Environmental, social, and governance (ESG) factors are increasingly influencing the commercial property market in New Zealand. ESG considerations include aspects like energy efficiency, water conservation, waste management, tenant satisfaction, and governance practices.
Investors, buyers, and tenants are progressively prioritising properties that reflect their values and sustainability goals. This shift in demand is reshaping the development, management, and marketing of commercial properties, with many now striving to achieve Green Star ratings. Green Star is the largest voluntary sustainability rating system for non-residential buildings, fit-outs, and communities in Australasia.
Sustainable Design and Construction
A key area where ESG is making an impact is sustainable design and construction. Renewable energy sources, such as solar and wind, are increasingly being incorporated, alongside green roofs and walls that enhance air quality and reduce heat. Developers are also using environmentally friendly materials and implementing water conservation measures to minimise the environmental footprint of properties.
Focusing on Social Well-being
ESG is also reshaping New Zealand’s commercial property market by placing a greater emphasis on social well-being. Many properties are designed to support tenant and visitor welfare, with features like access to natural light, green spaces, and outdoor areas. Community spaces, such as shared gardens and social rooms, are also being introduced to foster connection and a sense of community among tenants.
Governance Improvements
Governance practices are changing, with more property managers and landlords implementing ethical and transparent policies. These policies cover issues like discrimination, harassment, and fair treatment of tenants. Many property managers are now publishing environmental and social performance data, enhancing transparency and accountability.
The Long-term Impact of ESG
ESG is having a significant and widespread impact on New Zealand’s commercial property sector and the momentum will only build as the uptake grows. Environmentally friendly design, social well-being initiatives, and ethical governance are contributing to a more sustainable and equitable future.
As demand grows for properties that align with ESG values, it’s likely we will see changes in commercial property development and management across New Zealand as ESG is adopted as
‘mainstream’. You may think that ESG is just a slogan and the impact in the provinces is currently less pronounced than in larger cities and global markets. However, as ESG values gain importance, investing in ESG-compliant commercial properties will not only benefit the environment and public but also offer a stable, long-term return for investors. The commercial property sector in New Zealand has a prime opportunity to lead sustainable real estate initiatives, setting a standard for others around the world.
Author: Paul Harvey is the Director of Williams’ Harvey Registered Valuers. He has a diverse and broad knowledge of the HB property market. To contact Paul,
email: paulharvey@williamsharvey.co.nz
