ESG legislation, CSRD reports; is it all giving you a headache? No need, because with the right guidance, obligations can lead to opportunities, even in real estate. With these sustainability challenges, you can not only preserve the value of buildings, but even increase it. A clear business strategy helps with this: look ahead and invest in sustainability. Our real estate experts will tell you how.
In the fast-changing world of property valuation, Environmental, Social and Governance (ESG) is taking on an increasingly prominent role. The introduction of the Corporate Sustainability Reporting Directive (CSRD) in 2024, which requires large companies to report on their sustainability performance, adds to this. Our Business Advisory experts see this as a profound structural shift of perspective in real estate, where sustainability and responsibility are now the keywords. A new balance between returns and responsibility is emerging in the sector. And yes, that includes new rules and obligations. But if you dare to look ahead, you will reap the rewards.
A forward-looking strategy
With a forward-looking strategy, you benefit from value creation in the long term. Entrepreneurs who integrate sustainability into their strategy are more likely to succeed in responding to future market developments. A gap analysis gives insight into the aspects that are or will become relevant for your company, and whether the company is able to meet these requirements and gain a competitive advantage in this way. A proactive, anticipatory sustainability policy that translates into a forward-looking strategy and portfolio undoubtedly leads to a higher actual value of your company. With ‘stranded assets’, which decline in value unexpectedly or prematurely due to changes in sustainability regulations, you achieve the opposite.
From brown to green
Take the so-called ‘brown buildings’: properties without sustainability certification. These buildings are not only more expensive to maintain, but they also lose value, or lose value more quickly, because energy-efficient buildings are increasingly desirable. This also makes the depreciation methodology of brown buildings challenging. Indeed, factors such as stricter laws and regulations, higher energy costs and reduced rental demand may accelerate the decline in value. By making brown buildings more sustainable, you not only make them more energy-efficient, but also help reduce deterioration, extending their lifespan. Additionally, ‘green buildings’ are more attractive to a growing group of buyers and tenants who value sustainability. Aside from a less complex depreciation methodology, sustainability also leads to more future-proof buildings that are well-placed in the market.
Sustainability strategy offers all kinds of benefits
Buyers and tenants are not the only ones who see sustainability as increasingly important. Employees, financiers and grant issuers also look at this. A strong focus on sustainability therefore helps your organisation attract and retain (young) talent, which is welcome in an increasingly tight labour market. Obtaining favourable financing terms and subsidies or tax facilities can also benefit from a clear (sustainability) strategy.
And do you want more clarity about how sustainable your enterprise actually is? To measure is to know. ESG due diligence offers insight on this aspect: how is your organisation actually doing in terms of sustainability, equal opportunities and social responsibility? And what opportunities are you currently missing that you need to seize quickly?
Take your opportunities
Baker Tilly’s experts know what challenges you face, as well as where the opportunities lie. Our Business Advisory specialists offer you valuable strategic advice and guidance in the field of real estate and sustainability. We identify opportunities and design effective strategies to integrate real estate-related (ESG) objectives into your organisation. To achieve those objectives, you need to make the right strategic and tactical choices, seize opportunities, be able to keep track of risks, and design processes efficiently and effectively. Our Business Advisory specialists offer tailor-made approaches; not theoretical models, but pragmatic solutions. Analyses, insights and advice you can build on.
Would you like to learn more about our services? Our advisors are here to discuss the challenges and opportunities for you and your business.
