Environmental, Social and Governance (ESG)

Property professionals have a significant role to play in de-carbonising the economy and meeting sustainable infrastructure targets. This begins with the construction industry and real estate development, but applies equally to the full life cycle of a building.  Read more about the environmental agenda for real estate here. 

By their nature, buildings become part of the communities around them. A property is a long-term asset, however frequently it is traded, refurbished or redeveloped. This brings with it an opportunity to use buildings for the good of the community, creating value for society. Read more about creating social value in real estate here.

ESG scrutiny is set to increase. In the past 12 months we have seen a vast number of property companies, funds, developers and advisors making clear ESG commitments.  Many development appraisals now incorporate targets and objectives.  We have already arrived at a position where ESG factors have to be addressed.  This is motivated by a desire to make a positive contribution but also an acceptance that ignoring ESG is a risk few are willing to take, given where we are socially and politically. Good governance will be required as we see organisations now having to implement their action plans and report back on progress. 

There are significant opportunities for the built environment.  As more capital is being allocated to investments that deliver to criteria, ESG-led schemes will be in high demand. One of the main factors behind this is that it is no longer seen as a purpose-led strategy to the detriment of financial returns.  Developments that can perform on ESG as part of an asset management strategy are set to see their value increase.