Environmental, Social, and Governance (ESG) is becoming increasingly important for various stakeholders in the real estate sector. Potential buyers are pushing for properties with a good ESG record. Investors and buyers are well aware that non-durable assets are at significant risk of depreciation.
While awareness of ESG is encouraging, the acute lack of related skills in the real estate sector is a major concern. The ESG skills shortage means the real estate sector is struggling to meet the challenge of climate change and achieve net-zero emissions targets.
Real estate is a sector with a huge ecological footprint. It is responsible for as much as 37% of global CO2 emissions. Ironically, it is also a sector that is itself vulnerable to climate change. Builders now have to take more extreme weather conditions into account in their designs. That provides additional reasons for the real estate industry to focus on sustainability and work on a war footing to bridge the ESG skills gap.
What can be done?
It goes without saying that construction cannot stop; it can’t even be slowed down. The solution lies elsewhere. The solution depends on overcoming market barriers to take the real estate sector to net zero.
The first of these barriers is the lack of reliable information on energy efficiency measures. The second is a lack of qualified professionals who can enable the real estate sector to achieve a complete green transition. If we are to have any real chance of achieving net zero targets, the industry must immediately start securing the necessary resources and skills to improve its ESG credentials.
For the real estate sector, solving the skills shortage problem is critical for several reasons. Sustainability and addressing climate change issues are not just reputational imperatives; they also entail financial and legal risks. It’s actually very basic: if real estate companies don’t pay enough attention to ESG, they will find it increasingly difficult to raise funds and close sales. The pressure comes directly from end users, who are raising awareness and demanding that the companies they do business with are sensitive to their ESG issues.
But why is there such an acute skills shortage?
There are several reasons why the real estate sector does not have the required skills when it comes to ESG. Most glaringly, architects, building designers, builders, and emerging professionals from related industries are completing their respective courses without having learned enough about the importance of ESG. Educational institutions are to blame; for many, sustainability is still an optional extra.
If such perceptions persist, the next generation of professionals entering the real estate industry will likely be underequipped when it comes to ESG. But just naming the problem is not enough; solutions must be found. One of these could be to train young professionals entering the job market to be sustainability-conscious at all times. In fact, evaluating how conscious job seekers are about sustainability and ESG should be a hiring criterion. In addition, senior staff must be continuously educated and trained on ESG. It’s hard, but it has to be done.