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Sustainable property a ‘real opportunity’ for investors


Investing in sustainable buildings could offer a real solution to reducing emissions in one of the world’s most polluting sectors, said Taronga Ventures, an investment firm focused on sustainable innovation and tech.

Buildings currently represent 39% of global greenhouse emissions, according to U.N. data. Almost one-third (28%) of the global total is the result of running buildings — referred to as operational emissions, while 11% comes from building materials and construction.

“It is a widely unknown fact,” Avi Naidu, co-founder and managing director of Taronga Ventures told CNBC’s “Squawk Box Asia” Friday.

Naidu said that while many people believe that transport is the biggest driver of greenhouse gas emissions, methane or food, in reality it’s actually the built environment. His company invests into innovation within construction and real estate.

Dispelling misconceptions

That lack of awareness, however, presents a “huge opportunity” for investors, said Naidu, noting that the technology and appetite for sustainable building solutions are already there.

“There is a misconception in markets and particularly from landlords [that] it will cost more. Absolutely, as technology is first introduced it sits higher on the cost curve, [but] as it gets more widely adopted we see it go further and further down the cost curve,” he said.

The Parkroyal Hotel’s exterior in Singapore.

Getty Images He said that investors and consumers are starting to pay more for ESG-aligned assets and products.| Universal Images Group | Getty Images

“We’re also starting to see consumers and investors pay a premium for products and assets that are ESG aligned and much more sustainable,” he continued.

Environmental, social and governance — or ESG — investing has grown increasingly popular in recent years, mainly in the wake of the Covid-19 pandemic.

He said that landlords are increasingly able to get higher rents and greater assets values which is helping reduce the cost of renting.

Decarbonizing the economy

Decarbonizing the economy could be a market opportunity worth up to $30 trillion within the next two decades, according to Goldman Sachs.

Taronga Ventures, for its part is looking at green building solutions across the entire value chain. This includes all aspects of design, construction and operation, as well as the destruction and repurposing of buildings.

Read more about clean energy from CNBC Pro

As we build new stock, “we have an opportunity to think about different materials, different kinds of concrete, different methodologies that make the process safer, smarter and obviously, from a carbon perspective, more efficient,” he said.

Naidu’s comment comes ahead of the 26th U.N. Climate Change Conference of the Parties, known as COP26, in Glasgow in November, where world leaders will discuss efforts to combat the climate crisis.