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If you haven’t seen Adam McKay’s “Don’t Look Up” starring Meryl Streep, Leonardo DiCaprio and Jennifer Lawrence, you should. The film speaks to an existential, albeit preventative, threat to our world, and well, no one seems to care.
While an allegory, this political piece reflects the climate reality for many. For those who do care, there is no shortage of confusion on how to best tackle this looming threat.
But what if an answer was lying right in front of us? Take that anstounding 40% of global greenhouse gases come from the “Built World.” Forty percent is quite the figure in the context of what’s at stake. In this case, do look up – and to the right, and to the left, because the answer might be all around.
Front and center come the estimated 97 billion square feet of commercial real estate. Despite this sizable footprint and impact on climate, lack of awareness and the real estate industry’s sluggish pace of tech adoption have hampered action until recently.
Adding to this have been misperceptions of returns on investments in climate investments, and frankly, information overload as the industry gets smart about carbon neutrality. Fortunately, evidence is emerging on the ROI of climate tech for both buyers and investors – evidence that could be crucial to usher the “Built World” into an era of carbon neutrality.
Green translates to green
As the saying goes, you have to spend money to make money. And when it comes to reducing real estate’s climate footprint, according to Jones Lang LaSalle (JLL), the path starts with adopting technologies that enable green certifications such as LEED and BREEAM.
Among a host of conclusions, JLL’s report cites that green certifications result in a rent premium of 6% for commercial real estate and a sales premium of 8%. But acknowledgment of climate change and awareness of climate technologies’ efficacy is just the beginning. Knowing where to start brings its own challenges.
To unlock this ROI, property owners have implemented a range of cost saving technologies such as efficient lighting, reimagined cooling and heating systems, and systems to reduce their electricity footprint. After all, to get a LEED certification, buildings must hit a performance score combining metrics across several categories including energy, water, waste, transportation and quality.
To accommodate, technology has popped up transversely across the value chain of designing, constructing and retrofitting parts of the building life cycle to improve metrics across LEED’s target categories. To unpack the opportunity come specific considerations with investments at each point.
Climate technology solutions across the real estate value chain. 1Estimated per Cove.Tool; 2New York Times “New York’s Real Climate Challenge: Fixing its Aging Buildings”; 3Department of Energy’s “Proving the Business case for Building Analytics”. Image Credits: SVB Capital.
Design and construction
An ideal, carbon-neutral world might be built from the ground up. Proven technologies such as Cove.Tool and Juno Residential are popping up to enable this brave new world of energy efficiency, starting with just how buildings are designed and what materials they are built from.
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