Prioritising Biodiversity in Real Estate

The pressures on biodiversity are increasing, making it critical for the real estate industry to consider its impact, particularly across the Asia Pacific region where Southeast Asia alone hosts nearly 20% of the world’s known species within just 3% of the global land area.

Biodiversity contributes significantly to the functioning of ecosystem services such as clean air and water, climate regulation and disaster risk reduction which are essential for human well-being and economic stability. However, this is threatened due to this region’s rapid urbanization, deforestation, and agricultural expansion. For example, air and water pollution are the highest environmental risks that urban Asian cities face, with air pollution being the cause of one in five deaths in India in 2019, resulting in economic losses of USD 36 billion.

Driven by growing investor concerns and the need for robust ESG disclosures, regulatory trends are increasingly focusing on biodiversity. Initiatives like the UK's Biodiversity Net Gain (BNG) and the emergence of frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) are putting pressure on companies to disclose their environmental impacts and demonstrate how they are contributing to nature conservation.

The real estate sector, a significant contributor to biodiversity loss through land use, consumption of raw materials and disruption of natural cycles, is central to this shift. An upcoming white paper developed by CBRE in collaboration with Nature Positive and the Metis Institute acknowledges this and aims to explore the feasibility and benefits of incorporating biodiversity into green leases in Southeast Asia. Green leases serve as an important link between landlord and tenants on the sustainable objectives of a building, and including biodiversity within would help to integrate both party’s interests.

The white paper acknowledges several challenges when addressing biodiversity risks. Adoption and support for nature-based solutions is low due to weak legislation, lack of awareness, and maintenance difficulties . Additionally, the intangible benefits of nature-based solutions make it hard to justify the capital investments.

Despite these challenges, the real estate sector has a unique opportunity to turn the tide. By integrating biodiversity into urban development, the industry can enhance urban resilience to climate change effects, such as flooding and heatwaves, improving business continuity and urban liveability.  Furthermore, properties that incorporate green spaces and biodiversity measures often see increased market values, as investors are attracted to the operability and resilience of the building, along with higher tenant satisfaction.

While the path forward is fraught with challenges, the potential benefits of addressing biodiversity risks present a compelling case for action within the real estate industry.

To get started, the real estate industry can consider the following actions.

Prioritising biodiversity should be a necessity in sustainable urban development in Asia Pacific before it is too late to salvage local ecosystems. By setting clear targets, engaging stakeholders, fostering collaboration, and prioritising quick wins, the real estate industry can play a crucial role in preserving the region's rich biodiversity while reaping significant economic and social benefits.