Turning Green Into Growth: How Sustainability Delivers ROI

On Wednesday 23rd July, Jaclyn Kaminski-Beneche , Global Head of Sustainability at International Workplace Group plc , Krystian Zajac , CEO at Watergate , Murdo Mcilhagger , Co-Founder & MD at mys | B Corp™ and James Fisher , Head of Strategic Partnerships at BRE joined us for a powerful conversation on how sustainability is transforming from a regulatory obligation into a true growth engine for real estate.

It was a pleasure hosting our fantastic speakers and the highly engaged audience in this session! In case you missed it, here are some key quotes from this week's webinar.

The session recording can be accessed through the link here:

https://global.proptechconnect.com/416DtH6

Webinar Highlights

1) How is the property sector shifting with the current global geo-political movies and impact of the US administration worldwide? How is this making sustainability a core business driver in real estate, rather than just a regulatory checkbox? 

Jaclyn: "At International Workplace Group (IWG), all of our top 10 corporate clients now have net zero targets, and they simply cannot meet those targets without their suppliers. If we don’t decarbonize, improve our building performance and help them meet their goals, we risk losing their business essentially. We’re also seeing a growing focus from clients on climate resilience. It’s no longer enough to just decarbonize. They’re looking for their partners to go further by investing in beyond value chain mitigation activities such as biodiversity conservation, climate adaptation activities. The message has been really clear, especially over the past 6 to 8 months: sustainability is a core part of the business value and core to ensuring long-term risk management in real estate overall."

Krystian: "Historically and up until this point, the vast majority of our business has been PBSA (purpose built student accommodation), built around co-living and a bit of hospitality. Now, other types of customers are coming to us, essentially anyone who needs to pay attention to their water consumption, e.g. infrastructure such as public toilets and offices. At Watergate, real estate leading companies are shifting mindset from a box-ticking exercise to actively trying to find competitive advantage through water intelligence. Water prices have risen by, on average, 47% across the UK, hitting operators hard, especially those with all-bills-included models like student accommodation. 

Regarding ROI, energy bills were historically highest, followed by gas, then water. Suddenly water has overtaken gas as the second highest utility bill. From a pure economic point of view, money spent on water efficiency moves the needle much further than continuing to invest only in energy efficiency. Even trivial things like a leaky toilet can waste over 10,000 liters of water in a single day. Savings of up to 68% on operating costs translate into increased NOI, which in some cases, affects asset valuation. There is a new sustainability reporting standard in the UK starting January 2026 that will force listed companies and their supply chains to report on water efficiency for the first time. Taking action to stop leaks and reduce consumption and waste is not only a matter of fiscal responsibility but also of sustainability, since every cubic meter of water used, wasted, or leaked results in 10.4 kilograms of CO₂ emissions.”

James: “In the work I’ve been doing with BREEAM, we’re probably operating a bit differently because BREEAM certification is always above regulatory minima. When you earn credits and scores in BREEAM, it means you’ve gone well beyond the minimum, which is important. The conversation is shifting away from labels; it doesn’t matter what term you use as long as action is taken. For us, sustainability and ESG are probably slightly outdated terms. It’s becoming more about resilience.

Our clients, mostly global and heavier in Europe, use the certificate because it delivers rental yield uplift and resale value uplift. Studies show BREEAM in-use certification across a portfolio can give a 6.9% rental yield uplift and a similar exit value uplift. About 10 years ago, our assessor network was mainly architects and engineers. Now we’ve climbed the value chain and speak directly to funders, financiers, and portfolio holders. I’m even seeing a move toward corporations, big brands that see value from a tenant perspective.

Regarding liquidity and different funds, investors have varied requirements. Some portfolios are core funds, while others focus on assets that need a net-zero pathway or transition, or on lower-value assets they want to improve. Regarding core asset investors, each fund is different. Pension funds tend to seek long-term investments, while others are more opportunity-focused. Some investors will be looking to dispose of assets, while others are building transition portfolios to protect value. The certification supports this, and CFOs and investors won’t approve these strategies at the board level unless they’re confident about what they’re getting in return. There’s always more to do, millions of buildings need our help, so we’re certainly not going to stop.”

Murdo: “Net zero has been driving regulation and much of sustainable investment, but that regulation was built on cross-party, cross-country consensus. In the US, globally influential politicians are rolling back sustainability commitments. In the UK, there’s been no clear consensus since 2021. Labour supports the agenda but has scaled back its £28 billion annual green investment pledge, while Reform is actively campaigning against it. Globally, the trend is similar. Real estate tends to be the first mover or the first to react. Larry Fink of BlackRock, once a leading voice on sustainable investing, didn’t even mention it in his 2025 letter to shareholders. Meanwhile, about 200 companies have been delisted from sustainability indices and science-based targets in the past year. Yet what did shareholders do? Walmart’s stock is up 60% year-on-year; Microsoft’s is up 12%. A few years ago, abandoning net zero targets would have been C-suite suicide. Now, investors appear to be rewarding other priorities.

Net zero isn’t dead, but the landscape is shifting. Unless sustainability investments can become more self-sustaining, they may not be truly sustainable in the long term. There’s always opportunity, but real estate isn’t one uniform market. It’s fragmented, with diverse buyers and sellers. A core institutional investor holding for 30 years will prioritise net zero, asset protection, and long-term value. But a homebuilder focused on managing costs will see net zero regulation as an added burden. It really comes down to your business plan. Identify the right wave and align your investment strategy accordingly. If you can make your building more efficient, you make money. As long as the increase in NOI or the capitalisation of that NOI exceeds the CapEx, it doesn’t matter whether you hold the asset for a week or 20 years. There’s value in that. That said, if we looked at the capital stack behind sustainable investment today, I’d be surprised if the value-add side wasn’t still a minority compared to regulation-driven capital deployment.

2) What opportunities can organizations leverage to transform sustainability from a compliance obligation into a driver of measurable ROI and long-term value?

Murdo: “One reason student housing has topped investor mandates recently is its operational nature. It's a net operating income business: the student pays a global rent, and the landlord incurs all running costs. The asset is valued on the remaining NOI, so making the building more efficient directly drives better returns. In retail, even if you improve the building, the operator has the final say. With student housing, you control it all, it's an open canvas. Newer buildings are more efficient, often due to work like James' with BREEAM. But 60% of UK PBSA are over 10 years old, and many are dramatically inefficient. Over 90% of these assets have only a single meter for water, gas, or electricity, making detailed tracking impossible. When utility costs spiked 400% in 2022, most operators were caught off guard. It was a hot topic at the time, but it’s conspicuously absent from discussion now and very little has actually been done. So there’s a clear opportunity: inefficient buildings, minimal measurement, and under-management."

James: “ In the BREEAM sphere, especially in the UK, we’re more familiar with our new construction and refurbishment standards than our in-use standard. We’re also seeing a rise in appetite for hospitality, where customers and end users are beginning to demand these sustainability attributes. Colonial is a fund that repurposes standing assets in Paris, with tenants like Facebook and Google. In one BREEAM-certified refurb and fit-out project, the new tenants demanded very high sustainability standards. The technical director told me they secured a higher value lease for a longer term, effectively paying for the refurbishment through the lease. We’ve already touched on the millions of buildings that need help. It comes down to taking the right steps, ringfencing energy efficiency budgets, identifying low-hanging fruit, and starting with practical actions. Whether you’re looking at BREEAM In-Use data or GRESB, trend analysis over time shows that certain techniques produce results. But at some point, you’ve got to be bold and commit to a strategy.

Krystian: “ For me, water is a clear example of low-hanging fruit. The main challenge has always been the illusion of abundance. We assume that because we’re surrounded by water, it’s readily available, but it’s not. The UK is running out of drinking water, and two-thirds of the global population faces water shortages. Waking up to this reality and asking, “What can we do around water?” solves multiple issues at once. Most organisations don’t know how much water they’re using. (...)

We need to rethink what we mean by ROI. In the UK, some investors can’t even get planning permission because the area is water-stressed. Water utilities are under immense pressure. We’re seeing hosepipe bans and utilities transporting water across regions just to keep the supply going and this creates opportunity. Developers can leverage this by working with utilities that are now subsidising sustainable technologies. For example, if a new build includes verified water-saving tech, some utilities may reduce or waive connection fees entirely.

Jaclyn: “I’ve seen quite a few different tactics. The best advice I can give is, first, to have the data, create case studies and develop a deep understanding of the commercial risks involved. I’ve always found it extremely beneficial to tie sustainability efforts back to commercial risk and client needs. Second, think through the lens of a pilot. You don’t have to tackle everything at a global scale initially. There are opportunities to create small pilots that generate data to build a stronger case for wider implementation. There are many ways to approach this, but focusing on small-scale impact that tells a bigger story and clearly articulates the commercial value or risk is, in my view, the most effective strategy.

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See the full webinar in the link here:

https://global.proptechconnect.com/416DtH6