Blog Courtesy of Nimit Raval, Associate : Sustainability at Pascall+Watson
As ESG mandates tighten and occupiers face pressure to decarbonise, is sustainable design finally becoming a business decision, or are we still treating it as a nice-to-have that gets value-engineered out?
The short answer is yes, increasingly, but not consistently enough. What was once dismissed as a nice-to-have is increasingly difficult to justify removing when regulatory deadlines, occupier expectations, and asset values all point in the same direction.
There seems to be a genuine shift in how businesses and landlords approach sustainable design. The conversation is moving from aspiration to obligation, though the gap between intention and delivery remains a challenge.
The regulatory landscape is accelerating this change. The Minimum Energy Efficiency Standards (MEES) require commercial properties to achieve an EPC rating of C by 2027 and B by 2030. With an estimated 60% of existing UK office stock currently falling below a C rating, the risk of stranded assets is no longer theoretical; it is imminent. Landlords who delay may miss an opportunity, with long-term asset value eroding.
Post-pandemic, the relationship between workplace quality and occupancy has sharpened considerably. As organisations compete to bring people back to the office, the built environment has become a genuine differentiator. Spaces certified under BREEAM or NABERS, which independently verify environmental performance and operational efficiency, are attracting stronger demand and, in many cases, rental premiums of between 5% and 12%. WELL-certified and neurodiversity-informed environments are following a similar path, with employers recognising that wellbeing-led design supports talent attraction and retention in measurable ways.
Corporate ESG commitments are adding further weight. Occupiers operating under frameworks aligned with the UK Net Zero Carbon Buildings Standard (UKNZCB), launched earlier this year, can no longer treat their workspace footprint as invisible. The buildings they occupy and how those buildings perform operationally are increasingly reflected in reporting obligations, making workspace selection a boardroom-level business decision rather than purely a facilities matter.
Circular economy principles are also gaining meaningful traction within fit-out. Designing for disassembly, specifying reclaimed or reused materials, and extending product lifecycles all reduce embodied carbon, an area the UKNZCB addresses directly through its whole-life carbon accounting framework. For occupiers and developers with net-zero commitments, this is no longer a design aspiration; it is part of delivering on their stated targets.
And yet, value engineering remains a persistent obstacle. Sustainable features are being removed entirely less often, which itself reflects progress, but they are regularly diluted. Acoustic performance is reduced. Biophilic elements are scaled back. Energy monitoring systems are simplified. The intent survives; the impact is too often compromised.
This is where the industry must be more disciplined. Features that underpin certification, occupier wellbeing, and regulatory compliance should be protected within any brief, not treated as discretionary items subject to the first round of cost-cutting.
The recommendation is straightforward: establish ESG priorities before cost planning begins, not after. When the business case for sustainable design is clearly articulated from the outset to reduce void risk, ensure regulatory compliance, meet occupier demand, and strengthen long-term asset resilience, it becomes significantly harder to value-engineer away. Landlords, developers, and occupiers who treat sustainable design as a core commercial driver, rather than an added layer, will be better positioned as requirements tighten. The market is moving in one direction. The decisions made today need to keep pace.
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