The Royal Institution of Chartered Surveyors (RICS) is launching a new data list, alongside a thought leadership paper which explores and aids valuers in incorporating ESG into their work.
In 2022, RICS established a Leaders' Forum, convening a key group of its members across continental Europe to assess ESG's impact on valuation. This new group is a response to a 2021 report which found that around half of valuation professionals believed that green and sustainable properties provided a price and rent premium over buildings designed without ESG requirements.
The Leader's Forum's work aims to embed ESG requirements into real estate valuations, based on real, measurable data. The group comprises valuation service providers, investors and banks, with the European Central Bank (ECB) and European Banking Authority (EBA) as Observers.
To aid the further implementation of ESG into valuation, RICS has published a data list which lists assets and indicators that can be applied to valuation work.
RICS has also launched a thought leadership paper on the impact of ESG on the valuation of Europe's real estate.
The paper, titled 'The future of real estate valuations: the impact of ESG', noted the increased premiums ESG-focused properties provide to investors while valuers pay increasing attention to environmental factors. However, there are several significant gaps in ESG integration, and the publication calls for incorporating a consistently holistic approach to ESG, which, it is hoped, the data list will support.
Sander Scheurwater, Interim Head of Strategic Planning and Reporting, and data list author, said: “Bringing together Europe’s main valuation service providers, investor and banking associations (INREV, EPRA and the EMF), as well as other relevant organisations such as WorldGBC, ULI, WBCSD, ERES and IVSC, to develop this Data List has been an amazing journey. The data list will be a key tool to embed ESG requirements into valuations. Thanks to the hard work of all involved, we now have a European-wide list of indicators that are already being put to good use. We look forward to continuing the work based on market feedback.”
Gina Ding, RICS Senior Public Affairs Officer for Europe, and author of the data list, said: “The twelve core indicators in the ESG & Valuation data list provide valuers and financial clients with a consistent set of data points which can be taken up in valuation reports. From the inception of the Leaders Forum one-and-a-half year ago to today, we have managed to raise awareness and increase the understanding between valuers and clients that we are on this journey together and that our interests on this are aligned. I am grateful to our members across Europe for pulling together the publication that provides a state-of-play on ESG and valuation in European markets, and am confident that the data list will help further increase awareness, understanding and action.”
