Regarding The District: the social impact on the real estate sector
Article by Ramon Bastida, director of the Chair of Decent and Sustainable Housing at the UPF-Barcelona School of Management.
The pressure to invest capital in sustainable assets is an unstoppable trend in almost all sectors.
It is well known that the real estate sector is an important sector for the economy, people, and the environment. In the economic sphere, the activity of the real estate sector represented more than 10% of GDP in 2021 and is one of the growth engines of the Spanish economy. Furthermore, it is a sector that employs almost 1.5 million people.
At the people level, the real estate sector generates a very considerable social impact: access to housing in decent conditions contributes to people’s health and well-being, improving their physical and emotional health.
A study on the social impact of building rehabilitation, carried out by the Chair of Decent and Sustainable Housing of the UPF-BSM, in collaboration with the Metropolitan House Foundation, concluded that, for every euro invested in building rehabilitation, 4, 6 euros of social return. And in the environmental field, this sector plays a fundamental role, given that buildings are one of the main emitters of greenhouse gases, it is a sector that is intensive in the use of natural resources, or generates a significant volume of waste. In this sense, aspects such as energy efficiency, the use of recycled materials, or waste management, among others, are key to mitigating negative externalities in the environment.
The pressure to invest capital in sustainable assets is an unstoppable trend in almost all sectors.
The real estate sector requires significant amounts of capital. In recent days, a large number of executives from financial entities and investment funds have attended the sessions organized at The District, one of the most relevant international forums in the sector, held in Barcelona. An important part of these sessions were dedicated to the sustainability and social impact of real estate. This is very evident proof of the importance that financial entities and investment funds in the sector give to the selection of investments that meet sustainability criteria, better known as ESG criteria.
The pressure to invest capital in sustainable assets is an unstoppable trend in almost all sectors, but it is even more so in capital-intensive sectors that can contribute decisively to the mitigation of climate change, and to the improvement of conditions. of people’s lives.
This trend poses risks and opportunities for companies in the sector. The most crucial risk is that companies do not integrate sustainability into their strategy, business model, activities, products, etc. and continue “doing things the way they have always been done.” The most important opportunity is to take advantage of the sustainability requirements of financial entities and investment funds, and the new regulations at national and European level, to transform the business model, create new products adapted to the new demands of capital and customer needs, and introduce ESG aspects into the management systems of real estate companies.
Companies that take a step forward in this regard will contribute to highlighting the positive economic, social and environmental impact of the real estate sector, and will have access to more financing, and at cheaper prices than other companies.
- See the study The social value of Bellvitge 2030 Green Social return of a building rehabilitation project) of the Chair of Decent and Sustainable Housing
