Can PropTech help the UK achieve its Net Zero commitment?
While there are a lot of opinions around Net Zero targets, there is general agreement that PropTech can help, by bringing transparency to the process, offer a clear way to manage and measure impact at scale. And, with investment in real estate tech companies globally hitting $14 billion in the first half of 2019, the space is evolving fast, making it difficult to know how to engage and make the most of the opportunity.
1 – Which solution, when?
Before tackling this issue, it is important to acknowledge the sector context – there are big discrepancies between the long construction times required in real estate and the short innovation sprints which are the ‘special sauce’ in PropTech. There is no denying that reconciling these two important practices makes it harder to ensure that a ‘smart building’ stays smart (AND useful) until it gets occupied. So, yes, it is challenging, but not impossible.
In addressing this, there needs to be a combination of business strategy and organizational mentality. I propose that we all move from fear to curiosity, drop the ‘yes, but’ and embrace the ‘how about?’. When we invite curiosity, there is business value to be unlocked AND, in our case, a world of good to be tapped into.
Which solution, how mature should it be – I hear you say? Similar to every investment decision, this one is no different – it needs just as much due diligence done and risk management considerations applied to it. By having a sustainability strategy, integral to the business strategy, organizations will choose the right PropTech solution.
2 – Making the case for PropTech is hard
I recognize that identifying and evaluating clear returns can be tricky, but it does not mean we should not go for it. While the case for the ‘green premium’ is hard to prove, the existence of the ‘brown discount’ is undeniable.
Let us stop chasing case studies for the ‘why’ and think about writing use cases for the ‘why not’. We’ve got a climate crisis and time is ticking… ‘a little less conversation a little more action, please’.
3 – And once the case is made, more often than not, the organizational support is lacking
When organizations decide to go for it, it often feels there is not the right level of support in place to help. It takes honest conversations between clients and PropTech providers about what success looks like: some may go for the straightforward model of PropTech providers plus data platforms, others may opt for the bundled solution of services wrapped around the tech. It depends on the organizational skill set and its maturity in terms of tech adoption. Personally, I trust that the unbundled solution will prevail with service partners and data platforms coming together and strengthening their core capabilities through strategic partnering. I have been lucky enough to experience market adoption of nascent solutions in sectors like MarTech and FinTech. In the long run (which is what counts), the focus on specialization with an open collaboration approach always wins. (More on this here).
4 – If PropTech is the answer, what was the question?
(paraphrasing the architect Cedric Price’s famous quote)
PropTech can do a lot and, also, achieve nothing if it doesn’t address the needs of most stakeholders (end users) in real estate. It needs to be aligned to strategy and championed throughout the organization so one does not end up with multiple systems doing similar tasks in silos. Best practice indicates that when organizations consider new solutions, it is best to check with the wider organization if something similar exists; and, if it is, then you have something to benchmark against and the opportunity to have cross-department collaboration.
PropTech can help deliver Net Zero in this context, namely in two ways:
- Optimize workflows, processes and resource management in each individual sector
- Provide key links across sectors, which can be achieved through inter-operability incl. APIs (technology layer) as well as solutions that provide frameworks across sectors themselves, e.g. collaboration type software and cross-sector data management.
In all the above, it is important to remember the human element! The best solutions are worth nothing if the right training, workflows, incentives and conflict management are not provided.
5 – Final thoughts:
Net Zero is only possible if people collaborate across the entire “building journey”, from concept to design, siting/location, development, construction, commissioning, operation, tenant engagement and finally, decommissioning and recycling.
Go beyond the ‘shiny’ tech and ponder for a moment at the new emerging business models i.e ‘X’aaS (see Light As a Service from Philips or even Ink as a Service from HP) which offer access to products and services rather than ownership.
Maybe, just maybe, the unintended consequence of PropTech will help us move from the consumption-based growth model we know to a more sustainable, needs-based one and thus help us achieve Net Zero.
Net Zero is a real opportunity for the entire sector to come together and take real steps in addressing Sustainable Cities and Communities Goal. If we truly approach this as a collaborative exercise (not just lip service) and not with a winner-takes-all approach, then it can go a very long way.
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This article is written by Oana Neumayer, CMO, Fabriq