Sustainable construction brings important financial benefits: lower long-term operating and maintenance costs, lower default rates and decreased odds of becoming a stranded asset. » Al zbeta Kl e i n , Internat i ona l Fi nance Corporation’s Director and Global Head of Climate Business/World Bank Group. « 8. Business Growth Hub, Social Value: what it is and why it’s more important than ever, 2020. It should be noted that, as with all innovations, the cost of sustainable and lightweight materials and solutions will fall as their use becomes more widespread. The additional cost will become increasingly marginal in the face of multiple and direct financial benefits. Other arguments, which are more indirect but no less critical, remind us that we have no choice but to build sustainably – especially if the objective is to remain competitive, attractive, and a sound investment proposition. A reduction in financial risk in an increasingly strict regulatory environment At a time when regulatory constraints aremultiplying, the first factor to consider is the Risk of Not Investing (RONI), where existing assets risk being downgraded to stranded assets, thus losing their value. In Europe, the Energy Performance of Buildings Directive (EPBD) sets the tone. In addition to its objective of decarbonizing buildings, it aims to combat energy poverty, in particular by stimulating long-term and sustainable renovation. Its targets include a requirement for residential buildings to achieve a minimum EPC rating of E by 2033. In concrete terms, this means that non-compliant housing will ipso facto lose their value, becoming stranded assets without any possibility of profitability. Following on the heels of this regulation, Japan has a newweapon in its legislative arsenal that establishes that from 2025 all new construction, including residential buildings, must comply with stringent new energy saving standards. This strengthening of regulatory obligations, which is happening in in many countries, is bolstered by initiatives launched by cities, who are often quicker to put binding measures in place. For instance, Amsterdam in the Netherlands has announced that it wants to halve the use of new raw materials in construction by 2030. Meanwhile Oslo, Norway, is conducting pilot projects for public buildings constructed without the use of fossil fuels. Social responsibility: a key success factor Beyond the energy and environmental aspects, the social impact of companies (and therefore private stakeholders in the construction sector value chain) is being scrutinized by observers including consumers, customers, and investors. Regulatory initiatives such as the EU taxonomy for sustainable activities will make the social aspect a key evaluation criterion that will increase in importance in the years to come. Furthermore, social responsibility is effectively becoming a decisive competitive advantage. In the UK, the weight given to the social criterion in decisions regarding the awarding of public contracts has increased from 5% to 40% since the Public Services (Social Value) Act 2012,8. 72 SAINT-GOBAIN
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