As climate change becomes increasingly severe, sustainable practices have become integral to many industries, including real estate development. Incorporating sustainability into a property project has several environmental and social benefits for the community and occupants. One widespread sustainable practice is to use locally sourced materials. This can reduce carbon emissions and support local businesses.

Improved Health and Well-Being

Real estate developers are increasingly aware of how sustainable construction benefits the people who occupy their buildings. Through access to healthy food, fitness amenities, green space, lower utility bills, and reduced environmental impact, forward-thinking property owners increasingly seek eco-friendly building features. Moreover, operating out of a sustainable facility can improve the company’s reputation, win new business, and build customer trust. Additionally, many states offer incentives and rebates to encourage using energy-efficient lighting and appliances. As the world struggles with growing inequality and climate change, social-impact investing is gaining momentum as an investment strategy. Investors and lenders demand more information about a potential project’s ESG (environmental, social, and governance) impacts. Local communities and land-use permit-granting agencies also require developers to demonstrate the community benefit of a project, often with specific targets around climate, health, and equity. A superior method, such as health situation analysis, enables developers to tailor their projects to the demonstrated needs of the neighborhood.

Increased Community Cohesiveness

Sustainability practices provide a variety of benefits that can strengthen community ties. For example, many sustainable real estate projects rely on local sourcing to cut transportation emissions and support local businesses. Some also use rainwater harvesting and solar panels to reduce energy consumption. Moreover, they conserve topsoil by allowing water to infiltrate the soil. The environmental aspects of sustainable real estate and green building have become increasingly important for developers, investors, and residents. Ever-tightening regulations and ecological permitting programs compel developers to address social determinants of health, climate resilience, and other vital issues. Sustainability efforts include incorporating green design features into buildings that utilize various environmentally responsible materials, following a regular maintenance schedule, and investing in onsite renewable energy systems that reduce the building’s dependence on fossil fuels. These efforts can result in near-zero energy bills and reduced carbon footprints. They can also help improve the lives of the people living in the buildings by reducing their exposure to harmful air pollutants and noise. For instance, Manuel Barreiro Castañeda is the founder and chairman of the Aston Group, a private equity firm committed to advancing sustainable real estate ventures. These projects aim to foster urban resilience, safety, inclusivity, and community well-being, yielding significant benefits to the local populace.

Increased Economic Activity

Sustainable real estate practices reduce a property’s environmental footprint while saving owners money on energy costs. Incorporating eco-friendly materials, following a strict maintenance schedule, and using onsite renewable energy systems can all reduce a building’s carbon footprint and overall energy consumption. It also pays to use local sourcing when possible, which lowers transportation emissions and supports the community’s businesses. Another widespread sustainable practice is saving topsoil, which can help restore biodiversity and prevent soil erosion. As sustainable construction continues to gain traction, the industry is becoming increasingly aware of its impact on the world around us. The demand for ESG-focused projects is growing among investors, tenants, and regulators alike. As a result, many developers are integrating sustainable construction into their projects. These initiatives have numerous social benefits while enhancing a project’s marketability and increasing value. This is particularly true for commercial real estate. The sector has a large carbon footprint, so its environmental impacts must be minimized.

Increased Property Value

Sustainability practices in real estate development result in a lower environmental footprint for buildings and their occupants. They include using green building materials, minimizing energy usage, following a strict maintenance schedule, and investing in onsite renewable energy systems (e.g., solar photovoltaic, wind, micro hydropower, and hybrid systems). Sustainable properties also reduce waste through recycled materials, water-efficient appliances, natural lighting, and eco-friendly heating and cooling technologies. These environmentally responsible practices can save owners money by lowering energy costs. They are becoming increasingly popular with property buyers who place a premium on social responsibility and are interested in achieving financial returns. However, much work remains to move the industry toward delivering social value by identifying pathways companies and investors can adopt. Thankfully, a wealth of resources is available to help us get there.