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This book explains why and how the improvement of buildings requires a complex, holistic approach that brings all stakeholders together with respect and understanding. Yet to do this against a limited time frame is challenging.

Decarbonisation is a global issue affecting all classes of real estate. 27% of total UK carbon emissions is attributed to housing; however great potential to decarbonise this sector rests with the adoption of energy efficiency technologies (Nejat et al, 2015) as the energy savings realised will lower greenhouse gas (GHG) emissions. Three main approaches exist to achieve this. The first is to take a mandatory approach in which minimum high level energy efficiency standards are set, enforced and applied to both new and existing buildings by enforcing compliance through retrofits of substandard stock (Wilkinson et al, 2015; Patrick et al, 2014). Option two is a voluntary approach, using mechanisms such as Energy Performance Certificates (EPCs) or other rating tools that classify performance to stimulate awareness and action. Third, financial measures, both incentives and taxes, can be applied to ‘nudge’ behaviours. With most westernised countries wedded to neo-liberal governance paradigms, the voluntary fiscal approaches have prevailed over the last 30 or so years. The argument is the market will value more energy efficient properties through increased prices (RICS, 2011. Warren-Myers, 2016). It follows that a premium for energy efficient properties should be apparent (Fuerst et al, 2015. Ferlan et al, 2017). As the time available to take effective climate action diminishes, evaluation of the effectiveness of this approach is imperative. Given the implementation of measures, both voluntary and mandatory over the last three decades, this paper reviews academic literature and case studies of a selection of large-scale consortia projects conducted in Europe. Most of the research reviewed is based on hedonic pricing analyses which have sought a relationship between Energy Performance Certificates and either capital, or rental residential values across Europe. The research sought to gain a deeper understanding of the relationship between energy efficiency and the value of r

All new houses in Australia have to include energy efficient housing features to meet the National Construction Code minimum requirements, which are recorded in the local government database. The dominant household energy uses are heating and cooling, and although building designs can increase the energy efficiency and performance of a house, it is neither measured nor communicated to stakeholders. Some researchers have endorsed a building passport as a user manual to improve occupant understanding of their house’s energy efficiency and performance, however, a building passport is not currently available in the housing transaction database. Homebuyers have limited access to sustainable housing feature information and therefore may not use this information as a price determinant in their purchasing decision. It may need the active involvement of the government, financiers and property professionals to inform and promote the sustainable features. Well-informed buyers can increase the demand for sustainable housing and so impact the value of housing if they include energy efficient and sustainable features.

The scope of the Handbook is set out in this chapter, which commences with a discussion about the differences between awareness of the issues amongst real estate stakeholders globally and levels of action taken. The overarching aim of the book, to help move us forward and to help educate and convert those with open minds to enable a more sustainable real estate sector now and in the future. Property (or real estate) is a major global fixed asset, with an estimated total value of US $217 trillion in 2015. The themes covered in the book are governance and policy issues, valuation, investment and finances issues, management and redevelopment and adaptation. The handbook aims to provide a lens on how a shared understanding built on better knowledge can be influential in addressing some of the challenges set out in this chapter. It does not present complete solutions: far from it; but we hope it represents perspectives to educate, inform and provide a platform for future debate.

This chapter is focussed on the various financial instruments and incentives that have been implemented in a range of countries to encourage sustainable developments in all property sectors. It is an area that has undergone substantial change globally since 2008. Sustainable property development has been impacted by the Global Financial Crisis, particularly with regards to the availability of private sector funding and the requirements of funders who now have a more cautious approach to risk. Sustainability, and sometimes a lack of it, is increasingly viewed as a risk in some markets; it is also seen as an area in which governments, through creation of markets and through the use of fiscal instruments can seek to speed up the pace at which the economics of sustainable development makes good business sense. However, it is not just governments that provide the incentive for sustainability- or the dis-incentive for non-sustainable behaviours.

Throughout the book, international case studies are used to demonstrate how sustainable property development is applied in practice around the world.