Understanding the adoption of voluntary environmental, social and governance (ESG) standards in the real estate sector.

The environmental performance of the real estate sector has been subject to growing scrutiny in recent years, with the United Nations estimating that the sector accounts for a substantial share of global energy consumption and energy-related greenhouse gas emissions. In turn, environmental, social and governance (ESG) factors are becoming increasingly significant investment considerations for real estate investors. In this context, voluntary ESG standards are becoming central in promoting sustainable and responsible practices among real estate players, and in helping them to address global challenges. Thus, this report is of importance in three respects: first, we review the academic literature in relation to the drivers of organizational adoption of voluntary ESG standards; second, we analyse GRESB’s Real Estate Benchmark, the de facto industry standard for ESG activities in the real estate industry; and finally, we provide recommendations for industry professionals and future researchers interested in the adoption of voluntary ESG standards in the real estate industry.