In a nutshell below are the 10 most relevant sustainability challenges facing the Real Estate Sector worldwide and their impact .These aspects need to be addressed in a strategic level of any Real Estate sector related business, governments and funds.
- Climate Change: The climate is changing globally. Aggressive weather phenomena, extremely high and low temperatures, increased rainfall, drought are affecting our natural environment including the built environment. Hence buildings and infrastructure can suffer damages and lose efficiency of cooling and heating new climate requirements.
- Energy Security: As living conditions are improving and new developments are increasing globally the energy demands are increasing. That causes interruptions (ie power cuts) especially in some countries with limited energy resources and that affects business and social activity. Real estate sector depends on the use of energy and needs to act immediately with respect to use of sustainable energy sources.
- Resource Scarcity: Real estate is directly dependent on resources such as minerals, fossils fuel, timber etc. As these resources are depleted there are potential program delays and increased costs associated with the construction, operation and maintenance of the assets. In addition, poorly extracted resources cause additional reputational damage.
- Waste and Pollution : Land ,water and air pollution as well as noise and light pollution due to construction and real estate operational activities are putting a significant burden on the environment. Concrete waste and general waste are the two biggest categories of waste during construction and operation of assets. Both issues are not being addressed efficiently and create negative sustainability impact.
- Water Security : Water is the core ingredient that contributes to the viability of a real estate asset during its lifecycle. Projects are totally depending on water quality and availability through all the supply chain from construction to operation. Floods and water shortage can have negative impact on the asset efficiency and also degrade the eco systems.
- Poverty and Inequality : Job security, payment of salaries ,working and living conditions for the employees , occupational safety and wellbeing ,provision of equal opportunities are social aspects directly influenced by real estate sector employers which can have negative or positive impact on poverty and inequality.
- Health and wellbeing : Real estate creates and shapes the urban environment where people live .Hence the impact of the asset quality on the health and well being is major. Pollution from construction and building systems emissions has a negative health impact . In addition, insufficiently designed work and living spaces have a negative impact on wellbeing and mental health.
- Cultural Identity : Many times real estate developments take over lands that used to be occupied by habitats are that no longer included in the new plans or their access is restricted .In addition lack of access to affordable housing in areas that are being redeveloped with upmarket developments can have negative impact on the cultural identity of the society.
- Technology Application: Digitization and automation are great advantages in the current times as they reduce technical and financial risks however they come with potential consequences. Advanced technology applications in real estate sector have created a lot of job losses. In addition not all developing countries can keep up with the technological advancements which increases inequality and exclusion.
- Biodiversity and Ecosystem Loss : As land development is the core scope of real estate there is direct impact on the biodiversity and ecosystem. Lands are being stripped of their original natural environment use and wildlife is being affected.
All the above are outlining the negative impact that the real estate sector can have ,however there are many opportunities and proven examples of positive impact that the Real Estate sector has in the current environment . Examples of how we can identify opportunities and solutions related to the above in our organizations will be discussed in my next article.