Acting on The Business Case for Decarbonization
PropTech Connect
Connecting Global Real Estate Executives, Entrepreneurs, & Investors.
On Wednesday, 29th of May, George Konstantakopoulos , Head of Innovation and Ventures at CERT - What's next, starts here. , Robin Rivaton , CEO at Stonal , and Laurence Desmazières , Managing Partner of ICAWOOD at ICAMAP , joined us in this session about decarbonizing real estate.
It was a pleasure to witness such an engaged audience and to gain insights from our fantastic speakers on this ever-important topic.
In case you missed it, here are some key quotes from this week's webinar.
The session recording can be accessed through the link here:
Webinar Highlights
Robin - “The asset managers who can achieve net zero by 2050 are the ones with large lands, agricultural lands or forests. If you only have built buildings, it's just not possible. But this is not a big deal. I think the ambition is a good thing. Now we need to measure but we don't have a standard to properly measure existing buildings. For new buildings, we do, but we cannot use consultants on existing stock because it would cost hundreds of millions. We can't waste this money on making assessments. We want to use it to make real changes to save energy or to improve insulation.”
“We have a major issue - we focus only on energy consumption but we should care about carbon emissions. Consumption will never kill this planet. But if we continue to emit greenhouse gases, it will have a dramatic impact on the lives of billions. We desperately need initiative from regulators because in the end it will come from them - we need to know how to measure it properly. We will then develop the tools to make it automated and scalable.“
George - “There are massive technological advancements that are taking place currently. We are creating concrete that is almost emitting zero emissions, or is able to even actually take emissions from the atmosphere. And we're 25 years away from the goal. If you think in the 2000s, we didn't have smartphones. If, back then, you were discussing the idea that everyone will be connected, be able to call, and have a PC in their pocket, people would say ‘maybe yes, maybe not’.”
“I think net zero is achievable. There is a lot of work to take place, especially in real estate. 40% of annual CO2 emissions are linked to the real estate industry and roughly 40% of the world's total waste is generated from construction and demolition. These are massive, massive numbers. So definitely it's a data game.”
Laurence - “I think that what we lack today, and this is actually very much the case at a European level, is first the data and the question as to ‘where are we now’, even before knowing where we want to go - how can you assess your current carbon footprint and then from that draw your trajectory. And I think it will be key to achieve net zero by 2050. When we talk about net zero, we need to all bear in mind the ‘net’ in the net zero. It doesn't mean that you don't emit at all by 2050, but you need to sufficiently decrease your carbon emissions so that the residual parts can be compensated. And I think this compensation is a key second step. But today, the first step is really to reduce the carbon footprint of the real estate industry, both on construction, on operations and also on end of life.”
Robin - “80% of GHG emissions were related to 57 companies. Yes, they produce coal, oil, gas, but it's everyone. Who uses oil in their car, who uses gas to heat their home? So it's not by targeting the 57 companies, that we will tackle the issue. We can try to put pressure on some of these companies but, at the end of the day, it's those who live in buildings, who want to have their heating at 21C and not at 19. It's all of us. It's very difficult to change and to amend our individual behaviours but now we have the technologies to do that - it's good news.”?
“Our issue is the money we have is limited and it will never be the one trillion required to completely decarbonise. It will be limited and we need to focus and budget to maximise the gains now.”
George - “We are discussing something that is so complex, so multi-layered and with multi-stakeholders. [...] It's something that we need to work all together as it needs both the big and the small players.”
“You need data to understand where you are at and how much you're consuming, and you want to see how smart you can be around that. [...]? There are technologies which can then help you once you have the data. But back to the big picture, I think the legal and regulatory framework is critical to move forward. And I feel there are countries that are more ahead than others. We need to work more together to co-design these policies and the industry will follow suit.”
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Laurence - ”I think there is a question on how you can value the CAPEX that you inject to decarbonize - today, it's not necessarily entirely clear. We've been talking about data for decades and things haven't necessarily changed, so we need to move on, we need to act.”
“Giving the tools to tenants to really understand the carbon footprint of the building that they might let and see what's, as the end consumer, going to direct your choice on a more decarbonized asset than another. [...] And today, as a tenant you don't necessarily have, on a European level, a carbon tag on the buildings that you are going to let. So you can't really make an enlightened choice.”
Robin - “AI could help us to prioritize the buildings. Again, we will not be able to retrofit all the buildings on earth, so we need to focus our efforts. And very simple models can just discriminate the buildings and indicate where the most efficient CapEx, retrofitting or even demolition can be done.”
“Everything is on the table. We just need to focus our efforts and not try to do everything in a very disorganized way.”
George - “We need bold decisions to achieve the target. There are new builds and then there is the existing stock - we need to investigate the existing stock and make decisions that may not seem simple or obvious. For example, demolishing assets that are not working, and that would require a massive investment to make them work.”
“More and more people are willing to do the right thing if you allow them to do so, so we need to implement the right innovations in building design to allow people to, for instance, recycle. We identified that people are willing to pay up to 20% more to live in a property that will have higher sustainability standards.”
Laurence - “Decarbonization, and this big threat that we're facing, bears amazing opportunities in terms of innovation. And the tools are there. There are technologies, there is data, there is software, etc. - we have all the ingredients to work on decarbonizing. [...] It means that there are lots of new sectors within the real estate space, whether it's construction materials, engineering, asset management, etc., and it needs to completely reshuffle the way real estate has been performing business.”
Robin - “We really need to focus and take decisive actions on the most rubbish buildings. And if we don't, we will just waste our money and our money is rare.”
George - “We looked at which assets we have full control over, that we can actually make decisions and change things the next day, and we initiated the process where we gathered data on the carbon footprint. Practically, I would try to start where you have the most influence.”
“If you start pitching at a higher price without being able to provide the data, you may actually lose business because everyone is just looking at the bottom line. So we've gathered the data to justify the increased investment amount, the increased cost of the construction above the market standards, and the increased average pricing.”
Laurence - “Companies and all the stakeholders need to jump on the bandwagon. There's no point thinking through a whole strategy, going into nitty-gritty detail, debating with hundreds of people whether you should take into account this parameter or that parameter. I think we're spending way too much time discussing what needs to be done, and not enough time just testing and learning. [...] Start acting even if it's not perfect, even if the data is not perfect, etc. It's the best way to start.”
Leaders from across the industry join the PropTech Connect webinars on a regular basis to learn about the winning strategies to stay ahead of the curve. Come back next week, Wednesday 5th June, for our next webinar, 'How To Maximise Real Estate Finance & Investment Returns'.