The commercial real estate (CRE) industry is undergoing a fundamental shift from high-level sustainability commitments to deep, measurable action. In today’s market, reporting alone is no longer enough.

For investors, this evolution reflects a growing recognition that sustainability is essential to asset value preservation and long-term performance.

For commercial real estate leaders, this is a call to embed sustainability into the operational DNA of every department, ensuring sustainability principles are fully integrated from acquisition and development to asset management and eventual disposition.

Strategic sustainability integration is now a prerequisite for future-proofing portfolios. Here’s how forward-thinking firms should be turning sustainability ambition into investment-grade action:

1. Obtain Accurate and Comprehensive Utility Data

You can’t manage what you don’t measure. Whole building utility data is the foundation of any decarbonization strategy. Obtaining this data for tenant-controlled assets, particularly industrial, retail, and multifamily properties, remains a significant challenge. One tthankshat requires ongoing collaboration with tenants, utility providers and technology partners.  

Collecting accurate and comprehensive utility data requires significant energy, coordination and persistence.

Over the years, I’ve helped numerous clients successfully navigate this process, working directly with tenants and utilities to unlock the data needed for informed, strategic decarbonization of individual assets and entire portfolios.

Data should not just be used for reporting and compliance.  It needs to be utilized to make improvements in energy, water and waste reduction. 

2. Leverage AI and PropTech Partnerships

Once you have the data, the next step is understanding your portfolio’s baseline.  This is where technology really can make a difference. Specifically, PropTech and cleantech tools that help analyze risk and opportunities at a high level with the added benefit of capital planning abilities.

By analyzing performance across a portfolio, investors can identify which assets are the best candidates for retrofit, electrification or renewable energy integration by prioritizing action based on ROI, risk exposure and carbon impact. Collaborating with AI-driven PropTech firms can turn raw data into strategic insight to scale sustainability results.

3. Conduct In Depth Energy Audits on Selected Assets

Once AI tools have evaluated the portfolio and identified the most promising candidates for decarbonization, conducting detailed energy assessments, such as ASHRAE Level II audits, provides a deeper analysis of each asset’s specific challenges and opportunities for improvement. 

A comprehensive energy audit is more than a check-the-box exercise. It’s a critical tool to:

• Identify inefficiencies and performance gaps
• Highlight opportunities for low-cost or no-cost savings
• Reduce operational expenses and improve NOI
• Validate claims made in sustainability reports or green certifications

As investor scrutiny intensifies, energy audits support responsible capital allocation and emissions reduction planning.

4. Build Decarbonization Roadmaps

A patchwork of sustainability upgrades won’t cut it in today’s market. Companies need to create decarbonization roadmaps with clear timelines, cost estimates, cost savings, regulatory fines and emissions reduction targets.

These roadmaps typically include:

• Operational improvements
• Building envelope upgrades
• Deep energy retrofits
• Electrification projects
• On-site or off-site renewable sourcing
• Integration with green finance mechanisms (e.g., green bonds or sustainability-linked loans)

The most effective plans are phased, measurable and responsive to evolving technology, regulation and tenant demand. Prioritize assets by emissions intensity and retrofit potential, then layer in financial modeling to support investment decision-making.

5. Apply Climate Scenario Modeling & Implement Proactive Maintenance

Real estate is inherently a long-term investment class. That makes climate risk exposure and the ability to forecast it a critical consideration.

Scenario modeling allows firms to assess the impact of different environmental and regulatory futures on asset performance. Whether it’s rising temperatures, flood risks or carbon pricing, these insights inform smarter investment decisions and risk mitigation strategies.

In addition, proactive maintenance strategies can help with insurance challenges by securing coverage and minimizing skyrocketing premiums. 

Climate risk analytics should be incorporated into due diligence and underwriting, asset management and property management operations and tie scenario findings and proactive maintenance directly to capital planning.

6. Align Stakeholders Around Shared Sustainability Goals

Sustainability leadership requires coalition-building. CRE firms must actively engage a diverse set of stakeholders including investors, tenants, regulators, community groups and internal teams to align incentives, set shared goals and drive measurable outcomes.

Transparent communication builds trust, while tenant engagement fosters operational collaboration (e.g., energy data sharing, green leases, wellness initiatives). Internal alignment across acquisitions, asset management and development teams ensures that sustainability engagement is woven throughout decision-making processes.

Overcoming the split incentive challenge requires a shift in mindset from viewing sustainability as a cost center to recognizing it as a shared value opportunity. Forward-thinking landlords and tenants are now finding ways to align on mutual goals, co-investing in energy efficiency, electrification and sustainability improvements. By structuring green leases, sharing data transparently and clearly defining the benefits for both parties, they can distribute costs more equitably—and uncover long-term operational savings, improved asset performance and stronger tenant satisfaction.

Companies that take decisive action today by leveraging data and technology, integration, and stakeholder engagement will be the winners of high-performing, low-carbon assets and portfolios of tomorrow, positioning themselves for the strongest returns on investment.

Let’s move from sustainability compliance to real action and results.