Sustainability is a high priority among European property investors

What is the approach to ESG among European property investors? What are the biggest obstacles to sustainable investments – and what drives them? These are some of the questions answered in the international study on the approach to sustainable investments among European property investors.

“Although it seems abstract, international studies of this kind aren’t unimportant. They give us a much better understanding of where the market is heading and where there are actual challenges. For the first time, we’re seeing reliable data on ESG trends in the European real property industry. This gives property investors an insight that they’ve been waiting for and that is relevant to their decisions,” says Jannick Nytoft, CEO of the Danish Property Federation.

The study was published in May 2021 and was conducted by the consulting firm Green Soluce and the French think tank IEIF in cooperation with a number of European real property organisations, including the Danish Property Federation. More than 90 players in the European real property markets participated in the study.

Well-defined sustainability strategy

The survey shows that the vast majority of the respondents have a well-defined sustainability strategy for their property investments – and well over half have established monitoring of their climate footprint. The study also shows that sustainability is an investment parameter for many investors.

It is clear that there are several challenges in relation to investments and sustainability is complex. This applies, for example, to the work to obtain valid data in this area. At the same time, there is a lack of a joint normative framework for the sustainability work. So there is not always agreement on what ‘sustainability’ covers and how to work with it.

“In Denmark, we’re grappling with several of the same challenges when it comes to sustainability. We’re also discussing how to access and use data. This study is thus also well in continuation of the large project on sustainability and digitalisation that the Danish Property Federation, Rambøll and PwC are currently conducting,” says Jannick Nytoft.

The study was conducted from October 2020 to January 2021 and was supplemented by a number of in-depth interviews with leading, including several Danish, real property players.

17 specific sustainability proposals

The Danish Property Federation has previously prepared the catalogue ‘The road to greener properties in Denmark (Danish title: ‘Vejen til grønnere ejendomme i Danmark’) on how to create a framework that supports green investments and improvements to properties. It contains 17 specific proposals and four fundamentals barriers that are holding back investments:

1. There must be more direct financial benefits from green investments
2. Improvements must be implementable more easily and quickly
3. Public subsidy schemes must be more transparent and effective
4. There must be more room for innovation and experimentation

There is consequently a need for simpler and more comprehensible legislation that makes the green agenda the centre of attention.