The real estate sector is thinking big about climate action. Sustainability is a major concern for all industries, and the fact that companies all over the world have started to adopt measures to reduce their carbon footprint is clear proof of this. Real estate companies aim at transformative solutions, too, in order to handle a diverse set of challenges associated with climate change. According to Architecture 2023, 40% of global carbon dioxide emissions are generated by the real estate sector. And of these emissions, nearly 70% come from building operations. The numbers are alarming aren’t they, and the need for change has never been greater. Let us understand sustainable real estate development.
Understanding Sustainable real estate development
According to the online definitions available, Sustainable real estate includes residential and commercial real estate property that is planned, built and operated in a way that reduces environmental impact to minimum. The financial, ecological, and social components, as key components for a sustainable development. A sustainable arrangement improves social and ecological relationships with less capital misfortune.
Sustainability will certainly influence real estate’s decision-making!
Using energy efficiently
Carbon tunnel vision is all about decarbonization, carbon emission reductions, carbon credits, carbon compensation, and carbon equivalents. Achieving zero emissions seems impossible if we are to mention the surface of the new floor space that has to be built, given the expansion of the world population. Nonetheless, if real estate companies focus more on energy-efficient buildings than on financial returns, sustainability will be more reachable. This kind of building is powered by renewable energy sources (solar power, wind power, hydroelectric energy) and uses zero fossil fuels on-site.
The raise in demand for sustainable infrastructure is influenced by various factors, among which the most important is the appeal of these ‘green’ amenities to potential tenants that could push rents forward, the availability of financing vehicles like rebates and incentives, the ongoing popularity of EVs with consumers, and the declining costs of EV charging tech and solar panels. And, apart from the evident benefit of helping with decarbonization, on-site renewable solutions can pick up the utility bills, a significant consideration if we allude to the ever-growing electricity rates.
Real estate organizations are aiming to strengthen their ESG (Environmental, Social, and Governance) programs that is because proficient specialists in this field would help real estate companies support the overwhelming technical work of diminishing emissions and energy across their portfolios; reporting requirements and regulations; and incorporate ESG considerations into their business operations.
However, the journey toward net zero has already started. Real estate firms’ plans include responding to government influence, adopting newer technologies for low-carbon heating and cooling, upgrading to eco-friendlier lighting systems, and incorporating climate change risks into asset and portfolio valuations. Given the latest innovations in real estate, we have hope that this could be reachable in the near future.