How the impact of ESG today is shaping the future we want tomorrow

How the impact of ESG today is shaping the future we want tomorrow
Carlota Varela Cid
WIRE Portugal, Associate | CBRE Portugal, Marketing & Communications Director

In the past, and across many industries, we've seen the market and its stakeholders pushing for legislation and public policies to support their operations, but with ESG there is a paradigm shift, as Europe is forcing net zero policies and failure to adopt them will very soon become a business liability. But beyond the issue of liability, there is another - and probably the most important - thing for investors to consider: if their real estate portfolios are not aligned with ESG criteria, the value of the assets is likely to fall.

In Iberia, the impact of sustainable strategies has been growing over the past decade, but it is fair to say that it has boomed in the aftermath of the pandemic. Both Spain and Portugal have seen a surge in sustainable development projects and a growing demand for "green buildings" across all market sectors.

It seems to me that, in the current scenario, all investment decisions in the Iberian real estate market should take into account five main aspects of sustainability:

  1. The demand for certifications such as LEED, BREEAM and WELL is increasing. Investors and tenants are actively seeking properties with these certifications, which prioritize energy efficiency, water conservation, healthy environments and use of sustainable materials.
  2. Energy Efficiency Regulations: Iberia has enacted regulations to improve energy efficiency in buildings, including the Energy Efficiency and Sustainable Use of Energy in Buildings Regulation. This encourages property owners to undertake energy-efficient measures and reduces the environmental impact of buildings.
  3. Sustainable Urban Planning: Many Spanish cities are focusing on sustainable urban planning. Initiatives such as pedestrian-friendly streets, green spaces, and efficient public transportation systems are being implemented to promote environmentally friendly and socially inclusive urban development.
  4. Energy Transition: Portugal has made significant progress in renewable energy, particularly in wind and solar power. This commitment to clean energy is influencing real estate development, with a growing emphasis on energy-efficient and renewable energy solutions in buildings.
  5. Green Financing: Real estate developers are increasingly accessing green financing options to support sustainable projects. Green financing refers to financial products specifically designed to fund environmentally friendly and socially responsible real estate projects.

The need to adopt ESG strategies in real estate is not just about creating sustainable spaces and preserving asset value. It is truly about building a legacy that will resonate for generations to come.

So yes, the impact of ESG today is certainly shaping the future we want to see in the real estate landscape tomorrow.

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