RICS unveils Data List to align ESG indicators for Valuations
RICS unveils Data List to align ESG indicators for Valuations
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RICS unveils Data List to align ESG indicators for Valuations

Universal ESG integration remains a work in progress, with potential indicators to be added in the future
RE+D magazine

In 2022, RICS established a Leaders' Forum, convening a key group of its members across continental Europe to assess ESG's impact on valuation. The creation of this new group comes as a response to an environmental report that found around half of valuation professionals believe that green and sustainable properties provide a price and rent premium over buildings designed without ESG requirements.

The Leader's Forum's work aims to embed ESG requirements into real estate valuations, based on real, measurable data. The group comprises valuation service providers, investors, and banks, with the European Central Bank (ECB) and European Banking Authority (EBA) as Observers.

According to Joël Scherrenberg MRICS, Chair of European Leaders Forum Impact of ESG and Valuation; RICS Chair Benelux and European World Regional Board member, “This thought leadership paper and the data list will help valuers to asses ESG as a new and significant risk & value driver in their professional judgement of any property. RICS, together with their stakeholders, sets the standard to enhance public trust.”

To aid the further implementation of ESG into valuation, RICS has published a data list of core indicators that valuers can discuss with their financial clients and take up in their terms of reference and valuation report, along with the launch of a thought leadership paper on the impact of ESG on the valuation of Europe's real estate.

The paper, titled “The future of real estate valuations: the impact of ESG”, noted the increased premiums ESG-focused properties provide to investors, while valuers pay increasing attention to environmental factors. However, there are several significant gaps in ESG integration, resulting in the publication’s call for incorporating a consistently holistic approach to ESG.

The paper brings together Europe’s main valuation service providers, investor and banking associations (INREV, EPRA and the EMF), as well as other relevant organisations such as WorldGBC, ULI, WBCSD, ERES and IVSC. 

“The data list will be a key tool to embed ESG requirements into valuations. Thanks to the hard work of all involved, we now have a European-wide list of indicators that is already being put to good use. We look forward to continuing the work based on market feedback”, said Sander Scheurwater, Interim Strategic Planning & Reporting & author of the Data List

As Gina Ding, RICS Senior Public Affairs Officer Europe & author of the Data List mentioned, the 12 core indicators in the ESG & Valuation data list provide valuers and financial clients with a consistent set of data points which can be taken up in valuation reports. 

“From the inception of the Leaders Forum one-and-a-half year ago to today, we have managed to raise awareness and increase the understanding between valuers and clients that we are on this journey together and that our interests on this are aligned”, said Ms. Ding. 

In addition, the paper includes an appendix of specific countries, such as Greece, that mentions national laws and codes related to the implementation of ESG strategies.

As mentioned by Panos Charalambopoulos MRICS, Managing Director of SOLUM Property Solutions, RICS Greece Board Member, and Chair of Valuation Forum of RICS in Greece: “This great initiative by the RICS in Europe Leader's Forum "Future of Valuations: The Impact of ESG" aims to "embed ESG requirements into valuations and the valuation process". RICS Greece supported this thought leadership paper by providing an appendix with relevant country specific legislation, and will follow up with a Continuous Professional Development event, aiming to further educate RICS Professionals.”