What could be more symptomatic than a week of heat waves never seen in France in June for the closing episode of the season dedicated to climate risk. More than ever, the challenges of climate change are tangible in our cities and territories: adaptation will be essential.
On this occasion, Ella Etienne-Denoy, Managing Director and Partner of Green Soluce, spoke in the Urban Chronicles to give you her expert opinion on emerging risks, existing solutions and the position of the sector’s players, because it is time to act!
Green Soluce : Why is climate risk at the heart of Green Soluce’s positionning today?
Ella Etienne : As we are experiencing a week of intense heat wave in Paris, let us take a moment to reflect on how sutainable our business activities really are in the face of climate change. Heat waves will multiply and intensify, as Météo France clearly indicates : Against 1 day of a heat wave today, we must expect 30 days of excessive heat per year in France by 2050. This is unprecedented and worrying. Climate change is indeed turning into a serious operational risk, thus a financial risk, especially for the real estate sector.
For Green Soluce, within its Sustainable Finance hub, it is therefore a priority to offer real estate players a dedicated approach to assist them in identifying and managing their financial exposure to climate risk.
Green Soluce : In concrete terms, what are the challenges of climate risk at the building level?
The real estate sector is especially sensitive to climate risk for three main reasons: high exposure to physical risk (floods, droughts, etc.), high financial exposure to the risks of transition to a low-carbon economy and the difficulty of carrying out costly adaptation investments in a context of uncertainty.
In terms of physical risks, rising temperatures for example, create a threat to the health of city dwellers : the frequency of hot days will exacerbate the urban heat island phenomenon and increase air pollution and the risk of mortality. Let us recall the 2003 heat wave – which is now considered as the relevant baseline in terms of summer temperatures in France and across Europe – that caused 15,000 deaths. A serious public health issue is at stake and the real estate industry plays a key role in improving the resilience of cities! In this context, the intrinsic “resilient” feature of buildings will increasingly be considered as a competitive advantage for real estate developers and investors by combining comfort and sobriety.
Transition risks in the transition towards a low-carbon economy must also not to be overlooked. Regulations, market developments or technological innovations have a direct impact on the valuation of a building and make it run the risk of becoming a “stranded asset” or “failed asset”, i.e. an obsolete building affected by a high devaluation. In the context of developing a European taxonomy – or classification – of activities considered as “green”, real estate players must actively take these developments into account in order to maintain and continue to attract investors.
Green Soluce : The transition to air-conditioning seems inevitable, how can we prevent this critical situation from taking place?
We must make sure that preserving user comfort does not contradict the global ambitions to limit climate change to 2°C, as well as France’s recent commitment to achieve carbon neutrality by 2050. The real estate sector will therefore not be able to rely solely on air conditioning, at the risk of jeopardising the efforts made during the construction phase. To combine comfort and sobriety, bioclimatic constructions will be an essential lever to adapt to the new climate reality and for the deployment of passive buildings. Natural ventilation, thermal walls or the use of nature-based solutions should also be generalised.
Green Soluce : We can see that nature is making its great comeback in the city. What are the benefits for real estate in the face of climate change?
Nature and its ecosystems offer us a wide range of responses to deal with global warming, both in terms of mitigation and adaptation. Nature-based adaptation policies consist of preferential use of ecosystem services to adapt to climate change, rather than using artificial facilities, such as dikes to protect against coastal erosion, for example. Mitigation approaches can take the form of carbon sinks, as is the case with forest conservation.
Urban biodiversity and the positive systemic impacts it generates, are gaining momentum in the real estate industry, particularly in relation to the reduction of heat islands. Fortunately, the IPBC or CIBI (the International Biodiversity & Real Estate Council) is leading the way internationally with the Biodivercity® label for a better integration of biodiversity in real estate projects at building and district level. However, questions remain regarding the choice of plant species to be deployed and how sustainable these essential natural infrastructures remain overtime.
Green Soluce : What are the social implications of climate risk in cities?
To quote Mr. Daniel Breuiller, Vice-President of the Greater Paris Metropolitan Area in charge of nature in the city, “The metropolis of tomorrow will either be green or unbearable”. Therefore, there is a public health and well-being issue to adapt to climate change through the greening of our cities. This goes hand in hand with a certain climate and social justice that must encourage cities and landlords to offer the same level of comfort to all user-citizens.
In this respect, the Chief Resilience Officer of the City of Paris, Mr. Sébastien Maire, shared with us in a previous episode of Urban Chronicles™ the city’s strategy to fight against heat islands at a city-wide scale: the “OASIS” project is the creation of islands of freshness in primary school playgrounds based on the greening of those spaces and the opening of schools on weekends. In the same way that we talk about energy insecurity during winter, adapting to heat waves will become a social issue, especially at a city scale. Thus, comfortable, carbon efficient, and climate change-proof buildings will be the most sought-after types of buildings in the market!
Interview by Constance Flachaire and Lucille Christien for Urban Chronicles™
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