A small estate with multiple apartment blocks within the real estate industry.

The real estate industry finds itself at an important point, with sustainability becoming a key factor in its future path.

This industry has a large environmental impact, covering aspects such as the use of land, building materials, energy use and carbon emissions. Therefore, incorporating sustainability into property practices is now a moral obligation and a strategic need.

The drive towards sustainability is prompted by the increasing demands of global sustainability objectives, including the United Nations Sustainable Development Goals and the climate targets of the Paris Agreement. These global agreements act as a benchmark for the property industry, pushing it towards adopting methods that support sustainable city development, energy conservation and lesser environmental harm.


The State of Sustainability in the Real Estate Industry in 2024

The industry’s effects on the environment, communities and economies have positioned it as a key player in addressing climate change, resource shortage and social inequalities. This brings both challenges and opportunities for those involved in real estate to promote sustainable growth.

The impact of global sustainability goals on the property industry has been substantial. These objectives have pushed the industry towards adopting more sustainable methods and reconsidering the design, construction and management of buildings. The industry is now acknowledged for its role in helping to meet these ambitious goals, from cutting carbon emissions and reducing energy use to supporting sustainable urban environments and communities.

In 2024, the move towards sustainability in property is marked by an increased embrace of sustainable building standards, energy-saving practices and principles of sustainable city planning. Advances in construction materials, the use of renewable energy and smart building technologies are becoming more widespread, showing the industry’s dedication to reducing its environmental impact. Moreover, ESG criteria are now crucial for investment and management decisions throughout the real estate asset lifecycle.


Key Sustainability Trends in the Real Estate Industry

These trends are reshaping the approach to building design, construction and management, as well as the development of urban areas to support sustainable lifestyles and workplaces.

Green Building and Certification Systems

A recent study concluded that commercial LEED-certified buildings are projected by their design teams to save 20–40% in energy, depending on their level of certification.¹

The implementation of green building standards is motivating the industry to adopt sustainable design concepts, use resources efficiently and reduce carbon emissions in their projects. This movement is environmentally beneficial, increases property values, complies with legal standards and meets the rising demand from occupants and investors for sustainable living and working environments.

Sustainable Urban Development and Smart Cities

16% of the current and 24% of planned projects in 26 UK smart cities were within the sphere of smart transportation.²

By adopting these practices, the real estate industry is important in creating sustainable urban areas that focus on environmental preservation, social fairness and economic stability. The development of intelligent, sustainable cities by the industry helps to build resilient urban spaces that are prepared for evolving community needs and environmental challenges.

Energy Efficiency and Renewable Energy Integration

Reducing carbon emissions in the building sector is crucial for addressing climate change, given that this sector accounts for 40% of global energy consumption and contributes to 37% of total greenhouse gas emissions worldwide.³

Incorporating energy-saving measures and renewable energy solutions into property developments can cut operational expenses and carbon output as well as meeting the changing expectations of occupants, investors and regulators. This trend leads to the creation of buildings and areas that support a shift towards a less carbon-intensive economy.


Challenges to Sustainability in the Real Estate Industry

The progress towards incorporating sustainability into the real estate industry shows obstacles that illustrate the complexity of shifting towards more sustainable practices in an industry tightly linked to the global economy and society.

A key issue for the real estate industry is the balance between the immediate costs of sustainable development and the economic feasibility of projects. Green buildings and sustainable urban plans typically offer long-term savings and environmental advantages, yet their initial outlay can be considerably higher compared to conventional development projects. This financial challenge requires creative financing solutions and incentives to motivate developers and investors towards sustainability. Without obvious economic benefits or a short-term return on investment, the uptake of sustainable practices may lag.

Dealing with changing regulations around sustainability and green building standards is another significant hurdle. These regulations and standards differ greatly across regions and are constantly being updated, which can make it difficult to maintain compliance and add to the complexity of carrying out sustainable property projects. The industry must stay well-informed to adjust to regulatory changes and work together for standardised, transparent and attainable sustainability goals. This involves a joint effort among all parties to shape policy and ensure that regulations facilitate the achievement of sustainability objectives.

The adoption of cutting-edge technology for energy efficiency, renewable energy and smart city functionalities necessitates a workforce skilled in both technology and sustainability in property development. There’s often a lack of skills and knowledge among industry professionals, from builders to property managers. Overcoming this obstacle requires investment in education and training programmes to provide the workforce with essential skills for sustainable development. The industry should also encourage innovation to create and apply technologies that are both efficient and easy to use.

Matching market demand with sustainable property offerings is another challenge. Although consumer awareness and demand for sustainable living spaces are increasing, translating this into broad market demand for sustainable real estate projects can be challenging, especially in markets where sustainability is not a main factor. The industry needs to better educate consumers and market the advantages of sustainable property more effectively. Creating attractive value propositions that emphasise the environmental, health and financial benefits of sustainable properties is vital for generating demand and ensuring the success of sustainable property projects.


Opportunities and Strategies for Sustainable Real Estate

By adopting forward-looking strategies, the industry can address current challenges and significantly contribute to a more sustainable future.

Embracing Green Building Innovations

Strategy: Focus on investing in green building technologies and innovative design methods that decrease energy usage, water consumption and carbon emissions. Adopting green building standards and aiming for certification can act as markers for sustainability achievement.

Opportunity: Properties with green certifications, like LEED or BREEAM, not can aid environmental sustainability and attract tenants and buyers seeking healthier, more sustainable living and working environments. This approach can improve property values and maintain long-term market competitiveness.

Advancing Sustainable Urban Development

Strategy: Work with urban planners, government entities and communities to incorporate sustainable principles into city development projects. Emphasise mixed-use projects that encourage walking, cut transport emissions and improve community well-being.

Opportunity: Practices in sustainable city development provide an opportunity to transform city living, making urban areas more pleasant, resilient and sustainable. This strategy meets the increasing demand for sustainable lifestyles and can encourage innovation in city design and infrastructure.

Leveraging Renewable Energy Sources

Strategy: Implement renewable energy sources, like solar panels and wind turbines, in new and existing property developments. Investing in energy-efficient building systems and technologies can greatly lower operational costs and carbon footprints.

Opportunity: Using renewable energy reduces energy expenses over time and marks property assets as sustainability frontrunners. This can attract sustainability conscious tenants and buyers, offering a competitive advantage in a market becoming more aware of environmental issues.

Promoting Circular Economy Practices

Strategy: Apply circular economy concepts in construction and property management, focusing on the reuse, recycling and reduction of waste. Form partnerships with suppliers and contractors who value sustainable materials and methods.

Opportunity: Circular economy methods in property can lead to cost savings, lessen environmental impact and promote innovation in material use and waste management. This approach supports the industry’s sustainability ambitions while addressing increasing regulatory and consumer demands for responsible environmental stewardship.


Why Do Real Estate Organisations Choose McGrady Clarke?

Real estate organisations choose McGrady Clarke for our specialised knowledge in lowering operational expenses, meeting environmental regulations and promoting sustainability within real estate. We offer tailored energy purchasing strategies and efficiency assessments to reduce costs and enhance the operational performance of property portfolios. Our carbon management solutions help property management businesses reduce their environmental footprint and adhere to legal standards.

Our services are specifically designed to address the unique requirements of the property industry, providing financial benefits while supporting sustainability. This establishes us as a reliable partner for companies aiming to find a balance between profit and environmental responsibility.



¹ Scofield, J.H., Brodnitz, S., Cornell, J., Liang, T., & Scofield, T. (2021). Energy and Greenhouse Gas Savings for LEED-Certified U.S. Office Buildings. Energies, 14(3), 749. https://doi.org/10.3390/en14030749. Licensed under CC BY 4.0.

² Müller-Eie, D., & Kosmidis, I. (2023). Sustainable mobility in smart cities: a document study of mobility initiatives of mid-sized Nordic smart cities. European Transport Research Review, 15, 36. https://doi.org/10.1186/s12544-023-00610-4. This article is licensed under a Creative Commons Attribution 4.0 International License.

³  Reddy, V.J., Hariram, N.P., Ghazali, M.F., & Kumarasamy, S. (2024). Pathway to Sustainability: An Overview of Renewable Energy Integration in Building Systems. Sustainability, 16(2), 638. https://doi.org/10.3390/su16020638. Licensed under CC BY 4.0.