Sustainability in construction and real estate – market competitiveness or just an image?

The last decade has changed the way we perceive sustainability. What was once unfamiliar, and later considered as no more than a nice-to-have, is now omnipresent. Today, topics of sustainability and ESG are everywhere. It might be so because the construction and real estate market has always had great potential when it comes to improving its sustainability. The promise of improved environmental friendliness is exactly what makes this sector so receptive to change

As an active construction and real estate market player, we are witnessing how green building spreads, becoming a subject of interest for banks, funds, investors and tenants. Is it just a matter of image or has it actually become a factor that increases competitiveness?

Wider context – what has changed?
Construction and real estate market is more and more bound by legislation. Key regulations that cover green buildings are the Energy Performance of Buildings Directive that aims to achieve a fully decarbonised building stock by 2050, EU Taxonomy that sets goals for various areas (climate change mitigation and adaptation, protection of water resources, circular economy, pollution prevention and biodiversity) and the EU Emissions Trading System (ETS) that introduces system of payments related to greenhouse gas emissions including construction sector. Even local laws develop and set sustainability standards – for example construction law covering environmental protection, including soil, greenery, water containers and other natural goods or the ISO 15392:2008 standard that identifies and establishes general principles for sustainability for all the stages of property lifecycle – construction to demolition.

The expectations for institutional investors are also increasing. ESG now includes non-financial reporting – the Sustainable Finance Disclosure Regulation that aims to avoid greenwashing and boost the flow of resources into sustainable investments in line with ESG principles. ESG becomes an increasingly important criteria when it comes to decision making. Investors tend to integrate ESG with their business strategy to manage the risks and respond to markets requirements. Investment in sustainable real estate is said to be more profitable in the long term.

Common awareness about sustainability has grown. Tenants and users are well aware of the topics of health, well-being, convenience, inclusivity and accessibility, and the decrease of operational costs of their areas.

How the sustainability factor impacts property values and operational costs
The  value of property today is no longer based simply on traditional income generation. Green CAPEX, operational costs and sustainable technologies are becoming more important.

Sustainable buildings are equipped with solutions that limit usage of water and energy, and in result decrease the costs of exploitation. They have the potential to be more future proof as they are one step ahead of the regulations and standards and take adaptation to climate changes into consideration. Wise implementation of modern environmental-friendly solutions lower the risk of soon modernisation and move forward stranding point, as per Carbon Risk Real Estate Monitor (CRREM) analysis to the far future.

Loans for sustainable buildings are easier to be refinanced. That is not only the matter of the price of financing, but even its availability. Financial institutions require the projects to be sustainable or at least to include reasonable pathway to reach that, what has to be reflected in ‘green CAPEX’.

Investors and developers are increasingly aware of the benefits that come with sustainable construction. It is not just ‘nice-to-have’; it is a strategic tool that impacts financial wellness. Green buildings are competitive advantage allowing for better financial outcome and minimising business risks.

Standards, certifications and audits
One of the most common ways to assess sustainability performance in buildings is a certification system. LEED and BREEAM are the most recognizable ones, prevalent in the commercial sectors. Each of them focusses on slightly different priorities, but they both evaluate a building’s impact on the environment, its efficiency, material used, users’ wellbeing and its resilience over the lifecycle. The popularity of WELL, Green Star and PLGBC’s Zielony Dom certification is continuously rising, but they are more of accompanying certificates than the main ones for buildings.

Market standards are continuously increasing, so for the companies positioning their assets competitively, aiming for BREEAM Excellent or LEED Gold or even top ratings Outstanding or Platinum has become a pragmatic standard. Lower certification levels still support the projects’ market visibility, but they rarely deliver the same degree of economic differentiation.

Beside certification, audits are essential component of sustainable asset management. Some are now required by regulations. These include holding an Energy Performance Certificate and, for some owners and investors, EU Taxonomy alignment analysis.

Recommended audits focus on verifying and reducing energy consumption and carbon footprint including checking overall energy performance, using EPC as a basic indicator and applying CRREM to understand, when a building may exceed respective CRREM decarbonisation pathway. This may also involve Climate Risk Assessments and LCA.

Additional audits relate to broader ESG aspects, such as ecological reports, biodiversity measures, proper waste management, staff training, and monitoring systems that support segregation and waste reduction.

Trends: Net Zero Carbon, digitalisation, and modernisation
One of the most noteworthy market shifts is the move toward Net Zero Carbon assets. These aim to reduce operational emissions to the absolute minimum and compensate for any remaining footprint. For investors, Net Zero buildings are less likely to become stranded assets and are more aligned with long-term capital strategies.

Emphasis on retrofitting existing properties is also noticeable. Modernising an operating building through HVAC optimisation or renewable installations typically requires lower capital expenditure than constructing a new asset and carries less development risk. Retrofitting also tends to deliver a faster return on investment, making it an increasingly attractive strategy for both owners and tenants.

The third major trend is digitalisation. Building Management Systems (BMS), IoT-based sensors, automated controls, and real-time performance dashboards and last but least AI analysis are becoming mainstream. They allow owners to monitor consumption, detect inefficiencies and proactively manage maintenance. Digital buildings not only operate more efficiently, but are also valued higher by the market.

What does this all  mean for investors, developers and contractors?
Strategy for the construction market players is clear – sustainability requirements should be integrated at the earliest design stages, because the more advanced project stage, the more expensive change gets.

Cost analyses progressively show that although sustainable buildings may involve higher upfront expenses, their operational savings, improved resilience, and reduced long-term risk lead to a relatively short payback period. In other words, sustainability is no longer a premium feature, but more of financial optimisation strategy.

Although the availability of detailed local data may vary, global sustainability trends increasingly shape the Polish market. Certification rates continue to rise, retrofitting becomes more common, and institutional investors apply similar ESG expectations to assets in Poland as they do across Europe. As a result, companies operating locally benefit from adopting international standards and anticipating future regulatory developments rather than reacting to them.

In conclusion, sustainability is no longer a matter of image. It is a real competitive determinant, a business advantage. Ignoring sustainability standards generates risks of higher operational costs, regulatory risks and lowering asset value. It is a topic that resonates both in the media and across business. It influences strategic decisions, best practice, and is reflected in the market data. The green transformation is no longer the future, it is present.