CSOs: What's holding back sustainability in real estate?
The central challenge for today's CSO is how to deliver on sustainability goals profitably while balancing the needs of multiple stakeholders. This means making the most of recent financial and technological innovations.
This new pressure is a key finding of CBRE's 2025 Asia Pacific Real Estate Chief Sustainability Officer Survey. We interviewed executives from nearly two dozen corporates in Asia-Pacific – most notably Hong Kong, Australia, Singapore and mainland China – divided equally between landlords and investors in commercial real estate.
The survey reveals a maturing landscape: Nearly 90 per cent of these companies have a dedicated sustainability function – up 10 per cent in two years – and 70 per cent of their CSOs are full-time. When asked to identify their most pressing challenges, these leaders highlighted three issues that have grown sharply in importance since 2024.
First, the CSOs pointed to the complexity of the current policy and business environment.
Second, they cited the difficulty of establishing clear financial benefits of meeting their sustainability goals, and the typically lengthy payback periods for sustainability investments.
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Finally, CSOs find that they increasingly must do more with less. More than 60 per cent said they had no plans to expand their sustainability teams, despite heightened operational challenges.
New normal
One reason for this corporate caution is a regional step change. Sustainable buildings are no longer the exception in Asia-Pacific, they are becoming the norm.
CBRE research indicates that the share of green-certified Asia-Pacific office floorspace crossed the 50 per cent threshold in 2024. Our 2025 survey reflects this momentum: Almost two-thirds of respondents said that by 2028, at least 80 per cent of their portfolio will consist of green-certified buildings.
While this is good news for sustainability, it also means that the scope for a green premium is fading. Tenants now expect sustainability features and performance as a standard offering, not an extra for which they will pay higher rent.
The exception is in less mature Asia-Pacific markets, where the supply of green buildings is tighter and occupiers remain willing to pay more for a building that aligns with their sustainability goals.
This leaves CSOs in the position of needing to meet tenant expectations for green buildings – 60 per cent reported pressure from tenants in this regard – while also satisfying internal stakeholders to justify sustainability investments in financial terms, as opposed to treating sustainability as an end in itself.
Several CSOs said they needed to demonstrate a return on investment to win approval for projects.
The way forward
How, then, should CSOs go about this? The path forward involves shifting the focus from purely environmental benefits to the underlying business case and asset resilience.
The first step is to recognise that green is the new normal. The sustainability of commercial buildings in Asia-Pacific is quickly transitioning from a 'nice to have' to a 'must have' – an essential component of the asset's value.
Additionally, assessing the risk of assets becoming stranded as a result not only of changing tenant expectations but also regulatory change, must be a core part of the calculus for CSOs in establishing the business case for sustainability investments.
Next, while sustainability tends to focus on carbon emissions, energy savings and cost savings usually go hand in hand. Sustainable building materials offer an example – for instance, the use of abundant bamboo instead of timber in China. Energy dashboards that optimise lighting as well as heating, ventilation and air-conditioning systems around building footfall reduce both costs and emissions.
Energy retrofits that limit energy waste can have the same impact, although some CSOs noted government incentives are often needed to make these projects viable.
On the positive side, the financial sector also offers additional help. Energy upgrades and new green construction are often eligible for green finance. Sustainability-linked loans are the most common instrument, which 77 per cent of survey respondents reported using, alongside green loans, green bonds and other similar instruments. Concessional financing can substantially improve the business case for sustainability projects.
Lastly, as climate change poses a direct physical threat to buildings, investing in building resilience is a core part of protecting an asset's long-term value. Taking an integrated approach that prioritises resilience alongside other factors makes sense at a time when under-insurance against climate risks is a growing challenge.
Overall, CSOs can build a stronger business case by focusing on projects that strengthen an asset's green credentials while simultaneously lowering its energy costs and bolstering its climate resilience. This approach then becomes as much about the bottom line as it is about cutting carbon emissions.
Ultimately, real estate leaders who integrate sustainability with profitability will set the pace for the region's future.
The writer is head of research for Asia-Pacific at CBRE
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CSOs: What's holding back sustainability in real estate?
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