A Sustainability strategy attracts businesses with similar commitments
The majority of consumers have become ‘greener’ in their purchasing, and 50% rank sustainability as a top 5 value driver. We’ve also seen over the past five years, products with ESG-related claims account for 56% of all sales growth. In this light, we can expect businesses will want to meet these consumer expectations. We can see how the sustainability of the premises could inform where they decide to set up their operations. Businesses want to align with what their consumers value. As a result, they need options that help them meet those goals. CREs that have sustainable premises to offer will take the lead here and attract tenants by being the obvious lower Scope 3 emissions option. Businesses that can report lower scope 3 emissions ultimately become more appealing to their respective consumer base.A sustainability strategy supports a strong case to attract investors
ESG factors were considered by 85% of investors in their investments in 2020, and 91% of banks watch the ESG performance of investments. It’s also important to note that 74% of investors surveyedsaid they are more likely to divest based on poor ESG performance than before the COVID-19 pandemic. Investor interest continues to grow and shows no sign of weakening. Research conducted by Deutsche Bank supports this view. The bank evaluated 56 academic studies. In 89 percent of those studies, they found that companies with high ESG ratings outperform the market in the medium and long term. We are also expecting the biggest capital reallocation in history, fueled by the surge in Net-zero action. Savvy investors and business owners are already positioning themselves to catch that wave.A sustainability strategy is good preparation for government regulations
As per the Paris Agreement, world leaders agree we need to limit warming to no more than 1.5 degrees. To achieve this, emissions must be reduced by 45% by 2030 and reach net zero by 2050. Climate change has reached an observable status, and governments across nations are putting plans into action to mitigate its effects. Top of mind is the disclosure requirements proposed by SEC in March 2022. Amongst other things, the proposed rules call for the disclosure of direct greenhouse gas emissions. The New York City Local Law 97 is a great example of regulatory efforts to decarbonize CREs. Under that law, most buildings over 25,000 square feet will face greenhouse gas emission limits. It is likely that we will see this type of regulation repeated across North America. New regulations are also being implemented internationally, in the UK and the European continent. There are clear benefits to adopting a sustainable business model. In fact, getting on board could be a significant advantage. Deloitte surveyed CxOs from 24 countries in their Deloitte 2023 CxO Sustainability Report . An overwhelming majority of 84% agree that the world can reach climate change goals, while also achieving global economic growth. WBSC weighs in, saying, “Companies that fail to make the transition with the speed and agility required are likely to attract a higher degree of risk, produce more volatile earnings and losses, and have less resilient business models.” Looking to the future, companies will find the most stable footing if they adapt and innovate. It is possible for CREs to remain competitive in a changing landscape. A sustainability mindset will get them there.