to office — Crime and personal safety have been significant factors for cities. For example, although Paris and Barcelona are busier than before COVID-19, San Francisco is becoming a ghost town with a 35% vacancy rate that could reach 50%

• AI — how will tools such as ChatGPT affect the design and construction industries?

• Conversions — Some cities want them, yet some don’t, while at the same time some buildings are easy to take on and others hard

• Government stimulus — The Inflation Reduction Act in the US and the Investing in Infrastructure Canada Program are two significant opportunities to inject new finance

• Flight to quality — Companies are actively seeking out the very best places to do operate a business, leaving behind those stranded assets that attract less capital

• Education gap — There is an urgent need for training across the industry; for example, Canada needs 100,000 new electricians alone, and the US closer to one million

Robin Hawker, Introba Climate Resilience Associate Principal, took part in a panel with Kathryn Bakos, from the Intact Centre on Climate Adaptation and Tanja Milosevic from Grosvenor. They looked at how best to factor climate risk and resilience into decarbonization strategies, including the bridge between decarbonization and resilience and the benefits of building climate risk factors into your decarbonization journey.

There was a healthy Introba attendance at the conference sessions, including Stuart Hood, Eduard Cubi, Emily Codlin and Kevin Welsh. Here are our seven key takeaways from Building Lasting Change 2023:

• The “Carbon as a Metric in Future Codes and Standards” session examined how design building performance will be measured in the coming years, including operational greenhouse-gas limits within the upcoming 2025 National Building Code (NBC) and embodied carbon requirements in the NBC by 2030.

• Tackling existing building performance, Montreal seems to be accelerating important work around building benchmarking by-laws, which may set a precedent for other municipalities.

• Mark Hutchinson, Vice President of Green Building Programs, CAGBC, said decarbonization transition planning was one of its core focus issues in the coming years. He advocated that all portfolios and individual buildings should be developing decarbonization transition plans and that industry must nurture the knowledge and skills base to support the development, review and application of these plans at scale.

• The decarbonization transition plan is a necessary step to meeting our net zero goals nationally by “putting buildings on the pathway” and providing a more accessible strategy for engaging in previously difficult markets like existing buildings. The main focus will be on large commercial and industrial buildings; although they represent only 30% of Canada’s buildings, they are responsible for 80% of Canadian building emissions.

• To increase reach and impact across industries, there will be purposeful alignment of green building program requirements with market regulatory, sustainable investing and government stimulus requirements. These will include the Investor Ready Energy Efficiency (IREE) from the Canada Infrastructure Bank, Carbon Risk Real Estate Monitor (CRREM), Global Real Estate Sustainability Benchmark (GRESB) and other ESG frameworks. This alignment will likely weave throughout LEED v5 to increase its relevance to other stimuli and requirements.

• Large building portfolio holders such as Grosvenor now see the tangible value in assessing future climate risks and designing buildings to better stand up to future conditions. This means there are now buildings designed with more climate-resilient features such as greater cooling capacity and flood protection. These provide important case studies on the real costs and benefits of climate resilient design.

• Craig Losos, Executive Director at the Nature Conservancy of Canada (NCC), shared information about the impact of the NCC and its projects in terms of protecting and investing in nature in Canada.

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