Capital markets recognising ESG’s early adopters: PwC

As ESG becomes a more central consideration for the property markets, the creation of the EU taxonomy is an important milestone which has provided a clearer framework for sustainable investment according to Dirk Hennig, Berlin-based partner, valuation, modelling and analytics, PwC.

There are important distinctions to be made between existing and newly constructed assets, Hennig points out. “It’s a question of energy consumption of buildings and it’s a question of the material used,” he told Real Asset Insight’s Richard Betts.

While some people do not see a future for existing buildings in terms of their ESG status, Hennig contends that since the carbon is already embedded in their structure “from an ESG perspective, existing building stock is a very big advantage for real estate investors”.

PwC has analysed how ESG affects capital markets and the ESG ratings of real estate companies, which ones are the leaders and which are average and which are in the bottom group.

Hennig said there is a clear picture emerging that enterprises who are most active in terms of ESG, which started investing in it early and are transparent, are also faring better.

Click on the video above to watch the full interview or listen to the podcast below.