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Environmental, Social Governance(ESG) is Becoming a Key Driver for PropTech


It seems trite to say it, but 2020 is a year of great changes in the real estate industry. COVID provided an unprecedented opportunity to re-examine the way of development. In 2020, the environmental, social, and governance (ESG) initiative experienced tremendous growth.


The real estate industry consumes some 40% of all raw materials globally, some 40% of the world’s energy, and is responsible for more than 30% of carbon dioxide emissions. We also know that our buildings and public spaces can have a dramatic impact on our health, wellbeing and productivity. Sustainability and resilience are the two key factors at play.


Over the next few years, data that is in real-time, reliable and comparable will become critical in the built environment. A real driver for this will be ESG related requirements underpinned by consistent reporting metrics. We will also see a further increase in pressures from buyers and tenants, for homes, buildings and public spaces that have a positive social impact. These requirements, once developed, will largely shape investment, loan, and indeed even insurance, decisions. Opportunities include building and energy optimisation, predictive maintenance, and the improved utilisation of physical environments. Ultimately, PropTech if used effectively can support more sustainable and resilient built environments.


In addition to environmental aspects, property technology can be used for social and corporate governance aspects, such as to improve the transparency and authenticity of business data, to optimize the interactions between internal employees and external stakeholders, and to achieve relevant sustainable development goals. While not much is certain as we move through 2021, what is certain is that ESG will drive PropTech and to a certain extent real estate development generally.




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