ESG and infrastructure
Obviously, real estate and infrastructure are closely related. For example, the real estate industry is a major consumer of energy. Therefore, the construction of more sustainable buildings, e.g. by means of new eco-friendly materials or smart technological heating or ventilation, not only helps the environment, but it also boosts the return of the respective real estate investment, improving investment performance. Governments around the world are increasingly fostering these new construction methods to improve the carbon print of cities and emissions mitigation. As such, it is also relevant to take a quick look at the impact of ESG in infrastructure.
Overcoming new infrastructural challenges
Implementing an efficient ESG-focused infrastructure system is vital for undeveloped countries – it provides access to the most basic services like energy and water for the community. Also, fordeveloped countries, it may help to face new challenges, such as the increase of population in urban areas and the environmental concerns. Additionally, ESG standards are already proving to be decisive in infrastructure closings. This is because investments are beginning to face community oppositions, which is often due to the lack of ESG considerations, resulting in costly delays or changes to the initial project.
Smart cities
Another expression of the ESG impact on infrastructure is the so-called “Smart cities” initiative, which refers to urban areas for which different innovative technological methods are designed. The output generated by such methods (e.g. in the form of data or statistics) can assure that city infrastructure is managed and organized more efficiently. Most of these methods are nowadays designed to allow ESG guidelines to span across the life of a city, in the respective assets, community services and resources, including better (and greener!) transportation, improved communication networks, optimization of energy consumption, water supply, crime detection and waste.
Some examples: Dubai, Singapore, and Luxembourg
A successful example of a smart city is Dubai3, which is tech-innovative in various sectors. A few examples:
- transportation: development of the first hyperloop between Dubai and Abu Dhabi and of autonomous air taxis
- tourism: project Oasis Eco Resort which aims to build a sustainable complex in the middle of the desert
- housing: project Martian city aimed at build houses in the desert for 600,000 people as a start for a 100-year Mars colonization plan
- energy: a mega solar park with the aim of making Dubai an ecofriendly powerhouse
- security: development of selfdriving police cars.
Singapore is also a pioneer in this field. It has introduced the broader concept of smart nation4. Some examples of ESG tech innovations in Singapore are the development of a cashless public transport, the digital engagement and transformation of healthcare (“Telehealth”), the development of a platform used as a channel between schools and parents (“Parents Gateway”), and the development of “Lamppost as a Platform”, i.e. a project which aims at maximizing the use of street lampposts to monitor changes related to environmental conditions, installation of cameras to analyze crowd build-ups and better monitor to increase safety in public spaces.
Finally, Luxembourg is also moving towards the concept of a smart nation. For a more specific analysis on the digital innovations on our jurisdiction, please see Deloitte’s article on this topic5.
