Real estate’s ESG skills gap is a problem
Environmental, Social, and Governance (ESG) is increasingly assuming greater importance for various stakeholders of the real estate sector. Potential buyers are insisting on properties that have a good ESG record. Investors and buyers know full well that unsustainable assets are at a considerable risk of depreciation in value.
While the awareness about ESG is heartening, the acute lack of related skills in the real estate industry is a big worry. The ESG skills gap is causing the property sector to struggle to meet the climate-change challenge and reach net-zero emission goals.
Real estate is a sector with a massive carbon footprint. It is responsible for as much as 37% of global carbon emissions. Ironically, it is also a sector that is itself vulnerable to climate change. Builders are now having to factor in more extreme weather conditions in their designs. That provides added reasons for the real estate industry to focus on sustainability and work on a war footing to bridge the ESG skills gap.
So, what can be done?
It is a no-brainer that construction cannot stop; it can not even be slowed down. The solution lies elsewhere. The solution hinges on overcoming the market barriers to getting 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 go for a complete green transition. If we are to stand a real chance of reaching net-zero targets, the sector has to immediately get down to securing the requisite resources and skills to improve its ESG credentials.
For the property sector, solving its skills shortage problem is crucial because of several reasons. Sustainability and meeting climate change issues are not just reputational requirements; they also pose financial and legal risks. It is quite elementary actually — if real estate companies do not pay enough attention to ESG, they will find it increasingly difficult to raise funds and close sales. The pressure is coming directly from end-consumers, who exude great awareness and demand that the companies they deal with are sensitive to their ESG concerns.
But why is there such an acute skills shortage?
There are several reasons why the real estate sector is falling short of the requisite skillset when it comes to ESG. The most glaring one is that architects, building designers, builders, and emerging professionals of related industries are completing their respective courses without being taught enough about the importance of ESG. Educational institutions are to blame — for many, sustainability is still an optional extra.
If such perceptions continue, the next generation of professionals who will work in the real estate industry is bound to be under-equipped when it comes to ESG. But just stating the problem will not do; solutions have to be found. One of them could be to train young professionals entering the job sector to be sustainability-conscious at all times. In fact, evaluating how aware jobseekers are in terms of sustainability and ESG should be a criterion for hiring. Additionally, senior staff also needs to be reskilled and trained in ESG on an ongoing basis. It’s tough, but it has to be done.