Sustainability in Property Asset Management : An overview of perceptions, important aspects and implementation of sustainability in Swedish commercial real estate companies

Abstract: Due to the challenges posed by climate change, the notion of sustainability is gaining traction in the real estate industry. This study highlights property asset managers' conceptual understanding of sustainability, and explores whether the level of implementation of sustainability is actually achieving sustainability objectives through the management of commercial real estate. A qualitative approach was used in order to gain an understanding of property asset managers’ perceptions of sustainability, the most important aspect of sustainability and the implementation of sustainability in real estate portfolios. Data was collected through surveys and semi-structured interviews. The surveys had a response rate of 44%, accentuating the robustness of the study. The data was analysed using categorical analysis, rankings in order of importance and comparison between sizes of organisations. The survey was complemented with 4 interviews to further understand how and why property asset managers implement sustainability in their portfolios and the data collected from the interviews were analysed using thematic analysis to determine the reason for implementing sustainability. The findings reveal that property asset managers found sustainability to be a critical issue for the real estate industry, and most respondents agreed on sustainability not being a fad. The property asset managers’ perception on sustainability seemed to differ between company sizes and findings identified reduction of energy consumption followed by production of renewable energy as the two most important sustainability aspects. The reasons for property asset managers to implement sustainability were varied, with increasing costs, brand image, competitive external and internal normative pressure being identified as strong reasons. Our recommendation to property asset managers is to encourage sharing knowledge and investing in pushing the status quo on sustainability in the industry since the frontrunners are proving it to be economically beneficial, not to mention the benefits for greater society. The study indicates that the industry wants to change, but craves more initiative takers to lead by example to catalyse the change enough for mimetic pressure from the industry to drive the sustainable development further.