The real estate industry is every day more pressured to measure how they impact the environment. In 2022 the Finnish based startup CHAOS brings new solutions for industries needing this information.
The global climate summit 2021 in Glasgow, COP26, took off with a promising agenda; to find ways to enable and encourage countries affected by climate change. Moreover, to find ways to protect and restore ecosystems and build a more resilient infrastructure to avoid losing homes, livelihoods and lives.
However, the COP26 fell short in delivering the national commitments. The lack of concrete strategies for national and municipal entities has left local businesses wondering which steps to take. Therefore the success of this worldwide target will depend greatly on the cooperation between the public and private sector to achieve these targets.
A recent report from the World Bank states that 70% of the greenhouse emissions are produced in cities and that ⅔ of the world’s energy is consumed in cities. More critically, we also know that “the expansion of urban land consumption outpaces population growth by as much as 50%, which is expected to add 1.2 million km² of new urban built-up area to the world in the three decades”.
With these challenges, cities play a critical role in meeting our climate targets and improving people’s well-being and quality of life.
The stakeholders in the city development chain will lead the way for a climate-neutral society – a society with a net-zero emissions balance. From there, the Real Estate industry will occupy a role as one of the biggest influencers due to its investment capacity, for example, being one of the world’s biggest stores of wealth, valued at $300 trillion.
The founders of CHAOS, CEO Natalia Rincón and COO Paloma Bautista have an extensive background in city development and wanted to see a change in how cities are developed.
“City development always has two shareholders. The investors and the citizens. People have been adjusting to the changes of the investor-driven city planning, but we think it should be the other way around,” says Paloma Bautista.
This is why Rincon and Bautista want to ensure that the decision-makers have the right tools to make city planning decisions that are based on data and facts instead of gut feelings. They believe this could enable the creation of more liveable and sustainable cities.
"City development always has two shareholders. The investors and the citizens. People have been adjusting to the changes of the investor-driven city planning, but we think it should be the other way around."
Most of the urban planning practices do not effectively address sustainability, environmental, and well-being issues.
“I believe that the battle for climate change will be won or lost depending on how well we embrace innovations for decision making within our cities”, says Natalia Rincón.
Meanwhile, the world is producing enormous volumes of data; only during 2020, it is estimated that the world will produce 90ZB of data. At the same time, we are experiencing an awakening of the Real Estate industry; we now see big brands adopting state-of-the-art tech that would empower their decision-making. The players that will benefit the most will be the early adopters.
“The right tech will need to be in place to make use of this data abundance”, Rincón says.
”Technologies such as AI and machine learning will propel the market and will lay a crucial role in the application of location analysis to enable predictions for holistic planning and problem-solving for climate challenges.”
As the effects of climate change are becoming more concrete, the EU has been increasing the pressure on the real estate industry to reduce its impact on climate change. The challenge, however, is that the real estate industry players have few to no tools and knowledge on how to measure their environmental impact.
Traditionally, the Real Estate industry has made investment decisions based on financial and economic information. The consideration of people’s fast-changing needs or the impact of the investments on the environment has been completely lacking from the equation. Today, investment decisions must also consider that the developed property (and infrastructure in general) stays relevant throughout most of its lifecycle.
Nonetheless, the advancement of technology has made it possible that today we have more than enough information to better understand the performance of specific locations. The challenge is figuring out how to cost-effectively aggregate the inconsistent, scattered data, and leverage data science for building the necessary means to get the insights.
“Building inclusive, resilient, and sustainable urban environments requires effective solutions within the UrbanTech and PropTech scopes. We need ground-breaking innovations that can be deployed in cities now to hit climate neutrality targets and improve life in cities”, says Rincón.
Although the discussion on sustainability has become more prominent, measuring sustainability is still waiting for new technologies. CHAOS founders understand this need and their efforts are placed in providing solutions that will enable this.
“While talking about the sustainability of the real estate industry, we need also consider the consumption and the sustainability of and for people. Sustainable cities create more strong communities and improve the residents’ quality of life”, says Bautista.
This year, CHAOS has taken steps to help real estate players to measure their environmental impact. The goal for 2022 is to provide comprehensive business insights that consider multiple factors in the city development process. This means going beyond the transactions, materials, and emissions of the buildings and looking also into other factors such as transportation, walkability, service provision, people’s thoughts and behaviours.
“We need to start thinking about liveability and sustainability as whole systems that have interconnected parts that cannot exist on their own. This means that providing measurements for these complex systems will require us to look at the sum of the parts that compose them. In Real Estate jargon this translates into being able to accurately forecast the return of investment thanks to the understanding of how macroeconomics is affected by looking into factors that contribute to it – such as market demand and trends, planning regulations, the economy of cities, and job creation, to name a few,” Rincón says.
CHAOS is now developing a solution that combines familiar market drivers with demand forecasts and changing needs. It enables real estate and city planning decisions that are driven by future demands and measurable sustainability factors. The development is done in close cooperation with real estate industry players and academia.
“We at CHAOS are all for people and liveability. We are excited to take concrete steps towards helping the creation of human-centric and liveable cities while promoting sustainable city growth and economic development”, Bautista says.
CHAOS’ AI-based urban forecasts and data screening help noste.io promote a more sustainable real estate business and create value for its customers.
treco leverages the transparency and precision provided by CHAOS’ data, particularly in rental pricing and predicting trends in the housing market.
Multiple survey results and reports published during recent years indicate that the majority of executives in the RE industry now believe that harnessing the potential of big data and AI offers a huge competitive advantage But how far are we in the transformation process? Has the industry unlocked the full potential of data, advanced analytics, and AI?
