Green Buildings Market Is Losing Momentum

The Royal Institution of Chartered Surveyors (RICS) in London recently published its 2025 Sustainability Report, and the picture for green buildings is getting weaker. Demand for sustainable real estate is cooling in most European regions, many projects are stalling over high upfront costs and uncertain payback, and almost half of construction professionals still don’t measure carbon on their projects—a share that has actually grown over the past year.

Energy-efficiency experts from Exergio, a company developing artificial intelligence (AI) tools for energy efficiency in real estate, said the sector is stuck not for lack of ambition but because three systemic failures—stalled demand, unclear financial value, and weak operational follow-through— remain unresolved.

Global demand for sustainable buildings has been sliding for several years now, with the latest RICS report showing another drop from 41% to 30%. Investors and developers mostly blame unclear returns: 35-46% cite uncertain return on investment, payback periods, or operational savings as their main barrier to investing.

“Investors aren’t against building sustainably—they just need proof it pays back,” said Donatas Karčiauskas, Exergio CEO. “If a project requires expensive materials, equipment and certifications but the real-world performance doesn’t translate into measurable savings, why would anyone scale it? Until buildings can demonstrate clear, verifiable returns, demand will keep sliding.”

 RICS data reveals a growing split between what building owners value and what investors prioritize. Building inhabitants favor performance—94% cite indoor environmental quality and 88% name energy efficiency as top priorities—while investors still focus on certification (86%) and resilience features (78%). 

“Occupiers care about how a building works; investors care about how it’s labeled,” Karčiauskas said. “Until performance and certification point in the same direction, we’ll keep building assets that look sustainable on paper but don’t deliver it in practice. The real solution is to measure what happens inside the building, every day— that’s when both groups finally get what they’re paying for.”

The RICS report showed that this kind of measurement is still the exception, not the rule. Across regions, roughly half of respondents don’t measure embodied carbon at all, and only about 16% say their assessments change design choices. Just 17% believe the industry has enough sustainability knowledge, and only 10% are very familiar with whole-life carbon methods.

Karčiauskas believes this is because the respondents do not know how to measure the emissions: “You can’t improve what you don’t measure, and you can’t measure what you don’t have the skills to assess,” he explained. “Right now, most carbon decisions are built on assumptions instead of real evidence.”