COMMERCIAL PROPERTY WHAT ’ S ESG AND HOW DOES IT AFFECT PROPERTY ?
ESG is an acronym which has been bandied about commercial property for many years , however it ’ s not totally understood what it is and how it impacts property . Environmental social governance is the response to a new era of socially conscious investors who consider not just financial returns but environmental impacts today and into the future . In Australia , the National Australian Built Environment Rating System ( NABERS ) is the leading rating scheme which considers energy , water and other social implications . With the government growing its commitment to zero net carbon emissions by 2050 , we ’ re seeing a growing pool of owners , tenants , investors all ensuring their assets are future ready , and we ’ re starting to see some creep into the residential sector .
CommBank recently announced their Green Home Loan offering which provides discounted rates to those who purchase a Green Building Council of Australia ( GBCA ) green star home , or have appropriate Nationwide House Energy Rating Scheme ( NatHERS ) ratings across energy and water criteria . While this may be skewed to newly developed products , demand is high for stock to be built in keeping with these principles as consumers grow more environmentally conscious . With many other banks likely to follow suit there are a number of green initiatives which will further encourage homeowners to consider upgrades to their home to improve livability , comfort and health while offsetting growing energy costs .
Australian commercial property is world-leading in its implementation and practices around ESG , with most property owners having robust mandates around NABERS and their principles when buying or developing new property . This is seen as a pivotal piece to manage future risks while achieving strong returns and meeting sustainability goals . We ’ re also seeing a growing tenant requirement for highly-rated assets in response to employee expectations surrounding their employer having an authentic commitment to reducing their carbon footprint .
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