The challenge of climate change for the PropTech sector
Climate change is causing enormous costs: according to the German Federal Ministry for Economic Affairs and Climate Protection, climate-related damage already amounts to at least 145 billion euros and could rise to 900 billion euros if no action is taken. The construction and building sector, which is responsible for 37% of global greenhouse gas emissions, bears an immense responsibility in this battle. Malte Westphal, Head of Scouting & Markets at blackprint, puts it in a nutshell: ‘The PropTech sector is and will remain hot. It has to be, otherwise it will be for all of us’. This statement emphasises the urgency of driving forward the transformation of the sector.
Investment gap in the PropTech sector
Although the figures are alarming, funding is lagging behind. Only around 5% of global venture capital flows into the construction and building sector, which includes PropTech. This means that despite the massive need for innovation in areas such as energy efficiency and sustainability, only a fraction of the necessary capital is being made available.
The €145 billion makes it clear that it is not enough to take small steps. The industry needs significantly larger investments to close the innovation gap. The construction and property sector not only has the opportunity to become more environmentally sustainable, but can also benefit economically if it focuses more on decarbonisation and energy efficiency technologies.
Opportunities in the PropTech sector for smart companies
Despite being underfunded, the PropTech sector offers enormous economic potential. The growing demand for climate-friendly technologies and energy-efficient buildings is creating space for innovation and new business models. There are strong overlaps, particularly in the areas of climate tech, adaptation tech and energy tech, which will shape the construction and property sector in the long term.
Investors are beginning to shift their focus to cross-sector investments that have a sustainable impact. Companies that join this trend at an early stage have the opportunity not only to make a contribution to combating climate change, but also to realise considerable economic benefits.
Consequences of climate change for the future of the PropTech sector
The 145 billion euros that climate change has already cost is a wake-up call. Without decisive action, the costs will continue to rise, with serious long-term consequences for both the industry and society. The PropTech sector must step up its role as a driver of decarbonisation in the coming years in order to meet the rising challenges.
To realise its full potential, investors, governments and companies must work more closely together and invest jointly in sustainable technologies and innovations. The construction and property sector is at a turning point - and success will depend on how decisively it tackles climate and economic challenges.