17. Sustainable Real Estate Roger Baumann
COO & Head Sustainability, Credit Suisse Global Real Estate
The Market for Greener Buildings At the global climate conference in Paris in December 2015, the international community agreed on a new climate protection accord to reduce harmful greenhouse gas emissions. Since buildings account for around 40% of global CO2 emissions, sustainable real estate can make a significant contribution towards achieving global climate protection goals.1 “Green real estate” and “green buildings” have been gathering momentum as a theme in the real estate sector for some years and mirror the trend towards more sustainable properties. In Europe, there are now more green buildings being constructed than conventional buildings.2 The same is true for the US commercial property market. Sustainable buildings account for between 40% and 48% of the total real estate market.3 This is equivalent to an annual investment volume of around USD200 billion in 2016.4 Up to USD300 billion is currently being invested in green buildings worldwide,5 a trend that shows no sign of slowing down. Sustainable properties can offer added value, as reflected in the higher rental and sales prices they achieve on national and international real estate markets (see Figure 21). Studies show that in some cases rental prices are more than 10% higher and sales prices up to 30% higher when compared with conventional properties.6 Apart from financial factors, such as securing and enhancing the risk-adjusted return, the main advantages are environmental benefits, resulting from lower energy and resource consumption, as well as positive social aspects. Sustainable real estate therefore integrates environmental, social, and governance (ESG) factors into investment decisions. The general assumption is that sustainable properties are better equipped to meet the challenges of the future, help to reduce risks, and offer the prospect of superior returns. In addition, building regulations and disclosure obligations are getting stricter worldwide, turning green buildings into a necessity rather than a luxury.
Sustainability Certificates and Green Labels Green buildings often carry sustainability certificates or labels that allow users to judge the quality of their sustainability performance. Certificates
125
