海角视频

The built environment is always at the forefront of complex, shifting market conditions. And at a time where the entire economy is subject to climate uncertainty, shifting regulations and rising investor scrutiny, managing the complex interplay of environmental, social and financial risks is no longer optional. Indeed, it is essential, and a strategic imperative.

海角视频 decided that it was time to fill the business performance evidence gap on ESG strategies in the built environment, to on the value the management of interconnected environmental, social and economic risks brings.

We surveyed senior global executives across investment firms, real estate managers and corporate real estate departments to explore the connection between advanced ESG strategies and business performance. We discovered that for those overseeing built assets, this isn鈥檛 about ideology or image. It鈥檚 about safeguarding long-term value, seizing new opportunities and staying ahead of disruption. It is about moving beyond compliance to grasping a strategic advantage.

In our own work with clients, we see the importance of embedding ESG strategies not just as a compliance exercise, but as a strategic driver of long-term value. For example, our work with Aviva Investors shows how tailored sustainability frameworks and asset-level interventions can translate high-level ESG ambitions into measurable and market-leading outcomes.

Here, read about the UK-specific findings of our research, key applications in real-world examples and the key takeaways for leaders managing built assets.

Key insights from our UK respondents

The most significant trends and outcomes identified by our UK respondents, shedding light on how ESG strategies are shaping business performance in the region are:

• 81% of UK respondents are integrating or developing ESG strategy
• 89% of UK executives see positive ESG-financial performance link (versus 79% globally)
• Of these senior executives, over 46% reported an increase of over 11% and a further 42% reported a 5鈥�10% increase
• 81% of respondents say that climate risk and the related insurability and cost of insurance is a rising concern for the near future.

The business case for ESG in the UK

Our research shows that 89% of UK executives say ESG positively impacts financial performance. This is higher than the global average of 79%. Digging down, of the senior executives who say they have experienced a positive financial impact from ESG, 46% reported an increase in their financial performance of more than 11%, and a further 42% reported a 5鈥�10% increase. This financial boost is reported as higher in the UK than globally (where 40% reported a boost of more than 11%).

Laura Plazas is associate director in the UK sustainability and physics team at 海角视频, with extensive experience in sustainability and ESG across commercial and residential developments. In her work with key clients in the asset management sector, there are some key elements that she advises on that play a critical role in encouraging financial uplift.

These include outperforming statutory building compliance (sustainable buildings as safer investments), working towards building performance credentials that ultimately support rental premiums and environmental certifications that drive rental growth and capital values. It is clear why this work impacts on a businesses鈥� triple bottom line.

Indeed, our research identifies “a strong business case for action” as a critical accelerator towards success, with 70% of UK respondents rating this as important. Providing clients with advice on their individual drivers is a key way to make the business case clear 鈥� when expert advice is taken on board, it can lead to enhanced financial performance, higher returns on assets and reduced volatility for investors.

Laura said, 鈥淏eyond meeting regulatory requirements, ESG and sustainability initiatives can unlock substantial strategic value, driving operational efficiencies, enhancing asset performance, attracting capital and strengthening stakeholder trust. These efforts position organisations to lead in innovation, mitigate long-term risks and build resilience 鈥� ultimately contributing to sustained competitive advantage and long-term profitability.鈥�

Integration and organisational maturity

Almost all the senior executives in our research acknowledged the importance of having an effective ESG strategy. 82% are developing an ESG strategy, have or are actively integrating ESG into their organisation鈥檚 core strategy. Organisations with a mature, integrated approach to environmental and social risk management are already seeing measurable financial benefits. When 89% of senior executives surveyed reported a positive impact on financial performance, the message is clear: those who act decisively are already ahead.

Beyond meeting regulatory requirements, ESG and sustainability initiatives can unlock substantial strategic value, driving operational efficiencies, enhancing asset performance, attracting capital and strengthening stakeholder trust.

Laura Plazas, associate director, UK sustainability and physics team, 海角视频.

The UK鈥檚 regulatory landscape is key in seeing this success. National building regulations and national targets for net zero carbon are significant drivers for organisational maturity and innovation in the built environment sector. ESG strategies can move businesses beyond compliance and instead become a tool for innovation and transformation.

Laura said, 鈥淚t is also important for those with influence to make the choice to push beyond compliance. Regulations provide a strong foundation, but internal stakeholders who push for going above and beyond compliance are key to achieving true organisational maturity.鈥�

Maturity of ESG practices 鈥� and associated success 鈥� is reflected in our work with Aviva Investors, where 海角视频鈥檚 hands-on approach to embedding ESG and sustainability standards across the organisation has delivered measurable benefits and improved resilience.

海角视频 was appointed by Aviva Investors in 2021 to embed ESG and sustainability standards throughout its development portfolio and help the organisation achieve its own ambition of becoming net zero carbon by 2040. We continue to work with Aviva Investors, with experts seconded to work within their organisation full time.

Laura Plazas said, 鈥淲e have helped Aviva Investors in navigating emerging sustainability standards across a broad range of topics, including energy, waste, water, climate resilience, embodied carbon, health and wellbeing and biodiversity. By working closely with the organisation to gain a deep understanding of its portfolio, we have developed tailored tools (design guides and standardised procedures) to embed consistent and impactful implementation across the supply chain.

鈥淲orking with multiple stakeholders in Aviva Investors at different levels of knowledge ensured that ESG and sustainability objectives and targets are clearly communicated, widely understood and embedded at the right time 鈥� while proactively de-risking any related roadblocks. As ambassadors and subject matter experts, we play a critical role in driving financial uplift across the built environment.鈥�

Measurability and performance tracking: getting specific

Our research identified that both measurability of ESG performance at the portfolio or fund level and measurability of ESG performance at the asset level were both considered as 鈥渆ssential鈥� factors for success. This chimes directly with our experience of working closely with clients: in the first case, 海角视频 helps cascade organisational ESG strategy to the level where investment decisions and programme management are conducted. And at asset level, we make sure that an asset aligns with building-scale performance requirements while accounting for asset-specific factors.

Trevor Keeling is director in 海角视频鈥檚 UK sustainability and physics team and works with a range of real estate investment funds. He said, 鈥淲e are changing the way the institutional investor operates. This is literally changing the system from the inside. We do this in a pragmatic way informed by deep technical expertise and a compassion and understanding of our client鈥檚 goals and ways of operating. By doing this we help to create a future where pensions and investments are resilient to the stresses and strains of climate change.鈥�

Climate risk: responding to rising challenges

Climate risk is a growing concern for businesses, and 海角视频 is actively supporting key clients to address this challenge. 81% of UK-based respondents told us that climate risk and the related insurability and cost of insurance will be a rising concern over the next three years. Strikingly, UK respondents differ significantly from global respondents, who reported this number as 68%.

Increases in frequency and severity of climate events 鈥� recording breaking heat in 2022, instances of drought and widespread flooding 鈥� highlight the financial and operational risks of climate change. This growing concern demands not only awareness but decisive action from those managing built assets and investments.

Resilience is not just about reacting to crises but anticipating them, planning for them and considering how they might be a catalyst for growth and innovation.

Laura Plazas, associate director, UK sustainability and physics team, 海角视频.

海角视频 has worked with Royal London Asset Management, part of the UK鈥檚 largest mutually owned pension and investment company, for the last five years to support the development and monitoring of their sustainability framework for two of their new development and refurbishment funds. Working in a way that allows clients and customers to take advantage of the investment opportunities of the low carbon sustainable transition is critical to their work in this area.

Royal London Asset Management Property鈥檚 aspiration is to be leading in sustainability performance and to help reduce the effect of climate change, while creating thriving buildings and places which have enduring appeal for occupiers and add value to local communities. A key component to our work in this area is always to take a proactive role in the reduction of carbon emissions, both embodied and operational 鈥� a main contributor to the climate crisis.

Our work with Royal London Asset Management led to the creation of a new set of design standards which are considered aspirational and market leading. We defined specific actions to support net zero, to build climate resilience and to champion sustainable growth.

This can be evidenced by the creation of a sustainability strategy and framework that led to new 鈥淣ew Construction and Major Refurbishment Sustainability Standards鈥�. This set requirements across nine themes: energy and carbon emissions, climate resilience and adaptation, social value, materials and supply chain,聽biodiversity聽and green infrastructure, waste,聽water, building certifications and finally, health, safety and wellbeing. This ensures Royal London Asset Management continues to create environments and communities that demonstrate their ESG commitment and start to deliver social value.

Commentating on the importance of resilience, Laura Plazas said, 鈥淐reating resilient assets is key to managing them over a long period. Resilience is not just about reacting to crises but anticipating them, planning for them and considering how they might be a catalyst for growth and innovation. As the market evolves, climate risk is no longer a distant concern but a central factor in real estate decision-making.鈥�

海角视频鈥檚 technical expertise in this area has resilience and adaptability at its core, covering: real estate oversight, net zero carbon audits, feasibility studies, climate transition and physical risk analysis, decarbonisation models and advice for ESG capex budget programmes.

Conclusion: a strategic imperative for UK businesses

In conducting research across executives in investment firms, real estate managers and corporate real estate departments on ESG practices and strategies, what we discovered was clear. There is a strategic imperative for ESG and the management of interconnected environmental, social and economic risks 鈥揵uilding resilience, driving financial impact and enabling innovation.