The economy has created recent challenges for both investors and occupiers as it relates to investing in modernizing and improving sustainability in their built environments. JLL’s new report, The Commercial Case for Making Buildings More Sustainable, highlights three key factors that should still be prioritized in decision-making around ESG.
Firstly, the rising demand for sustainable buildings is impacting office market dynamics globally. However, the current pipeline of low-carbon workspace falls short, with only 34 percent of future demand being met. Tenant’s expectations for sustainable buildings are evolving, with increasing value for environmental performance and green buildings. This shift is evident in some markets, where low-carbon office spaces are commanding historic rental rates.
Secondly, more regulations are on the horizon. These signal a growing commitment to sustainability in commercial real estate. Lastly, the mounting costs from physical climate risks underscore the need to assess the risks and potential damage from extreme weather events.
“Despite the current headwinds from today’s global economic environment, the business case for making investment into decarbonizing and resilience across real estate portfolios is getting even stronger.”
– Guy Grainger, JLL’s Global Head of Sustainability Services and ESG