How Sustainability Will Shape Competitive Business Advantage in Real Estate in 2026

The Sodali & Co team had the pleasure of attending IMN’s ESG & Decarbonizing Real Estate Winter Forum in Nashville, TN in late January. The two-day forum brought together sustainability leaders across real estate – from public REITs, private fund managers, operators, developers, and more – to reflect on the challenges and successes of 2025 and build towards even stronger strategies for 2026.

From the sessions we attended, the discussions we participated in, and our collective viewpoint from what we are seeing in our day-to-day with the real estate companies we engage with, we lay out practical strategies that sustainability teams should consider to have a high-impact year.

Sustainability Fundamentals That Drive Building and Portfolio Value

A common theme in how sustainability teams are securing approval for new initiatives is their ability to clearly articulate the business value they create. This might involve demonstrating near-term financial gains, such as replacing aging HVAC equipment to reduce operating expenditures – or OpEx – or highlighting indirect benefits, such as installing unit submeters that give residents more control over their energy usage and spending, which can lead to greater tenant satisfaction and higher retention rates.

Sustainability teams are more successful in implementing new initiatives when they embed their work into the core functions and operations of the business. This approach reduces friction across teams and reinforces that sustainability is a shared goal, a shared responsibility, and a shared business driver.

Meeting Stakeholder Needs Through a Sustainability Lens

As sustainability work becomes integrated across the business, each stakeholder brings a unique perspective on what creates the most value to them. To deliver impact and tie sustainability to business value across the stakeholder spectrum, sustainability teams must understand these drivers and priorities and communicate in terms that resonate with each group. Some practical considerations for common real estate stakeholder groups may include:

• Investor Relations: What topics matter most to our investors? And will transparent, auditable reporting of our efforts increase our reputation and credibility amongst them?  
• Asset Management: Which are the most energy-intensive properties within the portfolio? And which have the best opportunity to enhance ROI by driving down energy consumption (e.g., due to a local BPS threshold, due to building and equipment age, due to increasing energy costs, etc.)?
• Property Management: What opportunities are there to adjust building schedules to lower operating costs? Are there any recurring hot/cold complaints, leaks, or building envelope issues that – once resolved – could improve tenant satisfaction and retention?
• Leasing: Do our lease forms (and renewals) incorporate “green” lease provisions – surrounding data-sharing rights, sub-metering, and/or building regulatory compliance – so that we can measure performance and support tenant reporting? Can we present sustainability features to prospects to market and differentiate the building?
• Acquisitions and Due Diligence: What sustainability information can we request from sellers (e.g., consumption data, BPS fines and violations, equipment age, etc.) to inform underwriting? What physical climate risks (e.g., flood, wildfire, extreme heat) affect the building today and over the hold period?
• Legal and Compliance: Are we compliant with applicable disclosure regulations (e.g., local benchmarking/BPS; EU CSRD; SFDR)? Are there mechanisms to vet or assure sustainability information and claims to reduce greenwashing risk?

Each real estate company operates differently, which requires each sustainability team to distinctly understand the needs and drivers of their various teams. This level of relationship building requires ample time, which means sustainability teams must find creative ways to deliver other parts of their work more efficiently.

Finding Efficiencies Through Automations That Focus on Impact

As sustainability teams are asked to do more with fewer resources, the ability to automate routine tasks and streamline compliance workflows has become essential. Leveraging modern tools, A.I., and emerging Proptech solutions can help sustainability teams focus their time on the work that truly matters identifying material risks, driving operational improvements, and planning ahead for compliance (rather than reacting at the last minute).

Across the industry, new technology-enabled workflows are helping reduce friction, improve data quality, and lower the barriers to entry for once-resource-intensive processes. Examples include:

• Automated Retro-Commissioning: Streamlining periodic testing and ensuring systems are calibrated for efficiency with minimal manual oversight.
• Decarbonization Planning: Using advanced modeling and forecasting tools to identify cost-effective pathways to decarbonization and support long-term capital planning.
• Physical Risk Screening: Leveraging geospatial data and risk analytics to assess and quantify asset exposure to flooding, extreme heat, wildfire, and other climate hazards.
• Building Regulations Exposure Screening: Automatically identifying properties within a portfolio that fall under existing or emerging regulatory requirements, helping teams prioritize actions based on risk and impact.
• Ongoing Performance Monitoring: Deploying continuous building analytics to verify savings, detect anomalies, and support proactive maintenance.  

As Building Performance Standards (BPS) and other disclosure requirements continue to emerge across U.S. cities, counties, and states, these types of automated, scalable solutions are becoming some of the most effective ways to stay ahead of regulations and protect long-term asset value.

With today’s platforms delivering cleaner, faster, and more reliable data, sustainability teams can make decisions with greater confidence – validating existing strategies, identifying new opportunities, and accelerating progress toward decarbonization goals.

Key Takeaways

The conversations at IMN’s ESG & Decarbonizing Real Estate Winter Forum reinforced a central message: sustainability creates real business value – through stronger asset performance, reduced operating costs, and more thoughtful risk management. Capturing that value requires collaboration, buy-in, and, at times, creativity across teams. No one sustainability team can drive impact alone, and no two real estate companies will implement these strategies in the same way.

In 2026, the most effective organizations will be those that align cross-functional priorities and leverage automation and reliable data to focus their time on initiatives that matter the most to their business and stakeholders. With more efficiency and clearer insights, teams can move faster, be nimble, and communicate value more effectively while staying on top of a rapidly evolving market and regulatory landscape.