TØRVIK – The Role of Sustainability and Esg in Property Investment and Development

Sustainability and Environmental, Social, and Governance (ESG) factors are increasingly playing a crucial role in modern UK property development and investment. ESG considerations are now being factored into every stage of property development, from due diligence to construction, to ensure environmentally friendly and socially responsible projects.

The EU’s Sustainable Finance Disclosure Regulation, for example, requires fund managers to disclose how sustainability risks in their investment processes could impact financial returns. The Principles for Responsible Investment (PRI) require signatory investment managers to incorporate ESG criteria into their investment processes, covering a minimum of 50% of their total assets under management.

Occupiers and investors are seeking properties with strong ESG credentials, driving up demand for green buildings and sustainable developments. This increasing trend is expected to preserve asset value and increase the value of sustainable properties. In summary, ESG factors are now a fundamental consideration in UK property development and investment driven by regulatory requirements.