The built environment, which is the buildings we live and work in, is the biggest emitter of CO2, and generates around 40 per cent of all global CO2 emissions
When I co-founded Kush Serviced Apartments, a boutique serviced apartment platform in Hong Kong in 2006, we had a simple mission: to use design to build better places for people to live in.
As part of this ethos, we incorporated sustainability initiatives in the buildings we invested in and managed, including recycling polices for our tenants, light sensors in common areas and the use of ISO 14001 certified paints in all our renovations. In Hong Kong and Asia, and at that time, it seemed forward-thinking and I am proud of what we achieved. But if we had the technology back then to measure our overall carbon impact and diversion of waste to landfill as a result of these initiatives, it would honestly have been fairly minimal.
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Fast forward to today and it is difficult to get through a week without hearing news of climate catastrophes, melting glaciers, calls for sustainability regulations and someone in the public domain declaring they are now vegan. This is all fantastic because it forces us to think about some of the decisions we make and encourages discussion around sustainability and climate.
However, the problem is that this level of bombardment, over time, can become noise that is difficult to make sense of. Where do we focus our decisions, our capital and our time to help contribute to mitigating this problem? What can make the biggest positive impact at scale?
I struggled with these questions and in response, about two years ago, I co-founded Undivided Ventures to invest in companies that have identified a pathway for a more sustainable future for the built environment. We are Hong Kong-headquartered and source our investee companies in Asia, Europe and Israel and help them find scaling opportunities in the robust Asian real estate and infrastructure markets. I chose this path because I wanted to help address the climate problem, and the built environment provided the biggest opportunity of doing that at scale. However, it took us some time to reach this conclusion.
Even though I have had 20 years of experience in investing in real estate, it was not until 2016 that I really started reading about and looking at data surrounding the massive negative impact the built environment, which includes real estate and infrastructure, has on our planet. It is the biggest emitter of CO2, and generates around 40 per cent of all global CO2 emissions. It also contributes 30 per cent of all waste generation, 30 per cent of workplace fatalities in construction, 50 per cent of resource consumption and 25 per cent of freshwater withdrawals. And it may only get worse—to accommodate the expected level of urban growth, the global floor area could double by 2060.
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Cement alone, which is mixed with aggregate and water to make concrete, and which is a crucial material in constructing roads and buildings, is responsible for 8 per cent of all carbon emissions. Far more than the global emissions from aviation. Then you have steel, aluminium and glass, all with large carbon footprints from the manufacturing, transportation and installation of these materials, yet all of them are essential in constructing the buildings where we live, work and shop.
Surprisingly, even with all this data, there is a climate tech investment mismatch of epic proportions: the built environment, with arguably the greatest capacity for progress on decarbonisation, receives the smallest proportion of venture capital dollars. Meanwhile, mobility, for example, is responsible for 13 to 15 per cent of all global carbon emissions and yet receives some 48 per cent of venture investment to tackle sustainability challenges in its sector.
