In late 2025, the ULI Randall Lewis Center for Sustainability in Real Estate convened a series of roundtables with sustainability leaders to explore the industry’s perspective on top global priorities in 2026. Roundtables consisted of members of the ULI Americas Sustainable Development Council, the ULI Asia Pacific Net Zero Council, the ULI Europe Sustainability Council, and sustainability-oriented committees of District Councils from ULI San Francisco, ULI New York, ULI Los Angeles, ULI Singapore, and ULI Philadelphia.
Amid an era of climate urgency, technological transformation, and shifting regulatory and financial dynamics, these discussions brought together leading voices to spotlight the sustainability trends likely to shape real estate decision-making in the year ahead and beyond.
Now in its sixth year, ULI’s Global Sustainability Outlook offers a sought-after perspective on sustainability issues. This year’s report highlights five interconnected themes that reflect a maturing industry in the process of reframing sustainability—from moral imperative to business necessity, from isolated projects to systemic change, from compliance to competitive advantage.
Join a member-only discussion of the 2026 Global Sustainability Outlook on January 21, 2026
Growing recognition of financial risks and the business case for decarbonization
Risks associated with not adapting real estate for a low-carbon economy were detailed in this report in previous years, but awareness is now widespread. Investors increasingly embed sustainability metrics into their cash-flow projections to understand how climate risks drive financial outcomes and expose value-at-risk.
New York–based Varun Kohli—principal, director of sustainability at architectural firm Corgan—said, “I no longer ask clients to do certain things just because it’s great for the planet. I ask them what is good for their business, and I can show them how their success translates to better environmental outcomes.” Real estate managers affirmed that this approach resonates deeply with institutional investors, who see decarbonization and resilience as critical forms of risk management and value preservation.
“There is movement by the industry to consider how sustainability impacts the bottom line, and how it can enhance risk management, increase operational efficiency, improve innovation, and lower the discount rate,” said Mark Bhasin, adjunct associate professor of finance at the Chen Institute for Global Real Estate Finance, NYU Stern School of Business, and senior vice president at Basis Investment Group. “These financial metrics are a focus in the current political climate.”
A word of warning was issued by Judi Schweitzer, president and chief sustainability advisor of Schweitzer + Associates, who cautioned that although a fiduciary financial return angle is necessary for wide adoption of sustainability measures, that step alone is not sufficient. Focusing myopically on financial returns can undermine accounting for climate stressors and discount the unintended consequences of short-term thinking. Schweitzer called for “true cost” or “total benefit accounting” to address ethical responsibilities to people and planet that reflect broader social and environmental impacts.
Tenant engagement also emerged as a critical piece of the “people” dimension of sustainability, with building owners increasingly recognizing that achieving performance goals and maximizing net operating income require collaboration with occupants. ULI’s Tenant Engagement Primer series and C-Change resources offer practical guidance to help owners partner with tenants to drive operational efficiency improvements.
Standardizing and integrating sustainability into investment models
Integrating a standard approach to sustainability and risk metrics in underwriting is of increasing value to developers and investors. Much of this momentum stems from recent regulatory developments, which are set to play a central role in shaping the future of sustainability strategies for the industry. Sylvester Wong, ULI Global Trustee and former lead of sustainability services for AECOM in Asia, noted that, increasingly, “private lenders are flying a flag for sustainability” but need standardized and more robust methodologies for their underwriting criteria.
Measuring the cost of inaction, particularly in the medium- and long-term, is also growing in importance. This momentum toward data-driven metrics is being accelerated by upcoming regulatory shifts, such as changes to the Sustainable Finance Disclosure Regulations and the Energy Performance of Buildings Directive. To comply with regulations and effectively evaluate sustainability for investment models simultaneously, the industry needs credible, consistent forecasts for investment decision-making. Participants reported that the industry is beginning to sidestep this blind spot by finding ways to quantify climate risks and factor them into investment models.
The ULI C Change Transition Risk Assessment Guidelines provide a standardized framework for assessing and disclosing climate transition risks within discounted cash flow models. ULI’s Preserve tool is under development to ensure that these guidelines can be adopted at scale. Preserve is an open-source tool for consistently and transparently quantifying transition risks in discounted cash flow models that aim to facilitate implementation of the Transition Risk Assessment Guidelines. It should help the industry price climate transition risks—including the cost of not decarbonizing—into investment models, thus strengthening the business case for net zero buildings and helping owners understand how decarbonization is likely to affect their assets’ financial performance.
Meanwhile, INREV’s publication in April 2025, Integrating environmental considerations in real estate underwriting, examined ways that investors, investment managers, and lenders assess environmental goals to move beyond theoretical discussions to a more tangible, numbers-driven valuations approach.
Abigail Dean, global head of strategic insights for Nuveen Real Assets, described these initiatives as a “big leap forward” that lets the industry better assess the potential rental premiums, value uplifts, and transition costs tied to greener assets—especially amid growing political scrutiny around sustainability.
Shift toward whole-life-cycle and scalable decarbonization solutions
Participants reported that real estate companies are moving beyond incremental efficiency improvements to think about whole-life-cycle decarbonization. The overall life cycle of an asset—from design and construction to operations and eventual reuse or repurposing—draws increasing focus, according to Rives Taylor, global resilience research lead, principal at Gensler: “There is not a single one of our top 100 clients that isn’t still talking about resource stewardship, resilience, and regeneration—particularly as it relates to doing better for communities.”
Asia Pacific–based participants reported demand for low-carbon materials—such as engineered timber, bamboo-based products, terracotta, and low-impact concrete—in building designs. John Haffner, deputy director of sustainability at developer Hang Lung Properties, said that the company is tackling embodied carbon in its developments, with a focus on materials such as steel, concrete, and aluminium. Julie Hiromoto, director of integration at HKS, affirmed that groups such as the Bio-Based Material Collective are working to convene cross-sector advocacy, create evidence-based tools, and align policy to accelerate bio-material adoption.
Dean forecast rising demand for timber products and said that the topic has come up with her firm’s institutional investors. New York–based Joshua Plourde, project lead at Atelier Ten, emphasized that circularity should be applied beyond operational emissions: “Adaptive reuse is the best strategy to mitigate embodied carbon.”
Beyond the asset level, participants urged the industry to think broadly about decarbonization measures. Plourde, amplifying his earlier remarks, said, “Circularity is inherently a local problem, but one that scales up.” Addressing such issues as energy independence, climate mitigation, and insurance risk on a building-by-building basis can be inefficient and costly, roundtable participants emphasized. District energy systems or neighborhood-level strategies offer greater efficiency, as well as resilient and reliable electricity.
Jack Smith, South Carolina–based environmental lawyer at Nelson Mullins, noted that meaningful change requires planning at the regional or eco-regional scale, as well as integration of housing, energy, infrastructure, and environmental systems. “You can’t do it planning one resilient building at a time,” he said. “If there was a regional or national resilience plan, decisions could be made for how development affects that region’s long-term resilience. Global unity may be elusive, but local and regional coordination is achievable.”
District systems, though often complex to implement, hold immense potential for load balancing, shared infrastructure, and equitable access to green energy, participants said.
Leaders emphasized that advancing sustainability should not be a siloed effort but, instead, one that requires a cohesive vision incorporating commercial assets, housing, and urban planning. ULI’s Net Zero Imperative program—which works to unite real estate, public policy, and community development to drive measurable change—was cited as a tool helping the industry to scale solutions across portfolios, neighborhoods, and cities.
Rise of artificial intelligence as both a sustainability tool and a resource challenge
Artificial intelligence is one of the most transformative forces shaping the built environment and, therefore, is a key theme for 2026. In the roundtables, sustainability leaders said that AI’s potential to advance sustainability—including the streamlining of reporting, data collection, and decision-making—is enormous. Yet the rapid growth of the energy-hungry data center sector poses challenges.
Jeff Blaylock—director of clients, UK, at Deepki, a sustainability SaaS solution for real estate that provides insights to manage risk, enhance financial performance, and meet regulatory demands—said that companies are looking at how AI can help streamline sustainability reporting. Paul Stepan, head of sustainability consulting, UK, and EMEA at real estate consultant JLL—acknowledged AI’s power to reshape capital planning, asset management, and ethical frameworks, thus influencing which buildings may become obsolete and where new investment is directed. This shift must be accompanied by rigorous monitoring and governance, as the same tools that optimize decision-making could also entrench bias or misallocate capital if used without transparency or accountability.
The tension between the rapid growth of data centers and their energy demands was flagged by Jocelyn Hittle, managing principal, HDR. She said that AI data center development in Colorado was straining the local grid and putting pressure on utilities, which set the development at odds with the state’s mission to be fueled by carbon-free power. According to recent findings from the Pew Research Center, the increased energy demand is contributing to rising energy costs for consumers in all sectors of the economy.
Elliot Zatzkis—former financial planner at Prudential Financial, based in Los Angeles—highlighted increasing water scarcity due to the large cooling requirements of data center servers. Data centers are expected to consume 16 billion to 33 billion gallons of water annually by 2028. Zatzkis highlighted related water access issues: “In LA, there was a shortage of water, even during emergencies.”
Kohli said that Europe was making progress at harnessing data centers’ excess heat. In Mäntsälä, southern Finland, AI infrastructure company Nebius incorporates a heat recovery system to repurpose server heat for local residential heating, thus covering 65 percent of the local municipality’s needs. Meanwhile, Microsoft is developing two new data centers in the cities of Espoo and Kirkkonummi that will redeploy 75 percent of their waste heat annually for district heating.
Operationalizing physical resilience in response to escalating climate impacts
As climate-related losses mount and insurance costs rise, physical resilience continues to be a critical priority. Participants said that companies will focus on enhancing resilience to physical climate risks in 2026, as extreme weather events escalate. Participants cited the increased use of climate risk analytic tools, which evaluate physical climate risks such as flooding, heat, wind, and wildfire across entire portfolios. Roundtable participants reported that insight into the risks to assets from extreme weather is now a necessity, as extreme weather events occur with frequency in all regions.
According to Sonia Khanna, investment partner at Galway Sustainable Capital, a sustainability investor, multiple pressures drive this change: tenant business disruption, rising insurance premiums and insurability concerns, energy price volatility, and an uptick in climate-related damage. These factors force owners to confront the cost of inaction. Khanna reports that her firm is seeing demand from real estate companies for the funding of resilience measures. During the Asia Pacific roundtable, Stefano Tronci, Asia-Pacific sustainability lead and associate principal at SOM, said that the company is incorporating climate-resilience measures and sustainable engineering into the design of all of its current and upcoming projects in the Asia Pacific region.
As the 2026 Global Sustainability Outlook sets the stage for the new year, it’s clear that the real estate industry is entering a pivotal era defined by climate urgency, technological disruption, and shifting regulatory and financial landscapes. It’s also clear that sustainability remains a central concern, with implications for value creation, risk management, and long-term viability.
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