Europe leads the way: RICS 2023 Sustainability Report highlights rising demand for green real estate

The Royal Institution of Chartered Surveyors (RICS) is pleased to announce the publication of the 2023 global sustainability report. The publication outlines the state of the world’s green and sustainable real estate and investor interest in acquiring and developing it.

With the results of RICS previous sustainability reports having appeared in important institutions such as the European Banking Authority (EBA) in their report ‘on the role of environmental and social risks in t he prudential framework’, we hope this edition will be equally useful to all markets and stakeholders.

Across Europe, almost 80% of contributors have noticed occupier demand rising for green real estate in the past year. This is higher than in any other region. However, most respondents (around 54%) pointed to only a modest rise, while roughly a quarter reported a significant shift.

77% of survey respondents in the region stated that investor demand for green buildings had risen to some extent within the last twelve months, with the overall global sentiment reflecting this at 53%.

The slightly more impressive European numbers could be in response to the ambitious policies set by the European Commission, including the Energy Performance of buildings Directive and the Renovation Wave. The policies aim to reduce carbon emissions and energy consumption across the building sector substantially by 2030.

Interestingly 61% of respondents (the highest figure globally) stated that demand has risen in the past twelve months for reusable and recyclable materials and components, putting Europe at the forefront for utilising sustainable materials in building projects.

When asked what barriers contribute the most to investors being unable to acquire sustainable/green buildings, respondents in Europe cited high initial costs (59.1%), lack of a return on investment or uncertainty/lack of data around the benefits of acquiring green buildings (38.5%) and lack of common standards for green buildings (31.7) as the main contributing factors.

Almost half of contributors from Europe report that energy efficiency, reducing energy consumption and fossil fuel use is a fundamental feature for a green building for investors. In addition, around 54% of professionals from the region state that green building certifications is an essential aspect of a sustainable building for investors, just under a third state that it is a vital aspect for occupiers.

Tina Paillet, President Elect at RICS, said:

“The latest RICS global sustainability report shows that Europe is an exemplary region in relation to positive sentiment about sustainable real estate. This points to the positive impact of the European Commission’s strategy, alongside those of the leading countries in the region, to reduce carbon emissions and energy consumption across the region, which is promising to see.

“The built environment contributes 40% of the world’s carbon emissions. We cannot tackle global emissions without substantially reducing embodied and operational emissions from buildings and infrastructure. Because of this, RICS continues to develop its green standards for the sector, such as the recently developed Whole Life Carbon Assessment (WLCA) to guide the industry in a direction that supports greater sustainability and decarbonisation. What we can measure, we can then manage –understanding the scale and scope of emissions is a key first step. Sustainability is much wider than carbon emissions, and RICS will continue to support professionals through our range of standards, existing and in development”.

Source : RICS