Our free access period ends on the 18th April 2022. To find out about membership to Sustain RE, please contact us.

Urban Land Institute (ULI) Europe has launched a second edition of its PropTech Innovation Challenge (PIC), looking for entries which meet the challenge of substantially reducing carbon emissions. 

Last year’s competition was the first and saw the overall prize go to EFFIC, a Spanish specialist in residential refurbishments which improve energy efficiency. There were also regional winners from France, Germany, Nordics, Iberia, Switzerland, and the United Kingdom.

This year’s challenge is focused specifically on the reduction of Scope 3 emissions for managers and investors. Solutions must reflect a genuine shift away from business-as-usual practices and be tangible and scalable in a regional context.

Innovations must tackle at least one of the use cases proposed by the ULI community, which currently include retrofitting at scale, operational circularity, gamification to strengthen stakeholder collaboration, ESG platforms integration, and sustainable materials.

Lisette van Doorn, CEO of ULI Europe said: “We believe the PIC is an important initiative to build stronger connections between traditional real estate and proptech and encourage more industry wide innovation.”

More detail on the competition can be found here.

GRESB has launched a new suite of tools for managers and investors.

The new REAL Solutions product suite will provide actionable insights into the sustainability, resilience and efficiency of assets, the real assets ESG benchmarking firm said.

Roxana Isaiu, Chief Product Officer at GRESB said: “REAL Solutions marks a significant milestone for GRESB. It was developed in response to the evolving needs of institutional investors and managers seeking deeper insights into the sustainability of individual assets. This represents a decade-long commitment to understanding, measuring and benchmarking the real-world performance of investor-owned assets worldwide.”

The new suite of solutions is powered by GRESB’s annual real estate assessment, which measures factors such strategy, leadership, policies and processes, risk management, performance at the asset and portfolio level, and development factors, including its efforts to address ESG issues during design, construction, and renovation.

The first solution in the new suite, to be released in April, is REAL Benchmarks, an interactive dashboard for real estate fund managers, which allows them to analyse the contribution of individual assets to portfolio performance, including insights into energy use and emissions. 

The solution will enable users to compare asset performance against asset-specific GRESB benchmarks and against industry pathways, and to identify portfolio laggards. User will also be able to visualize energy and GHG performance and to filter portfolios by location, property type, and year.

The next product to be launched will be REAL Statistics, a global dataset covering energy and greenhouse gas intensity values and trends for financial institutions. When launched, REAL Statistics will provide asset-level data points organised into 11,000 combinations of property type, electricity grid, location and climate zones. 

AI could halve the annual carbon footprint of the built environment by 2030, new research from Pi Labs claims.

The proptech’s venture capital firm’s Sustainably Intelligent: AI for a Greener Built World report, launched today, delves into the profound impact artificial intelligence (AI) is poised to have on curbing carbon emissions within the real estate industry and the broader built environment.

The Pi Labs research team, headed by Luke Graham, quantified AI's carbon reduction potential, identifying that widespread adoption of just four AI use cases could avert an estimated 5.81 to 6.46 gigatonnes of greenhouse gas emissions annually by 2030. This figure, equivalent to offsetting the entire annual carbon footprint of the United States, underscores the transformative power of AI in addressing climate challenges.

Examining 68 sustainability-oriented AI use cases across the real estate value chain, Pi Labs spotlighted key applications, including generative design, construction rework prevention, energy waste reduction, and demolition waste redirection. These use cases leverage AI to optimize resource utilization, enhance construction efficiency, and minimize environmental impact.

Pi Labs' report highlights innovative solutions already in practice, such as ETH Zurich's use of 3D printing to slash construction material inputs and start-ups like Contilio employing LiDAR and 3D AI to mitigate construction rework. Similarly, companies like Demand Logic harness data analytics to curtail energy waste in buildings, while Sorted.io deploys computer vision to streamline waste sorting processes.

Graham said: "The findings of our report indicate that AI is poised to have a transformative impact on carbon reductions. According to venture funding data from 2023, there is already significant investor interest in AI driven green solutions aimed at the built environment, however there is the potential to drive this figure up yet further with a clearer understanding of the positive climate impact and growth potential of these technologies."

The report also acknowledges potential drawbacks, including increased energy consumption resulting from widespread AI adoption. The power requirements of generative AI could generate nearly 200,000 tonnes of CO2 a year, if it became part of the toolkit for real estate professionals worldwide.

Purpose-built student accommodation (PBSA) and rental residential firm Nido has formed a strategic partnership with ESG technology firm Utopi to reduce the carbon footprint of its assets across its Europe.

Nido will use Utopi's sensors and its data insights platform to monitor the carbon impact of its assets, starting with PBSA assets in Ireland and Denmark (pictured above).

By effectively measuring energy consumption within each building, Utopi estimates a potential reduction in energy use and carbon impact by up to 20% over a three-year period.

Initial results found two assets in the pilot scheme were running at average temperatures above 20°C, which were reduced to below this level by engaging with residents to drive more efficient use of energy.

Darren Gardner, CEO of Nido, said: “We are conscious of our environmental impact as asset operators and helping our residents reduce their carbon footprint is a priority. Our partnership with Utopi recognises that sustainability is linked to residents’ attitudes towards energy consumption and, following measurement and target-setting, we now have the consistent, real-time data we need to journey towards significant reductions in energy use and carbon emissions.”

Dutch proptech platforms Edge Next and Sense by Physee have merged to create Next Sense, a platform for reducing wasted energy in the office sector.

The new platform has also secured new capital from sustainable officer developer Edge, parent of Edge Next and Physee backers Timeless Investments, SHAPE Capital, and Job Dura.

Next Sense's integrated AI platform (dashboard pictured above) provides detailed energy and space usage analysis to comply with stringent corporate sustainability reporting guidelines. Additionally, the platform employs building physics algorithms to limit energy consumption to 70kWh per sq m, aligning with the requirements of the Paris Agreement. Only 3% of European offices currently meet this standard.

Coen van Oostrom, founder and CEO at Edge, said: ““The global market urgently requires a unified and standardised approach to reduce the carbon footprint of our buildings. Next Sense is ready to fulfil this critical need. I’m confident that all stakeholders engaged with Edge will eagerly welcome the next-generation software platform designed to support them in tackling this huge challenge of decarbonisation confronting us all."

Proptech and sustainability tech continue to attract capital, according to KPMG research.

The consulting firm’s Pulse of Fintech report covering the second half of 2023 revealed total fintech investment reached $113.7 billion, with a total funding deal count of 4,547. However, these figures represent the lowest year-total investment rates since 2017, signalling a notable decline in investor confidence.

However, amidst this overall downturn, certain sectors demonstrated resilience and growth. Proptech investment surged to a record high of $13.4 billion in 2023, while investment in ESG-focused fintech rose to $2.3 billion, from $1.2 billion in 2022.

 The research did not identify how much capital was raised for proptech ventures seeking to boost sustainability, however this has been a focus for many proptech companies worldwide.

Evora Global has announced the acquisition of Metry, a European platform for environmental data collection, for an undisclosed sum. 

Real estate sustainability consultancy Evora said the acquisition will “establish new standards in data excellence and technological innovation” by improving data automation and quality for its SIERA analytics and content platform.

“We are thrilled to welcome Metry into the Evora family,” said CEO Pradeep Menon. “This strategic acquisition marks a significant milestone in our journey to empower real asset investors with the tools and data needed to drive sustainable practices in the built environment.”

Magnus Hornef, Metry CEO and co-founder, who will be joining Evora’s executive committee as chief data officer, said: “We are enabling each other to make a bigger impact faster and I’m really excited about expanding our data collection capabilities to all of Evora’s customers. It is a giant leap towards connecting every building with reliable data and automated collection.”

As we head towards 2030, the world is under pressure to deliver a 45% reduction in emissions if it is to stay on track for the Paris Agreement target of keeping temperature rises this century to 1.5°. This means more pressure on real estate to decarbonise.

What can we expect to see in the year ahead and what should the industry be doing? Below are the thoughts of a number of real estate's leading sustainability professionals. We will keep adding to this story as Sustain slows down over the Christmas and New Year holidays, so keep checking in.

If you would like to submit your views on the year ahead, contact news@sustain-re.com.

Neil Granger, senior director, TFT

I’d like to think 2024 will be the year when we make some significant advances towards achieving Net Zero carbon. I am cautiously optimistic about the impact of the Energy Efficiency Directive (EED).  Introduced earlier in 2023, this has established the principle of a legally binding target to reduce the EU’s final energy consumption by 11.7% by 2030 (compared with 2020 figures).  

Many EU states will be adopting this legislation during 2024 and it should begin to result in a more concerted upgrade of existing building stock, much of which is sub-standard and requires high levels of capex to bring it up to the levels set out in the EED. Nonetheless, change on this scale requires significant time, resources and commitment from owners of assets.  Globally, less than half of investors are actively seeking to achieve Net Zero Carbon across their assets.  

Hanna Uusitalo, vice president environment and sustainability at KONE Corporation 

Around 80% of the buildings we have today will still exist in 2050. This means that retrofitting or repurposing buildings to make them more energy efficient and liveable is crucial for addressing the climate emergency.A particular focus going forward is pushing towards circularity.

Embedded carbon in the built environment is a major issue and circular economy principles are quickly developing to reduce the consumption of the planet’s resources and materials by sharing, recycling, reusing and repurposing materials. There is an urgent need for solutions that are low or no carbon and upgradable, and which achieve both sustainability and business goals.

Faced with the climate emergency and resource shortages, there is a global push for finding ways to continually address these issues and bring about permanent change.

Lara, Young, group head of ESG, Cromwell Property Group

 ESG will continue to be a top priority for commercial real estate investors and will receive even more attention in 2024. Such considerations are increasingly being factored into investment processes and we believe that this is a thematic process which will only escalate in 2024. Investors which neglect to adapt inefficient assets, choosing to redevelop traditionally rather than adaptively reusing the existing asset – or who build on undeveloped land rather than previously developed land – will find it challenging to attract occupiers, capital, funding and buyers.

We’re also expecting to see sustainable finance become the industry standard as European banks, as well as other financial institutions, evolve from offering discounts on ESG-linked loans to sustainable financing becoming the industry norm.

Eri Mitsostergiou, director, Savills world research

In 2024, sustainable building practices will take centre stage, reflecting COP28's emphasis on decarbonization and refurbishment over new development, as exemplified by the Buildings Breakthrough’s global push for near-zero emission and resilient buildings by 2030. 

The decarbonisation of the industry will also be led by new regulations in some jurisdictions. This is going to lead to more green certifications such as LEED and BREEAM. In this context, the use of sustainable and low-emitting building materials and sustainably harvested wood will become increasingly common and will help to reduce environmental impact.

Social value, which is in essence about the relationship a building or development has with the local community, will be another driving force, with real estate companies focusing on affordable housing development, community engagement, and diversity and inclusion programs.

The integration of renewable energy sources like solar and wind power will also become standard as they become increasingly cost-effective. Alongside that, we expect investments in sustainable real estate and energy infrastructure to gain further momentum. Real estate companies will focus on ‘greening’ their portfolios and channel resources into solar panels, wind turbines, and other sustainable practices.

Lisette van Doorn ULI Europe CEO

COP28 has held a mirror to progress on efforts to decarbonise the built environment, where real estate is responsible for a massive 37% of global carbon emissions. There were welcome pledges announced to accelerate progress such as the Buildings Breakthrough commitment by 27 countries to make near-zero emissions and climate-resilient buildings the norm by 2030, but there was also a clear sense that the overall pace of action from the built environment isn’t rapid enough, with many hurdles impeding the progress we need. 

ULI’s latest report shows that a lack of alignment between property owners and occupiers is not only hindering progress on decarbonisation, but it also has the potential to increase total emissions over the medium to long-term. Yet at the heart of the solution is the need for a stronger partnership and closer collaboration between occupiers and owners, which itself echoes an imperative of the ULI’s C Change programme, in that to drive transformation we all must unite in our urgent response.

Our recent C Change Survey did reveal some cause for optimism, showing that decarbonisation is rising up the agenda among Europe’s real estate investors and managers, with 89% of those surveyed factoring in transition risks in investment decision making, indicating these risks are being taken seriously. In addition, carbon pricing, a prominent focus of COP28, may provide one of the biggest opportunities for the industry to make the greatest impact on carbon emissions.

Laura Jockers, global head of ESG for M&G Real Estate

Over the next 12 months, real estate investors will continue to look at new ways to decrease carbon emissions across their portfolios whilst ensuring investments remain income producing.

Delivering meaningful action to reduce emissions requires reliable data and methodologies. However, obtaining the data needed to make these informed decisions remains very challenging and time-consuming, particularly for reducing emissions associated with development activity and tenanted space. To help tackle this challenge, we want to see more collaboration between real estate investors, developers, and occupiers including sharing energy data so they can work together to improve the energy performance of their buildings.

Meanwhile, the concept of net zero continues to be both simple and deeply complex. There is still no universally accepted standard for what qualifies as a net zero carbon building, and at the same time, the number of regulatory sustainability requirements needed across different global markets continues to rise. Over the upcoming 12 months we hope there will be more alignment between the various ESG regulatory bodies so that we can create universal standards and avoid duplicative reporting.

Andrew Clarke, vice president, UK office development, Trammell Crow Holdings

Commercial buildings, whether they are new, repurposed or refurbished, need to become better linked to the towns and cities in which they are located. The real estate sector has made great strides in terms of placemaking, creating active buildings that promote community, attract occupiers and add vibrancy, but there is another untapped opportunity and that is to connect to the very fabric of a city. More and more countries are investing in infrastructure, particularly in support of sustainability and meeting net zero targets.

Trammell Crow believes more landlords and developers need to and will embrace the use of clean infrastructure and energy to power buildings as part of a holistic performance perspective. That might be solar PV on the roof – and the extension of permitted development rights in the UK to help facilitate this is very welcome.  But it might also be connecting to existing infrastructure – in this regard innovation is key to making the greatest impact.

We hope to see a new movement spear-headed by investors, developers and landlords to set new standards, which is not only commercially astute because it will help assets retain value and attract occupiers, but also contributes positively to society and promotes the health and wellbeing of our planet and those who rely on it. It will mark a great evolution of our real estate industry.

Vicky Cotton, ESG director at Workman LLP

As we approach 2024, proptech is soaring up the priority list for many real estate businesses seeking to take action to achieve more sustainable operations. Smart technology presents the definitive means of shifting from a ‘business as usual’ approach to managing commercial property, to educated and considered operational improvement or ‘managing for performance’ – the exact focus of the Better Buildings Partnership framework I was proud to help develop and launch this month. This sort of industry collaboration is coming into sharper focus as we drill into the more challenging decarbonisation processes that falls under Scope 3.

2024 should see more meaningful progress in this area, specifically concerning the emergence of technology that can fast-track data sourcing, since a critical element of ESG progress centres on having the intelligence and detail to make and measure the impact of changes. We are finally seeing progress in the installation of smart meters within tenants’ demises too; further evidence of a more collective cross-sector decarbonisation drive.

ESG is now a firm priority across the investment community. Today we regularly see investors superseding regulatory requirements and government policy in pursuit of their own - more demanding - net zero investment criteria. As this becomes more engrained, my hope is that the focus will go beyond point-scoring, and further towards performance improvement at every level – this is the truest form of collaboration after all.

Andrew Smith, president of SIOR Europe and partner at Carter Jonas 

Across Europe, we have seen a fluctuating office and industrial market, however the one constant has been the growing importance of ESG and sustainability, driven by investors and occupiers alike. That said, fuelled by a difficult market, rising inflation and interest rates, there has been too much assertion in the property industry that positive change on climate matters is cost-prohibitive.

As constructions costs stabilise next year, we hope there will no longer be a good excuse to avoid setting high sustainability standards and leading by example. The latest UKGBC report highlighted that insufficient progress now means we need to act twice as fast to meet net zero targets.

There are some key drivers here across Europe: the growth in regulation across Europe; the need to hire and retain talent, as well as encourage productivity, aided by buildings that improve the health and wellbeing of employees; rising energy costs and both investors and occupiers being prepared to pay large premiums for properties with green credentials.

Penny McCallum, head of sustainability at BW: Workplace Experts

It’s a fact that 80% of all buildings that need to be constructed by 2050 have already been built. Therefore, the focus for investment is shifting towards existing stock which needs enhancement to not only meet net zero targets, but also to attract occupiers, who are becoming increasingly stringent about the minimum sustainability credentials that they will accept from their premises.  

This means a significant rise in retrofit and refurbishment at a time when resources are strained and construction costs high, albeit stabilising. We need a sharper shift in focus to a whole life approach, which encompasses design but also operational performance.

While there is more awareness about operational performance, more guidance and standards are needed. We not only need standards but also transparent reporting from landlords and occupiers on performance. With data comes knowledge and with collaboration comes improvement. 

James Nelmes, director, Bennetts Associates

Against the backdrop of COP28 it’s easy to despair at the failure of governments and fossil fuel providers’ ability, or willingness, to progress beyond business as usual. However, mainstream media and public opinion around the world are increasingly recognising the shortcomings of these organisations in stark contrast to what the world requires and expects of its leaders. In the property industry we have talked for several years about ‘stranded assets’ and, similarly, countries should be wise to the risk of becoming ‘stranded economies’. 

We are in a time of rapid change and expect that 2024 will continue and accelerate that change. Yes, governments and big business need to demonstrate leadership, but the change is happening anyway. It has to. In the face of change, and driven by occupier expectations, the investors and developers who are clear, aligned and genuine in their focus to reduce carbon consumption quickly will deliver resilience and returns. 

This will mean ongoing growth in both sustainable refurbishment and the adoption of biogenic construction materials, such as mass timber, at scale. The approach to – and priority placed upon – biogenic materials varies internationally. For instance, in India timber is almost impossible to adopt as a result of regulations designed to protect natural resources. Here, our focus is on reducing operational emissions through climate-responsive design, which is especially important given how carbon intensive the country’s grid is.

An historic French office building has been retrofitted with a semiconductor-based heating, ventilation and air-conditioning (HVAC) system which will reduce both emissions and costs, the manufacturers claim.

Helsinki-based indoor air solutions company Halton Group and North Carolina-based semiconductor-based cooling solutions firm Phononic jointly developed the system, which has been fitted at Pierre Charron, a 102,257 sq ft office and retail building in Paris built in 1877.

The partners said this was the first installation of a semiconductor-based HVAC system which heats and cools an entire property. “We have an entirely new HVAC technology which helps property owners meet increasingly stringent climate goals,” said Anu Saxén, managing director at Halton.

The new technology will reduce energy use and carbon emissions by approximately 15%, and costs by about 20% compared with traditional systems, Halton and Phononic said.

"We wanted to provide our tenants with comfortable and environmentally sustainable spaces. This technology is an ideal solution for our purpose," says Francois Menage, CEO of Balzac REIM, which owns the building.

Installation of the new TTAP system

The system uses Terminal Treatment of Air with Peltier (TTAP) technology. When current is applied to the semiconductor-made Peltier cell, one side heats up, and the other cools down. This thermoelectronic phenomenon is used for temperature control in electronics and small coolers but has not previously been applied to a large-scale HVAC system.

Devices containing Peltier cells circulate air with their own fans, causing the air in a room to be either cooled or warmed. Fresh air from the ventilation unit flows into the space through the device.

"Cooling and heating often consume over 40% of the energy used in commercial buildings, so the industry is actively exploring ways to reduce energy consumption and carbon emissions. The announcement of the first TTAP project is a truly exciting moment for us," said Tony Atti, CEO of Phononic.

Halton and Phononic said the system was 20% cheaper than traditional HVAC systems over the building's lifecycle. Savings will be achieved, among other things, by not having cooling water networks, and using smaller water chillers. Fewer moving parts will mean lower maintenance costs.

Proptech venture capital firm Pi Labs has opened in Hong Kong and appointed Akina Ho to lead its Asia business.

Ho was co-founder of the Hong Kong Proptech Alliance, where she is an adviser, as well as an adjunct professor at Hong Kong University of Science & Technology. She was previously head of digital transformation and innovation at listed real estate company Great Eagle Holdings.

Pi Labs said its new presence in Asia had been driven by its increasingly global investor network and their growing requirements for specialist proptech investment expertise in the region.

Ho said: “With Pi Labs’ expansion into Asia, it will allow investors to have access to deep tech startups that help to digitalise and decarbonise the built world.  As proptech in Asia is moving seriously towards a more ESG-focused strategic direction, it is perfect timing for Pi Labs to enter Asia.”

Pi Labs founder Faisal Butt said: “Hong Kong is a key gateway to Asia and benefits from progressive real estate developers already taking bold steps to deploy the latest technology into the built world. We already have partners in Hong Kong including household names such as Swire Properties and continue to have meaningful discussions with world-class capital partners who are searching for the connectivity, deep industry knowledge, and investment expertise we have in built environment technology.”