Environmental, social, and governance (ESG) practices are increasingly critical for firms in the real estate sector seeking to remain competitive and sustainable in the long term. Growing consumer awareness and tighter regulatory standards have made ESG integration essential for achieving a stronger market position and attracting valuable tenants.
Building success with sustainable real estate practices
An effective ESG approach in real estate begins with measurement and actionable steps. One prominent certification in real estate to consider is the globally recognised B Corp certification, which promotes socially and environmentally responsible business operations. Companies like Patagonia, Bullfrog Power, and Canada’s Business Development Bank exemplify the power of ESG-driven strategies.
For real estate professionals, ESG in real estate brings value to both properties and portfolios. Firms can align their efforts with clients who prioritise community-focused values by tracking and enhancing their environmental and social impacts. Realtors and property managers who already engage in community support or sponsorship activities can use these actions as part of a comprehensive ESG strategy, ensuring all stakeholders are engaged.
ESG’s tangible benefit
Philippe Bernier, Executive Vice President of Strategy and Growth at JLL Canada, highlights the competitive edge sustainable real estate practices offer. He notes that as demand for low-carbon buildings rises—especially in urban centres like Toronto and Vancouver—ESG-oriented properties are increasingly appealing to top-tier tenants and lenders. “A decarbonized building is more competitive, attracts quality tenants, and has higher liquidity at sale time,” says Bernier. This trend illustrates how sustainable real estate practices are no longer optional; they’re essential in today’s market.
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Enhancing tenant and investor appeal with sustainable real estate practices
The limited supply of low-carbon buildings globally emphasises the urgency for sustainable real estate practices. According to JLL research, nearly 90% of Toronto’s top office occupiers have carbon-reduction goals. Yet, the current supply falls short of what’s needed to meet 2030 targets without substantial retrofitting and low-carbon construction. By advising clients on properties’ energy efficiency, carbon footprint, and potential for decarbonisation, real estate professionals can create a compelling value proposition that resonates with today’s environmentally conscious tenants.
There’s also a strong case for improving tenant comfort and well-being through sustainable buildings. ESG practices foster resilient properties that serve both owners and occupants by lowering energy use and supporting green certifications. With a focus on ESG in real estate, firms can attract long-term investors, reduce operational costs, mitigate climate risks, and align with key stakeholder values.
To maximise value through sustainability, companies can use ESG tools like Klimado ESG tool to enhance reporting accuracy and boost ESG performance at a competitive rate.
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This article is referenced from Find competitive advantages with ESG integration: A path to decarbonization & community impact by Fast Company
Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit: Avi Waxman
