In recent years, environmental, social, and governance (ESG) criteria have moved to the center of investment strategies. According to CBRE’s European Investor Relations Survey 2025, 95% of investors now consider sustainability a decisive factor in their investment decisions. This figure reflects more than a trend — it signals a deep shift in how value is defined in the real estate sector.

Assets that fail to meet ESG standards are increasingly viewed as liabilities. They are at greater risk of devaluation, exclusion from investment portfolios, or becoming stranded in a fast-evolving market. In contrast, sustainable assets are not just maintaining value — they’re driving future-proof portfolios.

What’s more, this shift isn’t driven solely by market demand. Regulation is reinforcing the direction. New EU rules require companies to publish climate transition plans and report on sustainability performance. Even though recent changes — like the Omnibus Package and the simplified ESRS — have eased the reporting burden for some, most organizations continue to define and communicate their climate strategies. Sustainability is no longer a PR move; it’s a financial necessity.

As a result, the sector is rethinking its approach. Renovating existing buildings has emerged as the preferred strategy for many investors. Retrofitting older assets to meet ESG criteria is seen as a cost-effective and impactful way to comply with regulations while enhancing long-term value. The market is beginning to reward efficiency and transformation, not just shiny new developments.

Interestingly, this growing importance of sustainability has flipped the narrative on pricing. Investors are now less inclined to pay a premium for green buildings — not because sustainability is less valuable, but because it is now expected. Green is no longer a luxury; it’s the baseline. The absence of ESG compliance has become a real financial risk.

This evolving mindset is shared across the real estate value chain — from developers and constructors to asset managers and financiers. All players are facing increased pressure to deliver assets that are energy-efficient, low-emission, and future-ready. Whether through material choices, building systems, or data transparency, sustainability is now embedded in performance metrics.

Ultimately, the transition toward sustainable real estate is not just about meeting regulatory demands or ticking ESG boxes. It’s about staying relevant, competitive, and resilient. Companies that continue to treat sustainability as an “extra” will struggle to attract capital or keep up with evolving expectations.

In today’s market, sustainability isn’t about standing out — it’s about staying in the game. And the companies that move fastest to embrace this new standard will be the ones best positioned for long-term success.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes