The appetite for green buildings has softened globally, led by a sharp decline in the Americas as perceived high costs, unclear returns, and shifting priorities amid geopolitical instability hinder investment in sustainable construction, found a study by the Royal Institution of Chartered Surveyors (RICS).
Based on insights from more than 3,500 real estate and construction professionals across 36 countries, the report reveals that while sustainability remains on the agenda in the sector, progress in embedding green practices – particularly carbon measurement – is stagnating.
Almost half (46 per cent) of construction professionals surveyed said they do not measure embodied carbon in projects – a figure that has risen over the past year. Only 16 per cent said that carbon data meaningfully informs material choices.
The built environment is responsible for nearly 40 per cent of global carbon emissions, with embodied carbon – that is, the emissions released during the mining, manufacturing, and construction of a building – expected to account for half of all new construction emissions between now and 2050.
RICS warned that without mandatory whole-of-life carbon assessment and reporting, the sector will not achieve decarbonisation targets. The World Green Building Council has recommended that by 2030, all new projects globally should achieve at least 40 per cent embodied carbon reductions and all new buildings have net zero embodied carbon emissions by 2050.
Across Asia Pacific, survey respondents reported slower demand growth for green and sustainable real estate compared to previous years. This softening mirrors global trends, as the Americas saw the sharpest decline, while demand in Europe also cooled. The Middle East and Africa (MEA) was the only region where green building demand strengthened.
Demand growth for green buildings has softened across all regions except Middle East and Africa, particularly over the last 12 months. The Americas have seen the steepest decline, but Europe and Asia Pacific have also cooled. Source: RICS Sustainable Building Index 2021-2025
Despite the softening, 40 per cent of respondents globally still report rising occupier and investor demand for sustainable buildings. However, fewer than 10 per cent see a “significant” increase, and roughly 60 per cent report no change.
The report links the decline mainly to “changing political attitudes and policy focus” driven by the US, coupled with weak commercial property cycles.
The report reveals some progress, but also “clear signs of fatigue and uncertainty,” said RICS president Nicholas Maclean. The findings emerge in a year that extreme weather fueled by climate change has caused unprecedented damage to the built environment in the US, with a record US$101 billion in damages recorded in the first six months of 2025, according to nonprofit, Climate Central group.
Barriers to sustainability investment in buildings
High upfront costs and uncertainty over returns are the top barriers to investment in sustainability in the built environment, followed by a lack of investor awareness – highlighted by 40 per cent of Asia Pacific respondents.
A lack of consumer and occupier demand for sustainability was considered a more significant barrier in Asia Pacific than in any other region.
The principal barrier to investment in sustainability in the built environment is high initial cost. Asia Pacific ranked highest for a lack of consumer/occupier demand for green real estate. Source: RICS Global Sustainability Report 2025
Commenting on the findings, Singapore-based built environment professional Martyn Harrison said that deprioritisation of greening in the sector owes much to a lack of awareness and poor storytelling by the sustainability function. “Getting sustainability embedded into a real estate portfolio requires a lot of knowledge, understanding how to present this, how to pivot in meetings if things are not going to plan, and garnering internal support,” he told Eco-Business.
Investing in sustainability should be a “no-brainer”, as it improves a building’s performance and can add value to the property and help in lease negotiations, he said.
However, new build or renovation projects are typically driven by upfront cost, and as sustainability in real estate is not mandated in most jurisdictions, “it just does not get done,” Harrison said. “It is a very myopic view that does not appreciate the wider and bigger picture.”
Biodiversity and adaptation rise up the agenda
While progress on carbon measurement is lagging, concern for biodiversity and nature protection is gaining ground, the study found. More than 60 per cent of professionals globally agreed that protecting biodiversity and the natural environment is a critical issue, with the strongest conviction found in the Americas and MEA.
Adaptation and resilience are also increasingly seen as central to sustainability strategies, particularly in climate-vulnerable regions such as Asia Pacific. However, around one-fifth of respondents globally still do not view climate adaptation as a critical issue – a sign of persistent awareness gaps.
Data-sharing and resource efficiency practices are more widely adopted Asia Pacific than in Europe or the Americas.
The study found a clear divide between what investors and occupiers value in green buildings. Investors prioritise certification and climate resilience, while occupiers place greater emphasis on energy efficiency, indoor environmental quality, and water conservation – factors that directly affect costs and day-to-day operations.
These differences highlight the challenge of aligning financial and operational motivations in the transition to sustainable real estate, the report said.
