Real Estate and Society

Real estate can play a key role in averting further climate change because of its high contribution to pollution and substantial energy consumption. Interest in green and sustainable buildings has grown dramatically in recent years with increasing awareness of these factors. This chapter explores the economic significance of the energy efficiency and sustainability trend in real estate, addressing the financial performance of green buildings, in both the United States and international markets. The behavior of corporations with respect to housing decisions is discussed, analyzing how real estate can be used as a proxy for corporate social responsibility. The chapter then investigates how institutional investors integrate sustainability in their allocations to real estate, measuring the environmental performance of dedicated property fund managers.