Amanda Skeldon, climate & nature director, JLL looks at the effects on the environment of real estate.

The World Economic Forum lists 'Infrastructure and the built environment' as one of the top three sectors threatening global biodiversity, emphasising the importance of the industry reassessing and reducing its impact on the natural world. In response, policymakers globally are beginning to introduce new regulations to improve the sustainability of new property developments.*

However, an intention-action gap still exists. Despite 85% of investors surveyed by JLL this year reporting to either have or be developing a biodiversity and nature strategy, fewer than half reported having one in place already. Currently, the motivation for change is primarily driven by compliance, but lasting change will only come when investors and developers recognise the potential for asset value growth in properties that integrate biodiversity. Robust nature strategies should not be seen as a tick-box exercise, but rather an opportunity to future-proof assets, enhance climate resilience, complement Net Zero transition plans, improve human health and wellbeing, and give developments a competitive advantage.

The rise of nature-positive regulations

As regulations around sustainable property development are prioritised globally, investors are required to ensure that new developments meet more stringent environmental rules. For instance, in 2023, Paris committed to ensuring that 40% of the city will be permeable green space by 2050. Similarly, the introduction of the UK's Mandatory Biodiversity Net Gain this year requires developers to increase biodiversity by at least 10% when undertaking major building projects.

The built environment is increasingly at the forefront of net-zero and climate risk mitigation policies of countries globally; nature-positive strategies are imperative for investors to align with stronger regulatory compliance.

The potential for asset value growth

In the wake of this new legislation, sustainability has transitioned from a desirable amenity to a non-negotiable asset, and properties integrating biodiversity are poised to gain a significant competitive advantage.

Tenants are increasingly eco-conscious and actively seeking workspaces that reflect their values - with 74% already prioritising the inclusion of nature-based solutions in their lease agreements or planning to do so upon renewal**. This commitment to sustainability extends beyond preference, as tenants are increasingly willing to pay a "green premium" to secure environmentally responsible properties. This is supported by 73% of investors reporting that green strategies drive higher occupancy, higher rents, higher tenant retention, and overall higher value. ***

Alongside this, sustainable land management and nature-based solutions, such as living walls and sustainable drainage (SuDs) enabled street trees, can help protect properties from the effects of climate risks which de-risks the net zero transition and improves long-term value.

Socio-economic value for money

Robust nature strategies have a human impact as well as a commercial one. Research from Harvard Business Review**** shows exposure to nature in the workplace improves employee well-being and performance. Research by the IGNITION project in Manchester compiled evidence demonstrating that by integrating nature into the workplace a range of benefits can be seen including reduced sick leave and staff turnover.

More broadly, the World Economic Forum's recent BiodiverCities report revealed that by 2030, $583 billion in strategic investments into nature and biodiversity strategies could create 59 million jobs and generate over $1.5 trillion in annual business value.

Conclusion

Integrating nature and sustainability measures into investment decisions is no longer optional. Investors and developers must adapt to ensure they are being compliant, but also so they can enhance asset value, build long-term resilience and remain competitive.

* World Economic Forum, 2023

**JLL Value of Nature Report

** Responsible Real Estate Global Survey

*** JLL Value of Nature Report

*** Harvard Business Review