‘We need to do something about energy consumption. But what? And how?’

COMMENT We are at the start of a sci-fi horror movie when it comes to the future of our planet. Buildings account for 36% of the global energy consumption and 39% of CO2 emissions. These stats are only heading upwards. We need to do something. But what? And, even more crucially, how? There are lots of emerging tech solutions that can help, but how do you assess what is right for your business? It’s time to share ideas and adopt solutions so that leaders in the real estate community can start to have a meaningful impact and build out actionable sustainability plans. This also needs to be undertaken with a greater sense of urgency as the sector is a primary target for new regulation. Without retrofitting activities, assets are at risk of becoming stranded based on existing benchmarks and the 2050 Paris Agreement targets. If sustainability goals are not rapidly and seriously addressed, costs will rise and challenges will emerge as tenants and investor expectations increase. Making a contribution I moved from Canada to Europe in January 2021 to join 2150, a new sustainable urban tech venture capital fund. The momentum of start-ups moving into this sector gives me hope that we can actually hit the 2050 targets. At our fund we think about technology across what we call the “urban stack”. Cities are complex and we tend to view them in silos such as buildings, roads or utilities. But over the past few years we have seen how interconnected they all are – from the infrastructures that enable the city by powering and connecting it; to the methods and materials we use to build cities; how we operate these urban environments and, ultimately, how we experience life and work as urban dwellers. The real estate sector can contribute greatly to helping improve the resilience of this urban stack. Weather, volatile markets and health crises affect it, so how can we utilise technology to maintain stability as future issues arise? Where to start Here are a few concepts for consideration as you build more actionable plans for your properties: n Green premiums: Sustainable solutions are often cost competitive if not less expensive than they have been historically. Additionally, with emerging regulations and policies, new costs are being added to the calculations, making them more attractive. It’s important to look beyond switching solutions out 1:1, as new technologies are continuing to rapidly evolve on cost and impact scope. n Higher retrofit rates: Some 85% of the buildings we have now will still be operating in 2050. How can we reduce the operational emissions from these buildings? There are a number of technologies that can bring down energy consumption and improve efficiency. HVAC and ventilation technologies can reduce air leakage and costs, new heating and cooling solutions help electrify buildings while reducing emissions, and smart windows (new and aftermarket) optimise energy usage. n Carbon accounting: As a recovering accountant, there are a few principles that will never leave me. The old adage that you can’t manage what you can’t measure holds true. In every company we all need to implement a sustainability strategy, and one that also provides the data we need to make informed decisions. Understanding industry benchmarks, disclosure requirements and future regulation can be complex. There are a number of tech solutions that can help you remain compliant with evolving regulations and policies and provide the insights to achieve your emission reduction targets. n Collaboration: Developing an actionable sustainability strategy shouldn’t be something you do in isolation. Work with your customers, suppliers and investors to see how you can collaborate. ESG strategies are becoming an important driver for investor and tenant decision-making. Finding ways to solve these problems together will ensure the entire ecosystem is engaged to support the development of resilient urban environments, helping improve results and reduce costs. Leases can be structured so that tenants actively reduce waste, optimise energy usage and support the installation of renewable energy sources. Investors can be engaged around new building methods and materials, such as modular construction using cross-laminated timber or lower emission concrete.  Momentum for VC investment in urban tech solutions is strong, having grown from €5bn (£4.2bn) to €23bn in the past five years. Investment in climate and sustainability is up by 210% on 2020. Not only are more people jumping in and joining start-ups, but big corporates are now investing and supporting their growth. This sector is shaping up to ensure solutions for real estate are well-funded, robust and ready to scale. Nicole LeBlanc is a partner at 2150