The energy transition is a central building block for the decarbonisation of our economy and society. Without the consistent expansion of renewable energies, it is impossible to achieve the climate targets and secure a sustainable future. In this context, traditional real estate is increasingly becoming real assets that offer not only economic, but also environmental and social added value.
Contribution of the building sector to emissions
According to the latest report from the Energy Transitions Commission (ETC)[1] dated 3 February 2025, the global building sector currently contributes to a third of greenhouse gas emissions. To significantly reduce these emissions, tailor-made solutions are required that are tailored to the specific needs of different building types, countries and climates. However, three key priorities are at the forefront of creating a sector with zero CO2 emissions:
- Electrification as a substitute for fossil fuels
- Dramatic improvement in energy efficiency
- Construction of efficient and low-carbon buildings.
The role of renewable energies
Renewable energies such as wind, solar and hydropower are the key technologies to reduce CO2 emissions and reduce dependence on fossil fuels. However, the expansion of these technologies requires significant investments in infrastructure, especially in the power grids, in order to efficiently integrate distributed energy generation.
Real Estate as Real Assets
Real estate plays a decisive role in the energy transition. By integrating renewable energies and energy-efficient technologies, buildings can not only meet their own energy needs, but also contribute to stabilizing the power grid. This makes real estate valuable real assets that offer both economic and environmental benefits.
Financing the energy transition
According to the KfW Climate Barometer 2024[2], the average annual investment required to achieve the goal of climate neutrality in Germany by 2045 is around 120 billion euros. This corresponds to around 3% of Germany's gross domestic product. This highlights the need for companies of all sizes to significantly scale up their efforts to achieve climate neutrality.
The real estate industry is of great importance here, as it requires significant investment in sustainable buildings and infrastructure projects. The fund industry provides the necessary financial resources to make these investments possible. Institutional and private investors who invest in real estate funds make a significant contribution to financing the necessary investments in renewable energies and energy-efficient buildings. Without the support of these investors, it would hardly be possible to cope with the enormous financial demands of the energy transition.
Challenges and opportunities
The transformation of real estate into real assets brings both challenges and opportunities. On the one hand, it requires significant investment and technological innovation. On the other hand, it offers the opportunity to create sustainable and future-proof buildings that make a positive contribution to the environment and are economically profitable at the same time.
Result
The energy transition and decarbonisation are closely linked, with real estate playing a central role as real assets. Through renewable energies and energy-efficient technologies, buildings can reduce CO2 emissions and offer economic benefits. Significant investments are necessary to achieve climate targets. This transformation brings challenges and opportunities, requires investment and innovation, but offers the opportunity to create sustainable and profitable buildings. Investments in this area are crucial for a sustainable future.
[1] https://www.energy-transitions.org/publications/achieving-zero-carbon-buildings
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