RICS Draft Guidance Note: Sustainability and ESG in commercial property valuation and strategic advice, 3rd edition

Sustainability and ESG in commercial property valuation and strategic advice 3rd ed

3 Valuation purpose

Purpose is fundamental to all valuation activity, and this is amplified in the context of sustainability and ESG. Particular attention may need to be given to valuations for a regulated purpose. The valuer may be required to explicitly articulate the evidential basis for assumptions around sustainability and ESG. Examples include:

  • Secured lending: the lender may want the valuer's insight into the resilience of a property as a security over the term of the loan (Red Book Global Standards, VPGA 8).
  • Financial reporting (including in accordance with, for example, IFRS or GAAP): there may be a particular focus on the evidence base supporting the valuer's judgements.