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Sustainability, Property and Investment

Sustainability is increasingly relevant to the way property is acquired, financed, managed and valued.

Property investment decisions have long-term consequences. Buildings purchased today may remain within portfolios for decades, during which they will be exposed to changing regulation, energy costs, climate risks, technology, occupier expectations and market conditions.

Understanding sustainability can therefore help investors consider not only the current performance of an asset, but also its resilience, adaptability and potential long-term value.

Sustainable Property Investment

Sustainable property investment involves considering environmental, social and governance factors alongside traditional financial and property characteristics.

Relevant considerations will vary between assets and markets but may include energy performance, carbon emissions, climate exposure, building condition, adaptability, regulatory requirements, accessibility, occupier wellbeing and the environmental impacts associated with an asset.

These issues can influence operating costs, capital expenditure, rental prospects, marketability, financing, risk and value.

RICS's 2026 sustainability guidance recognises investment, acquisition and leasing as important mechanisms through which capital can support more sustainable built and natural environments.

RICS - Sustainability practice for surveyors

ESG and Property

Environmental, social and governance ESG considerations provide one framework through which investors and organisations can consider sustainability-related issues.

For property, environmental considerations may include energy, carbon, climate resilience, biodiversity and resource use. Social considerations can include health and wellbeing, accessibility and the relationship between buildings and communities. Governance concerns how these issues are understood, managed, monitored and reported.

ESG information can therefore form part of a wider understanding of an asset's performance and risk.

However, ESG should not simply become a checklist. The relevance and significance of individual factors depend upon the property, market, investment strategy and purpose of the analysis.

Sustainability and Property Value

The relationship between sustainability and property value is complex.

More sustainable or efficient properties may benefit from lower operating costs, stronger occupier demand or improved marketability. Conversely, properties that perform poorly or require significant expenditure to respond to changing standards may face additional costs and potentially increased risk of obsolescence.

Terms such as “green premium” and “brown discount” are sometimes used to describe these effects, but they should not be assumed to apply automatically.

The impact of sustainability on value needs to be supported by appropriate market evidence and considered within the circumstances of the individual property and market.

This distinction is particularly important in professional valuation.

RICS, ESG and Commercial Property Valuation

RICS's current global professional standard, ESG and sustainability in commercial property valuation, provides a framework for considering significant sustainability and ESG factors in commercial property valuation.

The fourth edition was published in January 2026 and became effective on 30 April 2026. It supports the current RICS Valuation - Global Standards and International Valuation Standards and distinguishes between professional valuation and wider strategic ESG risk advice.

RICS emphasises that sustainability and ESG factors should be considered where they are significant to the valuation rather than assuming that particular sustainability characteristics automatically result in a particular adjustment to value.

RICS - ESG and sustainability in commercial property valuation

Risk, Resilience and Stranded Assets

Sustainability can also influence investment through risk.

Physical climate risks such as flooding, overheating and coastal change can affect property directly. Transition risks can arise from changes in regulation, energy performance requirements, technology, financing and occupier or investor expectations.

Properties that are unable to adapt economically to changing requirements may become less attractive to occupiers or investors and, in more significant circumstances, may face increased risk of obsolescence or becoming stranded assets.

RICS's sustainability guidance specifically identifies the risk of assets becoming stranded where they are not adapted to climate change and changing regulation.

Understanding these issues can therefore form part of prudent long-term property investment and asset-management decision-making.

Investment, Retrofit and Asset Improvement

Investment decisions are not limited to deciding which properties to buy or sell.

Existing assets can often be improved through maintenance, refurbishment, retrofit, adaptation and better management.

Investment in energy efficiency, building fabric, building services, climate resilience or other improvements may reduce operating costs, improve environmental performance or help maintain the usefulness and attractiveness of an asset.

The appropriate approach will depend upon the building, its condition, use, market and investment objectives.

This creates a strong connection between sustainable investment and the wider property lifecycle.

Sustainable Finance

The relationship between sustainability and finance is also developing.

Lenders and investors increasingly consider environmental performance, climate exposure and sustainability information when assessing assets and investment strategies. RICS identifies finance and funding specialists as having an important role in directing debt and equity towards development and property and in helping owners understand how sustainability performance may affect access to investment and green-finance opportunities.

Reliable information is particularly important in this context. Sustainability claims should be supported by appropriate evidence rather than assumptions about an asset's environmental or social performance.

Beyond Financial Return

A sustainable approach to investment can also consider the wider consequences of where capital is deployed.

Property investment affects buildings, places, natural resources and communities. Decisions can therefore have environmental and social consequences alongside financial ones.

This does not mean that financial performance becomes unimportant. Rather, sustainable investment recognises that economic, environmental and social outcomes can interact, and that understanding those relationships can support better long-term decision-making.

Sustain Surveying and Property Investment

Sustain Surveying provides independent professional analysis and advice on sustainability considerations affecting property and investment decisions.

Our approach brings together surveying expertise, sustainability research, RICS standards and guidance, market and policy developments and wider professional evidence to help clients understand sustainability-related opportunities and risks associated with property.

Advice may include identification and interpretation of relevant sustainability and ESG considerations; climate and environmental risk; energy and carbon; resilience and adaptability; potential retrofit and asset-improvement considerations; emerging regulation and professional practice; and the relationship between sustainability, property performance and longer-term decision-making.

Where an instruction requires a formal Red Book valuation, regulated investment advice, financial advice, detailed engineering assessment or another specialist service, the appropriate scope and professional requirements will be identified.