What is a sustainable investment?
Sustainable investing in real estate means that the investor considers the environment, the climate, and other social factors while purchasing a property. Sustainable investment is also called socially responsible investing or ESG investing. Sustainability in real estate aims to promote the sustainability of the environment and nature through the investments and the projects developed by real estate companies. Sustainability in real estate does not only focus on the profits made by the company or on the capital gains. Still, it looks at the benefits the investment has for the environment. You might want to know about Park View City.
Why is it important?
Sustainability in real estate and sustainable investments have become extremely important, especially today. A significant reason for the rise in importance of sustainable investments is the awareness and protests carried out by millennials. These days buyers are not just looking at the structure and facilities provided but also giving importance to that project’s environmental impact. This has made real estate companies and developers focus more on sustainability and consider the environment and climate while making investment decisions. Sustainable investing benefits the environment and has several advantages for the real estate firm as well. Principles adopted to ensure sustainability allow firms to cut costs in the long term and earn a higher profit. Sustainable investing does not mean that the investor will not focus on the profit or the financial gains that the deal could result in it. The goal of sustainability in real estate is to focus on profits and the environment so that neither gets ignored. Firms that focus on sustainability have done exceptionally well, and sustainable investments have not been less profitable. Furthermore, since climate change is a matter that so many feel so strongly about, focusing on sustainability will help you attract more clients. Read more about Blue World City.
Strategies for sustainable investments
Three factors are considered while calculating the impact of an investment on the environment and its sustainability. These factors are divided into three categories, environmental, social, and governance. The environmental aspect includes the impact the investment will have on the area’s environment and the climate as a whole. It will consider the carbon footprint, the waste, the water use, and the clean technology used for its construction. All these factors directly impact the environment and are hence extremely important. The social aspect considers the impact the investment will have on the people of the society and their livelihood. It looks into how the investment will help promote the social good of the people or whether it will negatively affect it. It also looks into the company’s actions as a whole and sees whether it stands up for social issues. For example, they look into whether the company has stood up for the rights of its employees and how it has supported Nonprofit organizations around it. They see how the company contributes to the well-being of society. The third aspect is governance. The governing policies and rules of the company are looked into to see how they manage their company and derive its workers towards creating a positive impact. It looks into factors such as corruption, rights of workers, the executives of the company, their policies, and shareholder rights.
Difficulties faced while trying to achieve sustainability
While sustainability is extremely important and needs to be pursued by each firm, there are many challenges involved in it. Adopting sustainable strategies usually increases expenses, increasing the cost of the investment. This will have an immediate impact on the profit of the company while it will be negatively affected. The main goal of each firm is profit maximization, and hence sustainability often gets in the way of that. Invest in Nova City.
Ramza Zahra is a Karachi-based freelance content writer who uses her life experiences and curious nature to research and pen it down and make a living. Currently, she is working with Sigma Properties as an Snr. Content Writer.