"Sustainability and Innovation in the Real Estate & Construction Industries"

Riga may have lagged behind in the new real estate project development, but what has already been started and what is planned for the future is even more daring and sustainable than what's been done in Western Europe. This is one of the takeaways from the Nordic Baltic Business Forum, which took place in Riga, May 12, focusing on how are Nordic investors contributing to the sustainable development of the real estate and construction industries in Latvia.

Since the restoration of Latvia's independence, Nordic investors have provided a significant contribution to the development of Riga's cityscape and currently and are leading the way in introducing green and sustainable solutions in the real estate development in Latvia and are raising the bar for all other players in the market. Nordic investors are also seen as strategic partners to the city of Riga in achieving its ambitious goals in becoming the first climate neutral city in the Baltic States and one of 100 cities in Europe that will aim to reach climate neutrality by 2030.

At the start of yesterday's forum, the Mayor of Riga Mārtiņš Staķis acknowledged that the largest proportion foreign direct investments in Riga have always come from the Nordic countries. „This strategic partnership will always be a priority for me and the city," said Mārtiņš Staķis in his opening remarks. The Mayor of Riga also pointed out that, lucky for him, residents of Riga have shown that they understand that „green and sustainable development is the only way forward". A few other takeaways: Geopolitical context

➡️ When speaking of the geopolitical security in the Baltic region in the light of recent Russia's invasion of Ukraine, Adviser to the Council of Latvijas Banka Andris Strazds emhpasized: "No, Baltic countries are NOT "the next "(see Article 5 of North Atlantic Treaty). In the face of threats from Russia, Latvia is as safe as other NATO member countries.

➡️ Even with a leadership change in Russia things will not change dramatically and the situation in Russia will largely remain the same (see extractive economic institutions in Acemoglu and Robinson "Why Nations Fail?", 2012).

➡️ Containment is an appropriate long-term strategy, when it comes to nuclear Russia (see George Kennan "The Sources of Soviet Conduct", 1947).

Sustainability & Innovation

➡️ The questions should be not, whether you can afford sustainable construction, but rather - can you afford not to?

➡️ The costs of sustainable construction are higher at the moment of implementation, but are less in the lifespan of the project.

➡️ Real estate developers and investors have to make a choice - whether to take costs now, or expect double or triple costs in the future;

➡️ "Soon there will not be sustainable construction, - only construction", as all construction will have to be sustainable.