Individual

Society

Markets

Considerations for Investors

The sector relies heavily on personal and sensitive data, such as financial information and personal preferences. Inadequate data privacy measures can lead to breaches and unauthorized access, undermining customer trust and exposing the sector to legal and reputational risks. In addition, data-driven algorithms can introduce biases if not developed and implemented responsibly. Best practice recommendations include: focusing on data privacy and security measures, and advocating for the ethical and responsible use of algorithms. Integrating responsible data stewardship and AI practices into governance and design, helps companies to build resilience against regulatory and reputational threats.

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Creating Future Us is the Not-for-Profit arm of Paradigm Change Capital Partners LLP

Real Estate - Individual

The key societal impacts of concern for investors are: 

 

Responsible AI: Deploying unproven AI analytics or automation in hazardous chemical or mining operations can hold grave risks if systems are scaled irresponsibly. Extensive testing and human oversight are imperative.

 

Privacy risks: The collection of extensive worker, customer and equipment data warrants clear consent permissions, stringent access controls and purpose limitations to prevent abuse or unauthorized use.

 

Discrimination: Underlying flawed data or biased algorithms used risk assessments, equipment repairs and inventory management could disproportionately impact certain groups if not proactively audited. Regular impact assessments can alleviate this.

 

Accessibility: User interfaces for equipment control panels, or operator tools can accommodate people with disabilities and other marginalized groups using inclusive design.

 

Unless the above are proactively addressed, potential ramifications include:

 

  • Noncompliance costs as regulations tighten around safety, sustainability, and privacy.
  • Liability costs if workers are discriminated against by biased algorithms.

Real Estate - Society

The key societal impacts of concern for investors are: 

 

Surveillance infrastructure: The increasingly ubiquitous use of cameras, sensors, tracking and facial recognition technologies could transform environments into pervasive surveillance networks. At this scale, safeguards against unauthorized monitoring are vital.

 

Security: Outdated physical access systems like door locks, perimeter fencing, or facility monitoring cameras can pose operational and data security risks to tenants if not regularly upgraded.

 

Algorithmic fairness: Models driving property valuation, tenant eligibility, customized pricing or predictive maintenance can perpetuate discrimination unless ethical constraints are incorporated into the design.

 

Cyber resilience: Interconnected smart building controls, access systems, medical devices, and operational technologies exponentially increase the risks of devastating ransomware attacks or cascading outages if protections lag.

Unless the above are proactively addressed, potential ramifications include:

 

  • Costs associated with Cyberattacks and fraud enabled by security flaws in real estate systems.
  • Reputational damage if automated systems are seen to exacerbate housing inequality issues.
  • Increased regulatory burden due to increasing surveillance in the sector.

Real Estate - Markets

The key market impacts of concern for investors are: 

 

Vendor ethics: The widespread use of outsourced external data brokers and technology partners creates the need for transparent governance through audits and contracts to ensure fairness, security and privacy are respected.

 

Secondary data markets: The sale of tenant behavioral data profiles to advertisers or  third parties multiply privacy risks as sensitive information circulates without informed consent.

 

Legal compliance: Navigating the evolving, often nascent data privacy regulations across different property jurisdictions is inherently complex for data flows.

 

Regulatory lag: Innovation may outpace oversight, requiring proactive governance to ensure ethical deployment of emerging real estate technologies.

 

Transparency: Lack of visibility into opaque algorithms, data practices, and predictive models across PropTech applications reduces accountability.

 

Unless the above are proactively addressed, potential ramifications include:

 

  • Fines and lawsuits connected to noncompliance with evolving regulations.

 

  • Cyberespionage facilitating intellectual property and sensitive data theft.