The Future of Real Estate Valuations: The Impact of ESG. Views from a European Expert Group

RICS (2024) | Asset Management, Risk Mitigation, Valuation

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The present study underscores the mounting significance of sustainability, resilience, and ESG (Environmental, Social, and Governance) factors in property valuation. Driven by regulatory demands, stakeholder expectations, and risk management needs, ESG considerations are increasingly influencing market value, investment appeal, and financing terms. In the contemporary context, valuation professionals are compelled to take into account a broader spectrum of external factors, including fiscal policies, planning regulations, and certification systems such as LEED, BREEAM, and GRESB. ESG elements in leasing and finance also have a significant impact on commercial property valuations.

The governance of the RICS is of particular significance in this regard, with its valuation professionals being bound by global standards and ethical codes. The paper proposes a more extensive set of ESG indicators that are deemed essential for the asse…