The demand for ESG-compliant buildings has continued to increase globally. However, industry uncertainty in legislation and a lack of data are hindering the real estate sector from achieving net-zero goals more quickly. This is the result of a survey conducted by the professional association of real estate professionals, RICS, in which approximately 4,000 real estate experts worldwide participated. "Decarbonization in the real estate sector is still too slow and not sufficiently effective," said Susanne Eickermann-Riepe, CEO of RICS Germany.

The RICS Sustainable Building Index rose to a net balance of +44 points, indicating a growing demand from tenants and investors for climate-adapted properties. The upward trend is evident in all regions, with Europe (+73) showing the greatest growth in demand for green buildings, followed by the Middle East and Africa (+52), Asia-Pacific (+38), and North and South America (+26).

RICS distinguishes between users, i.e., tenants, and investors. More than half of the global respondents reported that tenant demand for green and sustainable buildings had increased in the past twelve months. Investor demand for green properties has shown similar trends, with nearly two-fifths (39%) of the survey participants reporting a slight increase in investor demand for green real estate in the past twelve months.

Sustainability features of a building also have a strong impact on rents and valuations. In Europe, about 27% of respondents believe that green features have a significant impact on the capital value of a property. In comparison, around 16% of respondents stated that green features significantly influence the rental price of a building.

Among the key features of a green building are energy efficiency, reduced energy consumption, and reduced use of fossil fuels. Around 30% of respondents believe that these are essential features for investors. Green building certifications are also high on the agenda, with around 30% of respondents worldwide stating that certification (e.g., Breeam, Leed, Wells or Nabers) is a crucial feature of a sustainable building for investors. Nevertheless, certificates are considered less important for tenants.

High acquisition costs are seen as one of the main obstacles to purchasing green buildings by almost three-fifths of respondents. One problem is the lack of data on the benefits of environmentally friendly buildings. Additionally, just under a third cite a lack of knowledge, awareness, and expertise among investors regarding green real estate as an issue.

The lack of standards and definitions for environmentally friendly buildings is also problematic. The development of binding standards for overall energy efficiency across Europe is seen as a crucial step to achieve the ambitious goals of the EU's Green Deal.

Despite the increasing demand for ESG-compliant buildings, there is still a lack of measurement of CO2 emissions in real estate. Construction industry experts indicated that projects do not measure the sequestered carbon or provide little evidence of how the selection of materials and components affects it. However, to achieve climate goals, actual measurement is essential. "Measuring carbon emissions throughout the entire lifecycle must become common practice. Circular economy practices must be adopted, and qualification measures are necessary at all levels," states Eickermann-Riepe.