Green returns: the state of sustainability ROI in 2025

At a debate held at Mipim’s London Stand last month, sheltered from the uncharacteristically gloomy weather of Cannes, Property Week editor Lem Bingley asked a panel of experts how priorities have changed when it comes to green building investment decisions and retrofit projects, and what solutions are needed to support sustainable development and a strong return on investment (ROI).

Watch highlights from the GSFNZ Mipim panel 2025 event on the player below, or alternatively, click here:

Growing trends and new models

As the industry moves towards creating a more sustainable built environment, investors, developers and managers seem to be adopting new business models.

Jessica Coldrey, partner engagement lead at the World Green Building Council (WGBC), argued that property investors were increasingly seeing a direct link between sustainability and profitability, and that energy efficiency was rapidly becoming “a financial imperative”.

She added: “Investors and occupiers are now concerned with broader ROI factors, such as co-benefits like occupants’ health and the resilience of assets against catastrophe and natural disaster, as well as regulatory compliance. Investors face the risk of stranded assets that aren’t sustainable. This risk from climate impact is changing sustainability from this niche concern to become a mainstream driver of ROI.”

Look at residential, retail or offices and you see a decrease in consumption due to better energy efficiency
Vincent Bryant, Deepki

Adam Hart, vice-president, segment sales and partnerships, at ChargePoint, echoed this point. Hart said more and more of the electric vehicle charging company’s commercial clients were viewing the push for sustainability as a “business imperative”.

Hart argued that industrial and logistics assets in particular that did not have capacity for elements such as electric vehicle charging would probably be “defunct by 2030”. He added: “I don’t think that’s far off. We’re really looking at this transition for business purposes. It’s gone beyond just ESG and that’s the drive we’re really seeing continue throughout the year.

“The view investors have taken in the past 12 months is more long term – thinking about the productivity and health of occupants, lower lifecycle costs and mitigating those climate change impacts, which are all very closely connected to long-term ROI.”

According to panellist Vincent Bryant, co-founder and chief executive of Deepki, his company collates client data to analyse the industry’s progress in improving energy efficiency, narrowing data from hundreds of thousands of assets down to a sample of 30,000 across six asset classes. He noted a “significant improvement in building efficiency in some asset classes” – but not all.

Bryant added that while the industrial and logistics sector was “doing better” with sustainability, the data pointed to “an increase of energy consumption” in the sector as a whole. “Whereas, when you look at residential, retail or offices, you can see a decrease in consumption due to better energy efficiency action,” he said. “It’s driven by the fact that energy prices in 2023 and 2024 were very high, pushing people, companies and institutions to improve their efficiency with long-term initiatives.”

The regulation push

It’s not just business imperatives pushing this shift to greater energy efficiency. The panel made clear that regulation was still the primary factor setting the pace, with companies having no choice but to comply.

Hart said this had been the case for years, highlighting the automotive industry as a key example of compelled progress and adding that aligning with government goals was something the real estate industry must embrace.

“We’re actually in quite a good place and a lot of this transition from the vehicle side is already done,” he said, adding that building owners are seeing the fruits of that progress, with growing opportunities to provide electric vehicle charging services.

However, the WGBC’s Coldrey warned that regulation was also “driving a lot of uncertainty,” particularly for investors. She presented two solutions to resolve this uncertainty: stay ahead of regulation or help to shape it.

We’re actually in quite a good place and a lot of the transition from the vehicles side is already done
Adam Hart, ChargePoint

“We do a lot of work with corporate partners at the WGBC helping to shape the future of regulation,” Coldrey said. “Many governments are still offering roadmap targets. It’s something that will really support companies to plan more proactively, audit their portfolio, make sure they’re aligning with any retrofitting needs and setting aside capital expenditure for that.

“Chances are the buildings in your portfolio now will still be in your portfolio in 2050. Whether these regulations come to fruition in the short or medium term for the industry, these buildings will still be around. So, looking at [sustainability] now is going to be very important.”

Barriers and solutions

Asked to identify other factors standing in the way of progress towards greater sustainability, Coldrey said another hurdle was simply upfront costs. She added that “53% of industry leaders still perceive high upfront costs as their biggest barrier to green building investment”.

She said a possible way to overcome this barrier was to “look at those lifecycle cost savings and use that as a way internally to start considering how initial expenses might be offset through energy efficiency”. She added: “Buildings that are more energy efficient obviously save on utilities and save on maintenance. That’s something that can really help improve ROI.”

Hart argued that building and operating the right infrastructure was just a simple step to keeping cash flowing and securing ROI, as “cashflow equals returns, but operations equal cashflow”.

He added: “Investment you might make in additional infrastructure that goes into your property portfolio, or a particular building, really needs to be maintained. There’s a need, certainly from a facilities management perspective, to understand how these new assets are maintained and serviced. That’s a big piece of potentially achieving cashflow certainty.”

Deepki’s Bryant, while acknowledging the progress the industry was making in sustainable solutions, highlighted a long-standing problem: “We don’t invest enough.”

He said this was the result of not having “a long-term plan where you want to see the entire market running the energy efficiency marathon, because we need to be near zero by 2050”, and was down to “short-term decisions based on very high prices of energy and maintenance”.

Many governments are still offering roadmap targets. It’s something that will really support companies to plan
Jessica Coldrey, WGBC

He added: “This is a concern to us, because we would like to see the entire industry going in the right direction, at the right pace.”

Bryant pointed to a number of low-cost actions that building owners can prioritise to improve sustainability.

First, he highlighted management of existing HVAC equipment as an easy win. He noted that straightforward changes to heating and air-conditioning oversight, such as by “having the right temperature in the office or the warehouse”, could reduce energy use by up to 30% in some buildings.

“This doesn’t require a lot of investment; it’s mainly the onboarding and the training of the amendments and the building operators, operation of maintenance etc,” Bryant said.

He argued that another more challenging but also “more interesting” solution was better insulation, through which the industry “can get up to 50% of energy savings” depending on the building.

Bryant said the most important thing was to improve the energy efficiency of existing stock. Backing up Coldrey’s point, he noted that 80% of the assets that will be around in 2050 already exist.

“We need to refurbish and retrofit buildings,” he said. “Using low-carbon materials and technology is very much one of the key levers and the key actions the industry should grab, both for new buildings and existing buildings.”

Strategy

If there was a single message from the panel regarding sustainability and ROI, it was this: get your strategy in place pronto.

“Start now,” Hart urged. “Think about how it is going to impact your various properties, your portfolio, and then the various needs of your tenants.

“If you have a large portfolio with many different workplaces across Europe and different warehouses in the logistics space, you are likely to need some kind of strategy now for understanding the impact of that on everybody.

“It’s a bad idea to not be proactive, because you end up with many different solutions and many different prices and therefore your data is very hard to aggregate and very hard to put together.”

Coldrey agreed, her advice being to use “recognised green building certifications and tools as part of your strategy”.

However, she concluded that collaboration, particularly with smaller business, was an absolute necessity, because smaller businesses often come up with more creative and interesting solutions.

“We’re really seeing that collaboration and partnership is key to figuring out how we standardise, prove and level out the expectations around what the facets of green buildings are and how can we communicate that in a way that’s transparent and has a clear ROI.

“I think that as an industry, we need to be providing those signals and helping these smaller businesses that are coming up with low-carbon materials and supporting them along that journey.”