As we prepare for the annual Sustainable Finance Live conference on October 10, 2023, at Events@No6 in London, Finextra is engaging with industry leaders participating in insightful panel discussions during the event.
Jannika Aalto, Program Manager for Sustainable Circular Cities and the Built Environment at the Green Digital Finance Alliance, will contribute her expertise to a session titled, "As cities transform, what is the role of behavioral science to inform the change and ensure a ‘just transition’?"
In line with one of the core themes of the Sustainable Finance Live 2023 conference, Aalto underscored the importance of understanding the structure and implementation of sustainable urban environments in today’s climate. "The essence of our work is encapsulated in our title: green, digital, and finance. My primary focus is on the built environment and urban spaces. When considering sustainability, I envision tangible elements: walls, roofs, windows—how we regulate temperature within our homes—and the physical transformations required for progress," Aalto stated.
She emphasized that the smart application of data and artificial intelligence can enhance decision-making in sustainable urban development by mapping multifaceted datasets related to socioeconomics, environmental factors, and building conditions. This mapping can identify potential risks such as flooding and heating issues, fostering a clearer understanding of economic disparities while paving the way for equitable climate action and a just transition.
"It’s crucial that the benefits and responsibilities of urban transformation are distributed evenly across communities, not just confined to affluent neighborhoods or certain demographics," Aalto remarked. "The capabilities of data analytics and AI provide scalability and speed that manual efforts cannot achieve. For instance, employing remote sensing technology coupled with advanced modeling allows for the pre-screening of homes needing energy efficiency renovations, which helps concentrate resources on the most at-risk properties. It’s surprising how much of this is still conducted through physical inspections and paperwork."
Aalto noted that while the Internet of Things (IoT) and AI can enhance sustainable reporting processes, it is essential to recognize the inherent limitations and biases in data collection.
Regarding policy developments, Aalto indicated that forthcoming EU regulations will catalyze action toward net-zero objectives that companies have established, with increased emphasis on Scope 3 emissions.
"The anticipated update to the Energy Performance of Buildings Directive and the expansion of carbon markets to encompass buildings represent both challenges and opportunities for the sector. The investment required to decarbonize the EU’s building stock through renovation is estimated at €3.5 trillion by 2030, yet traditional financing models often fail to meet the diverse needs of various building owners, limiting access to affordable and flexible capital," she explained.
Aalto also expressed concern that rising energy prices and inflation are deterring customers from pursuing climate-friendly renovations, calling for enhanced collaboration among financial institutions, their clients, and mortgage lenders to promote cleaner energy solutions on a broader scale.
Looking ahead, Aalto highlighted a significant shift within the sustainable finance sector towards initiatives addressing biodiversity loss and creative approaches to growth.
When asked about her expectations for this year’s Sustainable Finance Live, Aalto shared her enthusiasm: "I’m particularly pleased to see the agenda emphasize ‘just transition.’ I look forward to exchanging ideas on how to integrate social equity with climate and nature conservation, and envisioning future implications for urban development!"
To learn more and register for Finextra’s annual Sustainable Finance Live conference, where industry experts will gather to discuss strategies for creating sustainable urban environments, please visit Sustainable Finance Live for more information.