The Two Biggest Sustainability Challenges in Real Estate… And Strategies For Tackling Them Head-On

Commercial real estate portfolio holders are under more pressure now than ever before to stay on top of sustainability demands. With new regulations popping up and frameworks like CRREM gaining traction, it’s easy to feel overwhelmed. 

Map Mortar have been doing their research and have now pinpointed the two biggest challenges you’re likely facing right now. They’ve also provided three simple strategies to help you turn these obstacles into opportunities.

1. Keeping Up with Regulatory Compliance

Let’s face it – sustainability regulations are getting tougher every day. 

Staying compliant means more than just checking boxes; it requires real investment in building upgrades, data management, and much more. The costs of compliance can add up fast, but the risks of falling behind are even steeper, including; 

• Significant costs from reporting requirements 
• Climate litigation and exposure to crackdown on greenwashing 
• Fines and tax increases for not meeting emissions mandates / building standards 
• Decrease in subsidies for certain carbon-intensive technologies 
• Exposure to disclosure related risks 
• Even more investment costs to bring your portfolio in line with national laws 

But here’s the good news – compliance isn’t just about avoiding penalties. It’s an opportunity to boost your entire asset value, attract top-tier tenants, and streamline your operations. 

Plus, it’s a surefire way to build trust and transparency with stakeholders.

Three Smart Ways to Stay Ahead:

1. Regular Energy Audits: Identify inefficiencies and benchmark your performance against the latest standards.
2. Invest in Upgrades: Retrofit with energy-efficient tech like LED lighting, smart HVAC systems, and renewable energy sources.
3. Automate and Monitor: Implement a Building Management System (BMS) to keep an eye on energy use and ensure compliance. It’s a big investment, but worth it for the long-term gains.

2. Mastering the CRREM Framework

The Carbon Risk Real Estate Monitor (CRREM) is all about cutting carbon emissions in real estate. It’s a powerful tool that investors and lenders can use to analyse portfolios in a number of ways, from alignment with Paris goals to identifying assets that are at risk of stranding.  

But let’s be honest – getting CRREM right is not easy. From the data collection and quality issues to the upfront costs of retrofitting, the challenges can seem endless. 

Even still, CRREM is undoubtedly a game-changer. It can protect your assets from future regulatory shifts, boost market competitiveness, and deliver long-term cost savings. 

Three Steps to Tackle CRREM Challenges:

1. Get Your Data Right: Invest in robust data management systems to ensure you’re collecting accurate, real-time information.
2. Explore Financing Options: Look into green bonds, energy performance contracts, or government incentives to spread out the cost of improvements.
3. Stay Informed: Work with sustainability consultants to keep your strategies aligned with the latest regulations.

Engaging your tenants with sustainability programs and green leases can also make a big difference, aligning their goals with yours and fostering a collaborative approach to energy savings.

Turning Challenges into Opportunities

Yes, the road to sustainability is full of challenges, but with the right strategies in place, it’s also full of opportunities, such as increasing asset value, attracting great tenants, streamlining operations and building a foundation for long-term success for your portfolio and overall business. 

By staying proactive, investing in the right technologies, and keeping a finger on the pulse of regulatory changes, your portfolio will not only survive in this ever-changing market … it could thrive! 

About Map Mortar

Map Mortar is the only solution on the market that gives an eagle eye view of the decarbonisation status of your entire real estate portfolio. The innovative technology simplifies complex financial planning, helps reduce and de-risk CAPEX and also gives the strategic oversight Heads of Sustainability need to succeed in their roles within the commercial real-estate industry. 

Visit the website at mapmortar.io or head over to their booth at PropTech Connect to meet the team. 

Written with MapMortar