It was a great privilege to appear on EG’s tech podcast this week.
Hosted by Features Editor Emily Wright, the interview gave me a chance to discuss some of my career experiences so far as well as new trends making ground in the property sector. Emily was also interested in just why sustainability as a theme had fallen a little bit off the radar of late, as the property sector seemed to be devoting more attention to proptech innovation and disruptions to the sector.
Up to now, the property industry's response to sustainability has been to cover the basics. Most companies in the sector are seeking to measure just how much energy their portfolios are using, focusing on improving their data monitoring practices and building management systems. However, attitudes across the sector are changing.
A major theme at Longevity is the interconnectedness of sustainability with other sectors and even society as a whole. For example, many proptech solutions have an impact on the overall performance of buildings. They address more conventional performance issues like energy efficiency.
LED lighting, for example, has been around for a while, and the perception is that it is very expensive. This is a misperception as costs have dropped significantly, LED solutions are very affordable, and can lead to cost reductions of up to 70% on conventional methods of lighting.
More recently, proptech innovation also contribute to improving the wellbeing of building occupants. Our view at Longevity is that greater familiarity with new technology will push developers to start thinking about these solutions more.
Indeed, sustainability itself carries a wider definition that encompasses social issues, such as providing equal opportunities, ensuring diversity, and preventing the occurrence of bribery or child labour. There are wider socio-political trends at play here, as demonstrated by Indian Prime Minister Narenda Modi’s speech at the Davos Summit in January, in which he highlighted the global impact of climate change as the #1 issue to affect global growth.
We obviously share his concerns – temperatures around the world are forecasted to rise by two degrees by 2050, which would lead to a 0.5-meter increase in sea levels leaving many countries under water. The pressure to find solutions to climate change is more urgent than ever, and that is becoming ever more evident in the property sector as well.
An example of a property company taking action to mitigate climate change is Hammerson. They are now covering all their car parks with carport photovoltaic panels with the goal of achieving a net positive target for these assets by 2030. Companies like Hammerson have grasped both the wider social implications of the changes.
Read more about carports and PV in our blog here.
In the interview, Emily asked me what my biggest frustration with the property sector was. My response was that unfortunately some property companies still do the bare minimum. In my experience, however, a growing majority now recognise the social and business benefits of a long-term sustainable approach. Carbon emissions from buildings account for 36% of the global total, so there is a chance for our sector to have a significant impact on an issue that affects us all. If we could increase the speed of integration and uptake of sustainable technologies in our sector, then we could make large strides towards the reduction of those emissions.
Changes in the way that the large funds approach sustainability have been noticeable in the last 10 years. If you had even mentioned PV solutions 10 years ago, there would have been a complete lack of knowledge of the issue. Luckily, that is no longer the case. Many of the funds have appointed heads of sustainability, who have set targets and required asset managers to take part in the Global Real Estate Sustainability Benchmark (GRESB). We have clearly made progress, but we need to do more.
In summary, the sector-wide attitudes have changed, and will continue to do so as technology becomes more widely available, costs come down, and sustainability becomes a strategic driver for growth.