Throughout 2023 sustainability continued to gain significance: this is only set to continue, propelled by environmental crises and regulatory changes. Below are ten top trends we expect to influence sustainability in real estate in 2024:

1. More rigorous sustainability reporting

Sustainability reporting will continue to evolve into a more robust, quantitative and complex landscape.

In 2024, anticipate the initial implementation phases of the Corporate Sustainability Reporting Directive (CSRD) aligned with the European Sustainability Reporting Standards (ESRS). Additionally, the UK Government is expected to support decisions regarding the International Sustainability Standards Board (ISSB), aimed at reducing illegitimate sustainability claims and greenwashing.

2. Defining net zero

The Science Based Targets Initiative (SBTi) is currently working on a global definition of a 1.5C aligned or ‘net zero’ building.  In the UK, Savills, in collaboration with other volunteer organisations, has been working on the UK Net Zero Carbon Buildings Standard, set to be released in early 2024 and replacing the current definition.

3. The continued rise of social

Expect greater attention and emphasis on understanding the ‘S’ in Environmental, Social, Governance (ESG). The sector will scrutinise social impact, diversity, equity and inclusion more closely than ever, with a commitment to improvement and transparent reporting.

4. Occupiers utilising green leases

The Better Building Partnership (BBP) is set to launch a revision of the Green Leases Toolkit, marking the first update to the toolkit in over ten years. While green leases have traditionally been used by landlords as a punitive tool over occupiers, there is a rising trend among occupiers now imposing sustainability requirements on their landlords, reversing the traditional dynamic.

5. Laser focus on managing climate risk

In 2023, three studies revealed that financial institutions and pension funds were still not adequately accounting for the risks of climate change in their portfolios. The property sector must rapidly catch up on climate risk and resilience to avoid being impacted by the changing climate.

6. Measuring biodiversity

The focus on biodiversity will ramp up as corporates and financial institutions begin to voluntarily adopt the Taskforce for Nature Related Financial Disclosures (TNFD) reporting framework and UK developers are required to meet the delayed Biodiversity Net Gain requirements.

The United Nation’s Biodiversity Conference 2024, COP16 aims to mobilise plans to halt and reverse the loss of nature, including protecting 30 per cent of the planet and restoring 30 per cent of degraded ecosystems.

7. Retrofits and operational building performance

80 per cent of the buildings we will be using in 2050 are already constructed. There is an urgent need to address both their efficiency and their contribution to climate change. We expect to see a greater emphasis on reporting building operational/in-use performance.

8. Improving air quality

The World Health Organization’s Second Global Conference on Air Pollution and Health is scheduled to be held in Ghana, drawing attention to air pollution. In 2024 enforcement of low emissions zones will be extended to three additional UK cities, bringing the total to 12.

9. Increased use of artificial intelligence (AI)

An increasing number of startups are leveraging AI to support their sustainability goals. For example, digital twins, which are simulations or copies of the physical world, can test different future scenarios and forecast changes resulting from climate change. AI plays a crucial role in filling data gaps and can serve as an early warning system to help decision makers.

10. Women driving sustainable outcomes

Women’s participation and leadership in climate action has been associated with better resource governance, conservation outcomes and disaster readiness. In the private sector, more gender-diverse corporate boardrooms and C-suites have been shown to lead to more sustainable policies, and a growing body of research proves that better decisions are made when a more diverse group of people is involved.

Further information

Contact Tanya Broadfield