Future model of sustainability in real estate

Sustainability — the importance among investors has increased significantly

Even though direct banks are seeing an increase in account openings during the current crisis, German investors are still regarded as particularly conservative and safety-loving by global standards. A recent survey by Ipsos confirmed this. As part of the study carried out by the market research institute, a total of 301 investment advisors from cooperative banks, savings banks and private commercial banks were asked which factors their clients attach particular importance to when choosing investment products. The most important criteria for investors are therefore still safety and returns. However, investment advisors report that sustainability is increasingly being mentioned as an investment criterion. Around 17% of investors pay attention to the socio-environmental impact of their investments.

Specialized service providers have already positioned themselves on the investment market that exclusively provide their clients with sustainable investments. The real estate industry, as one of the most important investment sectors for investors, is following this trend: Sustainability is increasingly being taken into account when constructing buildings, as it is of great importance as a selling point. As an important social issue, sustainability not only promises future-proof investments, but also the good conscience to leave a better ecological footprint and support efficient yet socially responsible projects.

Climate crisis, environmental pollution, energy demand: potential for innovation

Sustainability is rightly in vogue. As a measure in which natural resources in particular are only consumed to the extent that they are also available to future generations in sufficient quality and quantity, sustainability is one of humanity's most important tasks for the future. 193 member states of the United Nations have prioritized this accordingly and created the “2030 Agenda for Sustainable Development” to drive forward active measures against the climate crisis, environmental pollution and energy crises. The agenda includes development goals to be achieved by 2030 in order to promote economic progress within the framework of ecological limits and social justice.

As a huge sector of the economy, the real estate industry has many points of contact with the UN Sustainable Development Goals of the 2030 Action Plan, particularly in the areas of energy, environment and health. Life cycle assessment, use of resources, but also transport connections and air quality are aspects that define sustainable construction. Even though various quality seals provide guidance, there is still no uniform legal regulation as to which criteria a building is considered sustainable. In the past, sustainability has often been reduced to environmentally friendly construction, which is supported by the state. This will change at the beginning of 2021, as the European Union also wants to regulate sustainability requirements for the real estate sector more closely as part of ESG regulation in the financial sector. One challenge will be to find potential improvements in the process flow that enable energy savings and compliance with disclosure obligations.

Solutions for greater sustainability in the real estate sector

There are various starting points for making the real estate sector more sustainable. This includes the use of ecological construction methods with renewable raw materials, the optimization of the energy requirements of buildings, and the use of self-sufficient energy systems. Passive houses are already showing the direction in which development in the entire real estate sector can take. However, the problem with the traceability of sustainability measures in the real estate industry is the lack of data accuracy. How should investors in a real estate project know where the building materials and materials really come from? Does the wood actually come from sustainable forestry? Were resources sustainably extracted for construction? Unfortunately, the word from project managers and property developers is not enough here. It is only through seamlessly traceable supply chains that it is possible to objectively assess how sustainable the construction of a property really is.

Blockchain technology makes just that possible: Supply chains can be represented in a forgery-proof and verifiable way in a sustainability blockchain of a construction project. This creates a complete and comprehensive data base that investors can rely on when evaluating a project according to fixed, predefined criteria. Thanks to blockchain, building materials can be tracked at any time. A delay in construction and the associated risks can be estimated at an early stage. Blockchain technology can fundamentally revolutionize the real estate industry in the next few years.

Blockchain-based business models in the real estate industry — a conclusion

Blockchain-based business models can have a beneficial impact on the real estate industry over the next few years. Sustainability in the industry can be achieved through Tamper-proof blockchain verifiable be made. The ecological and social footprint of a construction project can be reduced. The high level of data transparency provides a well-founded basis for decision-making, which can improve the security and sustainability of investments.