Sustainability now needs to become central to core investment strategies

Decision-useful metrics and deeper integration of data into the investment process stand out as priorities for real estate, says Helen Gurfel.

Real estate has made meaningful progress on sustainability. The focus is no longer on commitments, but on integrating sustainability into core investment strategies. In 2026, sustainability is increasingly embedded in underwriting and portfolio construction.

For CBRE Investment Management, sustainability is fundamental to long-term value creation and fiduciary responsibility. It is not agenda-driven. It is about cashflow durability, appropriately pricing risk and enhancing exit liquidity.

We are seeing clear market signals of sustainability progress:

• Energy-efficient and resilient buildings are increasingly influencing tenant demand and asset competitiveness. Occupiers are prioritising operating efficiency, resilience and alignment with their own goals.
• Operational upgrades that reduce cost volatility and improve NOI stability. In some cases, they also create incremental revenue opportunities, whether through enhanced tenant retention, green premiums, or ancillary energy solutions.
• Investors and asset buyers are scrutinising transition and physical climate exposure more closely. Assets without credible pathways or resilience planning face growing market friction.

Metrics and integration

When looking at the main issues facing the real estate sector, two priorities stand out: decision-useful metrics; and deeper integration into the investment process.

First, on metrics. The industry would benefit from a more standardised, comparable set of decision-useful indicators that directly inform pricing, capital allocation and return expectations.

What matters is not the volume of data, but whether the data changes how we underwrite an asset, prioritise capex, manage risk, or protect value over the hold period (and beyond). Our investors want confidence that we are identifying material risks, managing them effectively and safeguarding long-term value. That shifts the focus towards metrics that are investment-relevant, credible, comparable and increasingly forward-looking.

Second, integration. Decision-useful metrics only matter if they are embedded into investment decisions. Integration enables capital to be allocated in a way that manages climate risk while enhancing returns.

Transition risk, physical risk, nature, stakeholder engagement and financial performance are interconnected. These factors influence development feasibility, planning outcomes, leasing speed, operating costs and long-term liquidity.

Coherent strategies

The industry’s task is to move from siloed sustainability initiatives to coherent, asset-level strategies that directly support positive investor outcomes.

Our priorities at CBRE IM are investment-led. The focus is on deepening integration and improving decision quality across portfolios to drive long-term value for our investors.

At the asset level, we are focusing on:

• Operational performance: Energy consumption, emissions intensity and utility cost exposure directly affect NOI and competitive positioning. Improving performance enhances resilience against cost volatility and regulatory tightening.
• Transition risk: This includes regulatory exposure, evolving tenant expectations, and the feasibility and cost of decarbonisation pathways. These factors influence future capex requirements, asset marketability and terminal value.
• Physical risk and resilience: Acute hazards such as flooding, wind and wildfire, as well as chronic risks like heat stress and water scarcity, impact business disruption, downtime, repair capex, insurance costs, and ultimately asset valuation. Resilience planning is increasingly central to income protection.

Ultimately, integrating transition, resilience and broader sustainability considerations is about one objective: delivering durable, risk-adjusted returns over the long term.

Helen Gurfel is head of sustainability and innovation at CBRE Investment Management