Our industry is engaged in an important dialogue to improve the efficiency and resilience of real assets through transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
ESG is now a politically charged acronym. But real estate leaders want to see the industry get back to basics: focus on the financial upside of paying attention to matters of energy and the environment, and demonstrate a return on investment.
— PWC – ULI Emerging Trends Global Report 2025
Environmental, Social, and Governance (ESG) priorities continue to evolve across real estate markets, with growing emphasis on aligning sustainability performance with financial returns. While ESG narratives often vary, a consistent theme is emerging: assets that demonstrate strong environmental performance, backed by high-quality data, are commanding greater value and enabling access to favorable financing—specifically, green finance.
This article explores the role of data and PropTech in improving sustainability performance, reducing asset risk, and meeting the growing requirements of institutional investors and regulators.
1. Market Dynamics: Green Premiums vs. Brown Discounts.
The 2025 ULI Emerging Trends Report highlights a clear theme in real estate markets. Sustainable, high-performing assets are attracting premium valuations, while lower-performing, inefficient buildings are increasingly discounted.
Green Premiums
A recent CBRE study found that 32% of European investors are willing to pay a premium for ESG-aligned buildings, with more than half of those prepared to pay in excess of 20%. These premiums are largely driven by operational savings (such as energy and water efficiency), reduced regulatory risk, and increased tenant demand.
Importantly, institutional capital is shifting towards assets with measurable sustainability outcomes. This includes compliance with national building performance regulations, alignment with investor reporting standards (e.g., GRESB, SFDR), and demonstrable progress toward Net Zero Carbon (NZC) objectives.
High-quality data is central to quantifying and reporting on these outcomes. Without verified performance data, it becomes increasingly difficult to achieve premium asset positioning.
Brown Discounts
On the other hand, non-compliant or inefficient assets—often termed “brown” buildings—are being transacted at a discount. While some investors are pursuing value-add strategies through acquisition and retrofit—and this is one to watch—the success of these approaches is dependent on baseline performance visibility and reliable data on consumption and emissions.
Retrofitting older stock without data-driven insights can result in missed investment priorities, inefficient upgrades, and challenges in verifying outcomes. Investors seeking to reposition brown assets must have access to detailed, real-time performance metrics to identify where to deploy capital for maximum impact.
2. Data as a Prerequisite for Green Finance and Asset Performance
The Importance of Data Availability:
A significant proportion of ESG data currently used in real estate is based on estimates or assumptions rather than measured performance. This creates inconsistencies, reduces accuracy, and undermines comparability across assets.
Estimated emissions models typically rely on sector benchmarks or asset typologies. While this may meet some reporting thresholds, it fails to account for operational performance, occupant behavior, or the impact of sustainability interventions. As a result, investors and lenders lack the confidence to link data to financial decision-making.
Financial and Regulatory Implications:
Inaccurate or incomplete data can lead to higher operating costs, reduced NOI, and reduced asset value. Over time, inefficient buildings become more vulnerable to regulatory penalties, tenant attrition, and financing barriers. Reliable, standardized data allows owners and operators to:
- Monitor and reduce energy consumption
- Identify and resolve inefficiencies
- Track emissions and improvement trajectories
- Meet disclosure requirements under SFDR, EU Taxonomy, and GRESB
With performance data playing an increasingly central role in loan underwriting and portfolio-level sustainability scoring, asset-level transparency is no longer optional.
Mitigating Stranded Asset Risk:
Properties that fail to meet minimum performance standards face increasing risk of becoming “stranded” due to regulatory non-compliance or lack of market interest. Real-time data enables early detection of risk, prioritization of upgrades, and verification of outcomes—thereby helping future-proof the asset.
3. Using PropTech to Improve Data Accuracy and Asset Value
But where is the real gold when it comes to this quality data:
- Asset Valuations and ROI— High-quality consumption data is increasingly influencing asset valuation, but without quality PropTech gaining access to that granular data can be time-consuming and costly. An example of best practice was Harrison Street Real Estate and CBRE; they leveraged real-time consumption data from Utopi to drive awareness across their UK and Irish PBSA assets. This awareness led to engagement and the reduction in energy consumption; it enhanced asset performance and increased investor confidence. By demonstrating actual reductions in energy consumption and emissions, 15% energy savings to be exact, HSRE was able to improve asset desirability, ultimately leading to higher valuations and stronger market positioning. They generated a 9x ROI with an asset value increase of GBP17 million. See the case study here.
- Industry Benchmarks and Sustainable Certifications—Reliable asset-level data is also crucial for obtaining industry benchmarks and sustainability certifications such as GRESB, BREEAM, Fitwel, and many more. These certifications enhance an asset’s marketability, attract sustainability-focused investors, and help ensure compliance with evolving regulations. With PropTech on your side, gaining the data needed to score highly on these certifications, like water use, carbon emissions, and resident engagement, is simplified.
- Accessing Green Finance and Regulatory Compliance—The growing green finance market offers significant opportunities for assets with strong sustainability credentials. Regulatory frameworks such as the EU Taxonomy and SFDR require detailed sustainability disclosures, which can only be met with high-quality, granular data. High-quality data not only enhances eligibility for green financing but also helps secure better loan terms and lower borrowing costs. Ultimately, better ESG performance means lower capital rates. See more on SFDR here.
Across global real estate markets, data is becoming a critical enabler of both financial and sustainability outcomes. Investors, operators, and lenders are increasingly focused on real performance—not estimates—and are rewarding those who can demonstrate measurable progress. As regulatory pressures mount and investor expectations increase, the ability to produce reliable, real-time ESG data will differentiate high-performing portfolios from the rest of the market.
Proving that green is indeed the new gold, and isn’t it about time we put a little shine on all assets?
This article was written by Ben Roberts, CMO and Co-Founder at Utopi. Learn more about Utopi here.