Artificial intelligence (AI) and ESG - a connection that is not particularly high on the agenda in the real estate industry. Let's take ESG monitoring with the help of AI as an example: it is only in tenth place according to this year's 18th market study "AI - but how?" by the Berlin University of Applied Sciences. According to the study, only four percent of real estate companies are currently making intensive use of AI. Around half of companies still have no experience at all with AI or even firmly reject it (or out of powerlessness).
Benefiting from climate protection
The use of AI offers a special opportunity for green growth: by this we mean increasing the added value per tonne of carbon emitted. Every climate protection measure can then be worthwhile not only for the environment, but also in monetary terms for the owner. Or rather: must instead of can! As Jens Beckert, author and professor of sociology, put it so well: "Climate protection must be translated into the language of prices."
Risk quantifiability
Let's take investment decisions on the financial market as an example: AI tools have long recognized patterns and correlations in available data that were previously hidden from human actors. And depending on the model, the AI quantifies the respective uncertainty in the decision for or against an investment option - unlike ChatGPT, which tends to conceal its own uncertainty in its statements and suggests a certainty that does not exist.
Human + AI = better forecast
In the real estate industry, we advocate a rough engineering analysis of the generally known costs of various ESG measures, from green electricity conversion to photovoltaics and insulation, in relation to the respective CO2 savings. This is followed by an in-depth AI scenario analysis for different cash flow developments - depending on whether the market rewards the ESG-enhanced property or penalizes the insufficiently enhanced property. Increasing pressure from users due to the prospect of rising energy prices plus CO2 costs can also be incorporated into the scenarios and be helpful in forecasting the ROI of the various ESG investments. However, human expertise will still be needed to challenge AI in the best possible way. Humans will not be replaced, they will just work with less gut feeling and greater forecasting certainty when in doubt.
The time is ripe for AI optimization
Incidentally, artificial intelligence should still be a thing of the future in our industry. At least that's what the ZIA said in 2020, two years before the ChatGPT hype: The real estate industry tended to see the trend potential for AI only in ten years or more, i.e. after 2030. And even in 2022, there was talk of AI only for administrative tasks, keyword document management. For operational tasks, such as the optimization of the building energy balance through AI, the answer in 2022 was: "Yes, maybe someday." We say: now. The days of investment avoidance and greenwashing are over. Instead of greenwashing, it must and may (also thanks to AI) now be called greenwishing.