Real Estate and green buildings: what do investors think?


I am a fan of numbers and statistics. We knew sustainability and climate change had moved up the Real Estate agenda, but here we have some actual figures - some significant figures - showing the impact on investment choices. There has been a massive growth in environmental, social and governance ("ESG") investing over recent years, and this trend looks set to continue. 

Further government intervention is also on the horizon; the consultation on the increase in minimum energy efficiency standards closed last month.

Between these investor pressures and increased regulation, the message is that the Real Estate sector needs to seriously consider what practical steps should be taken now to address sustainability and climate change. Forward thinking by property owners is key to avoid being caught short, taking a financial hit and to make sure properties (and leases of them) remain attractive to investors and tenants.

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According to a new global survey published earlier this year by deVere Group, 77% of millennials cite ESG investing as their top priority when considering investment opportunities. UKGBC is now preparing for an unprecedented decade of action Julie Hirigoyen, UKGBC       They won’t look kindly on buildings that compromise on their green credentials. In MSCI’s 2020 ESG Trends to Watch report published earlier this month, it warns that property owners could suffer a significant financial hit if they fail to kickstart their journey towards net zero carbon soon. “As the market continues to mature in 2020, green buildings may become the new normal, compressing the market into one where a ‘brown discount’ is put on to buildings struggling to meet new energy standards,” says the report.
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