Opinion piece: The best climate policy is to support companies’ carbon neutrality goals, because innovation is born in a society that embraces change

Opinion piece in Finnish newpaper Helsingin Sanomat, by Nrep’s CIO Jani Nokkanen & Green Building Council Finland ‘s Chief Expert Miisa Tähkänen

The real estate and building industry is committed to the green transition: new low-carbon solutions are emerging all the time and their estimated export potential is significant. Companies are aiming to reduce emissions in both energy consumption and construction activities.

Many real estate investors, developers, and cities have taken the bold step of evaluating the carbon footprint of their construction projects during the design phase.What is needed now is courage from decision-makers. The Building Act, which will come into force from 2025, will give powers to impose progressively tighter carbon footprint thresholds as conditions for building permits.

Denmark is one of Europe’s leading countries in terms of climate policy. Starting from the beginning of 2023, building projects larger than 1,000 square meters will undergo a life cycle assessment and need to meet a nationally established limit. The planned thresholds were announced in 2020 to give the industry time to adapt and incentives to find new solutions.

Similar courage is now needed in Finland. However, the setting of thresholds is bogged down in bureaucracy. At the same time, projects seeking planning permission in 2025 are already on the drawing board. The first thing the new government should do is to finish the job. However, the setting of limit values is bogged down in bureaucracy. Meanwhile, projects seeking planning permission in 2025 are already on the drawing board. The first priority for the new government should be to proceed with the task. Establishing increasingly stringent limit values in a timely manner will enhance predictability in the field.

A new study by the Climate Leadership Coalition, a consortium of Finnish companies, and the Boston Consulting Group (BCG) estimates that the green transition could generate €85-100 billion in export revenues for Finland by 2035.

Government parties have emphasized climate action that avoids unnecessary burdens on citizens. Consumers’ lives are not directly affected by emissions reductions in construction. Furthermore, numerous existing solutions are cost-neutral for businesses. Improving energy efficiency or increasing climate resilience will reduce the lifetime costs of a building and reduce business risks if future weather conditions become more challenging due to heat waves or heavy rainfall.

Climate change mitigation cannot depend only on the lifestyle choices of individuals. Few people even have the opportunity to consider the energy category, let alone the carbon footprint, when choosing a home, even though more sustainable alternatives already exist. It is essential to elevate the minimum standards for the products and services being offered.

Anyone working in the real estate and construction sector can tell you that our sector is responsible for almost 40% of emissions in Finland. However, government efforts to promote climate action are limited. Supporting companies’ carbon neutrality goals is the most effective climate policy, as innovation thrives in a society that embraces change. Businesses are ready, now we need policy makers to get on board!

Jani Nokkanen, CIO, Nrep
Miisa Tähkänen, Leading Specialist , Finnish Green Building Council