Enhancing the real estate sustainability policy framework
The analysis presented in this paper is the result of the experience of investors in the real estate sector who participate in the IIGCC’s Property Working Group. The IIGCC recognises that with a supportive and effective policy framework in place, the market will be able to deliver finance to energy efficiency programmes at the speed and scale required. We believe, however, that the current regulatory framework in the EU would benefit greatly from a critical reassessment in order to tackle a number of weaknesses and we propose the following policy recommendations to address them:
• Policies should focus on those who have control over sustainability and energy efficiency performance, those who pay for energy and utility costs, and those who have control over
capital allocation at specific times in a building’s lifecycle;
• Policies should exploit and explicitly target the most relevant opportunities for sustainability and carbon improvement during each stage of a building’s life;
• The effectiveness of the existing regulatory framework could be seriously improved by properly and strongly enforcing it;
• Ultimately, to be effective and unlock substantial capital investment, the policy framework should support the integration of sustainability risks into the market fundamentals of real estate financial investment: rents, yields and values.