New research with UK real estate management professionals conducted by Deepki, the ESG data intelligence firm, shows that almost half (44 per cent) believe that fund managers have the greatest influence when it comes to improving the ESG credentials of commercial real estate, followed by those using the buildings — occupiers (42 per cent), and their employees (36 per cent).
Government and regulators were deemed less influential despite having publicly stated ambitious commitments to meeting net zero targets by 2030 and 2050.
The value of sustainable assets is reinforced by the research findings, with 90 per cent of UK real estate professionals reporting that asset values have increased by 16 per cent–25 per cent as a result of green premia, the firm says.
The impact of poor ESG performance is also marked with half of respondents experiencing asset values which are 16 per cent–20 per cent lower in buildings with poor carbon footprints, and 42 per cent seeing values which are 21–30 per cent lower. Some 54 per cent are experiencing rental yields which are 21–25 per cent lower because of brown discounting, as occupiers increasingly favour greener buildings.
Commenting on the research findings, Katie Whipp, Head of UK, Deepki, says: “Our research shows that fund managers are at the forefront of the drive to improve commercial real estate’s ESG credentials. They have seen the capital and rental values of green assets increase by 16–25 per cent because occupiers are prepared to pay a premium for buildings which are energy efficient and provide an environment which supports the health and well-being of employees.
“We expect ESG regulation to tighten up in the UK during 2023 which will make greenwashing much harder and will support the drive for real change across the sector.”
Deepki writes that it offers a fully populated ESG data intelligence platform to help commercial real estate investors, owners and managers improve the ESG performance of their real estate assets, and in the process enhance their value.
The firm says that the SaaS platform enables clients to collect ESG data, get a comprehensive overview of their portfolio’s ESG performance, establish investment plans to reach net zero, and assess results. It also allows users to report to key stakeholders. The platform is supported by carbon and ESG experts who partner with clients across data collection and analysis, through to ESG strategy definition and implementation.