Real Estate

Venture capital fund backed by housing’s biggest companies plans massive climate change investment

Fifth Wall launches a $200M investment that will be used to accelerate decarbonization

Sea levels are rising, wildfires are spreading, and the U.S. housing ecosystem now faces one of the biggest obstacles to date – climate change.

The phenomenon, which is often debated depending on who you speak with, is accelerating and recent headlines suggest that the threat is real and at our door.

Last year, the Federal Reserve held its first-ever conference addressing climate change, focusing on the threat weather patterns pose to the nation’s housing market.

According to the organization, climate change is now an economic issue we can’t afford to ignore.

That’s why many companies are launching initiatives to not only address climate change but the real estate industry’s carbon emissions.

One of these companies happens to be California-based Fifth Wall, a venture capital firm backed by real estate titans like CBRE, Lennar, D.R. Horton, PulteGroup, Hines, Equity Residential, Prologis, Macerich, Host Hotels, and Lowe’s Home Improvement.

The company, which previously invested in several fintech companies including Notarize, Opendoor, Hippo and more, is now investing in climate change.

Fifth Wall is launching the Carbon Impact Fund, a $200 million investment that will be used to help the real estate industry reduce its carbon footprint.

Fifth Wall Company Partner and Carbon Impact Fund Leader Tyson Woeste

“Real Estate is the largest asset class on earth and one of the largest sectors of the global economy,” said Tyson Woeste, a partner at Fifth Wall. “So, it should come as no surprise to learn that the real estate sector consumes about 40% of the world’s energy, emits 30% of all greenhouse gases (GHG), and consumes 40% of all raw materials.”

According to Woeste, the real estate business is the world’s largest contributor to the climate crisis.

“We believe that the collision of the climate crisis with the real estate industry will be one of the most significant events in the real estate business in our lifetime,” Woeste said. “Fifth Wall is in a unique position to take an active role here. Our 50+ corporate strategic investors are a bold alliance of forward-thinking real estate organizations, who can collectively take responsibility and take action to identify, develop, and adopt critical new technologies to reduce the industry’s carbon footprint.”

And that’s exactly what Fifth Wall intends to do.

According to the organization, the Impact Fund will operate similarly to the company’s previous technology funds and will be broken down into four categories:

  • Decarbonization: Creating technologies and business models that enable a transition towards a net-zero carbon Built World, such as alternative power, carbon capture, and re-use, utility efficiency, and modern mobility
  • Climate Resilience: Developing technologies and business models built to adjust to or mitigate an already changing climate, such as retrofit technology, asset repurposing, vertical farming, and data processing
  • Waste Management/Circular Economy: Creating technologies that aim to maintain the value of products, materials, and resources while minimizing waste, such as construction materials, modular construction, and materials-as-a-service
  • Tracking and reporting: Which will help the sector better understand the damage they are causing through tracking assets and portfolios
Fifth Wall Co-Founders Brad Greiwe (left) and Brendan Wallace (right)

Fifth Wall’s co-founder and managing partner Brendan Wallace warns that 2020 will be the year everyone realizes that, above all else, climate change is a real estate problem.

“This is not just about saving money anymore,” Wallace said. “It is imperative that the entire real estate sector accepts responsibility for being the single biggest contributor to the climate change crisis. “This is one of the most important fights of our generation. Australia is on fire, Brazil was on fire, and people are dying. If this is not your number one priority as a real estate owner, you have got your priorities wrong.”

3d rendering of a row of luxury townhouses along a street

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