The RICS said in its Sustainability Report 2022 that as demand for sustainable buildings continued to increase not just in the UK but on a global scale, it was impacting both rents and prices, with a significant share of contributors to its data set seeing a market premium for sustainable buildings, and citing that non-green real estate assets were subject to a ‘brown discount’.

For those buildings that aren’t classed as green or sustainable, 48% of respondents noted a reduction in rents, and around half also cited a reduction in sale prices in the UK, with both figures lower than as can be seen in the whole of Europe, with 57% of respondents noting ‘brown discounts’ for rental properties, and 60% noting a ‘brown discount’ in prices.

At the same time, the RCIS stated that a majority of respondents (55%) noted a rise in climate risk assessments by investors on their built assets, suggesting that climate issues were indeed now rising up the agenda and could be influencing the behaviour of key market players.

However, according to the data - which was taken from almost 4,000 chartered surveyor contributors, around 1200 of which are from the UK - there has been little or no change in some important areas in the past 12 months. For example, in construction, a significant share of professionals said they did not measure carbon emissions on projects.

The global trade body said: ‘Progress is being seen in some aspects of the built environment on the drive to be more sustainable, however the rate of advancement needs to accelerate significantly and become more widespread.’

UK falling behind?
‘Some improvement in the push for sustainability has been made in the past year, notably in the commercial real estate sector as demand for green buildings continues to rise.’

Its report continued: ‘While the appetite to seek green buildings in the commercial property sector continues to rise in the UK, the change is modest. Looking at investors and occupiers separately in the UK, around 65% of contributors note that occupier demand for green/sustainable buildings has risen over the past 12 months, however the UK is falling behind Europe as a whole, with Europe leading the way with around 52% of contributors across the region seeing a modest increase in demand, and just under one-quarter stating that occupier interest in green/sustainable buildings has increased significantly.’

The figures suggest Europe is seeing stronger progress on sustainability in the built environment due to the spotlight being turned on green buildings by the European Commission’s ambitious Green Deal. Policymakers in other regions turning their attention towards sustainable real estate will lead to market shifts elsewhere, the report noted.

Construction & digital tools
Survey respondents reported that construction professionals in the UK were beginning to embrace digital tools and technologies to complete sustainability-related analysis for construction projects, predominantly to assess energy needs and costs, but they were less likely to utilise these tools to reduce embodied carbon or to measure the impact on biodiversity.

Some 47% of respondents in the UK report that digital tools and processes were used to complete sustainability assessments on less than half or none of their projects. By comparison, Europe’s figure is lower with 40% of respondents reporting that digital tools and processes are used to complete sustainability assessments on less than half or none of their projects, indicating that the UK is falling behind the rest of the region.

This year’s results also show that there is much room for improvement in measuring carbon emissions. Some 76% of professionals in the UK stated they made no operational measurement of carbon emissions on projects, which is in line with the whole of Europe, but slightly higher when compared globally (72%). With more than half of the UK respondents also saying that they did not measure embodied carbon, even for those that do, less than 14% use it to select the materials they use in their project.

When probed on the barriers to reducing carbon emissions, around 38% of contributors identified both the lack of established, adopted standards, guidance and tools and high costs or low availability of low-carbon products as the most fundamental issues. Alongside this, contributors also highlighted cultural issues and established practices as a challenge.

Kisa Zehra, RICS sustainability analyst, commented: ‘Behaviour change is happening, with higher rents and prices being seen for the more desirable sustainable properties, and climate risk assessments by investors on their built assets rising across the globe. But, measuring all forms of carbon, is also critical to the changes we need to see from the built environment.’

‘Barriers to progress cited in the report have included a lack of established standards, guidance and tools. However, it is equally fair to say that industry must adopt these tools and standards where they are available and should make carbon assessment and management an integral part of business practice. Industry needs to work in collaboration to succeed.’