The transition to net zero will almost certainly be one of the most significant capital outlays in history. A 2022 report from Goldman Sachs noted that Electrification ‘is poised to revolutionise European Economies and our everyday lives’ and that this effort would ‘need to mobilise €3.7 trillion of capital, most into green energy infrastructure, to develop renewables, upgrade power grids, refurbish buildings and to support the switch to electricity for mobility real estate and manufacturing.’
A report from BNY Melon and Fathom consulting called this ‘the largest redeployment of capital in history’, and we believe that this is particularly true for the real estate market, which will have one of the most difficult challenges in transforming almost every aspect of how it builds, maintains and operates its assets.
For some, this transition will be a cost that brings down margins and returns. For others, however, this represents a transformational opportunity as the transition will come on the back of new technologies and business models. Venture capital investing in the built environment is squarely in the second camp – backing the next generation of companies that will enable the trillions of dollars in capital that will be deployed in the next decade. And the companies that develop these new technologies to heat / cool buildings, electrify transportation, generate and store energy and manage and control operations will emerge as the next generation of market leaders in the same way that Google and Microsoft emerged as dominant players in the information age.
You can now read the full thought leadership at the link below