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Robert Irving Burns

What is ESG and why is it So Important for Commercial Landlords?

June 6, 2021    |   Robert Irving Burns

Defined as Environmental, Social, and Governance, the ESG Agenda is one that has left many commercial landlords in London scrambling for more knowledge. And rightfully so. These three umbrella factors not only measure sustainability but are also the best ways for socially conscious property owners to determine lucrative investments.

Courtesy of the 20th Century’s global push to improve environmental awareness, the world has come to a critical tipping point and property investors cannot be let off the hook. The ESG Agenda has become a key factor and commercial property owners in London need to disclose the sustainability of their investments.

Here are a few reasons why the ESG Agenda is so important for commercial landlords:

It guarantees an extensive due diligence process

There are times when property owners make a purchase or investment, only to realise that the land they purchased is not lucrative enough, or the property is not giving proper returns. As ESG experts focus on the investment life cycle as a whole, they are able to determine whether the property meets high-quality standards.

This certification will let commercial landlords in London know whether their property will lose its value in the long run. Additionally, during this period, properties are optimised using the ESG Agenda criteria such as energy efficiency.

It accounts for growing tenant demand

With a majority of people believing in the green or sustainability movement, tenants have stringent, green requirements on the properties that they choose. In fact, those seeking green office spaces may be willing to put down a heftier payment towards it.

After all, sustainable buildings mean better air quality and natural lighting. No matter the demand reasons; lower utility costs, improved productivity, or concern for climate change, the bottom line is the same – higher rent for commercial landlords.

It enhances asset value

It is not uncommon for commercial landlords in London to trade off one property asset for another. As with any other kind of business transaction, you are looking to make high returns. Buildings with sustainable value are associated with high selling prices because of the benefits that they bring. They not only impact obsolescence but they are also resilient.

Encourages new developments and renovations

Commercial landlords can choose to renovate their old buildings so that they can achieve newer governance and sustainability requirements. Adding sustainable features like a rain harvest to your building will make a great difference when it comes to its overall value. In fact, this is one of the smartest ways to increase the value of a building.


Environmental, Social, and Governance (ESG) factors will play a key role in commercial property management now and in the future. However, the deciding factor is whether environmental benefits can be reconciled with the investor return expectations because future challenges have already been accounted for.

As such, as a commercial property owner in London, you should embrace the agenda as it will benefit you in the long run.

If you are a commercial landlord in London and want to find out more about the ESG Agenda, contact our commercial lettings team today on the contact details below.

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