INREV’s latest paper raises awareness on how environmental factors are underwritten in investment decisions. This paper marks the first phase of a broader initiative to move the industry beyond theoretical discussions to a more tangible, numbers-driven approach for ESG valuations.
Key highlights include:
- Inconsistent approaches to assessing environmental impacts to protect long-term value.
- Six key impact areas identified as having the most impact on underwriting: energy efficiency, carbon intensity, and physical climate risk.
- Market practices such as shadow carbon pricing and green IRR modelling are gaining traction as ways to evaluate sustainability within real estate strategies.
- Four scenarios were identified, from ‘no defined environmental goals’ to ‘ambitious environmental goals’, to model how different levels of commitment impact future value and returns.
This project is guided by the ESG Valuation Focus group, with support from EY Luxembourg.
Download the full paper below and share feedback via the online survey or contact Professional.Standards@inrev.org.
You may also view more information regarding Environmental considerations in underwriting on our dedicated page below.
Integrating environmental considerations in investment underwriting
Published on 29 Apr 2025