The real estate sector is under increasing pressure to become more sustainable, and while the need for greener practices is clear, the challenges can be quite significant.

For developers and property managers, one of the biggest hurdles is improving energy efficiency in both new buildings and existing properties. Older buildings, in particular, tend to have outdated infrastructure that makes upgrading to energy-efficient standards a costly and complicated process.

Retrofitting these buildings to meet modern Minimum Energy Efficiency Standards (MEES) can be especially tricky, requiring significant investment to improve insulation, heating, and cooling systems, which not all building owners are ready to make(1).

One of the toughest sustainability issues in real estate is embodied carbon, which refers to the emissions associated with the production and transportation of building materials. As developers seek to meet sustainability goals, sourcing materials that are more environmentally friendly and lower in carbon can be an expensive and time-consuming process. Traditional materials are often cheaper and easier to obtain, but they contribute to a larger carbon footprint(2).

Waste management during construction is another area where sustainability is often lacking. The construction process generates a significant amount of waste, which, when not handled correctly, ends up in landfills. For developers looking to achieve green building certifications like BREEAM(3) or LEED(4), proper waste management and sustainable building practices are essential but come with additional costs and logistical challenges(5).

Despite these difficulties, there are opportunities for innovation. The increasing demand for green buildings-those that are energy-efficient and have minimal environmental impact-presents an incentive for the real estate industry to rethink its approach(6).

Companies that take the lead in embracing these changes will not only meet regulatory standards but can also benefit from improved profitability and a better market reputation.

Bibliography

1 Domestic private rented property: minimum energy efficiency standard - landlord guidance (Accessed May 2025) https://www.gov.uk/guidance/domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidance

2 Embodied carbon: the next big climate challenge for real estate (Accessed May 2025) https://www.cbre.co.uk/insights/articles/embodied-carbon-the-next-big-climate-challenge-for-real-estate

3 About BREEAM (Accessed May 2025) https://breeam.com/

4 BREEAM or LEED - strengths and weaknesses of the two main environmental assessment methods (Accessed May 2025) https://www.bsria.com/uk/news/article/breeam-or-leed-strengths-and-weaknesses-of-the-two-main-environmental-assessment-methods/

5 Green Building Boom: UK Real Estate Developers Focus on Sustainable Projects (Accessed May 2025) https://www.theuktimes.co.uk/green-building-boom-uk-real-estate-developers-focus-on-sustainable-projects/

6 Why Green Buildings? (Accessed May 2025) https://ukgbc.org/our-vision/why-green-buildings