26 June 2025
Cait, you have over 25 years of experience in the real estate industry – how have you seen investor expectations shift when it comes to sustainability performance throughout your career?
When I began my career, sustainability was largely something on the fringes – more of a reputational consideration than a financial or operational one. I have seen a significant transformation: investor expectations have evolved from simply “do no harm” to a much more strategic, outcomes-focused and meaningful approach. Today, sustainability performance is viewed as a critical driver of long-term value. Institutional investors are increasingly integrating sustainability metrics into risk assessment, portfolio strategy, and even valuation models. They expect transparency, rigorous data, and clear pathways to net-zero. This shift is as much about protecting future value as it is about making a positive impact.
How can businesses increase asset value by focusing on sustainability and climate resilience? What is your advice to asset managers looking to maintain profit while increasing sustainability?
Embedding sustainability into investment and asset management strategies can enhance resilience and future-proof value. For example, energy-efficient assets tend to have lower operating costs, which increases net operating income and overall asset value. Climate adaptation measures such as flood risk mitigation or the durability of materials protects against physical and transition risks, reducing insurance premiums and avoiding costly disruptions.
For asset managers trying to balance profit and sustainability, my advice is to focus on aligning sustainability with core financial performance. Start by integrating sustainability at the underwriting stage, setting measurable KPIs, and leveraging tools like green leases or sustainability-linked financing. Importantly, collaboration with tenants and local communities can increase both financial and social returns.
In your years of experience, how have you found that sustainability credentials impact an asset’s liquidity?
Sustainability credentials, like BREEAM, LEED, or NABERS, are increasingly influencing marketability and liquidity. Assets with credible certifications or demonstrable sustainability performance markers tend to be quicker to transact, particularly in core markets where institutional capital prioritises sustainable outcomes. Brown discounts are also becoming more pronounced, with underperforming assets facing valuation pressure or becoming stranded.
Buyers are now asking tougher questions about sustainability performance, carbon trajectory, and regulatory alignment. Sustainability credentials have moved from being a “nice to have” to a decisive factor in buy/sell decisions.
How can businesses embed climate resilience into day-to-day decision-making?
It starts at the top with governance and culture. Climate resilience needs to be championed at board and executive level, and embedded into risk frameworks, investment committee processes, and procurement strategies.
Data is more critical than ever before, and businesses need to assess asset-level exposure to physical risks (like flooding or heat stress) and transitional risks (like regulatory shifts or energy pricing).
Operational and capital planning is key, and this can be enhanced by scenario modelling, asset-level audits, and the use of science-based targets. Ensuring teams have clear responsibilities and are well informed should help sustainability become a shared value across businesses.
What are some of the most common sustainability-related misconceptions you encounter among asset owners/managers?
The cost : return debate is an interesting one: the idea that sustainability always entails significant cost with limited return. In reality, smart sustainability investments often deliver both operational savings and reputational gains.
Another myth is that sustainability is just about energy efficiency. While important, it is key to also look at other levers such as wider environmental impact, supply chain, social impact and governance.
There is the thought that sustainability can be deferred, done when regulation requires it. But that is a reactive stance and will probably lead to an increase in future retrofit costs and transition risk. The market is moving quickly, and owners must be proactive to ensure they keep up to shore up resilience and investor appeal.
Looking ahead, what do you see as the biggest sustainability challenges and opportunities for the real estate sector in the coming years?
One of the biggest challenges is navigating regulatory complexity and aligning with multiple evolving frameworks—SFDR, CSRD, ISSB, and others. Doing this for a cross-border investor can be particularly daunting.
Retrofitting existing stock at scale and speed is another major hurdle – 2030 is less than five years away, 2050 less than 25. Given funding constraints and tenant sensitivities implementing the theory will be a challenge.
At Longevity we believe that with challenge comes opportunity. There’s significant potential in leveraging green finance opportunities, digital tools for real-time sustainability monitoring, and partnerships across the industry. Net zero pathways, circular economy strategies, and climate resilience planning can unlock long-term value. We believe that leaders in this space will be those who are proactive and move beyond compliance. Now is the time to embrace innovation, be transparent, and champion bold action.