Global — A new study on Near-Zero Emission and Resilient Buildings (NZERB) reveals a significant shortfall in financing, despite the urgent need to decarbonise the buildings sector.
Sector Emissions and Investment Needs
The buildings and construction sector accounts for approximately 37 percent of global energy-related CO₂ emissions.
Therefore, it must undergo major decarbonisation by 2050 to meet climate targets.
According to the International Energy Agency:
- Global investment must reach $5.4 trillion annually by 2050
- At least $100 billion per year is currently missing
Study Background and Scope
The study was commissioned by the German Federal Ministry for the Environment Climate Action Nature Conservation and Nuclear Safety.
It was developed in partnership with the Global Alliance for Buildings and Construction Secretariat, hosted by United Nations Environment Programme.
Researchers surveyed international financing facilities and technical assistance institutions to assess how effectively they support NZERB investments.
Key Findings
The analysis shows a fragmented and reactive financing landscape.
In most cases, NZERB projects represent only a small share of major investment portfolios.
Additionally, current financing relies heavily on:
- Grants used by 87 percent of facilities
- Loans used by 41 percent of facilities
However, more scalable instruments such as guarantees and subordinated debt remain largely underutilised.
Three Critical Gaps Identified
First, strategic and knowledge gaps persist.
There is limited data, along with no standardised definitions, metrics, or monitoring systems.
Second, institutional and coordination gaps remain.
There is no central body guiding the ecosystem, while private sector participation and IFI engagement stay limited.
Third, financial and pipeline gaps constrain growth.
Investment tools are insufficient, and project pipelines remain weak, especially for resilience-focused initiatives.
The Way Forward
The study emphasises that the challenge is not just more funding, but better structuring of capital.
To address this, it proposes a three-pillar framework:
- Standardised NZERB criteria and investment mechanisms
- Locally adapted and viable business models
- Stronger local capacity for implementation and financing
Furthermore, key recommendations include:
- Aligning green building standards with climate finance frameworks
- Using guarantees and blended finance to reduce risk
- Improving institutional coordination across stakeholders
Outlook
Overall, the findings highlight a clear disconnect between available global capital and actual project implementation.
If addressed effectively, closing this gap could accelerate the transition to sustainable, low-carbon, and resilient buildings worldwide.
