How do you assess the risks and opportunities of green building and sustainability in commercial real estate?

1 Market demand

One of the main drivers of green building and sustainability is the market demand from tenants, buyers, and lenders. Tenants are looking for spaces that offer lower operating costs, better indoor air quality, and a positive brand image. Buyers are willing to pay a premium for properties that have lower environmental impact, higher energy efficiency, and higher occupancy rates. Lenders are offering better financing terms and lower interest rates for green-certified buildings, as they reduce the default risk and increase the collateral value. To assess the market demand for green building and sustainability, you need to research the local and regional trends, the preferences and expectations of your target market segments, and the competitive advantage of your green features.

2 Regulatory compliance

Another driver of green building and sustainability is the regulatory compliance with local, state, and federal laws and policies. Regulations can impose minimum standards for energy use, water consumption, waste management, and emissions. They can also provide incentives for green building and sustainability, such as tax credits, rebates, grants, and zoning benefits. To assess the regulatory compliance for green building and sustainability, you need to understand the current and future legal requirements, the potential costs and benefits of compliance, and the best practices and strategies to meet or exceed the standards.

4 Innovation and differentiation

A fourth driver of green building and sustainability is the innovation and differentiation of your products and services. Green building and sustainability can help you create innovative and differentiated solutions that address the needs and challenges of your customers and stakeholders. You can leverage the latest technologies, materials, and designs to create green buildings that are smart, resilient, adaptable, and healthy. You can also communicate your green credentials and achievements to build trust and reputation in the market. To assess the innovation and differentiation of green building and sustainability, you need to identify and evaluate the opportunities and risks of adopting new green solutions, the competitive landscape and positioning of your green offerings, and the value proposition and marketing strategy of your green brand.

5 Stakeholder engagement

A fifth driver of green building and sustainability is the stakeholder engagement with your employees, suppliers, partners, communities, and investors. Stakeholder engagement can help you build and maintain strong relationships with your key stakeholders, who can influence or be influenced by your green building and sustainability efforts. You can engage your stakeholders by involving them in your green vision and goals, soliciting their feedback and input, collaborating on joint initiatives, and reporting on your progress and impact. To assess the stakeholder engagement of green building and sustainability, you need to map and prioritize your stakeholder groups, understand their interests and expectations, design and implement effective engagement methods, and evaluate and improve your engagement outcomes.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?