Practice Briefing: Environmental, social and governance (ESG) and real estate valuation - the case of Sweden

Purpose - The aim of this briefing is to investigate how the impact of environmental, social and governance (ESG) is incorporated into real estate valuation in Sweden. The specific research questions are as follows: How is ESG incorporated in the valuation? What obstacles do the valuers meet in this process? Design/methodology/approach - This practice briefing is an overview of the role of ESG in the property valuation process in Sweden. The indicative research was conducted through round table discussions. Each round table discussion consisted of six representatives –: two authorised valuers, one bank representative, one auditor and two real estate company representatives – which lasted three hours. Findings - The outcome of the research can be summarised by that the valuers has a lack of evidence-based data on how and to what extent different sustainability factors affect property values. Practical implications - This study highlights the struggle of the valuation community in the matter of incorporating sustainability factors in the valuation process. Originality/value - The research targets the Swedish real estate industry and includes the perspective from not just the valuation community but also the auditors, banks and real estate owners.