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Decomposing the Value Effects of Sustainable Investment: International Evidence

Author

Listed:
  • Avis Devine
  • Eva Steiner
  • Erkan Yonder

Abstract

We provide the first systematic, international decomposition of possible financial benefits of sustainable real estate investment on corporate performance metrics across the two leading country-markets in terms of sustainable property certifications. In the UK, where a baseline level of environmental reporting is mandatory, listed property companies benefit somewhat from investments in sustainability-certified properties through higher cash flow and valuation outcomes. In the US, which features no requisite reporting, the benefits of sustainable investment are stronger and comprise distinct cash flow, risk, information and corporate valuation effects. Our results suggest benefits of improved transparency and benchmarking from environmental performance reporting.

Suggested Citation

  • Avis Devine & Eva Steiner & Erkan Yonder, 2017. "Decomposing the Value Effects of Sustainable Investment: International Evidence," ERES eres2017_517, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2017_517
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Energy Efficiency; Real Estate Investment Trusts; Sustainability; valuation effects;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    NEP fields

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