Real Estate’s Role in Generation Restoration
June 5, 2024 | Faisal Butt
June 5 is World Environment Day, and this year’s theme, #GenerationRestoration, calls for us to make significant efforts to restore our planet. This global initiative should be particularly relevant to the real estate industry, which must confront the pressing issue of climate change.
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Investors are making net-zero commitments, regulators are developing reporting standards, governments are passing laws targeting emissions, and tenants are demanding sustainable buildings. At the same time, the increasing impacts of climate change, such as storms and floods, are negatively affecting property valuations, underscoring the urgent need for a shift towards sustainability.
When I launched Pi Labs in 2014, real estate was already facing significant challenges. The industry was analogue, outdated, and had a significant sustainability problem, yet it stood on the brink of a technological revolution. I knew then that the next ten years of real estate needed to look very different to the last.
At Pi Labs, our mission is to back the founders who are creating a digital and sustainable built world. We invest in visionaries who are building sustainable and healthy cities of the future, making buildings and infrastructure efficient, transforming the future of work, retail & living and driving the sustainability revolution in construction.
Real estate, the world’s largest and fastest-growing asset class, is one of the least digitalised and most polluting. The World Bank estimates that the industry must cut emissions by up to 36% by 2030 to meet the targets set in the Paris Agreement, underscoring its crucial role in combating climate change. This transformation in real estate hinges on technology and innovation, driving the industry towards a more sustainable future.
In the spirit of World Environment Day, it’s important to recognise that the challenges faced by the sector are not insurmountable, and early signs indicate that the real estate sector is moving in the right direction.
The evolution of real estate is driven by several factors: the adoption of technology, government initiatives to improve sustainability, and increasing consumer demand for green buildings. The push for sustainability goes beyond just achieving net-zero buildings. More and more investment is going into technology and data-backed Proptech solutions that focus on sustainability and healthy buildings. And in turn, this tech is quickly becoming essential in the construction, real estate, and urban development industries worldwide.
Our portfolio reflects our commitment to tech innovation and sustainability. Innovations like Qflow, a 3D AI platform, reduce delays, lower costs, and cut carbon emissions on construction projects. Tangible automates supplier sustainability due diligence, ensuring responsible sourcing practices. Demand Logic offers a building management system and data analytics solution that saves energy, improves equipment maintenance, and enhances occupant comfort. These technologies are crucial in addressing climate change and promoting sustainability in construction.
Real estate firms are actively deploying ‘green’ technologies, increasing their R&D budgets, and leveraging technology to create a strategic advantage for early adopters. This gives us confidence that the trajectory for the next decade will be positive as the real estate industry — one of the world’s most valuable — undergoes a significant digital transformation.
World Environment Day serves as a crucial moment for traditionalists to pause and reflect on the actions they need to take to adapt their businesses to the inevitable changes on the horizon. By embracing sustainability and innovation, they can contribute and build a greener, more resilient future, fit for generations to come.
