Strategic Focus: Defining The Business Value Of Sustainable Real Estate
Ben Hext
Susan Clarke
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Executive Summary
The real estate community is increasingly engaging with the sustainability agenda, following the emergence of CEO-led carbon reduction targets, tighter building regulations and new interest from financial markets in environmental, social and governance (ESG) criteria. This report analyses the broadening business benefits of sustainable real estate across four key stakeholder groups: investors, owner-occupiers, facilities services firms and C-Level business executives. Our research finds that sustainable real estate is starting to provide value across six core areas: reduced operating costs, employee well-being, reduced climate risk, increased portfolio performance, brand benefits and optimized borrowing costs. To seize the benefits at scale, landlords and occupiers need to deploy innovative strategies to overcome the tenant-landlord split incentive and to fund projects with long-term paybacks.Sustainability Returns To The Agenda For Corporate Real Estate Executives
Investor Pressure And Corporate Targets Make Sustainability Impossible For Real Estate Managers To Ignore
Firms Are Targeting A Widening Range Of Business Benefits Through Sustainable Real Estate
Four Persona Categories Clarify The Value Pools From Sustainable Real Estate
1) Real Estate Investors Are Using Sustainability To Attract Funds, Access Capital And De-Risk Their Portfolios
2) Building Owners Benefit By Increasing Asset Value And Reducing Operating Costs
3) Facilities Managers Can Use Sustainability As A Business Winning Strategy
4) Business Executives Are Pushing For Sustainable Buildings To Differentiate Their Brands
Ambitious Real Estate Directors Must Navigate Multiple Hurdles To Capture The Benefits At Scale
Figure 2. Executives Are Targeting A Broadening Array Of Benefits From Sustainable Real Estate
Figure 3. The Business Value Of Sustainable Real Estate By Four Persona Categories
About the Authors
Ben Hext
Industry Analyst
Ben is an Industry Analyst in the Verdantix Smart Buildings practice. His current agenda covers hardware and software solutions for energy management, on-site power ...
Susan Clarke
Research Director
Susan leads the Verdantix Smart Buildings practice. Her current research agenda focuses on software solutions for real estate management including integrated workplace managem...
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