Integrating Environmental Considerations in Real Estate Underwriting

Professional standards paper by INREV (2025) | Underwriting, Financing, Capital Stack

Curators: Asha Lad and Bill Bateman

London, UK

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Why we recommend it: This publication, the initial phase of a larger project, offers a promising step forward in advancing the integration of sustainability into underwriting and valuations. The document effectively recognizes the wide variation in approaches to environmental integration among investors and highlights the most quantifiable factors currently in use. It is encouraging that valuers are now beginning to incorporate environmental factors into their processes, a move that could significantly impact existing underwriting and valuation methodologies. The report interestingly highlights new techniques, such as shadow carbon pricing and green IRRs, are emerging, though not yet mainstream due to regulatory uncertainty and market inconsistency. It affirms that advancing this transition continues to require consistent valuation methodology between investors, occupiers and valuers,…