Financing the Future: Embedding Sustainability in Real Estate Investment Strategy

nterview with Laurent Carlier | Partner, Ernest Partners | Former finance leader at Befimmo, Sodexo, Sanofi and Unilever

Published: June 23, 2025. This interview took place before the EU's Omnibus I directive changed the scope of the CSRD in February 2026; the article has been updated to reflect that change and to align project figures with public sources.

The question is no longer whether a building is green. It is whether it will still be leasable, financeable and sellable in five years. For Laurent Carlier, who spent more than three decades in finance across consumer goods, services and listed real estate, sustainability in property is now a valuation issue first and a values issue second.

Circular Is Harder, and It Still Has to Become the Standard

Carlier rejects the idea of comparing "traditional" and "circular" projects as if they were two options. "All real estate projects must evolve toward a more sustainable approach," he says. Energy efficiency, material reuse and biodiversity, in his view, have to become non-negotiable parts of any viable investment.

He points to ZIN, Befimmo's redevelopment of the former World Trade Center towers 1 and 2 in Brussels: a mixed-use project of around 110,000 m² completed in 2024. "We kept the structure of the previous building instead of demolishing it, even though it was more expensive." Around 95% of the existing building mass was kept, reused or recycled, including roughly 30,000 tonnes of concrete, and some salvaged elements went on to nearby schools. The approach cost more, but it substantially cut the project's embodied carbon.

Financial models have not caught up:

• Reused materials are rarely valued at market rates.
• Collecting, storing and redistributing salvaged materials is complex and underfunded.
• That logistics burden discourages developers.

His answer is incremental ambition. "You have to go as far as possible with each new project, learn from experience, and build partnerships with companies focused on circularity."

Build for the Tenant of Five Years From Now

ESG integration starts with three pressures that point the same way: what tenants will expect, what regulation will require and what lenders will finance. "At the start of the project, you must understand what tenants will need five years from now, not just today," Carlier says.

Certifications such as BREEAM, LEED and WELL have become standard requirements for multinationals leasing office space. Lenders are moving too. "Banks are also under pressure from the European Central Bank to green their credit portfolios. If your project lacks ambition, financing it will become impossible."

Future-proofing is also a hedge against cost. "If you anticipate future regulations now, you avoid retrofitting your building at great expense later."

Give the Board the Job of Oversight, Not Execution

Carlier suggests governance that matches a company's maturity:

• Early stage: a dedicated ESG committee, possibly with external experts. "But be careful," he cautions. "Other board members might think ESG isn't their concern anymore."
• Mature stage: ESG built into existing committees, with audit and risk overseeing sustainability reporting and the strategy committee embedding ESG into growth plans.

"Execution belongs to management, but the board must monitor and incentivize performance." That balance depends on a strong management team led by a Chief Sustainability Officer, and on a board that understands the topic. "Every board member should be trained on sustainability and conscious of their responsibility."

Blended Finance Can Close the Circularity Gap

Carlier sees blended finance as one way to fund ambitious circular districts. "Senior bank loans could be combined with mezzanine debt from public investment institutions that support the project for its societal value." The layered structure helps absorb the extra cost of circularity and affordability.

He also argues for public funding for startups working on bio-based materials and reuse logistics, and for local authorities to use mixed-use zoning to favor urban density over sprawl. "If cities don't maintain affordability while fighting non-compliance, they risk hollowing out their cores."

Know When a Building Becomes Stranded

Investors need to know when an asset risks becoming "stranded." Carlier points to CRREM, the Carbon Risk Real Estate Monitor, which maps the decarbonization pathway each asset type must follow to stay aligned with the Paris Agreement and shows the year a building is expected to fall off that pathway. "It tells you if retrofits will be necessary in five years, and you can deduct what that means for valuation."

In Carlier's experience, sustainable buildings attract better tenants and command higher rents, which improves the risk-return profile and can justify lower capitalization rates. "Appraisers are conservative, but they're beginning to assign real financial value to sustainability." Liquidity is the other side. "You don't want to own a building you can't lease or sell because it's not aligned with regulation or market demand. The best buildings are not just green. They're financially resilient."

Net-Zero Targets Need a Price Tag

Carlier warns against ambition without numbers. "Many boards set net-zero targets without estimating the investment required. That leads to disappointment or greenwashing."

His approach:

• Use the Science Based Targets initiative (SBTi) methodology to set a portfolio trajectory, then test its financial feasibility.
• Add acquisition criteria that assess each new asset's current performance and its impact on that trajectory.
• Tie executive bonuses to ESG milestones as well as financial KPIs.
• Plan in three-year cycles and present optimistic and realistic scenarios to the board.

Banks Won't Wait for Regulation

At Ernest Partners, Carlier helps mid-sized firms align with the EU Taxonomy even when they are not required to report under the Corporate Sustainability Reporting Directive (CSRD). That group grew in 2026: the Omnibus I directive, published in February 2026, limited mandatory CSRD reporting to EU companies with more than 1,000 employees and more than €450 million in net turnover. "Banks won't wait for regulation, they already prefer lending to companies that show clear ESG ambition," he notes.

Sometimes the lever is the tenant. One client's tenant, a fitness chain, requires every new gym to run on green energy and sit in a high-performance building. "Sometimes I just help push the client one step further. When they choose to invest in a better EPC rating despite the cost, I know I've done my job."

Three Lessons From a CFO's Chair

1. Avoid greenwashing by aligning ambition with financial realism.
2. Learn small, then scale: test circular solutions on smaller projects, build partnerships and scale what works.
3. Collaborate, even with competitors: "We share energy systems between buildings. Why not share knowledge too?"

Laurent Carlier is a finance executive with more than three decades of experience across investment, services and property development, including roles at Unilever, Sanofi, Sodexo and Befimmo, a Belgian listed REIT and the developer of the ZIN project discussed above. He is currently a Partner at Ernest Partners, a debt capital advisory firm.

Sources

• ZIN project data: Zukunft Bau and EPEA
• CSRD scope after Omnibus I, Directive (EU) 2026/470
• CRREM, Carbon Risk Real Estate Monitor
• European Central Bank, Guide on climate-related and environmental risks

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