RICS & Exergio on the Financial Reality of Green Buildings

Interest in green buildings is declining

New data reveals occupier interest in sustainable real estate has fallen from 41% to 30%, with RICS and Exergio warning financial viability needs proving.

The market for green buildings is losing momentum across most global regions, according to new research from the Royal Institution of Chartered Surveyors (RICS), with demand sliding sharply over the past year.

This lull in interest from the private sector comes despite growing pressure to decarbonise the built environment.

RICS's 2025 Sustainability Report shows that demand for sustainable real estate has dropped from 41% to 30% globally, with the steepest decline occurring in the Americas where the index has fallen from close to 50 in 2021 to just 11 in 2025.

The findings paint a troubling picture for a sector responsible for nearly 40% of global carbon emissions, with high upfront costs and uncertain financial returns cited as the primary obstacles preventing investment in energy efficient buildings.

Certification and performance disconnect

One of the most concerning issues for energy professionals is the growing disconnect between what investors prioritise and what people living in homes actually want when it comes to energy performance.

While 86% of investors prioritise green building certification, RICS finds that energy efficiency is the top priority of 88% of residents. This would not be an issue if certificates were always representative of a building's real time energy performance.

"Occupiers care about how a building works; investors care about how it's labelled." says Donatas Karčiauskas, CEO of Exergio.

"Until performance and certification point in the same direction, we will keep building assets that look sustainable on paper but do not deliver it in practice."

"Investors are not against building sustainably – they just need proof it pays back." he explains. "If a project requires expensive materials, equipment and certifications but the real-world performance does not translate into measurable savings, why would anyone scale it?"

His company, which develops AI tools that promote energy efficiency in real estate, reports that it has achieved energy reductions of up to 30% in its portfolio of commercial buildings, which translates to savings exceeding US$1m annually.

The RICS data reveals that between 35% and 46% of respondents cite uncertain return on investment or insufficient data on operational benefits as key barriers to acquiring green buildings.

Industry measurement challenges

The report also exposes a fundamental weakness in how the construction industry tracks energy and carbon performance.

Around 46% of construction professionals admit they do not measure carbon emissions on their projects at all, a figure that has actually increased over the past year. Just 16% say that they measure carbon in a way that influences their choice of materials and components.

"You cannot improve what you do not measure, and you cannot measure what you do not have the skills to assess." Donatas says. "Right now, most carbon decisions are built on assumptions instead of real evidence."

Only 17% of RICS's respondents believe that the industry possesses adequate sustainability expertise and only 10% report that they are familiar with whole-life carbon assessment methods.

This skills gap represents a critical barrier to progress in sustainable construction. Without proper training and expertise in carbon assessment methodologies, the industry cannot make informed decisions about material selection, construction techniques or operational strategies that would genuinely reduce environmental impact. 

Regional variations and the path forward

While global demand for sustainable real estate has cooled overall, the Middle East and Africa is showing growth with a Sustainable Building Index reading of 52 compared to the global average of 30.

Europe, which was previously the strongest market, has seen its index fall to 39 in 2025.

Nicolas Maclean, Acting President of RICS, sees ROI as just one piece of the puzzle. "In addition to high upfront costs and uncertainty around long-term returns, lack of knowledge and awareness about green buildings has emerged as a significant obstacle impeding investment in sustainable assets." he says.

Industry experts argue that artificial intelligence could offer a viable path to closing the performance gap at scale.

"AI closes the gap the industry cannot close on its own." explains Donatas. "It proves ROI with real performance data, aligns what occupiers want with what investors pay for and automates optimisation that today requires scarce expertise."

Without such intervention, even renovated or newly certified buildings are likely to continue missing both climate targets and the financial performance that would justify further investment in sustainable real estate.