Sustainability and digitalization are not only the most relevant drivers of innovation for the real estate industry, but are also inseparably linked. We at BuildingMinds are firmly convinced of this.

Hardly anyone continues to doubt the relevance of sustainable management. The World Economic Forum in Davos has just presented its annual “Global Risks Report“: For the first time in the history of this renowned study, all the ‘Top 5 Risks’ are ecological in nature. As part of its “Green Deal”, the European Union has estimated investments of up to one trillion euros for it to become climate-neutral by 2050. Our technology partner Microsoft has announced its intention to achieve a negative CO2 balance by 2030 and – as if that were not enough – to remove all previous CO2 emissions from the atmosphere by 2050. Blackrock boss Larry Fink is publicly and very clearly urging companies to adopt sustainable business practices. We as a real estate industry cannot and should not shut ourselves off from this.

But how can real estate be managed sustainably? This is a complex challenge for two main reasons:

Existing buildings must become smart: Much of the data and information required for sustainable portfolio management is still to a certain extent “trapped in physics”. For example, the current digitalization study by EY Real Estate and the ZIA identified missing data standards and poor data quality as major problems. True, more and more smart buildings are being built that can alleviate these problems. But 99 percent of real estate in Germany has already been built and is rarely particularly intelligent. And 80 percent of the buildings of 2050 already exist today. So the current problem will certainly continue to accompany us for several decades. Our goal is therefore primarily to reveal this data “trapped” behind the façade and make it usable. This requires the measurement and evaluation of a wide variety of data. For this to happen at all, it is necessary to harmonize and integrate the data, for which we are currently developing a Common Data Model together with strong partners.

“Next generation analytics” required: Portfolio management will continue to pursue the goal of profitability in the future – but within a framework of compliance with sustainability KPIs. Asset valuation will increasingly require compliance with the conditions of “green bonds” and various other regulations. To this end, it is essential to take into account not only opportunities and risks arising from location and building condition, but also those with a sustainability component such as the emissions caused. The necessary analytics can only be carried out with the help of machine learning and artificial intelligence. This is where we come in with our Common Data Model for the real estate industry, which enables us to integrate all data in a cloud-based platform, where it is transformed into concrete management insights.

Only on a resilient basis can decisions be made that also take into account sustainable goals. Even if the first hurdle has been cleared, i.e. the data has been made available in a harmonized form, the abundance of necessary information can hardly be processed without digital technologies, let alone condensed in time to form a basis for decision-making. Sustainability in the real estate industry is therefore hardly conceivable without digitalization. It must form an integral part of all management approaches from the very beginning.