As sustainability becomes a crucial factor in the real estate industry, several stakeholders increasingly emphasize ESG criteria. However, the way these elements are included in property values varies greatly, and there is a clear discrepancy in accepted standards. Commissioned by a company, this thesis addresses the need for a framework, including ESG measures in real estate valuations, to fairly reflect market reality and investor needs.

The research was conducted by conducting an exhaustive review of existing literature, industry reports, and relevant regulatory frameworks, which was further supported by interviews with real estate experts. The investigation focuses on identifying the critical ESG metrics that influence property values and the critical evaluation of the current practices in the Swiss real estate market. The objective was to assess the degree to which ESG factors are integrated into property valuations and to establish a structured methodology for integrating these factors into conventional valuation models.

With obvious trends of green premiums for sustainable buildings, the thesis identifies environmental factors—especially energy efficiency, renewable energy utilization, and green certifications—as the main drivers of property value. It also emphasizes the importance of consistent frameworks to include social and governance elements in valuations, which are sometimes disregarded because of the absence of accepted measures. The study offers useful advice for our client to improve the marketability and long-term worth of their real estate portfolios by matching their valuation procedures with global sustainability trends and so strengthening their processes. Apart from ensuring future-proof investments, the suggested structure helps our client by supporting larger industry initiatives aiming at a more sustainable real estate market in Switzerland.