#GreenRealEstate

Sustainability challenge and related SDGs

Urbanisation is one of the most important challenges of the 21st century. The UN estimates that the share of the urban population is bound to rise from 55% today to almost 70% by 2050.

Uncontrolled and hasty growth of urban agglomerations is putting SDG 11 “Sustainable Cities and Communities” in jeopardy. It will require a complete rethink of the real estate sector to create liveable cities in the face of the mounting threat from climate change.

Buildings need to be adapted to the new reality of extreme weathers and scorching heatwaves by using natural cooling systems. At the same time, they can help mitigate climate change if energy demand is reduced, thereby cutting CO2 emissions.

Possible solutions and their contribution to achieving the SDGs

white building with lots of vegetation on the balconiesThe solution for the required overhaul of the real estate sector is to bring buildings to a #GreenRealEstate standard. These standards are usually expressed in certifications that each building reaches a certain sustainability level.

Green building certifications also help to set sustainability objectives that can be achieved over time. The scope of the green building certificates may vary, but usually include measures of energy efficiency, water efficiency, materials and resource use, indoor environmental quality, emissions, operations and maintenance, accessibility, and flexibility of the buildings.

Consulting services for #GreenRealEstate are enabling developers to engage in the greening of real estate. Finally, the financing of green buildings and the securitization of their mortgages are facilitating the transition towards sustainable real estate.

Primarily related SDG Targets:  11.1, 11.3, 11.6, 11.

Investment Rationale and Growth Potential

Real estate has been recognised by governments as one of the most important levers for the transition to a sustainable future and the SDG 11 “Sustainable Cities and Communities” is their guidepost. More and more regulations are being implemented that require owners to achieve green building standards before they can resell their buildings.

More countries are pondering bans on fossil-fuel heating, requirements on insulation, or the use of solar panels that will lead to a rush for #GreenRealEstate certifications.

Subsidies for renewable energy are creating increasing incentives for homeowners to transform their buildings into veritable power plants. Given the sheer size of the challenge, the growth of #GreenRealEstate is likely to be high over the next decade.