As Proptech, Contech Investors Pile into Climate Tech, Is the US Building Industry Following Suit?

Citing the building and real estate industry’s massive carbon footprint, venture capitalists have poured billions into the promulgation of new solutions which, if leveraged by architects, engineers, contractors, real estate developers, and building operators promise to help the industry dramatically cut its carbon emissions as well as its embodied carbon and indirect carbon emissions.  The often-cited figure is that Buildings are responsible for 40% of the world’s carbon emissions, and so, the only road to significant cuts in emissions has to involve significant changes to how we design, build, and operate our buildings. BuiltWorlds, which tracks investment in the sector, has cataloged more than $5 billion of investment over the past year across at least a dozen areas of use cases in this arena. In an effort to understand how the industry is responding, BuiltWorlds is also in the process of surveying its membership. Results will be shared at the BuiltWorlds Buildings Conference in May, but in the meantime, it is already clear from the results so far that the US industry, taken as a whole, is still very far from broad adoption of the technology addressing our carbon footprint.

Bigger Firms Have Begun Putting People in Place To Tackle Sustainability

While most survey respondents so far have indicated that their firms have heads of sustainability, the vast majority of those sustainability leaders have been in place for fewer than three years. Further, so far, it is mostly the larger companies with more than five hundred employees that have added full-time sustainability resources and almost none of these folks have a formal budget for their work beyond what covers salaries. The survey period will remain open for another month, so there will be the opportunity to understand further how companies are responding to calls to cut carbon emissions, but, for the moment, the industry appears still to be in a learning mode relative to Climate Tech.

Without External Pressure, the Industry Struggles to Outline Climate Tech Actions

As more survey data is collected, a clearer understanding may emerge. However, preliminary results paint a picture of an industry that is still struggling to define its scope. Unlike in other countries, the US industry cites little pressure from government regulators, and, while customers may be asking about ESG initiatives, few appear to be making specific requests.  Even LEED certification, which was once a highly sought-after badge of performance in sustainability, seems to be a less frequent goal for participants, so far.

Investment May Spur the Advances in Materials and Software The Industry Needs

While the industry’s steps, so far, seem very timid by comparison to the scope of the challenge being described, it is possible that the US is still just very early in its efforts to address carbon emissions. The sheer size of the investment going into the sector may offer its own best estimate that investors and technologists, who typically take several years to fully commercialize solutions, are betting that the industry will grow to see the size of the challenge in front of it and will be scrambling to meet the challenge. In the meantime, the solutions they are investing in today may be mature enough in the coming years to provide more clarity as to how the industry can meet the challenge. 

About the Survey

As previously mentioned, the Building Tech Survey was created to better understand the industry’s shift toward more sustainable building and how it’s responding to the global carbon crisis. The results of this survey will be leveraged to inform BuiltWorlds’ Annual Building Tech Report, Annual Sustainability Report, and the Building Tech 50 List. Additionally, data will be pulled from the survey to drive conversations in the Building Tech Forum, at the Buildings Conference, and in various Analyst Calls. For more information on the Building Tech Survey, see this past Analyst Briefing. The Building Tech Survey will remain open until mid-April.

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