The Business Case—Property Values

Organisations and individuals own buildings to make money or to provide a public service efficiently. Setting out the relationship between sustainability and property value aspect of the business case for the transition to a sustainable built environment is important to understanding the rationale for the changing nature of property investment. Guidelines for valuation to include ESG topics, green premiums, brown discounts, resilience and insurance are all discussed. The transition to a sustainable built environment is about integrating new practices that build economic and environmental resilience in buildings and construction. It does not mean sacrificing economic returns, although sometimes the investment equation will need rebalancing and deeper thought. Valuation guidelines already include ESG-related factors and we will examine why that should be. This chapter explains how sustainability impacts property value and how risk management approaches are changing the necessity for the transition even faster.