WEF: Can Real Estate be Decarbonised using AI & Technology?
“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.
To provide solutions for real estate’s emissions, the World Economic Forum’s (WEF) Reimagining Real Estate: A Framework for the Future report explores how digital technologies are becoming a cornerstone of sustainable transformation.
As industries face increasing pressure to decarbonise, digital solutions could provide measurable ways to cut emissions, improve efficiency and achieve climate goals.
Digital solutions driving sustainability
The report identifies technologies such as AI, the Internet of Things (IoT), cloud computing, digital twins, data centres and advanced data analytics as key enablers of sustainable outcomes.
These solutions allow organisations to reduce energy demand, optimise resource use and improve circularity across entire value chains.
Technologies that enable energy efficiency, carbon emissions tracking and sustainable building practices can not only help assets meet performance metrics but also enhance asset value.
For instance, buildings that meet certain sustainability criteria have been shown to achieve rental premiums and lower vacancy rates, the WEF report says.
Technologies like smart building systems, AI-driven energy management and predictive analytics can enhance occupant experiences, optimise energy use and reduce operational costs.
The report says that as hybrid and remote work models become more prevalent, landlords and tenants need a foundation of understanding of how space is used.
Technologies such as occupancy sensors, space management software and AI-driven analytics can provide actionable insights on space use, helping optimise office layouts and reduce unused spaces.
This not only improves the efficiency of existing spaces but also aids in strategic decision-making for future developments and lease decisions.
“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.
The adoption of technology can help mitigate various risks, including those related to cybersecurity, asset obsolescence, mechanical problems and fluctuating occupancy rates.
For instance, digital solutions such as digital twins can automate risk assessments, monitor critical building systems and ensure compliance with safety standards, thereby reducing the likelihood of costly incidents and interruptions.
Economic and environmental impact
The WEF says that widespread adoption of these technologies could reduce global greenhouse gas emissions by up to 20% by 2050 across energy, materials, mobility and agriculture.
On the economic front, digital solutions have the potential to generate US$1.5tn in annual value by 2030, largely through efficiency gains and reduced environmental costs.
WEF states that cities consume two thirds of the world’s energy and investments in renewables and smart grid technologies can help cities ensure the delivery of reliable and clean energy.
As cities aim to decarbonise buildings and shift towards electrification, investment in grid infrastructure has become increasingly essential.
Modernising the grid includes enhancing storage capacity and deploying smart grid technologies to balance supply and demand efficiently.
These upgrades will ensure reliable power distribution, support increased loads from electric heating and vehicle charging and provide the resilience needed to sustain higher electricity demand.
The report also highlights that manufacturing and supply chains must accelerate decarbonisation through efficiency and retrofitting.
Buildings, including industrial and manufacturing facilities, account for nearly 40% of global GHG emissions, yet only 1–2% are renovated annually, according to JLL.
Retrofitting existing assets is therefore critical, with light to medium energy upgrades unlocking 10–40% in energy savings depending on the asset class.
Barriers for emissions reduction
The report warns that significant barriers remain.
Limited collaboration between digital systems, insufficient investment in digital infrastructure and unequal access across regions could hinder progress.
Governance gaps in areas such as data-sharing also may also restrict collaboration at scale.
To unlock the full sustainability potential of digital transformation, the WEF calls for greater collaboration between governments, businesses and civil society.
