The green shift: embracing nature in real estate strategies
Real estate companies that embed nature into their investment decisions will be best positioned to capture the upside, writes Robbie Epsom.
Nature is the thread that connects climate action, physical and value-chain resilience, social value, and long-term asset outperformance.
In real estate investment, it primarily concerns the protection and restoration of natural systems in and around the built environment and across the value chain.
This includes biodiversity, which refers to the diversity of life on Earth, encompassing variation within and between species and across ecosystems. It is one of several interdependent systems – alongside water cycles, soil health and climate-regulating functions – that are becoming increasingly material to investment risk.
Nature enhances urban resilience to extreme heating and flooding, improves wellbeing, and plays a key role in removing atmospheric greenhouse gas (GHG) emissions.
It is also becoming a marker of asset quality, with nature-integrated real assets increasingly seen as aligning with what will define ‘prime’ in the future: resilient, healthy and sustainable places. Access to nature has been shown to both reduce stress and improve productivity in office environments.
Tenant satisfaction
While many climate adaptation measures focus narrowly on risk mitigation, nature interventions simultaneously offer broader benefits, including increasing tenant satisfaction.
Nature has long lagged behind climate in both recognition and investment maturity. Whereas emissions reduction and energy efficiency are now widely integrated into risk frameworks and investment strategies, nature has been harder to define, measure and value. As a result, it has been less successfully embedded into risk and value creation considerations.
Moreover, its impacts are highly localised, benefits are often indirect, and regulatory frameworks are only just beginning to take shape. All this has left many real estate stakeholders with only a peripheral awareness of biodiversity risks and opportunities: but that is changing.
As regulators, investors and communities demand more resilient, liveable and ecologically sound places, nature is moving from the margins to the mainstream. Nature now represents both a transition risk and opportunity, where shifting regulation, investor expectations and community demands are reshaping what it means to futureproof assets.
Early adopters that embed nature into their risk frameworks and investment decisions will be best positioned to capture long-term upside.
From risk to opportunity
For many investors, biodiversity is first considered through the lens of regulatory compliance.
In England, Biodiversity Net Gain (BNG) has been introduced as a formal planning requirement: new developments must result in a better-quality natural habitat than existed before. Developers must deliver a 10% improvement in biodiversity as a condition of planning approval, measured using a government-developed and approved process. This gain must be secured for at least 30 years, placing long-term obligations on developers, asset owners and occupiers.
Projects that fail to factor in BNG at an early stage risk costly redesigns, delayed planning consent, or reliance on offsite biodiversity credits, which may be expensive without careful strategic planning and limited in availability.
While the BNG framework is most advanced in England, similar regulatory momentum is building across the UK and Continental Europe.
The EU Taxonomy includes biodiversity among its core environmental objectives, and the European Commission aims to achieve no net land take by 2050.
Nature-based solutions
In parallel, countries such as France and Germany are embedding nature-based solutions, such as green roofs and facades, into planning policy, supported by local incentives.
Elsewhere, the Netherlands is piloting biodiversity credits and ecological assessments for new developments, Spain is integrating nature into planning through national and city strategies like Madrid’s Urban Forest, and Austria and Switzerland mandate green infrastructure in Vienna and Zurich. The trend is also evident beyond Europe, in countries including Canada and Singapore.
“Nature-focused actions can also support tenant appeal, staff wellbeing and workplace retention, while strengthening the case for planning approval.”
Robbie Epsom, CBRE Investment Management
Together, these examples signal a broad shift: nature is evolving from an environmental aspiration to a regulatory and design imperative across urban markets.
Nature presents a clear transition risk. Shifting regulation, rising investor expectations, and evolving market standards are exposing portfolios to planning delays, reputational damage and stranded value. Inaction compounds cost, particularly when nature is left out of early-stage planning and development decisions.
But unlike many physical climate upgrades, which tend to address single issues, nature-based solutions (NbS) can deliver multiple advantages, from urban cooling and improved drainage, to flood resilience and land stabilisation. Indeed, NbS support climate-mitigation measures and are estimated to be able to contribute up to 30% of required global GHG mitigation by 2030.
Nature-focused actions can also support tenant appeal, staff wellbeing and workplace retention, while strengthening the case for planning approval. For investors repositioning assets, these co-benefits increasingly shape what tenants and regulators expect from prime, resilient real estate.
The business case may be harder to model, but the long-term value is broad and enduring. Investment managers who move beyond compliance and integrate nature considerations into early-stage acquisition, development and refurbishment decisions will be better placed to meet evolving regulatory requirements and tenant expectations.
Early adoption opens the door to opportunities that may remain inaccessible or be significantly more expensive later.
From compliance to integration
Once asset managers recognise the strategic value of nature interventions, the next step is to embed nature-positive decisions across the real estate value chain.
Nature considerations should be factored into underwriting and asset strategy, just as energy efficiency is, across site selection, acquisition, development, refurbishment and management.
This requires more than ad hoc greening or superficial landscaping. It starts with understanding where nature already exists across the portfolio, mapping the most material impacts and the best opportunities for creation and restoration alongside value-chain engagement. The risks and opportunities that arise from these ‘nature gaps’ will vary by sector and local context.
Market-recognised tools used in the BNG regulation can help establish a baseline, enabling investors to identify nature risks and prioritise action based on risk and planning exposure.
Asset managers should consult ecologists to design appropriate, site-specific interventions following the mitigation hierarchy. These include minimising land take and damage to existing habitats, enhancement of existing habitats, or habitat creation such as rooftop meadows, rain gardens, nature corridors or sustainable urban drainage features.
Strategic offsite enhancements may also be suitable where onsite options are limited. Early-stage integration ensures nature is not treated as an afterthought, but embedded as a core element of long-term asset strategy.
Frameworks for portfolio-scale integration
Managing nature risk at scale requires a broader perspective than bespoke site-level interventions.
The leading emerging standard for embedding biodiversity into portfolio strategy is the Taskforce on Nature-related Financial Disclosures (TNFD), which helps financial institutions assess, report and act on their nature-related dependencies, impacts, risks and opportunities.
Alongside TNFD, frameworks like the BNG strategy and forthcoming ISO guidance on biodiversity are helping to define consistent principles for planning, delivering and verifying nature outcomes across projects and portfolios. At its core is the four-phase LEAP approach: locate, evaluate, assess and prepare, drawing on established methodologies already used by market participants.
LEAP begins by mapping where assets intersect with nature, then evaluates dependencies and impacts, identifies material risks and opportunities, and prepares a strategic response.
For real estate investors, this applies to individual sites and broader workflows across planning, acquisition and refurbishment.
While adoption is still in its early stages, TNFD is gaining traction among financial institutions. CBRE Investment Management has an ambition to evaluate biodiversity across its portfolio through this lens.
Tools and data such as ENCORE, datasets provided by IBAT, and the screening for NbS opportunity areas included in the GRI Risk Viewer can help establish baselines and screen for potential impacts and opportunities where interventions can be prioritised.
Clear direction of travel
The challenges remain real. Nature is highly localised, data is inconsistent, and there is no common quantitative definition of a nature-positive asset or portfolio. Outcomes often take years to materialise, but the direction of travel is clear.
As regulation, public expectations and investor scrutiny converge, nature will become a greater strategic necessity. Integrating it into investment processes today secures a first-mover advantage that will be harder to replicate once new norms are established.
Investors who act now will be the ones to define what resilient, high-performing real assets look like in the years ahead. Nature is fast becoming a new marker of prime, both a risk lens and a lever for long-term value creation.
As the thread that connects climate action, resilience, social value and future asset quality, integrating nature into investment strategy is no longer optional. It is a pathway to future-proof portfolios and deliver sustainable outperformance over the long term.
Robbie Epsom is EMEA head of sustainability at CBRE Investment Management
