ESG due diligence for real estate transactions
Sustainability performance is increasingly central to real estate investment decisions. Whether acquiring or disposing of assets, investors and asset managers must understand how ESG factors influence long-term value, regulatory compliance, and climate risks. A strong ESG due diligence process provides the insight needed to make informed decisions — identifying both risks and opportunities across portfolios.
At Cooltree, we help investors evaluate the ESG performance of buildings and portfolios throughout the transaction process. Using a combination of quantitative data models and qualitative assessments, we translate complex sustainability metrics into clear, actionable insights that inform pricing, strategy, and asset management decisions.
Our approach:
ESG screening: We assess each asset’s environmental performance — including ESG data availability, energy intensity, carbon footprint, and alignment with EU Taxonomy and CRREM. Our analysis identifies where assets stand relative to the portofolio and future climate targets.
Physical & transition risk analysis: We analyse exposure to physical climate risks (flooding, heat, etc.) and climate transition risks arising from tightening energy regulations, carbon pricing, and tenant expectations.
Improvement pathways: Beyond screening, we outline practical improvement measures and capex implications to enhance ESG performance post-acquisition — from retrofit opportunities to renewable energy integration.
Tenant & occupier engagement: We evaluate tenant satisfaction, collaboration potential, and the presence of green lease clauses that promote shared sustainability goals. This helps ensure alignment between owner and occupier interests, supporting long-term value creation and retention.
Portfolio-level Insights: For portfolio acquisitions or disposals, we consolidate asset-level findings into a portfolio view that highlights key ESG risks, improvement potential, and alignment with investment objectives.
Why it matters:
A robust ESG due diligence helps you:
Mitigate risk by identifying potential regulatory, reputational, and financial exposures before they materialize.
Inform investment decisions with a transparent view of sustainability performance and transition readiness.
Enhance asset value through targeted improvement opportunities and credible decarbonisation pathways.
Support disclosure and reporting obligations under evolving ESG frameworks.
With Cooltree, ESG due diligence becomes more than a compliance exercise — it’s a strategic tool that drives value, transparency, and resilience across your real estate portfolio.
