Proptech - an inevitable key to green transition
Photo: Thomas Høyrup Christensen
Digitization has hit real estate! New innovative proptech solutions and business models are sprouting in Denmark and in most other parts of the world and are changing the way we build, trade, operate and use our buildings. And this is good news – especially for our climate. Proptech is, no doubt, one of the most important enablers to green transition in most parts of the world.
40% of our carbon emissions comes from real estate
Today, around 40% of Denmark’s total CO2 emissions comes from our buildings. The share is equal in most developed countries. Physical improvements of our buildings’ climate envelopes are no doubt part of the solution. However, most leading experts pinpoint that physical solutions such as better insolation and windows can only cut around half of carbon emissions stemming from our build environment. The rest must be reached by developing and applying new intelligent solutions and technologies. As an example, heating, ventilation and air conditioning (HVAC) consumes up to 65 percent of a large building’s energy consumption. HVAC systems are highly complex and interconnected systems. It therefore typically requires intelligent solutions and use of real time data to streamline HVAC operations without compromising comfort, indoor climate and health.
In large residential properties, another challenge that calls for smart digital solutions, is that successful energy optimization is completely dependent on changing and optimizing energy consumption patterns at the single tenant level. The opportunities but also complexities to optimize energy use in our homes and offices grow as we integrate more renewable energy sources and plugin ever more electrical devices to our buildings - including the charging of electric mobility solutions. Add to this the massive use of materials when we construct and renovate our buildings. In Denmark, construction industry is responsible for 40% of total material consumption and 30% of all waste.
A boom in green and innovative proptech solutions
Luckily, we are right now witnessing a significant increase in proptech startups offering solutions and new innovative approaches that help optimize energy consumption and in general make the construction and use of buildings smarter and more sustainable. Examples of promising Danish proptechs in this fields among others includes NorthQ, UbiqiSense and Wisehome. They all combine IoT devices with advanced data processing allowing the gathering, combination, analysis, and presentation of dynamic energy and space management data. Hereby, energy use and energy system management can be based on solid insights that also quickly reveals system errors, hidden leaks or inappropriate local energy use. Important to remember is that Denmark also is home to several established proptech providers such as Danfoss, Kamstrup, Brunata and Techem, that are international frontrunners in providing smart energy control systems and metering within electricity, water, heating and cooling.
Finally, we can also find interesting startups in the Danish proptech community that addresses and solves other crucial sustainability related challenges. Examples include the startup Frame that provides a digital tool and platform allowing partners in complex construction and building operation processes to much more easily define, manage and comply with sustainability goals and requirements. Another carbon emission challenge addressed by a Danish proptech startup is the skepticism to use wood in in larger constructions (wood is one of the most climate friendly construction materials) due to the high risk of rot and moist. The Danish proptech newcomer Woodsense, has therefore developed a sensor and AI based solution that detects unwanted moist in wooden constructions hereby preventing more serious rot and fungus damages.
The real estate sector is engaging in green transition - but collaboration needs to be increased
To put it short, proptech is an inevitable enabler to green transition in real estate. And, thus for a sustainable society as such. In 2019, Denmark's parliament adopted a new climate law committing Denmark to reach 70% below its 1990 carbon emissions by 2030. Luckily, many solutions that can help Denmark reach this very ambitious goal are already out there and we do experience that large established players in Danish real estate have started engaging in the sustainability agenda and are looking into how technology can be a driver in this. However, to succeed in the green transition real estate actors, startups, investors and regulators need to increase collaboration and create the needed mindset, innovation culture as well as regulatory framework that enables the implementation and scaling of proptech in real estate.
