WOBO acknowledges the work carried out by RICS Global and the World Built Environment Forum and DNA for the link.

While the built environment is going in the right direction, it is still not moving fast enough to decarbonise building stock, according to the latest annual sustainability report produced by RICS and the World Built Environment Forum.

The 2021 report, which collates sentiment from over 4,000 contributors to the RICS Global Commercial Property Monitor and the RICS Global Construction Monitor, shows a greater appetite for greener buildings and more sustainable projects but not at a fast enough pace to help reach global net-zero targets.

Commercial
In 2021, over 40% of respondents identify client, stakeholder and customer demand as one of the main driving forces behind the Environmental, Social and Governance (ESG) investment boom. Indeed, a net balance of 55% more respondents to the survey pointed to an increase in occupier and investor appetite for green and sustainable buildings in the past year, with only 6% of respondents reporting a fall in demand for such assets in spite of the challenges posed by COVID-19.

Other factors influencing the change include increased greater awareness of ESG risks and opportunities and brand image and reputation.

As demand for greener assets grows, there seems to be some evidence to suggest that enhancing the sustainability attributes of a building can command a rent premium. Half of respondents believe green can charge higher rents compared with non-green buildings. For those buildings that aren’t green or sustainable, 30% of respondents cited that these buildings are given a ‘brown discount’ – discounted rents to compensate for not being sustainable.

But more can be done. Whilst 40% of respondents have seen an increase in the number of green leases – landlord and tenant arrangements that encourage or even contractually dictate that there are standards around sustainability – the majority of contributors have yet to see green leases become a dominant feature of the market.