How AI and Digital Tech Can Help Real Estate Slash Global Emissions

Can Digital Technology Help Real Estate Cut 40% of Global Emissions?

The real estate sector accounts for roughly 40% of global greenhouse gas emissions. Achieving climate goals demands sharp reductions in emissions from both operations and construction. The United Nations Environment Programme highlights the urgent need for significant changes within this industry to meet global and national climate targets.

A recent report by the World Economic Forum (WEF) examines how digital technologies like AI, IoT, and digital twins can help decarbonise real estate. These tools unlock energy savings, increase asset value, and improve climate resilience, offering practical pathways to reduce the sector's carbon footprint.

Digital Solutions Driving Sustainability

AI, IoT, cloud computing, digital twins, and advanced data analytics are key technologies supporting sustainable practices in real estate. These solutions help reduce energy demand, optimise resource use, and promote circular processes across the value chain.

• Smart building systems enable precise control over energy consumption.
• AI-powered energy management improves operational efficiency.
• Predictive analytics enhance tenant experience while reducing costs.

The WEF report points out that sustainable buildings often command higher rental premiums and enjoy lower vacancy rates. Technologies like occupancy sensors and AI-driven analytics also help assess space utilisation, making space planning and management more strategic in evolving work environments.

Christian Ulbrich, Global CEO and President of JLL and Industry Chair for Real Estate at the WEF, emphasises that real estate plays a crucial role as physical infrastructure and an economic enabler. The sector must deliver on sustainability commitments urgently to meet broader social and climate goals.

Economic and Environmental Impact

Adopting these digital technologies could reduce greenhouse gas emissions by up to 20% by 2050 across multiple sectors, including energy, materials, and mobility. Economically, digital solutions have the potential to generate US$1.5 trillion in annual value by 2030 through efficiency gains and lower environmental costs.

Urban areas, which consume two-thirds of global energy, stand to benefit significantly from investments in renewables and smart grid technologies. Modernising grid infrastructure is critical to support electrification, improve storage capacity, and balance supply and demand effectively.

McKinsey reports that reducing and even eliminating emissions in real estate is possible with existing solutions at scale. Upgraded grids ensure reliable power delivery, support electric heating and vehicle charging, and provide resilience against increasing electricity demands.

Retrofitting existing buildings is vital. Currently, only 1–2% of buildings are renovated annually, despite their large share of emissions. Energy upgrades during retrofits can yield savings between 10% and 40%, depending on the asset class.

Challenges to Emission Reduction

The report highlights several obstacles that slow progress:

• Limited integration between digital systems.
• Insufficient investment in digital infrastructure.
• Uneven access to technologies across regions.
• Governance and data-sharing issues hindering collaboration.

To fully capture the benefits of digital transformation in real estate, stronger cooperation between governments, businesses, and civil society is necessary. This collaboration can help standardise data practices, improve infrastructure investment, and accelerate sustainable innovation.

Those in real estate and construction can explore how digital tools are reshaping sustainability efforts and consider integrating AI and IoT solutions to boost efficiency and reduce emissions. For more on AI applications and digital tools, visit Complete AI Training.