Beautiful facade, dirty reality: Green washing in the real estate sector

The construction and real estate industry is responsible for around 38% of global CO2 emissions - an alarming figure that clearly shows how big an impact this sector has on the environment. Terms such as “climate-neutral construction”, “green certifications” and “energy-efficient refurbishment” dominate marketing materials from project developers and investors. But how often is there more behind these promises than just a pretty facade? Greenwashing, i.e. the pretense of ecological responsibility without real sustainability, has become a serious problem.

You are green washing if...  

your company presents itself as more environmentally friendly than it actually is. It describes strategies that make companies appear more sustainable than they actually are. This can involve deliberate or negligent actions that create the impression of sustainability without delivering meaningful environmental benefits. The real estate industry provides plenty of examples:

• Inadequate certifications: Many buildings are awarded sustainability labels such as LEED or DGNB even though they only meet the minimum standards. Energy-saving lighting or green roofs are often enough to declare a building “green”, even if its overall balance sheet is barely better than that of a conventional building. This is possible because certifications are often based on individual measures and do not require a comprehensive consideration of the entire life cycle of a building.  

• Misleading promises of energy efficiency: Climate neutrality is often bought through CO2 offsets instead of genuine emission reductions. A building can have high energy consumption while its operator creates the illusion of sustainability through certificates or reforestation projects.  

• Incomplete life cycle analyses: Often only the operational phase of a building is considered, while the CO2-intensive production of building materials or demolition are not taken into account. New buildings may be energy efficient, but when they replace functioning old buildings, their overall balance is often negative.

The hidden traps of modern real estate

Business with “green” promises is flourishing in the real estate sector, but how often does the beautiful appearance conceal an ecological disaster? A prime example: New buildings are celebrated as energy visions, while functioning old buildings are unceremoniously razed to the ground. The “gray energy”, i.e. the energy that was stored in the original materials, falls by the wayside. The unavoidable demolition, material disposal and production of new building materials send CO2 emissions sky-high and mean that the initial environmental benefits of “green” new builds are lost for years. Wouldn't a smart refurbishment have been the more sensible and sustainable alternative?

But that's not all: “intelligent” office buildings promise a revolution in energy consumption thanks to digital control systems. The reality is often quite different: Error-prone systems and sub-optimal use mean that the expected energy-saving success fails to materialize. Added to this are energy-hungry IT systems that dash all hopes. Effective functioning of these technologies requires precise implementation and experienced consultants.

The sinfully expensive appearance of sustainable real estate  

In the glamorous world of real estate, greenwashing can be a costly nightmare for investors and users. Sustainable promises sound tempting, but what if these promises suddenly fall flat? Investors must fear that the value of their supposedly environmentally friendly properties will fall dramatically as soon as they fail to meet the highly praised environmental standards. The financial consequences? Devastating. And the trust of investors and business partners? On shaky ground.  

Stricter regulations such as the EU taxonomy or the German Building Energy Act (GEG) leave no room for false sustainability promises. Companies that engage in greenwashing could find themselves forced to carry out expensive retrofits in order to meet regulatory requirements. And the public exposure? Damage to their image that can have legal consequences and jeopardize their reputation.  

But tenants and buyers also face an unexpected hurdle. Those who fall for the deceptive sustainability claims may find themselves confronted with rising operating costs and a real environmental footprint that falls far short of expectations. What is advertised as a green paradise turns out to be a costly bad investment. Who can afford to believe the false promises here?

Transparency through technology - the key to real sustainability

In the era of digitalization, a new battlefield is opening up in the fight against greenwashing - and it's being fought digitally! Modern software solutions are the heroes that protect us from the deceptive appearance of green real estate. But how?

Let's start with the energy monitoring tools that reveal the actual energy consumption of a building in real time and compare it with the lofty promises. Here we can see where in theory it's fair weather and in practice the storm is raging. Deviations come to light and inefficient areas can be optimized in a targeted manner - a real game changer!

Life cycle analyses (LCA) go one step further: they not only look at the operation of a building, but also provide a comprehensive evaluation of the production of building materials, transportation and the construction process through to disposal or recycling. This holistic approach ensures that not only the shimmering facets of sustainability are highlighted, while the emission-intensive dark sides are swept under the carpet.

And then there is artificial intelligence, which tirelessly sifts through large amounts of data and checks the plausibility of questionable sustainability promises. AI systems can compare building certificates with real consumption data - an invaluable resource for investors and users who want to protect themselves from costly bad investments.

Companies that are serious about sustainability are increasingly turning to these technologies to create absolute transparency. In a world where greenwashing is no longer a rarity, reliable data and measurable efficiency gains are the only way to ensure real progress. No more greenwashing - now sustainability is verifiable instead of just advertising!

You want real sustainability instead of green washing - we can help!

At Pogo-Consulting, we offer customized ESG consulting services for the real estate sector. We help organizations integrate ESG principles into their business strategy and provide tools and technology to simplify data collection, reporting and analysis. Our team helps implement ESG initiatives and ensures that your projects are in line with best practice and deliver measurable results.  

Make an appointment now  

In times of digital transformation, we accompany you as a strategic partner on your journey. Don't rely on empty promises - rely on demonstrable sustainability with data-driven solutions and sound advice for a truly sustainable future.

References: 

WKO - Link 

Ummen - Link 

Buildingminds – Link 

Planon - Link 

Crem-Solutions - Link 

Ucem - Link 

White Case - Link