Advancing sustainable growth in the United States and China

Green Insurance to Scale Green Buildings


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Dr. Kevin Mo, Managing Director of the Paulson Institute, delivered a speech, Green Insurance to Scale Green Buildings, in the Shenzhen Session of the 2017 World Sustainable Built Environment Conference, which was recently held in Hong Kong. Mo presented ideas about how to drive the China’s green building market by implementing an insurance system that provides guarantees around buildings’ energy performance—thereby making investment in green buildings more attractive.

He pointed out a number of issues that have hampered the green buildings and energy efficiency market. Among them, he said that conflict of interest when certification bodies provide both consulting services and certifications may drive developers to pay for certification and result in less credibility. In addition, Mo also said the fact that official subsidies still have not been issued—though they are listed as policy in the national green buildings legislation—is also holding back the green building market. Only around 5% of new buildings in China are certified green each year, he said, and only 10% of those then earn green certification for their operation, indicating that only a very limited number of buildings have been certified for their actual energy saving performance.

Mo stressed that both improved green building performance—not just on blueprints—and transparent reporting on building performance will be vital to make breakthrough progress in green building development. He shared the Paulson Institute’s policy vision on exploring the green performance guarantee system by leveraging insurance funds and independent third-party evaluation entities. Such a market-oriented evaluation system would aim to provide credit enhancement to star-level green buildings and help attract private capital to green buildings investment. Currently the Paulson Institute is working with partners including PICC, China’s largest insurance company, aiming to promote buildings with green functions in China and to create a replicable business model.