How Emerging Tech can Decarbonise Real Estate

“Responsible for about 40% of all greenhouse gas emissions globally, the real estate sector is already confronted by high climate risks and will face fundamental changes as the global economy decarbonises to meet climate goals,” says the United Nations in its Climate Risks in the Real Estate Sector report.

The World Economic Forum’s (WEF) Reimagining Real Estate: A Framework for the Future report explores how digital technologies are transforming the real estate sector's approach to sustainability.

As these technologies advance, they offer a foundation for reducing emissions and improving energy efficiency. The WEF report highlights that industries must adapt to increasing pressure to cut carbon footprints.

Digital solutions supporting sustainability

The report identifies AI, IoT, cloud computing, digital twins and advanced data analytics as crucial technologies for fostering sustainable practices.

These digital tools assist organisations in decreasing energy demand, optimising resource use and enhancing circular processes throughout the value chains.

Enabling greater efficiency and tracking emissions, such technologies can bolster asset performance and sustainability practices.

Smart building systems, AI-powered energy management and predictive analytics are being employed to improve tenant experiences, streamline energy consumption and cut operational costs.

According to the WEF report, buildings meeting sustainability criteria can achieve higher rental premiums and experience lower vacancy rates.

As work models shift, technologies like occupancy sensors and AI-driven analytics are integral for assessing space utilisation, allowing for more strategic space planning and management solutions.

“We hope this next iteration of the framework will underscore the urgency and importance of delivering on our commitments in the built environment and the role that real estate plays, as an asset class, as physical infrastructure and as an enabler of our economic and social goals – in the broader global context,” says Christian Ulbrich, Global CEO and President, JLL and Industry Chair for Real Estate at the WEF, in the Reimagining Real Estate December 2024 WEF Report.

Economic and environmental impact

The WEF indicates that embracing these technologies globally could lower greenhouse gas emissions by up to 20% by 2050 across sectors, including energy, materials, mobility and agriculture.

On an economic level, digital solutions may generate US$1.5tn in annual value by 2030, driven mainly by gains in efficiency and reductions in environmental costs.

Urban areas, consuming two-thirds of global energy, can benefit from investments in renewable energy sources and smart grid technologies.

As cities aim to enhance electrification, improving grid infrastructure becomes increasingly vital. This modernisation involves boosting storage capacity and deploying intelligent grid technologies to balance supply and demand.

Upgraded grids ensure consistent power delivery, support electric heating and vehicle charging and provide resilience to meet rising electricity needs.

Moreover, the report emphasises that manufacturing and supply chains must expedite decarbonisation efforts through increased efficiency and retrofitting initiatives.

Currently, buildings, including industrial and manufacturing facilities, are responsible for roughly 40% of global emissions according to JLL, yet only 1–2% are renovated each year.

Retrofitting these structures is critical, with energy upgrades capable of unlocking 10–40% in energy savings depending on the asset class.

Challenges to emissions reduction

Despite the potential benefits, the report cautions about existing obstacles. There is limited integration among digital systems and insufficient investment in digital infrastructure, creating uneven access across different regions. Governance issues, especially in data-sharing, also pose challenges to achieving full-scale collaboration.

To fully realise the sustainability benefits of digital transformation in real estate, the WEF advocates for stronger collaboration between governments, businesses and civil society.