To reach our net zero targets by 2050, we need to reduce our dependence on the remanufacturing of materials. In doing so, this will eliminate the emissions that are the result of fabricating new materials. The solution? Circular building materials.
On Thursday the 11th of August, PropTech1 Ventures collaborated with UK Green Building Council (UKGBC) to host an event that focused primarily on the principle of circularity in new building materials. The purpose of the discussion was to find out what new technologies are out there, as well as what trends and challenges we are seeing, what is the adoption in the market, and what we should expect going forward. Moderated by Dilan Omari, Managing Director of Europe at LMRE, the panel featured; Oksana Bondar, Director of Design, BIOHM, Martin Gettings, Head of ESG Europe, Real Estate, Brookfield, Wendy Bishop, Associate & Passivhaus Designer, Architype and Kingma Ma, Head of UK, PropTech1 Ventures.
The evening was opened by Kai Liebetanz, Senior Sustainability Advisor at UKGBC, who discussed the organisation’s latest report (published earlier on the same day) titled ‘How Circular Economy Principles can impact carbon and value’. In short, the study provides insight into how the principle of circularity in building materials will help minimise impact and waste and was a great segway into the panel discussion that centered around the positive impact that circular thinking can have in delivering whole-life carbon reductions and value creation (UKGBC, August 11th 2022).
Before the panel discussion commenced, Tzvete Doncheva, International Investor Relations Lead at PropTech1, highlighted their work as a European early-stage venture fund, investing in real estate innovation. As a specialised PropTech investor, PropTech1 is able to provide ‘smart capital’ to prop/contech founders across Europe, building the businesses that will redefine the real estate sector. Thanks to its pan-European approach, the fund has direct visibility on the latest innovations taking place in the property tech ecosystem across the continent. This level of insight enables PT1 to support some of the largest real estate owners and operators of real estate (its shareholders) in accessing property tech innovation at scale, and navigating the complex proptech landscape (while making a sizable return). With respect to the panel, PT1 sees huge potential to invest in scalable net carbon zero innovations that can be built/deployed by the real estate industry.
This introduction to both the UKGBC’s recent findings of the positive implications of a circular economy, as well as PropTech1’s perspective from an investor standpoint was a great segway into the main panel discussion, as it provided insight into why the principle of circularity should be implemented from both sides of the industry.
A circular economy is based on the principles of reducing resource intensity, designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. As it stands, buildings and construction are responsible for 39% of global carbon emissions, while construction works and materials alone represent 11% (Big Buyers), whilst 40% of global energy today is consumed by real estate and the projected increase in building CO2 emissions by 2030 is over 50%.
8% of the global emissions come from concrete. The solution? Net zero carbon. The Canary Wharf Group’s ‘carbon zero initiative’ strives for using 100% net zero carbon by 2030. By re-using and recycling aggregates, you can not only create net zero carbon, but it will attract investors.
The good news is, as was proven in the UKGBC’s recent study, circular building materials provide us with a do-able solution to significantly improve the industry’s environmental footprint. The consensus amongst the panel was this idea of recycling on both a micro and macro-level. Brookfield looks to re-purpose buildings, cities, etc. in order to not only be recycling building and construction materials, but to make them attractive to investors, occupiers, and/or suppliers. For example, they recently refurbished ‘The Gilbert’ building, a 1930s private members club, and were able to retain 90% of the original structure. This project was the company’s first net zero in construction development in London.
Architype, whose work centres around pioneering, designing, and delivering Passivhaus buildings, recently completed a project in Cambridge that also included this idea of re-purposing at the forefront of its development. The project consisted of refurbishing an existing building, primarily using circular materials, into the Cambridge Institute for Sustainable Leadership’s new HeadQuarters. Whilst circular materials are crucial, we must also look at recycling processes like donating to charities and/ or community groups.
“Circularity is the upward form of recycling” – Martin Gettings, Brookfield.
In recent months, we have seen a huge shift in focus to reach net zero targets, with investors targeting green buildings for funding now more than ever. Commercial buildings that stick to net-zero targets show an increase of 5-12% in value, compared to a 30% drop for non-sustainable buildings, and companies with an ESG focus closed 33% of the financing rounds in Q2.
So how can sustainability and the built environment help tackle the climate crisis? For BIOHM, nature is at the forefront of their work, driven by a philosophy of having a regenerative impact. BIOHM is a research and development manufacturing company that allows nature to lead the innovation to revolutionise construction and contribute and pioneer the creation of a regenerative built environment. For six years, BIOHM has been working on developing a variety of biotechnologies that help tackle the problem of waste by channeling it to create regenerative carbon sequestering and waste-derived materials and products.
On the investor side, there is a significant focus on article 8 and article 9 funds, which are funds primarily aimed at Sustainability and ESG initiatives. So by demonstrating to potential investors how your company uses circular building materials and biotechnologies in practice, you have grabbed their attention by providing them with something tangible rather than digital. Both Brookfields and PropTech1 representatives agreed that circularity was a way that you can demonstrate to potential investors that your real estate fund is performing sustainably.
The panellists provided insight into how we, as an industry, can integrate sustainability into the built environment, whilst also discussing how to attract investors through tangible conferences and sustainability initiatives. It became clear that circular building materials, as well as the principle of circularity more generally, is increasingly leading the way in both real estate and investment funds. To keep up with the trends and stay ahead of the curve, as well as to tackle the climate crisis, we must ensure that sustainability and ESG is at the forefront of our work. The best news is, the principle of circularity is a solution.
This event by PropTech1 was a great opportunity to connect with leaders in the PropTech space and the real estate sector to better learn and understand how we as an industry can work towards a more sustainable future.
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