Our free access period ends on the 18th April 2022. To find out about membership to Sustain RE, please contact us.

2024 outlook, what to expect in real estate and sustainability

4th January 2024

As we head towards 2030, the world is under pressure to deliver a 45% reduction in emissions if it is to stay on track for the Paris Agreement target of keeping temperature rises this century to 1.5°. This means more pressure on real estate to decarbonise.

What can we expect to see in the year ahead and what should the industry be doing? Below are the thoughts of a number of real estate's leading sustainability professionals. We will keep adding to this story as Sustain slows down over the Christmas and New Year holidays, so keep checking in.

If you would like to submit your views on the year ahead, contact news@sustain-re.com.


Neil Granger, senior director, TFT

I’d like to think 2024 will be the year when we make some significant advances towards achieving Net Zero carbon. I am cautiously optimistic about the impact of the Energy Efficiency Directive (EED).  Introduced earlier in 2023, this has established the principle of a legally binding target to reduce the EU’s final energy consumption by 11.7% by 2030 (compared with 2020 figures).  

Many EU states will be adopting this legislation during 2024 and it should begin to result in a more concerted upgrade of existing building stock, much of which is sub-standard and requires high levels of capex to bring it up to the levels set out in the EED. Nonetheless, change on this scale requires significant time, resources and commitment from owners of assets.  Globally, less than half of investors are actively seeking to achieve Net Zero Carbon across their assets.  


Hanna Uusitalo, vice president environment and sustainability at KONE Corporation 

Around 80% of the buildings we have today will still exist in 2050. This means that retrofitting or repurposing buildings to make them more energy efficient and liveable is crucial for addressing the climate emergency.A particular focus going forward is pushing towards circularity.

Embedded carbon in the built environment is a major issue and circular economy principles are quickly developing to reduce the consumption of the planet’s resources and materials by sharing, recycling, reusing and repurposing materials. There is an urgent need for solutions that are low or no carbon and upgradable, and which achieve both sustainability and business goals.

Faced with the climate emergency and resource shortages, there is a global push for finding ways to continually address these issues and bring about permanent change.


Lara, Young, group head of ESG, Cromwell Property Group

 ESG will continue to be a top priority for commercial real estate investors and will receive even more attention in 2024. Such considerations are increasingly being factored into investment processes and we believe that this is a thematic process which will only escalate in 2024. Investors which neglect to adapt inefficient assets, choosing to redevelop traditionally rather than adaptively reusing the existing asset – or who build on undeveloped land rather than previously developed land – will find it challenging to attract occupiers, capital, funding and buyers.

We’re also expecting to see sustainable finance become the industry standard as European banks, as well as other financial institutions, evolve from offering discounts on ESG-linked loans to sustainable financing becoming the industry norm.


Eri Mitsostergiou, director, Savills world research

In 2024, sustainable building practices will take centre stage, reflecting COP28's emphasis on decarbonization and refurbishment over new development, as exemplified by the Buildings Breakthrough’s global push for near-zero emission and resilient buildings by 2030. 

The decarbonisation of the industry will also be led by new regulations in some jurisdictions. This is going to lead to more green certifications such as LEED and BREEAM. In this context, the use of sustainable and low-emitting building materials and sustainably harvested wood will become increasingly common and will help to reduce environmental impact.

Social value, which is in essence about the relationship a building or development has with the local community, will be another driving force, with real estate companies focusing on affordable housing development, community engagement, and diversity and inclusion programs.

The integration of renewable energy sources like solar and wind power will also become standard as they become increasingly cost-effective. Alongside that, we expect investments in sustainable real estate and energy infrastructure to gain further momentum. Real estate companies will focus on ‘greening’ their portfolios and channel resources into solar panels, wind turbines, and other sustainable practices.


Lisette van Doorn ULI Europe CEO

COP28 has held a mirror to progress on efforts to decarbonise the built environment, where real estate is responsible for a massive 37% of global carbon emissions. There were welcome pledges announced to accelerate progress such as the Buildings Breakthrough commitment by 27 countries to make near-zero emissions and climate-resilient buildings the norm by 2030, but there was also a clear sense that the overall pace of action from the built environment isn’t rapid enough, with many hurdles impeding the progress we need. 

ULI’s latest report shows that a lack of alignment between property owners and occupiers is not only hindering progress on decarbonisation, but it also has the potential to increase total emissions over the medium to long-term. Yet at the heart of the solution is the need for a stronger partnership and closer collaboration between occupiers and owners, which itself echoes an imperative of the ULI’s C Change programme, in that to drive transformation we all must unite in our urgent response.

Our recent C Change Survey did reveal some cause for optimism, showing that decarbonisation is rising up the agenda among Europe’s real estate investors and managers, with 89% of those surveyed factoring in transition risks in investment decision making, indicating these risks are being taken seriously. In addition, carbon pricing, a prominent focus of COP28, may provide one of the biggest opportunities for the industry to make the greatest impact on carbon emissions.


Laura Jockers, global head of ESG for M&G Real Estate

Over the next 12 months, real estate investors will continue to look at new ways to decrease carbon emissions across their portfolios whilst ensuring investments remain income producing.

Delivering meaningful action to reduce emissions requires reliable data and methodologies. However, obtaining the data needed to make these informed decisions remains very challenging and time-consuming, particularly for reducing emissions associated with development activity and tenanted space. To help tackle this challenge, we want to see more collaboration between real estate investors, developers, and occupiers including sharing energy data so they can work together to improve the energy performance of their buildings.

Meanwhile, the concept of net zero continues to be both simple and deeply complex. There is still no universally accepted standard for what qualifies as a net zero carbon building, and at the same time, the number of regulatory sustainability requirements needed across different global markets continues to rise. Over the upcoming 12 months we hope there will be more alignment between the various ESG regulatory bodies so that we can create universal standards and avoid duplicative reporting.


Andrew Clarke, vice president, UK office development, Trammell Crow Holdings

Commercial buildings, whether they are new, repurposed or refurbished, need to become better linked to the towns and cities in which they are located. The real estate sector has made great strides in terms of placemaking, creating active buildings that promote community, attract occupiers and add vibrancy, but there is another untapped opportunity and that is to connect to the very fabric of a city. More and more countries are investing in infrastructure, particularly in support of sustainability and meeting net zero targets.

Trammell Crow believes more landlords and developers need to and will embrace the use of clean infrastructure and energy to power buildings as part of a holistic performance perspective. That might be solar PV on the roof – and the extension of permitted development rights in the UK to help facilitate this is very welcome.  But it might also be connecting to existing infrastructure – in this regard innovation is key to making the greatest impact.

We hope to see a new movement spear-headed by investors, developers and landlords to set new standards, which is not only commercially astute because it will help assets retain value and attract occupiers, but also contributes positively to society and promotes the health and wellbeing of our planet and those who rely on it. It will mark a great evolution of our real estate industry.


Vicky Cotton, ESG director at Workman LLP

As we approach 2024, proptech is soaring up the priority list for many real estate businesses seeking to take action to achieve more sustainable operations. Smart technology presents the definitive means of shifting from a ‘business as usual’ approach to managing commercial property, to educated and considered operational improvement or ‘managing for performance’ – the exact focus of the Better Buildings Partnership framework I was proud to help develop and launch this month. This sort of industry collaboration is coming into sharper focus as we drill into the more challenging decarbonisation processes that falls under Scope 3.

2024 should see more meaningful progress in this area, specifically concerning the emergence of technology that can fast-track data sourcing, since a critical element of ESG progress centres on having the intelligence and detail to make and measure the impact of changes. We are finally seeing progress in the installation of smart meters within tenants’ demises too; further evidence of a more collective cross-sector decarbonisation drive.

ESG is now a firm priority across the investment community. Today we regularly see investors superseding regulatory requirements and government policy in pursuit of their own - more demanding - net zero investment criteria. As this becomes more engrained, my hope is that the focus will go beyond point-scoring, and further towards performance improvement at every level – this is the truest form of collaboration after all.


Andrew Smith, president of SIOR Europe and partner at Carter Jonas 

Across Europe, we have seen a fluctuating office and industrial market, however the one constant has been the growing importance of ESG and sustainability, driven by investors and occupiers alike. That said, fuelled by a difficult market, rising inflation and interest rates, there has been too much assertion in the property industry that positive change on climate matters is cost-prohibitive.

As constructions costs stabilise next year, we hope there will no longer be a good excuse to avoid setting high sustainability standards and leading by example. The latest UKGBC report highlighted that insufficient progress now means we need to act twice as fast to meet net zero targets.

There are some key drivers here across Europe: the growth in regulation across Europe; the need to hire and retain talent, as well as encourage productivity, aided by buildings that improve the health and wellbeing of employees; rising energy costs and both investors and occupiers being prepared to pay large premiums for properties with green credentials.


Penny McCallum, head of sustainability at BW: Workplace Experts

It’s a fact that 80% of all buildings that need to be constructed by 2050 have already been built. Therefore, the focus for investment is shifting towards existing stock which needs enhancement to not only meet net zero targets, but also to attract occupiers, who are becoming increasingly stringent about the minimum sustainability credentials that they will accept from their premises.  

This means a significant rise in retrofit and refurbishment at a time when resources are strained and construction costs high, albeit stabilising. We need a sharper shift in focus to a whole life approach, which encompasses design but also operational performance.

While there is more awareness about operational performance, more guidance and standards are needed. We not only need standards but also transparent reporting from landlords and occupiers on performance. With data comes knowledge and with collaboration comes improvement. 


James Nelmes, director, Bennetts Associates

Against the backdrop of COP28 it’s easy to despair at the failure of governments and fossil fuel providers’ ability, or willingness, to progress beyond business as usual. However, mainstream media and public opinion around the world are increasingly recognising the shortcomings of these organisations in stark contrast to what the world requires and expects of its leaders. In the property industry we have talked for several years about ‘stranded assets’ and, similarly, countries should be wise to the risk of becoming ‘stranded economies’. 

We are in a time of rapid change and expect that 2024 will continue and accelerate that change. Yes, governments and big business need to demonstrate leadership, but the change is happening anyway. It has to. In the face of change, and driven by occupier expectations, the investors and developers who are clear, aligned and genuine in their focus to reduce carbon consumption quickly will deliver resilience and returns. 

This will mean ongoing growth in both sustainable refurbishment and the adoption of biogenic construction materials, such as mass timber, at scale. The approach to – and priority placed upon – biogenic materials varies internationally. For instance, in India timber is almost impossible to adopt as a result of regulations designed to protect natural resources. Here, our focus is on reducing operational emissions through climate-responsive design, which is especially important given how carbon intensive the country’s grid is.


Share this article