Utop-enhagen
We recently attended CRETech’s Climate conference in Copenhagen, and thought we’d share a quick summary of the topics, points and people that made an impact. The focus of the event was sustainability, and it was specifically geared toward real estate, which has an obvious and outsized effect on climate change. Former UN Secretary-General Ban Ki-moon has perhaps one of the most well-publicized sentiments on this overlap:
“Our struggle for global sustainability will be won or lost in cities”
- Ban Ki-moon (2012)
With that in mind, here’s a summary from the event’s speakers regarding how real estate and climate are closely affecting one another:
Kåre Poulsgaard (Head of Innovation @ 3XN) illustrated why this conference simply had to take place in Copehagen - it’s a city that has embodied sustainable thinking in almost every facet of its operation while touting ubiquitously high liveability. It has a 4:1 bicycle to car ratio (with over 700K bicycles), generates 51% of its energy from renewables, and houses the best restaurants in the world (literally, #1 Noma and #2 Geranium) that offer only sustainable, locally sourced fare. The “New Nordic Theory of Innovation” systematizes flexibility, cost efficiency, circular product life cycles and people-centric design based on constant experimentation, then scaling what works. The evidence of this is everywhere in the city – Blue Planet Aquarium (which can expand by 30% as required), Islands Brygge and the Harbour Bath (swimming and waterfront recreation in the city’s central waterways), and the 8 bicycle superhighways that make getting around by bike more efficient than by car.
As per Mikkel Bülow-Lehnsby (Co-Founder and Chairman @ NREP and 2150), in the next 30 years, we (broadly, humanity) will need to build another 50% of what’s been built already across the globe to keep pace with population growth and intensified urbanization. Considering that the global built environment already accounts for 40% of the world’s energy consumption and 50-70% of emissions, you can see the magnitude of the problem. Treating this change as an opportunity to add new avenues of value will help companies build competitive advantage in what could be the biggest business opportunity in human history. The trick is to design and build paths of least resistance and make more positive decisions easy to make.
Juliette Morgan (ESG Consultancy Director @ Gensler) highlighted how the impacts of day-to-day decisions cannot always be easily measured during the course of business. For example, choosing a sand-based material for the façade of a building. The sand is to be dug up from remote rivers in Bangladesh allowing rivers to flood proximate villages. ESG accounting practices and better design can help to quantify these impacts simply, but the process can be dizzying, adding complexity in a system that needs speed.
Parag Khanna (Founder and Managing Partner @ FutureMap) discussed how many of the world’s most populated cities exist in the least habitable areas (temperature, precipitation, access to resources, exposure to natural disasters), all of which are being made gradually worse as the average global temperature goes up. These effects will drive migration (already begun as Californians flee wildfire-prone areas or are priced out by high wildfire insurance rates). This migration will drive a rebalancing of infrastructure, housing, etc. Therefore, any infrastructure/real estate investment should account for climate change, and a great number of businesses stand to gain from helping to slow it down.
Roxana Isaiu (Chief Product Officer @ GRESB) expanded on Khanna’s commentary with data - 25% of reported assets are already stranded (ie. catastrophically devalued based on high-risk exposure and/or poor performance). However, positive changes are afoot. Climate accounting firm GRESB saw participation up 24% from 2020 to 2021. Firms are starting to understand that ESG data can be used effectively to better understand where they are at risk vs. an arbitrary box-ticking exercise.
Torben Möger Pedersen (CEO @ PensionDanmark) offered some very practical advice when it comes to solving problems and offsetting one’s impact (really, the core of sustainable thinking). For each development, his fund plants trees to offset lumber used in the project. In another case, they built enough renewable energy to offset the everyday energy usage of its employees. The effort to offset your impact just requires some creativity in the application.
Finally, one of the greatest living architects, Bjarke Ingels (Founder @ BIG Group), presented his incredibly compelling design philosophy of “hedonistic sustainability” - building things that aren’t just good (high quality, useful, good for the environment, good for the city and its people) but also enjoyable. His design calculus becomes more about how many problems his solutions can solve simultaneously, embodying a “1+1=3” mindset. This philosophy has been embodied in truly awe-inspiring projects like Copenhill, Oceanix, New York’s Coastal Resiliency Project, Woven City and much more.
Each speaker offered a nuanced perspective, but the common thread of sustainability seemed to come back to the basic concept of taking what you need, doing more with what you have and leaving something on the table for tomorrow. In many cases, we can put more back on the table than was there in the first place. The processes and decisions are not always perfect (someone will always have an opinion on how to do it “better”), but the efforts should be lauded and built upon, and not argued into oblivion.
This idea of solving problems with a “1+1=3” mindset has tremendous value. It changes the conversation from one of “cost to build” to one of “cost to create.” The value of solving multiple problems simultaneously is a powerful compounder over time and only limited by creativity. To parallel the two most popular sentiments from the conference: if we “stop making shitty decisions” and “experiment, then scale what works” the world’s 2050 Net Zero commitments don’t seem so intimidating. Or, at a minimum, we’ll start building more interesting, sustainable cities like Copenhagen that people are excited to live in, with buildings that double as recreational spaces, farms, tourist attractions, focal points for social programs or even training facilities (Toronto Maple Leafs, are you listening?).
From your friends at GroundBreak Ventures