As the real estate industry continues to strengthen its approach to sustainability, one challenge remains: understanding how environmental factors influence value creation and risk mitigation. While there is growing recognition that sustainability considerations matter, the industry still lacks sufficient and consistent data to fully demonstrate their impact on financial performance.
To help address this, INREV's ESG Valuations Focus Group identified the six most relevant environmental factors for underwriting:
- Energy consumption/use intensity
- Greenhouse gas emissions
- Physical risk score/level
- Transition risk (stranded/misaligned year)
- Energy ratings
- Building certificates
These factors are also reflected in the INREV ESG SDDS, providing a practical starting point for organisations looking to enhance their sustainability reporting. While the ESG SDDS offers a comprehensive non-financial reporting framework, focusing on these six key indicators can help organisations establish a solid foundation and align with emerging industry practice.
By considering these KPIs during underwriting and adopting more common reporting practices, the evidence base needed to link these factors to financial performance can be further developed.
INREV will continue working with investors, managers, valuers and other stakeholders to help unlock a more consistent framework linking sustainability to long-term performance and value creation. We would like to thank the members of the ESG Valuations Focus Group for their contributions to this initiative and look forward to continuing the dialogue with industry stakeholders.
Read the paper and infographic below to learn more about the six environmental factors and their role in underwriting.
Environmental considerations in underwriting
Published on 16 Dec 2025