ESG and Real Estate Valuation, Perspectives Paper

IVSC (2021) | Asset Management, Risk Mitigation, Valuation

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This third paper in the ESG Perspectives series focuses specifically on environmental factors in the valuation of existing real estate assets. While previous papers addressed ESG from business and intangible asset perspectives, this edition focuses specifically on how sustainability, one of the key subcomponents of the "E" in ESG , can be quantified and reflected in property valuations.

ESG criteria are being used more and more often to evaluate the broader impact of corporate practices. These criteria extend beyond organizational boundaries to influence markets, society and the environment. While ESG is most often evaluated from a corporate perspective, this paper underscores the significance of implementing these principles in relation to tangible assets. Real estate, for instance, is directly impacted by environmental performance metrics such as energy efficiency, which influence both operational outcomes and long-term value.

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