ESG and Real Estate between impacts and opportunities

All great revolutions emerge from a deep crises. The current transformation of the real estate market, driven by ESG principles, is no exception.

Amid increasingly extreme and devastating climate events, it has become clear that the environmental crisis is the most pressing global challenge of our era. And as buildings account for more than a third of global Co2 emissions, it is no wonder that sustainability has become a top priority for every leading player in the sector.

Compliance with ESG (Environmental, Social, and Governance) principles in real estate has shifted from being a "nice to have" to a core strategic imperative. Investors, owners, tenants, and service providers are all embracing responsible development, recognizing the real estate industry’s pivotal role in driving the transition to a sustainable, green world.

But what does this change mean in practice? Below are a few considerations regarding the impacts and opportunities ahead.

A competitive edge

Adopting ESG principles is undoubtedly challenging, but it also offers a powerful opportunity to enhance your competitive edge. The market increasingly rewards properties with strong ESG performance, offering:

• - Higher prices and rental rates, with potential increases of around 10%
• - Lower operating costs in the long term
• - Greater market appeal, enabling faster leasing and sales cycles

ESG and Real Estate: increasingly stringent regulations

To address the climate emergency, Europe is targeting net-zero emissions by 2050, a goal that is driving rapid adoption of ESG criteria across the real estate sector. Although Italy has yet to implement comprehensive transparency mandates, securing ESG compliance certifications for buildings is increasingly essential. The most widely recognized rating systems include:

• - BREEAM, an international standard that highlights environmentally sustainable building design.
• - LEED, a certification framework for evaluating and benchmarking green building practices.

Today, monitoring sustainability performance is a top priority for investors, who increasingly conduct green due diligence during acquisitions. At the same time, the EU is introducing regulations and initiatives aligned with its energy and ecological transition objectives, most notably the EU Taxonomy and the SFDR (Sustainable Finance Disclosure Regulation).

The “brown discount” risk

An increasing number of tenants are prioritizing high-quality, carbon-neutral spaces—ideally backed by recognized green certifications. This poses a real risk for properties that fail to keep pace with the market’s sustainability standards, often resulting in the so-called “Brown Discount.”

The term refers to a drop in both sale and rental values, creating tangible financial risks for owners and investors. In Italy, where most buildings remain energy-inefficient, this trend underscores the urgent need for retrofitting. Upgrading properties is no longer merely an enhancement; it is crucial to safeguarding their market value.

The importance of investing in technology

Tecnologia e analisi dei dati sono sempre più strategici per ridurre l'impatto ambientale del settore immobiliare. L’implementazione di una qualsiasi strategia ESG, infatti, parte dall’integrazione sistematica delle moderne tecnologie del mondo digitale in tutto il ciclo di vita dell’immobile, dalla due diligence alla gestione quotidiana.

Energy use and carbon emissions, along with management practices and community impact, must all be carefully measured and monitored. Only by assessing performance at every level can an asset’s strengths and weaknesses be identified, paving the way for innovative solutions that create real value.

The adoption of ESG principles in real estate now engages stakeholders at every level. This shift toward sustainable development not only benefits the environment but also drives the modernization of a sector long characterized by resistance to change.