The buildings and construction sector is central to achieving global climate targets. Representing approximately 37% of global energy-related carbon dioxide (CO₂) emissions, it must be largely decarbonized by 2050, while its climate resilience must be urgently enhanced. Achieving this transformation requires a massive scaling-up of investment, yet the current gap stands at a minimum of $100 billion annually. However, bridging this financing gap is not simply a matter of mobilizing more capital; there are critical shortfalls in the structure and capacity of international institutions to promote and finance Near-Zero Emissions and Resilient Buildings (NZERB).
In response, this study, commissioned by the German Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear (BMUKN), in partnership with and with the support of UNEP-hosted Global Alliance for Buildings and Construction (GlobalABC) Secretariat, provides a landscape overview of NZERB financing and technical assistance facilities to identify institutional gaps and formulate recommendations for a more effective approach.
To gather information, a survey was conducted to assess two tiers of institutions and facilities that support NZERB investment using a standardized template. The analysis reveals a fragmented and reactive financing landscape. Except for a few dedicated facilities, NZERB projects represent a very small portion of the portfolios of large financing institutions, which generally lack specific frameworks for supporting them.
The survey identified several critical gaps:
• Strategic and knowledge gaps: A lack of strategic focus within major institutions, reinforced by poor data and the absence of standardized definitions, metrics, and monitoring for NZERB.
• Institutional and actor gaps: No central coordinating body to guide the NZERB ecosystem, coupled with limited access for the private sector and low engagement from International Financial Institutions (IFIs) due to high transaction costs.
• Financial and pipeline gaps: A reliance on inadequate financial instruments (grants and loans) that fail to scale investment, a weak project pipeline, and a bias toward energy projects with clear financial returns over those with non-monetized resilience benefits.
To address these gaps, the study proposes an integrated framework to scale NZERB investment, built on three pillars (see Figure 2):
• Pillar 1: Standardized NZERB criteria and investment mechanisms
• Pillar 2: Viable and locally adapted business models
• Pillar 3: Local capacity for implementation and financing
The analysis concludes that the key is not a lack of capital, but the need to maximize access to current financing mechanisms through a more coordinated and standardized approach. This will involve catalytic action to coordinate with international agencies, financing institutions, and national implementing partners. Key recommendations include promoting market development by fostering alignment between green building standards and climate finance taxonomies; de-risking investment through guarantees and blended finance; building local capacity within regulatory bodies and financial institutions; and strengthening institutional coordination to build a robust ecosystem for NZERB investment.
