New report reveals investor demand for green buildings is rising in Scotland

OCCUPIER demand for sustainable buildings in Scotland has risen, but legislative uncertainty and lack of measurement is stifling the impact on net zero targets, new research has revealed.

The Royal Institution of Chartered Surveyors (RICS) has published its global sustainability report for 2023, outlining the state of the world’s green and sustainable real estate and investor interest in acquiring and developing it. 

In Scotland, around three-quarters of contributors suggested investor demand for green buildings rose to some extent in the past year. 74% of respondents in Scotland report that demand from investors has increased, which is above the UK average of 63%. Looking at occupier demand, 75% of respondents said demand for green buildings increased, which again is above the UK average of 65%.  

Although both occupier and investor demand is rising, RICS revealed it is still seeing a lack of measurement. Like the 2022 and 2021 reports, construction sector professionals were asked to give insights around embodied carbon assessment across projects. The 2023 results show that around 43% of respondents globally report they make no measurement of embodied carbon on projects. Even if carbon is being assessed, there is little evidence to suggest it is having an impact on the choice of materials and components.

To achieve targets, RICS said measurement must become common practice. 

This could link to investors seeing high initial costs as the ‘most significant hindrance’ to investment in green buildings. Meanwhile, nearly a third of industry professionals state the lack of common standards and definitions of green buildings is a crucial obstacle to further investment.

RICS added that clarifying new UK energy performance certificates (EPC) standards for commercial real estate is essential to boost investment into energy efficiency measures and create greener buildings. 

Tina Paillet, president elect at RICS, said, “The latest RICS global sustainability report reveals that the UK is among the leading nations for positive sentiment in sustainable real estate. However, the research indicates that several bottlenecks, such as ongoing uncertainty surrounding EPC reform, are slowing down investment, while the UK should take greater steps to catch up with the European average.

“The built environment contributes 40% of the world’s carbon emissions. We cannot tackle global emissions without substantially reducing embodied and operational emissions from buildings and infrastructure. Because of this, RICS continues to develop its green standards for the sector, such as the recently developed Whole Life Carbon Assessment (WLCA) to guide the industry in a direction that supports greater sustainability and decarbonisation.

“What we can measure, we can then manage –understanding the scale and scope of emissions is a key first step. Sustainability is much wider than carbon emissions, and RICS will continue to support professionals through our range of standards, existing and in development.”