Impact on Real Estate Development Industry
At the Bloomberg CEO Forum, there was an exciting discussion on building new, sustainable cities. Among the panel included Raymond Lawler, CEO of Hines Asia Pacific—a prominent investment firm—and Chintan Raveshia, Cities Business Leader of Arup—a design and engineering company.
FORCES FROM STAKEHOLDERS
As two real estate development industry leaders, both speakers shared experiences of external forces affecting business decisions due to the recent focus on climate change.
1. Governments now have climate change as a top-of-mind concern, so they have increasingly enforced business regulations.
2. Customers and tenants are demanding that businesses be more mindful of the environment.
3. Investors are forcing companies to think long-term. For instance, in developing a new real estate project, “buildings cannot be obsolete upon completion,” meaning that developers must be forward-looking and sustainable to cope with future uncertainties.
THREATS AND OPPORTUNITIES
All these factors come into play and influence decision-makers in the business—they cannot be ignored. On the one hand, these factors can be considered threats to incumbent firms that have succeeded in their ways. They now need to adapt quickly and, in many cases, would require a substantial amount of new investments. On the other hand, this also serves as a massive opportunity for businesses that can crack the code and appeal to modern governments, customers, and investors. This would allow them to take advantage of the significant market potential in the increasingly challenging world while creating a positive impact through their businesses.
In the modern business world where all stakeholders demand an honest and transparent path toward sustainability. Companies must view this as an opportunity to capture demand and not just a challenge that threatens their usual operations. Raveshia cited Arup as an example of exercising this mindset which successfully attracting investors and customers through its holistic embedment of sustainability.
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