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Highlights from Ecosperity Conversations @ COP29
Decarbonising cities is critical to achieving net zero, given that urban areas are responsible for close to 70% of CO2 emissions. By 2050, it is estimated that Asia will have 1.2 billion additional people living in urban spaces. The built environment, which includes buildings, infrastructure, and urban spaces, is a major contributor to global carbon emissions.
Two key strategies have emerged to make the sector more sustainable: decarbonisation, which focuses on reducing the carbon footprint of buildings; and digitalisation, leveraging technology to enhance efficiency and sustainability.
At a recent Ecosperity Conversations session organised in partnership with SP Group, we discussed the convergence of these two trends in reshaping the built environment, making it more resilient, energy efficient, and environmentally friendly. We examined the solutions and opportunities that currently exist across the real estate value chain, and shed light on Asia’s transition to a low-carbon built environment. Some of the main summary points include:
Satinderpal Singh Sandhu, Head, Smart Cooling Solutions, Sustainable Energy Solutions at SP Group, highlighted the urgency of addressing climate change for this sector in his welcome address to the 80-strong audience. He said, “We stand at a crucial juncture, a time where our decisions and actions will shape the skyline and sustainability of Singapore and Asia for generations.”
In the face of numerous challenges including geopolitical and macroeconomic headwinds, aging buildings, and the perceived high cost and disruptiveness of retrofitting buildings, he cited success stories such as the Airbus Asia Training Centre (AATC), where leveraging innovative technologies and advanced data analytics has helped overcome the challenges faced by existing buildings in their decarbonisation journey.
Another example is the Tampines Distributed District Cooling (DDC) network, which is the first of its kind large-scale district cooling system implemented across seven existing buildings in a dense urban area. This project is expected to reduce about 1,300 1,000 tonnes of carbon emissions annually, equivalent to removing about 1,236 910 ICE vehicles cars off the roads of Singapore.
Satinderpal Singh Sandhu, Head of Smart Cooling Solutions, Sustainable Energy Solutions at SP Group speaking at Ecosperity Conversations
This sentiment of opportunity and long-term value creation was echoed by Mikkel Bülow-Lehnsby, Co-Founder & Executive Chair at Urban Partners. Based in Denmark, the investment firm creates asset value in their real estate portfolio by focusing on holistic and sustainable ways to build resilient and liveable buildings, and city districts . He emphasised that companies adopting a long-term perspective, focusing beyond immediate profits, stand to gain significantly. By addressing the unmet needs of tenants and urban residents, these firms can create vibrant, attractive communities. This approach not only enhances living conditions but also generates additional long-term value, ultimately leading to better outcomes and higher returns on investment. A prime example is Urban Partner's North Harbour project in Copenhagen, which received widespread recognition. This initiative transformed a once-inaccessible port area into a globally acclaimed model of collaborative, partnership-based urban renewal and regeneration. Over the past decade, the project has not only revitalised the area but also created substantial value for both the community and investors.
Digital tools can help building owners to track carbon emissions, optimise material use, and enhance energy efficiency, accelerating the transition to net-zero buildings. However, challenges such as high costs and data security concerns hold back wider adoption by the industry.
Going down to the nuts and bolts of decarbonisation in the built environment involves reducing embodied carbon and operational carbon. Embodied carbon comes from construction materials and processes, while operational carbon refers to emissions from energy use in buildings. Alvin Ee, Research Fellow, from the Energy Studies Institute at the National University of Singapore, emphasised the importance of addressing both to reduce carbon emissions effectively. Strategies for decreasing embodied and operational carbon include the use of renewable energy, energy-efficient building designs, retrofitting existing structures, and integrating passive cooling design.
Panel discussion at Ecosperity Conversations [In picture, from left to right: Derek Ang Director, Green Mark Department & Director (Covering), Quality & Certification Department Building and Construction Authority; Giovanni Cossu Head of Sustainability CapitaLand Development; Yvonne Voon Partner Fifth Wall; William Low Director, Investment (Real Estate) Temasek]
One question posed to the panelists was on how developers approach decarbonisation given the complexities operating across different geographies with differing policies, and challenges in the cost environment. Giovanni Cossu highlighted CapitaLand Development’s holistic approach to decarbonisation, focusing on the three key stages of a building’s lifecycle: design, procurement and construction. This strategic focus enables the company to align with broader sustainability goals while driving meaningful impact throughout the development and construction process.
Governments and industries worldwide are setting net-zero targets, driving policies that mandate energy performance standards and sustainable construction practices. The panel discussed the balance between incentives and regulation to challenge existing buildings to decarbonise – and at a faster rate.
Derek Ang from the Building and Construction Authority (BCA), says Singapore employs both the incentives and regulations to encourage the real estate and building ecosystem to future proof the island state’s buildings. These include initiatives like the Green Mark Incentive Scheme for Existing Buildings 2.0, bonus Gross Floor Area incentives, and other monetary incentives. Recent regulations include the Mandatory Energy Improvement (MEI) Regime, which will be implemented later in 2025, requiring energy-intensive buildings to undergo energy audits and undertake energy efficiency improvement measures.
When asked if BCA could accelerate the introduction of more regulations to speed up building greening efforts, Derek shared that while the industry should be ready for changes, especially as sustainability regulations becomes increasingly mainstream, any additional regulations have to be implemented in a measured and responsible way. To date, the agency has had success in greening more than half of Singapore’s building’s Gross Floor Area (GFA). Looking ahead to the next twenty years, he shared that the agency looks forward to continuing its collaboration with the industry, particularly in developing technology and AI optimization solutions, as well as changing behaviors to improve building performance.
While government policies help drive the adoption of green practices, the speed of adopting green practices is still driven by market forces. Grade A tenants, which typically comprise large enterprises and MNCs, are demanding floor space in certified green buildings to satisfy their own ESG requirements and long-term cost savings.
In the long run, the financial benefits of sustainability will become increasingly clear to building owners. Giovanni Cossu of CapitaLand Development adds, “There is a shift underway - from sustainable real estate to quality real estate. Sustainability has become a defining factor of quality”.
The integration of decarbonisation and digitalisation creates a transformative impact. COVID and high interest rates slowed Singapore's digitalisation adoption for green building solutions, but progress is underway, observed Yvonne Voon, Partner at Fifth Wall. She noted significant local innovation, emphasising the need to scale these solutions for commercial viability. Yvonne called for more vigorous regulation, similar to the United Kingdom, to accelerate the adoption of digital solutions and the greening of current buildings.
Innovative solutions are being introduced in Singapore, but it would necessitate taking them to the region that would enable them to scale. Some exciting solutions on the horizon that the Fifth Wall has invested in include battery-paired solar windows and a liquid desiccant solution that can be plugged onto HVAC units, reducing the energy needed to dehumidify air in the cooling process. She adds, "To drive innovation in Asia's real estate sector, we need to amalgamate demand across the region, take a leap of faith, and embrace the vision of the tech-enabled third generation. We're at the cusp of an inflection point, and by working together, we can accelerate the adoption of sustainable technologies and create value through green premiums."
Sustainability-driven disruption in the real estate industry is forcing stakeholders to rethink traditional practices, embracing innovative technologies and holistic approaches to create more environmentally friendly, energy efficient, and resilient buildings and urban spaces. While there are challenges in decarbonising cities, opportunities exist through ongoing innovation. Developers and landlords need to take a holistic approach to both operational and embodied carbon.
Digitalisation offers the built environment ecosystem plenty of opportunities to create more resilient assets, reduce operating costs, and attract environmentally conscious tenants. The Singapore model, balancing regulation and incentives, was highlighted as a potential example for sustainable urban development. Innovation and collaboration between the public and private sectors are crucial in driving sustainability in the real estate sector.
William Low, Director, Investment (Real Estate) at Temasek summarised the discussion with this observation, "As the regulatory landscape evolves, developers and landlords must take a holistic approach to carbon management. This presents an opportunity to create resilient assets, reduce costs, and capture value through green premiums, meeting the growing demand for sustainable buildings."
Picture : Successful green buildings in Singapore L-R:
This article was written based on the presentations and discussions at an Ecosperity Conversations session “Decarbonisation x Digitalisation of the Built Environment: Innovation, Investment, Collaboration” on 18 Feb 2025.
