EDGE: An online platform, a green building standard and a certification system for more than 130 countries

Today’s buildings generate 19% of GHG emissions and consume 40 percent of electricity globally. By 2050, the built environment is expected to double due to high population growth and urbanization trends, particularly in emerging markets. The adoption of resource-efficient building practices offers a chance to secure emission cuts at a low cost and lock in energy and water savings for decades. Yet while green building options and know-how are available, there is a lack of awareness, experience, and asymmetry of information which hold back a market that is by its nature slow to change. The Green Buildings Market Transformation Program catalyzes a virtuous cycle of supply and demand for resource-efficient building construction and ownership, through a holistic approach including: (i) public policy advice; (ii) technical assistance and investment for developers and banks; and (iii) green building certification. EDGE (“Excellence in Design for Greater Efficiencies”), an IFC certification program that spells out the cost advantages of building green, has set a standard of 20% reduction in energy and water consumption, plus a 20% reduction in energy embedded in materials. Green code programs in Indonesia, Vietnam, and the Philippines have reported 42.7 million m2 of permits issued in line with the new green standards in green markets that are new and expanding and 1.7 million m2 of floor space has been voluntarily EDGE-certified in 13 countries. In addition to overcoming information asymmetry, voluntary certification increases the incentives for market leaders to innovate in building green and undermines push-back against minimum regulatory standards from industry laggards. The standard is verifiable and leads to demonstrated reductions in utility costs. The identification of low-cost, high-return design options through easy-to-use software that encourages architects and engineers to choose the best design practices and solutions, combined with a fast, inexpensive certification system to verify that the standard has been met. The demonstration effect of green markets is also evident from direct investment in IFC’s own green buildings portfolio, mobilization through its banking partners, and support for new product development such as green mortgages, green bonds and green construction financing. EDGE is being used to streamline eligibility procedures and the reporting needs of financial institutions as they move towards green investment portfolios. Advice to governments. The IFC is working on green policies and codes in Indonesia, Vietnam, Philippines, Colombia, Panama, Peru, Ghana and Costa Rica. The IFC’s role has included helping identify least cost and highest impact measures (often using the EDGE application for benchmarking) whilst engaging with both public and private sector stakeholders to minimize costs and maximize enforcement. IFC is also collaborating with China’s Ministry of Housing and Urban Development on policy initiatives and EDGE is being integrated into the government’s voluntary certification approach. Direct investment in IFC’s own green buildings portfolio, mobilization through its banking partners, and support for new product development such as green mortgages, green bonds and green construction financing. EDGE can be used to streamline eligibility procedures and the reporting needs of financial institutions as they move towards green investment portfolios. EDGE certification. Through a partnership with the World Green Building Council, IFC has launched a global program tailored to developing country climates and customs. The EDGE standard is 20% reduction in energy and water consumption, plus a 20% reduction in energy embedded in materials. At the heart of the system, the EDGE application both offers up the most economic opportunities for developers to explore and supports a low-cost certification process. In up to 20 target markets, IFC aims for 20% of new construction to be certified green within 7 years of local launch. In addition to overcoming information asymmetry, voluntary certification increases the incentives for market leaders to innovate in building green and undermines push-back against minimum regulatory standards from industry laggards. EDGE Certification. • IT Platform: free software for building designers to use in 130 emerging markets, in English, Spanish, Portuguese, Bahasa, Mandarin, tailored for homes, hotels, hospitals, retail, offices, schools, light manufacturing and warehousing; user manuals; training materials and videos; case studies; online certification process. • Certification services available worldwide through SGS-Thinkstep, GBCI (the LEED certifier), plus local certification providers under license in: Colombia; Costa Rica; India; South Africa; Ghana; Nigeria; Indonesia; Philippines and Vietnam. • Financial sector: eligibility standard for green bonds (Green Bond Principles); EDGE used by commercial banks in India, Turkey, South Africa and Costa Rica; EDGE recognized by MDBs such as CDC, FMO, Proparco, IADB, EBRD. • As of end 2017, 1.7 million m2 of floor space had been certified green across 107 projects. EDGE-accredited green building auditors and advisers totaled 307 and EDGE user registrations 9,181. Particular success stories include South Africa, where 7% of new build is now certified green, and Vietnam, where 5% is now certified green. Investment. IFC’s investment in green buildings now exceeds $3 billion, including amounts mobilized from third parties. IFC demonstrates the potential for financial success in the sector within rapidly urbanizing markets. This encourages positive change in investment patterns where the greatest potential impact can be made. IFC’s own investments are a strong proof of concept that can help catalyze the $16 trillion investment potential for green buildings that exists between now and 2030 Green code programs in Indonesia, Vietnam, and the Philippines have to date reported 4218 million m2 of permits issued in line with the new green standards.