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The climate crisis is forcing pretty much every industry and business to reevaluate long-held traditions and practices. Though the transportation industry remains responsible for the lion’s share of greenhouse gas emissions, real estate isn’t far behind. According to figures from the U.S. Environmental Protection Agency, the transportation sector accounted for 28% of all greenhouse gas emissions in the nation in 2021, while commercial and residential buildings generated about 13%.

With that in mind, Twin Cities Startup Week organizers on Tuesday held a panel to dive into the future of real estate amid a changing climate. A half dozen speakers from the “Sustainable Developer Collaborative” shared some of the reasons that some companies and investors are still slow to adopt climate-friendly practices.

In the eyes of collaborative, one of the biggest obstacles standing in the way of sustainability is simply investor fear of straying away from more traditional development approaches. Though sustainable real estate projects are generally well received by the public, investors are sometimes hard to win over because sustainability is still considered an “emerging” market, said real estate developer and broker Sandra Rieger. Traditional development patterns generally have clearer paths forward for investors, she noted.

“We have been getting feedback about this concept because it’s not a proven-out concept for our market,” said Rieger at a panel held at the headquarters of Cloudburst SBC and Augurian in Northeast Minneapolis. “A lot of times investors are pretty cautious about moving into a new way of building.”

A second issue Rieger noted is the lack of resources available to small developers. From cautious lenders unwilling to collaborate on new projects to “a lack of like-minded developers to go to and problem solve,” sustainability-oriented developers are at an inherent disadvantage in today’s real estate market, she said. The Sustainable Developer Collaborative, meanwhile, was founded to serve as a viable alternative.

Cody Fischer, president of the sustainability-focused real estate company Footprint Development, said there are two main forms of carbon emissions in the real estate industry: Embodied emissions and operating emissions. Embodied emissions stem from materials and methods used by developers during the construction process. Operating emissions, as the name suggests, occur from ongoing use of a building after it’s been built.

“Operating carbon emissions is what gets all the attention when people talk about green building,” Fischer told attendees. Yet, “when you look at embodied carbon versus operating carbon emissions over 10 years for a new building, 80% of emissions are from the stuff that went into making the building, and that happens on day one.”

Concrete and steel are the top two emitters of greenhouse gas. Fischer suggested looking for wood frame construction over steel, or asking for low-carbon emissions concrete mixes available across Minnesota. Using organic insulation like cellulose (chopped up newspaper) rather than high-emissions foams is another way to reduce upfront emissions.

Going fossil fuel free and all-electric is a big step for improving a building’s efficiency and environmental impact, said local architect Adam Bradley Jonas. But beyond the pragmatics of designing an energy efficient building, it’s equally important to foster community connections to sustainability, he said.

Creating urban landscapes and green spaces, for instance, can help. Ditto for offering composting and rain collection on site to reduce resource waste.

“The building sets up the framework for these things to happen,” said Jonas.