5 Trends in Sustainable Development

The United Nations Conference on Trade and Development (UNCTAD) is behind an initiative to promote sustainable development in every member state of the U.N. Its stated goals also include initiatives to significantly increase sustainable industrialization in lesser developed countries (LDCs) by raising their share of GDP and industry share over the next 12 years.

Included in the initiative are 17 different goals that all member states are striving to achieve which are detailed in the U.N.’s Sustainable Development Goals (SDG). A major element to these goals is the promotion of sustainable development among private corporations in all nations which will have a noticeable impact on CRE. Specifically CRE should care about these 5 trends in sustainable development.

#1: Goals for Jobs in Sustainable Development to Impact CRE

One of the goals in the SDG is to promote jobs in sustainable development. That includes backing startups in the industry as well as large corporations looking to increase their green profile. Particularly for attracting millennial and Gen Z talent, it is important to recognize that according to a recent study nearly 95% of the latter factors a company’s carbon footprint and green values when deciding where to work. Companies searching for commercial real estate will increasingly require buildings that adhere to national and international standards for sustainability.

#2: Sustainable Development in E-Commerce Logistics to Impact CRE

Supply chains are one of the largest sources of pollution around the globe. Other initiatives in addition to the SDG will have a huge impact on logistics assets that support e-commerce thereby affecting industrial CRE. Long term sustainability is directly tied to socio-economic factors in many countries. As international organizations continue to work toward increasing economic prosperity through these initiatives, logistics networks will have to work to improve efficiency through sustainable technologies like solar, electric, and artificial intelligence.

#3: Smart Tech in Sustainable Development to Impact CRE

Autonomous vehicles are still a ways off for highly developed countries. The technology is even farther away for LDCs. In the meantime, other types of Smart technologies are leading the way to improving overall efficiency and sustainability in the CRE sector. For one, smart buildings themselves are helping businesses save money on energy costs while conserving energy and reducing waste and pollution. In less than three years, it is predicted that there will be over 3.5 billion smart devices connected to a commercial building.

#4: Corporate Partnering for Sustainability to Impact CRE

Some companies are partnering up to help meet industry requirements for sustainable development. Take for instance Nestle which has partnered with Danone to improve the sustainability of their water bottling process. Expect more of this in the food and beverage sector as well as grocery and retail. New CRE assets will need to provide on-site facilities for implementing sustainability programs.

#5: Greater Investment in Sustainable Development Projects to Impact CRE

Now more than ever, there are dozens of watchdog groups and non-profits monitoring corporate sustainability efforts. Investors are now factoring in sustainability efforts when deciding where to invest. Not only are sustainable buildings better performing but they also help to mitigate risk as climate change and major weather events continue to impact different parts of the globe.

Those in CRE should also pay close attention to one newly controversial global initiative. Over 200 countries have signed on to the Paris Climate Agreement. Despite the Trump administration announcing last year that the U.S. would pull out of the agreement, many states have vowed to continue with science-based targets included in the Paris Accord as well as the 200 other countries that are signatories to the agreement. Whether or not the U.S. government is officially part of the Paris Accord, its implementation will have an impact on CRE everywhere.