Thoughts

6 min read

A New Era of Accountability, Action, and Innovation – 2025 Predictions from Paul Sutcliffe

Thoughts

  • author-avatar
    Paul Sutcliffe
  • author-avatar
    EVORA

Tighter rules, rising caution about greenwashing, and, for some, looming 2030 Net Zero goals – 2025 will push the real asset investment industry to hit a new gear. Paul Sutcliffe, Co-Founder and Director of EVORA Global, offers a look into what the next year may hold. 

 

Here’s a breakdown of the key trends Paul predicts. 

 

Implementing CSRD

The Corporate Sustainability Reporting Directive (CSRD) is being phased in across Europe, with significant developments in 2025.  

 

The directive is reaching a critical milestone as organisations must align with its requirements for the 2024 reporting year, with first submissions due in early 2025. This means businesses are facing the operational realities of implementing the directive, and investors demanding greater transparency and comparability in ESG data. 

 

CSRD also requires large organisations to adopt “double materiality,” meaning they must report on both the impact of climate issues on their business and their business’s impact on the world. This marks a shift from voluntary sustainability disclosures to mandatory, detailed reporting standards under the European Sustainability Reporting Standards (ESRS). 

 

Even if some organisations aren’t directly covered, they will likely feel the ripple effect.  

 

Learn how EVORA can help with CSRD

 

Greenwashing Gets Risky

Recent legal cases and settlements demonstrate that inaccurate reporting won’t be ignored. Several big names have faced penalties over allegations of greenwashing, and these actions are likely to continue.  

 

Public scrutiny of data and claims about sustainability is rising. Companies that don’t appropriately check their data and disclosures run the risk of negative exposure and even prosecution. 

 

Challenges in the US

In the United States, shifting politics create a tricky environment for sustainable progress. Even so, real asset managers in the US still face real-world risks from floods, wildfires, and other climate threats. Avoiding the ESG label doesn’t make the real-life challenges disappear.   

 

Sustainability has been seen as an externality. It’s been outside of the commercial world of financial decision making, outside of the fiduciary duty of investment managers. But that’s not true; it is a financial question because it has a direct impact on value. Sustainability and climate-related issues are risks that needs to be identified, quantified, and managed to ensure that asset value is preserved, or enhanced.  

 

And while we don’t expect any nation-wide legislations to be introduced in 2025, many States are mandating strict energy-related ordinances, meaning real asset investors must keep tabs on different rules across different regions. 

 

Better Data And The Rise of AI

As regulation tightens, so does the spotlight on accurate data. But the days of spending huge sums on consultant time just to gather spreadsheets are coming to an end. Automated systems and efficient processes will be vital to keep costs in check, ensure traceability and reduce the risk of errors. 

 

 With the right support, real asset investors can collect solid data that both supports regulatory compliance, while also helping them plan property improvements, reduce carbon, and track progress with confidence.  

 

 Also, we will likely see more examples of how Artificial Intelligence can be used to support investment decision making in sustainability. Though some caution is wise: investment decisions being made on a pyramid of gap-filled, AI-generated assumptions, will be as risky as the underlying assumptions.  

 

 This further calls for the need of high-quality, traceable data, as well as human expertise – at the right place. While AI can ease many burdens around data analysis, the models behind the output can’t be built on AI alone. 

 

At the same time, more public reporting is on the way. That means AI engines will have wider access to facts and figures, helping them spot new links between climate risks, asset values, and future threats. AI is already a big factor in other sectors. So while real estate might be behind for now, it won’t be for long. 

 

Keeping Up With 2030 Targets

Many businesses have set ambitious net-zero deadlines, and some are feeling the crunch as 2030 approaches and reality catches up.  

 

In a recent EVORA survey, about a third of our participants expressed that they have changed, or were reviewing, their commitments. Of course, not everyone is aiming for the same deadline – some have set 2040 or 2050 dates – but for those who have a target to hit in five years, this is a serious challenge. 

 

Words alone won’t get the job done. There’s a continued and growing call for real action at the building level. While offsets often play a role, the market for reliable credits isn’t where many hoped it would be. Questions remain about quality and oversight. Without careful checks, offset investments can be risky and expensive – few want to buy offsets they can’t trust.  

 

 I don’t think the market for offsetting is as far forward as we’d hoped by now, it’s not closely regulated, and that creates problems. As we exit 2025, we’ll probably be in a position where we’re starting to talk far more around governance around offsetting principles, because we’re going to have to start to move that way”, says Paul. 

 

Meanwhile, real measures such as building refurbishments and on-site renewable solutions can cut emissions at the source. 

 

Moving forward, it’s wise to avoid simply postponing deadlines. Instead, get to work on actual asset improvements, and evaluate offset programs as part of a balanced strategy. Action, now, is required if the industry is to achieve its goals. 

 

Discover our Net Zero services

 

Steady Optimism

Despite the pressure, there’s a sense of optimism. As legislation mature and data tools improve, there’s hope that 2025 will mark a turning point. 

 

At EVORA’s we are excited for the year to come. We are working hard on delivering solutions to support our clients at asset level using our experience, but also that of our network of partners. We are also looking forward to connecting in person with more of our clients; our new London office in the heart of the city offers the perfect space to reinvigorate our client lunches and roundtables, where we can gather and discuss what levers to pull to make meaningful progress in the industry.

 

We expect there will be more to share on these topics in the months ahead. For now, the message is simple: prepare for stricter rules, stay honest about progress, and act where it counts.