海角视频

Introduction

Asset owners across Europe face a stark new reality: buildings and portfolios that fail to adapt to increasing economic, regulatory, climate and market risks are at growing risk of value erosion and becoming stranded assets. Asset values are no longer fixed, but are increasingly fluid, shaped by shifting investor sentiment and evolving financial fundamentals. These risks are now priced into lending, insurance, and capital allocation decisions.

However, the adoption of effective ESG strategies offers protection 鈥� enhancing resilience, stabilising asset value and reducing exposure to disruption. Financial institutions increasingly require the implementation of ESG frameworks, and recent research from 海角视频 shows that mature ESG strategies are now essential risk management tools, with nearly 80% of global executives reporting a positive financial impact.   

Europe benefits from the combination of an ESG framework for sustainability performance of a company and the EU Taxonomy as a classification system within the EU’s sustainable finance framework. Those clear, standardised criteria qualify “green” investments and are verifiable.鈥疎uropean businesses are well positioned to leverage ESG frameworks as catalysts for innovation and long-term value creation.

Thomas Kraubitz, partner and head of sustainability and climate (Europe), 海角视频

The global evidence base

海角视频 commissioned . We surveyed 400 senior global executives 鈥� most overseeing more than $750 million in annual revenue or assets under management 鈥� across investment firms, real estate managers and corporate real estate departments. We aimed to uncover how the effective management of interconnected environmental, social and economic risks can be leveraged to enhance business resilience, create value and improve long-term business performance. 

We found that ESG is maturing in the built environment. 82% of global respondents are developing an ESG strategy, have or are actively integrating ESG into their organisation鈥檚 core strategy (in Europe, this number is 76%). The financial uplift for those with an ESG strategy is impressive: 79% of senior executives surveyed globally say that ESG has a positive impact on their financial performance. (in Europe, this number is 74%). 

As European firms prepare for and implement reporting and align with initiatives like the EU Taxonomy, the demand for robust, recent and auditable ESG data is clear. Our findings provide a solid evidence base for leaders to act with confidence and ambition to further integrate the effective management of environmental and social risks throughout their business.   

ESG brings life to assets. It is inspiring to witness how our engineers and consultants, equipped with the right tools, can transform the most diverse buildings into resilient, future-ready investments. ESG at its core means value beyond compliance. It麓s how we future-proof assets and ensure long-term performance.

Victoria Yanovska, senior sustainability consultant/ESG manager, 海角视频

What erodes asset value? 

A perfect storm of risks and pressures has created an environment where some asset values are eroding faster than owners can adapt.  

Physical climate risks and the challenge of insurability are a key issue. 

• 68% of global and 63% of European respondents in our research cite climate risk and the related insurability and cost of insurance as a rising concern for the near future 
• Extreme events (floods, heatwaves, droughts, wildfires) are testing asset resilience, accelerating depreciation and boosting insurance costs. 

Transition risks and regulatory changes are equally pressing:  

• New or tightening regulations and ESG expectations are demanding verified performance, making some buildings non-compliant 
• Investor and tenant preferences and expectation鈥痑round comfort, sustainability and transparency shape demand 
• Non-ESG-aligned assets are suffering rental and liquidity decline, as evidenced by  

Macroeconomic risks are mounting  

• Higher interest rates increasing the cost of capital  
• Tight lending standards 
• Liquidity constraints and fewer buyers in the market, further driving down value 

Given the context of this influx of risks and pressures, it is unsurprising that our global research revealed that businesses across the built environment are consistently motivated by three core factors: 1. meeting increasing regulations and regulatory scrutiny, 2. attracting investment and 3. increasing long-term value. 

The top three factors are the same in Europe as globally but are prioritised differently:

‘Attracting new investment and meeting investor demands鈥� (Europe: 53% vs global 45%)

‘Increasing long-term value and shareholder returns鈥� (Europe: 43% vs global: 40%)

And 鈥榤eeting increased regulations and regulatory scrutiny鈥� (Europe: 39% vs global: 46%).  

Attracting new investment in Europe is likely to be connected to today’s low-interest environment: the stability of the European Union attracts real estate buyers due to increased foreign investment, access to lower interest rates and a stable legal framework. The Omnibus simplification package aims to reduce administrative burdens by postponing reporting for certain companies and narrowing the scope of who must report, though the core principles of the directive remain. 

Thomas Kraubitz, partner and head of sustainability + climate (Europe), 海角视频, said, 鈥淭he European market is aware of climate risks but not fully prepared for the impact they have on assets. While a core component in Asset Certifications, climate risk management also needs to be widened into non-certified spaces. Building in resilience against climate physical and transition risks is now critical for success, because left unmanaged they have the potential to continually erode asset value.鈥� 

With initiatives in place like the EU Green Deal and Fit for 55 providing a clear framework for identifying sustainable investments and economic decisions, European businesses are uniquely positioned to capitalise on ESG as a driver of green innovation and sustainable growth. For example, developers adopting low-carbon technologies or circular construction practices not only meet regulatory requirements, but also drive material innovation, reduce lifecycle cost and attract green financing.

Victoria Yanovska, senior sustainability consultant/ESG manager, 海角视频

Driving sustainable value: how European regulation is reshaping investment 

In response to this complex risk landscape, businesses are increasingly turning to ESG strategies not only to mitigate value erosion but to unlock long-term opportunity. In today鈥檚 market, ESG regulation is not just a compliance exercise, it is actively shaping how major financial institutions allocate capital and define investment strategy within the context of sustainability, transparency and resilience. 

Leading European financial institutions such as Deutsche Bank, UniCredit and BNP Paribas REIM are 鈥� including the Sustainable Finance鈥疍isclosure Regulation (SFDR), which requires financial institutions to disclose how ESG factors influence their investment decisions and risk management practices 鈥� to structure disclosures and drive transparency in investment strategies.  

The frameworks and operational practices of these banks demonstrate how regulation has evolved from compliance into a performance-based tool, guiding capital allocation toward sustainable real estate. For example, in 2022 UniCredit joined the Principles for Responsible Investment鈥檚 , indicating the finance sector鈥檚 desire to accelerate the sustainable transition of the real estate sector. 

A landscape that encourages a focus on a solid data foundation, advancing a materiality analysis and further developing sustainability strategies will lead to increased success and value protection.  

With updates to legislation like Omnibus providing clarity, setting realistic reporting standards and offering flexible reporting criteria (across the EU Green Taxonomy, CSRD and CSDDD), European businesses are now well positioned to leverage ESG frameworks as catalysts for innovation and long-term value creation..

Thomas Kraubitz, partner and head of sustainability and climate (Europe), 海角视频 

The ESG difference: turning risk into business resilience and reward 

Engaging in ESG frameworks and practices is not only abut risk mitigation, but about value protection. 海角视频鈥檚 latest global research reveals that organisations with a mature, integrated approach to environmental and social risk management are already seeing measurable financial benefits. Nearly 80% of senior executives surveyed report a positive impact on financial performance, some exceeding 20%. And are nearly three times more likely to achieve significant financial performance improvements than their peers. 

When non-resilient buildings face compared to 鈥済reen鈥� buildings, and climate-adapted assets maintain stable valuations and can command premiums, the message is clear: those who act decisively are already ahead.

In Poland鈥檚 real estate market, ESG frameworks 鈥� driven by EU regulations 鈥� are increasingly shaping valuation and investment decisions. Transparent governance and compliance with sustainability standards are becoming essential for mitigating long-term risks and maintaining property value in a market where non-compliant assets face growing financial and reputational pressures.

Wiktor Kowalski, associate director and sustainability lead (Poland), 海角视频

What leaders are doing differently

Our research shows that there are key strategies that leaders in the field employ in order to see the most success. Leaders are not just developing ESG strategies in isolation 鈥� they are actively embedding ESG into their core business strategies. These successful leaders prioritise the elements that we refer to as a strong business case for action, material and achievable targets, understanding ESG as a catalyst for innovation and growth, and the skills required to deliver ESG programmes. European leaders in our survey score higher than the global average on these accelerators, empowering them to maximise a range of related business opportunities.  

Europe leads in ESG due to a combination of comprehensive, mandatory regulations, a long-standing cultural commitment to sustainability and strong building councils like the that provide measuring sticks for green buildings. Key regulations like the and the鈥�鈥痯rovide a standardised framework for companies to report on their sustainability efforts, guiding capital toward more sustainable activities.鈥� 

When combined with the factors we identified as 鈥渆ssential鈥� (measurability of ESG performance at the portfolio or fund level, a track record of ESG-focused investments, and measurability of ESG performance at the asset level), leaders are using ESG not just as a compliance tool, but as a strategic lever for value stability and beyond this innovation, resilience,  and superior financial performance. As ESG becomes more integrated, its impact grows, creating a self-reinforcing cycle of reinvestment, innovation and growth. 

Effectively managing risk and building resilience to assure value   

To remain competitive, safeguard the long-term value of built assets and sustain investor confidence, European business leaders can redefine the management of interconnected environmental, social and financial risks. ESG 鈥� or rather, the processes that sit behind it, regardless of its nomenclature 鈥� is increasingly understood not as a reporting requirement, but as strategic risk protection approach that is essential for continuity, competitiveness and maintaining value. 

Whether framed as 鈥榬isk management鈥�, 鈥榮ustainability鈥�, 鈥楨SG鈥�, or simply 鈥榞ood business鈥�, the imperative is the same: address complexity head-on, mitigate critical risks, transform challenges into opportunities and convert resilience into competitive advantage, value stability and ultimately growth. 

Forward-thinking European businesses should take the opportunity to embed sustainability, innovation and purpose into their core strategies 鈥� not just to manage risk, but to unlock new markets, drive competitive advantage and create long-term value. Now is the time to lead with purpose and accelerate progress.

Thomas Kraubitz, Partner and head of sustainability and climate (Europe), 海角视频