In 2025, the US real estate market value will hit a mind-blowing $136.6 trillion. Admittedly, just like the changing consumer behaviour, many trends are impacting the industry, but the rise of ESG in real estate is something to highlight.
But what, in today’s age, is the connection between real estate and ESG? Well, if you’re wondering about this, then let’s ease your curiosity. In this post, we will discuss how the trends of ESG and smart buildings are changing the real estate landscape.
ESG has been growing in popularity for the last couple of decades. Specifically, the ESG approach is destined to change the game forever in the field of real estate.
The most recent studies find buildings accountable for 39% of worldwide energy-related carbon emissions. So obviously, a lot can be done better in this field. More significantly, this is a worthy opportunity to focus on ESG and catalyze big changes on this front.
Proptech and ESG integration in the real estate industry is pivotal to creating a more connected and sustainable world. When you consider the size and scale of the real estate sector, you can’t underestimate the opportunity to drive change with ESG at scale.
Leveraging the ESG mindset in real estate has countless perks, and you cannot underestimate them. These frameworks make properties more appealing to investors, enhance sustainability, and much more. That said, let’s take a closer look at some of these advantages:
The primary bottom line of owning any real estate is to save on costs. This is where ESG comes into the picture and helps you save on the overall operational costs of the building. You can reduce your overall energy consumption by leveraging the right sustainable approaches.
This means saving more on heating, air conditioning, lighting, and other expenses. This will help you benefit from better savings and invest this resource elsewhere. Here, it is important that you make the most of sustainable technologies and enhance overall savings.
Gone are the days when you could say that climate change is a concern for the future and get away with it. The unpredictable storms and wildfires should be indication enough that this is the right time to take action. This is another area where prioritizing energy-efficient building ESG becomes an excellent solution.
Constructing and operating buildings are both factors that contribute greatly to the changing climate around the globe. Even if you are not constructing a new building, operating the existing one still contributes to carbon emissions. All you need to do is make a couple of small changes and enhance the building’s overall energy efficiency.
Sustainability is a major priority for the future generation of buyers and renters. In fact, Pew Research showed that three-quarters of Gen Z see climate change as an overwhelming concern. As this generation enters the workforce, it is important to prioritize ESG in real estate and meet their expectations.
This will help ensure that your property stays ahead of the competition and gets better rent and valuation. ESG compliance also makes your property more appealing to potential renters and buyers. So, make sure you keep this in mind while working on a new or existing building.
There are a couple of different ways to apply ESG in your real estate and reap the aforementioned benefits that tag along. Some of the most effective and easiest of these ways include:
Of the 39% of global energy-related carbon emissions from buildings, about 11% come from materials and construction. This highlights the importance of using green construction methodologies to combat climate change.
One simple way to realize this goal is to leverage any existing structure already available on the property. This will eliminate or at least reduce the need for new construction that can contribute to climate change.
The other option is to source local materials to save essential resources like time and money. This will help reduce the cost of transporting material from faraway distances. More interestingly, you will not be responsible for increased emissions from trucks transporting construction materials.
When you invest in real estate, it makes sense to maximize the entire property. One simple way to do this is to divide the building into different zones and maximize every area. Promoting mixed-use buildings is great for the environment and for strengthening the social fabric of society. When you house both residential and commercial businesses under the same roof, it automatically enhances the walkability of the neighborhood. This ensures that residents don’t rely on transportation to access the necessary goods and services.
Besides, this helps promote local businesses and boosts the entire economy of the region. This boost will again help enhance the vibrancy of the area and increase property value even more.
Smart building technology 2025 is taking center stage in terms of enhancing a building’s sustainability. Leveraging ESG and smart real estate sustainability trends is a great way to enhance a property for good. Therefore, it is important to understand the benefits of these approaches and choose the right one for your needs.