“A real opportunity” for sustainable real estate investors

Investing in sustainable buildings could provide a real solution to reducing emissions in the most polluting regions of the world, said Taronga Ventures, an investment company focused on sustainable innovation and technology.

According to United Nations statistics, buildings currently account for 39% of global greenhouse gas emissions. About a third (28%) of the global total is the result of buildings in progress – called operational emissions, while 11% comes from building materials and construction.

“This is a largely unknown fact,” Taronga Ventures co-founder and managing director Avi Naidu told CNBC’s “Squawk Box Asia” on Friday.

“A lot of people think it’s transportation, it’s methane, it’s food that’s a big driver, but it’s actually the built environment,” said Naidu, whose company is investing in. innovation in real estate and construction. .

dispel misconceptions

However, the lack of awareness presents a “huge opportunity” for investors, Naidu said, noting that the technology and the appetite for sustainable building solutions are already here.

“There is a misconception on the markets and especially on the part of the owners [that] It will cost more. Of course, when the technology is first introduced, it sits higher on the cost curve, [but] As it becomes more and more adopted, we see it moving further and further down the cost curve, ”he said.

The exterior of the ParkRoyal hotel in Singapore.

VW Pix | Group of universal images | Getty Images

“We are also starting to see consumers and investors paying a premium for products and assets that are ESG-aligned and much more sustainable,” he continued.

Environmental, social and governance investments – or ESG – have become increasingly popular in recent years, mainly in the wake of the COVID-19 pandemic.

“So the ability to drive down rents and lower property values ​​brings costs down a lot, and that’s really how landlords should think about it,” he said.

decarbonize the economy

According to Goldman Sachs, decarbonizing the economy could represent a market opportunity of up to $ 30 trillion over the next two decades.

Naidu said that for its part, Taronga Ventures is investing in green building solutions “along the entire value chain”. This includes the design, construction and operation, but also the reuse and eventual destruction of buildings.

As we build up new stock, “we have the opportunity to think of different materials, different types of concrete, different ways to make the process safer, smarter and frankly, from a carbon perspective. , more efficient “. ,” They said.

Naidu’s remarks preceded the 26th United Nations Conference of the Parties on Climate Change, known as COP26, in Glasgow in November, where world leaders will discuss efforts to tackle the climate crisis.

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