There is an urgent need to reduce the emissions generated by buildings and construction, which are negatively affecting countless communities around the world.
The first of its kind, this report reveals that some decarbonisation initiatives are reducing inequalities, but others are leaving communities behind, generating greenlash - pushback to green initiatives - which costs valuable time, and money, and hinders the transition.
To increase support for, and ultimately accelerate, climate action, this report provides practical recommendations for policymakers and investors to maximise the enormous opportunities associated with a just transition.
Explore by city
Discover examples of positive and negative social impacts of decarbonisation initiatives, as well as locally-grounded visions for a just transition.
Right to housing
Which green initiatives are improving affordability and availability of homes, and which are resulting in higher prices and renovictions?
Workers' Rights
Is the green transition resulting in decent green jobs, or does it risk exacerbating historical issues of precarity and danger?
Spatial Equity
Which green initiatives are reducing inequalities,and which are increasing them through green gentrification?
There is a clear case for putting people first to unlock and accelerate climate action in the built environment.
Respecting people’s fundamental rights is the only way we can create the fair and sustainable societies we need for people and planet to flourish.
Recommendations
Filter
decision-maker
geographic-scope
human-right
-
Support local social innovation
From European housing cooperatives and community land trusts, to the self-help model in Africa, people everywhere demonstrate that their knowledge and potential to find solutions is valuable and is often disregarded. Understanding and supporting such civil society innovations would increase their agency and the city's capacity to resolve its own urban problems.
-
Public procurement to align social and environmental outcomes
For example, tenders could include social value metrics in the assessment frameworks or require training clauses to upskill and reskill the construction workforce and mandate the inclusion of apprenticeships . When the winning contractors are awarded a contract, these clauses ensure that they commit to training their staff (and possibly beyond) during the project in a specific set of skills. As a result, contractors contribute to the just transitions by dedicating time, budget, and means to train their employees and new workers, possibly directly on-site.
-
Affordable essential utilities
Ensure essential utilities (electricity, heating and water) are accessible and affordable for all residents, to provide the services required to uphold the human right to adequate housing. This can be possible through increased regulation of privatised utilities and reduced rates, discounted bills, and energy efficiency retrofitting programmes for publicly-owned utilities.
-
Multi-level, long-term governance
Establish strong structures and institutions to allow for multi-level governance so that regional and city-level plans integrate national decarbonisation strategies. Develop long-term plans which provide the policy certainty and predictability required to foster long-term, responsible public and private investment.
-
Protect against renovictions
Measures can include rent caps, a ban on no-fault evictions, increasing the duration of standard rental contracts, requiring affordable housing in mixed use developments, tying retrofit loans to future energy savings, safeguarding the social categorization of social housing after retrofit, and more.
-
Circular, equitable land use and spatial planning
Develop land use and spatial plans based on circularity and equity, upholding the rights to non-discrimination and spatial equity. This can include re-zoning to support mixed-use development, prioritising re-using existing buildings and incorporating social safeguards against gentrification and displacement. This approach revitalises communities, preserves cultural heritage, and minimises the environmental footprint of new developments.
-
Equitable National EPBD Implementation
Countries must embed a just transition approach into their national EPBD implementation plans. This may entail prioritising funding for lower-income groups, introducing safeguards which prevent renovictions and green gentrification, and upskilling programmes for existing construction workers.
Future iterations of the EPBD (from 2028) should include higher residential energy efficiency standards and a more explicit focus on social justice, including climate housing allowances which could be delivered through the Just Transition Mechanism.
-
Just Transition Plans
Engage with workers, tenants, and their unions to develop just transition plans that identify and mitigate against potential human rights issues in the green transition. These could include initiatives supporting carbon-intensive workers in accessing new green jobs, ensuring these deliver improved working conditions, or protecting tenants from potential renovictions, ultimately strengthening public support for climate action. The plans must be accompanied by dedicated funding for at-risk communities, and investors can contribute by prioritising investments in companies that have Just Transition Plans in place.
-
Maximise pre-competitive advantage
Gain competitive advantage and avoid stranded assets by developing investment products that comply with upcoming and emerging environmental and social regulations. In the EU, these include the EPBD, CSRD, CSDDD and Green Taxonomy.
-
Dedicated housing agency
Establish a dedicated housing agency (ministry, department, etc.) with autonomy, appropriate financial and human resources, and executive power to create policies, programmes, plans and strategies to protect the right to housing. Housing-responsible agencies at the local and national levels should be in constant and direct communication and coordination to maximise results.
-
Strengthen corporate reporting and disclosures
Introduce mandatory reporting requirements for large companies, strengthening transparency and accountability. Disclosures also play a key role in allowing investors greater visibility of the organisations they are investing in.
In Europe, this process has been started through the Corporate Sustainability Reporting Directive (CSRD), but construction sector-specific standards must be developed as part of the European reporting standards (ESRS)
-
Licenses and permits
Leverage business licensing and permits to prioritise businesses and social enterprises that commit to respecting human rights and align with the principles of a just transition.
-
Enshrine the right to housing
Enshrine the Right to Housing in national constitutions and in the EU’s Charter of Fundamental Rights.
-
Local hiring preference
Ensure that building (re)developments benefit local workers and communities, by mandating a local hiring preference. This would promote upskilling and economic development within the community.
-
Taxonomy-aligned investment
Align investments with the EU Green Taxonomy (Regulation EU 2020/852), particularly with the Minimum Safeguards (MS) as laid out in Article 18.
-
Long-term, stable returns over short-term extractive investments
For example, by providing a mix of homes which meet the local socio-economic profiles rather than those of speculators, strengthening tenant protections to minimise tenant turnover, and including commercial spaces which create stable employment opportunities for residents.
-
Protect workers' rights
Invest in companies with strong policies that protect workers’ rights, such as transparent human resources processes, safety standards, providing adequate support for all workers, regardless of gender, age, or disability, programmes to reskill for refurbishing and retrofitting housing.
-
Grow the public housing stock
Grow, finance, or establish public housing corporations, to increase public housing stock (for example through right of first refusal mechanisms), have greater control of the housing market, and generate long-term revenue. When market properties are built on public land, ensure land ownership is retained in the public domain.
-
Promote energy-efficiency retrofits
Provide incentives for home owners through tax-deductions and subsidies, and negotiating special pricing with energy companies for volume business, at neighbourhood or district scale. Specify benefit-sharing mechanisms to ensure subsidies aren't simply transferred on to tenants.
-
Develop a public housing investment programme
Consolidate multiple housing initiatives within a housing development investment programme, which can, for example, map all under-used and vacant buildings which could be converted into affordable housing, including through partnerships with investors. The programme should be developed in close partnership with CSOs, to ensure housing affordability – generating long-term financial returns from a large number of low-priced rents (citywide) rather than from a low number of buildings with high-priced rents.
-
Integrated land use and transport planning
Integrate land use and transport planning to ensure that existing and planned buildings have adequate access to resources that improve quality of life e.g. transport infrastructure like metro stations, green spaces, workplaces, schools, healthcare facilities and stores for daily needs.
-
Citizen and evidence-led
Decision-making processes and policy development should be based on evidence and citizen engagement. This helps avoid politicisation, prevent greenwashing, and find bipartisan, common-ground solutions to urban issues. It will also facilitate the integration of climate policies and social policies.
-
Social license to operate
Ensure developers in the investment portfolio have adequate provisions to consult (at least) and co-create (at best) with end-users and local communities.
-
Upskilling and re-skilling
Invest in upskilling and reskilling the entire value chain, e.g. through circular economy training programmes and other green skills for architects, engineers, and construction professionals of different skill levels and of different socioeconomic backgrounds.
-
Regulate investment
Introduce regulations that require responsible investments and conduct of (a) nationally headquartered companies operating overseas, as well as (b) foreign companies directly investing and operating in national territory.
-
Strengthened ESG reporting
Include respect for workers’ rights (on construction sites and through construction materials supply chain) and impact on housing affordability within ESG and impact investment frameworks, as well as in engagement with current and potential companies in the investment portfolio.
-
An equitable green deal, grounded in housing
Ensure the next phase of the European Green Deal has a greater focus on social equity, which will reduce public pushback. Sustainable, affordable housing should sit at its cornerstone, with the potential for a new Housing Commissioner.
-
Minimum energy efficiency standards with social safeguards
Introduce minimum energy efficiency standards for new homes, as well as national targets for retrofitting the existing stock. Crucially, these changes must be accompanied by social safeguards such as rental caps, prioritised funding for low-income groups and benefit-sharing mechanisms which prevent renovictions, green gentrification and job loss.
-
Participation platforms
Invest in establishing and developing participation platforms, where municipal and national government, technical teams, investors, civil society, and cultural organisations can collaborate.
-
Blended finance for social housing
Set financial incentives for blended finance in social housing, such as state credit guarantees or attractive interest rates, that require both environmental and social sustainability. This can also guide green finance to create green construction training and jobs in territories and neighbourhoods most impacted by economic restructuring.
-
Incentivise best practice
Offer regulatory (governments) and financial (investors) incentives rewarding developers who exceed building code requirements e.g. a building which exceeds the % affordable housing requirement and minimum energy efficiency rating is allowed to have an extra storey, etc.
-
National CSDDD Implementation
When developing their national implementation plans for the CSDDD, EU countries should clearly indicate that these apply to real estate and construction companies, including their impact on economic, cultural and social rights.
-
Expand participation
Businesses and government should involve NGOs, universities, and civil society organisations such as tenants associations and workers unions, in the design and implementation of green transition strategies. Meaningful engagement processes such as citizen assemblies are crucial to respect local communities, but they can also provide unique insights that can improve the projects for all stakeholders involved. Additionally, early-stage engagement helps reduce the likelihood of push-back and delays further down the line.
-
Consolidate funding pots
Provide clear avenues for governments, businesses and residents to access funding for green and affordable housing. At the EU level, consolidate loans and guarantees for green and affordable housing provided by EBRD and EIB into a single dedicated funding pot. The different pots available for retrofit and renovation should also be integrated into a single platform directly accessible to housing finance applicants, rather than being channelled through multilateral, national, regional or commercial banks.
-
Land ownership data
Increase transparency of real estate transactions through the creation of a publicly-available digital register of real estate ownership and transactions, as currently being explored by the OECD and the EU.
-
Human rights due diligence
Perform human rights due diligence on portfolio companies in construction and real estate, and require them to do the same down their supply chain.
-
Unionised workforce
Ensure there is strong(er) regulation in place protecting workers including their right for unionisation and collective bargaining, as well as access to remedy without retaliation. This is crucial to address the current labour shortages in the construction sector.
-
Context-specific investments
In many European countries, there is more than enough residential real estate to house everyone, without the need to build more. With 16% of homes across Europe unoccupied and countless vacant commercial buildings, just transition investments must focus on retrofits and sufficiency. In many other countries around the world, there are not enough homes for everyone, and populations keep growing. Hence, investments in those contexts require a combination of energy-efficient new builds and retrofits.
-
European Social Taxonomy
Develop the European Social Taxonomy to accompany the green taxonomy, increasing transparency and strengthening accountability with regards to the social impact of business activity. In the meantime, assess the performance of the minimum safeguards in the green taxonomy, and consider potential strengthening.
-
Embed diversity
Monitor and evaluate the diversity (gender, age, ethnicity, backgrounds) of the staff and boards of investment portfolio built environment companies.
-
Community retrofit hubs
To support citizens in their efforts to decarbonise the existing building stock, governments should partner with civil society organisations and businesses to establish community hubs which can provide guidance and expertise, particularly valuable for marginalised communities.
-
Social Urbanism
Adopt, support and invest in the Social Urbanism model of city (re)development. This model prioritises investments in social infrastructure in the most disadvantaged neighbourhoods of the city, unlocking both economic and social development potential.
-
Leverage fiscal measures to tackle housing financialisation
To reduce housing speculation, improve affordability, and prevent green gentrification and spatial inequalities, explore the possibilities for taxes on empty homes or second homes, bans to rent recently bought properties below a certain value, and regulations for the short-term rental market.
-
Alternative investment criteria
Include energy-efficiency and affordability (low price rents) as criteria for investments.
Towards systems change
While the above recommendations can deliver incremental progress, more structural, systemic changes will be needed to embed a just transition.
Emerging innovations
Explore emerging initiatives, models and strategies towards circular, regenerative and sustainable economies.