For much of the last five years, sustainability has been characterised by acceleration. Targets were set with confidence, commitments became more ambitious and new frameworks emerged at pace. Environmental performance moved steadily from the margins of development appraisal into mainstream investment and asset strategy. In 2026, the tone is more considered.
Sustainability has not fallen down the agenda, but it has entered a more disciplined phase. Investment committees are interrogating capital expenditure more closely. Developers are weighing environmental ambition against viability constraints, with investors focusing less on narrative positioning and more on operational performance and long-term resilience.
This is not a reversal of intent - it is a recalibration of emphasis. The market is shifting from ambition to evidence. The question is no longer whether sustainability matters, but how it delivers value in a climate that demands cost certainty, regulatory clarity and demonstrable performance. Understanding that distinction is critical, because while regulation may appear unsettled and frameworks continue to evolve, the long-term direction of travel remains intact. Those who use this period to strengthen fundamentals - carbon literacy, asset-level data and integrated strategy - will be better positioned when policy and capital align more decisively.
A more cautious market, shaped by experience
The current recalibration reflects hard-earned experience.
Sustainability policy in the UK has rarely progressed in a straight line. Over the past two decades, initiatives have been introduced with conviction and later revised, delayed or withdrawn. From the Code for Sustainable Homes to the Zero Carbon Non-Domestic Buildings Programme and more recently adjustments to Minimum Energy Efficiency Standards and the Future Homes Standard, regulatory signals have shifted. As a consequence some projects have faced redesign, revised funding assumptions and adjustments to anticipated value projections.
For organisations making long-term capital decisions, such shifts are significant. Acting ahead of regulation can create competitive advantage, but it also carries risk if timetables move or requirements soften. In a market where funding conditions remain tight and asset values are still adjusting, caution is understandable rather than regressive.
At the same time, the broader ESG conversation has matured. Investors are becoming more selective in how environmental credentials are assessed. High-level commitments carry less weight than measurable outcomes. Sustainability teams in some organisations have consolidated around areas that demonstrate tangible impact and financial relevance.
The result is not disengagement, but discipline - a more focused assessment of where sustainability investment strengthens asset resilience and where it risks becoming performative.
When progress creates complexity
In the absence of firm statutory signals, the market has continued to advance voluntary standards and certifications. Net zero carbon definitions have evolved. Whole life carbon assessment has moved from specialist practice to routine design consideration and health, wellbeing and biodiversity metrics have become embedded in development narratives.
This expansion reflects genuine technical maturity. Carbon accounting is more rigorous than it was even a few years ago. Methodologies have improved, benchmarks are clearer and the industry’s understanding of embodied and operational impacts has deepened. Yet progress has brought complexity.
Many frameworks now address similar objectives using different assumptions, boundaries and performance thresholds. Some assess projected performance at design stage, others require verification in operation. Some confer certification once, whereas others demand ongoing annual reporting. For clients operating across portfolios and jurisdictions, this divergence creates uncertainty rather than clarity. As the number of certifications increases, investors are prioritising common, comparable metrics - particularly whole building carbon emissions and energy intensity - to streamline reporting and reduce inconsistency in benchmarking.
The implications are increasingly commercial. Selecting a framework is no longer purely a technical decision - it is strategic. Which standards are likely to endure? Which align most closely with emerging regulation? Which are recognised by lenders and institutional capital? And which deliver meaningful resilience rather than reputational benefit?
In prime commercial markets, it is common for schemes to pursue several certifications concurrently. While this signals commitment, it can also increase capital cost and advisory input without proportionate improvement in underlying performance. The accumulation of frameworks does not always translate into enhanced asset quality.
The perception that sustainability has slowed is, in part, a response to this fragmentation. The market is not retreating from environmental ambition, it is seeking coherence.
A sharper commercial lens
Overlaying this complexity is a more demanding financial environment.
Delivering buildings aligned with emerging net zero pathways can increase capital expenditure, particularly where enhanced fabric performance, low-carbon systems and embodied carbon mitigation are prioritised. While operational savings may accrue over time, the allocation of cost and benefit is rarely aligned neatly between developer, investor and occupier.
At the same time, the well-recognised performance gap between modelled and operational outcomes remains an issue. Where reliable data is limited, projected savings can be difficult to validate, which in turn affects confidence at investment committee level.
In this context, sustainability decisions are being tested more rigorously against viability and risk. Energy intensity, retrofit feasibility and exposure to future regulation have become central to asset strategy discussions. Investors are increasingly focused on understanding how buildings perform in use and how they will respond to tightening standards over time.
The shift is subtle but important. Sustainability is moving from a differentiator to a determinant of resilience.
The direction of travel remains clear
Despite the current recalibration, several long-term trajectories are evident. Net zero carbon continues to frame strategic ambition across Europe and beyond. While definitions differ, the objective of deep decarbonisation is not in doubt. Although embodied carbon limits have yet to be formalised nationally in the UK [1], whole life carbon assessment is becoming embedded in planning and procurement processes, suggesting closer alignment between voluntary practice and regulation over time.
Operational transparency is also gaining prominence. Internationally, requirements for building-level reporting of energy and carbon performance are expanding. Investors operating across jurisdictions increasingly expect access to operational data as part of routine due diligence. The principle that performance should be measured and in due course disclosed, is becoming part of standard asset governance.
Most tellingly, operational energy intensity has emerged as the most credible indicator of building quality. Certifications signal intent, measured performance evidences resilience.
While tools and standards will continue to evolve, these fundamentals are unlikely to reverse.
Resetting the approach
The recalibration underway presents an opportunity to refine strategy and a disciplined market encourages a return to first principles. Understanding whole life carbon exposure across a portfolio provides a more durable foundation for decision-making than pursuing individual certifications in isolation.
Increasingly, clients are reassessing retention and adaptive reuse strategies through the lens of embodied carbon as well as cost and planning considerations. In many cases, refurbishment offers a stronger whole life carbon profile than demolition and rebuild, while also reducing programme risk and capital intensity.
At 15 Fitzroy Street, G&T supported the repositioning of an existing commercial asset through a strategy focused on retention and enhancement rather than replacement. By preserving and upgrading the existing structure, the project significantly reduced embodied carbon when compared with a full redevelopment approach. Sustainability measures were integrated alongside cost planning and delivery strategy, ensuring that environmental performance improvements were aligned with commercial objectives and tenant expectations. The result was a high-quality workplace that strengthened operational efficiency and future resilience without incurring unnecessary structural carbon impact.
Projects such as Fitzroy Street demonstrate that sustainability and viability are not competing priorities when approached strategically. Adaptive reuse, careful material specification and performance-led upgrades can deliver meaningful carbon reductions while supporting long-term asset value.
Operational performance should similarly be treated as a strategic asset issue rather than a compliance exercise. Collecting reliable energy data, benchmarking performance realistically and identifying underperforming assets allows capital to be deployed with greater precision. This is as much about protecting long-term value as it is about anticipating regulation.
This approach is increasingly evident in prime commercial refurbishments and deep retrofit. At 63 New Bond Street, G&T is supporting the repositioning of a landmark West End building of the old Fenwick department store, combining heritage sensitivity with modern environmental and operational performance expectations. The project demonstrates how carefully managed deep retrofit, extensive retention and innovative structural works can extend asset life, enhance occupier quality and support long-term sustainability objectives without the carbon impact of wholesale redevelopment.
Importantly, sustainability must be integrated with asset and capital planning. Decisions on timing, funding and repositioning should consider likely regulatory trajectories and the practicalities of retrofit. A strategy that anticipates embodied carbon constraints and operational reporting requirements will be more resilient than one that responds reactively.
The pause we are seeing is therefore constructive. It creates space for organisations to strengthen data, refine assumptions and align environmental ambition with commercial reality.
From narrative to resilience
The transition underway reflects a broader shift. Sustainability is becoming less about signalling and more about structural resilience. Buildings that can demonstrate credible carbon reduction pathways, strong operational performance and realistic retrofit strategies are more likely to retain liquidity and attract institutional capital, while mitigating the growing pricing differential applied to less sustainable assets. Those that cannot evidence performance may face increasing scrutiny as regulation tightens and investor expectations converge.
This evolution does not diminish sustainability’s importance. On the contrary, it embeds it more firmly within core asset strategy. But it does require greater clarity, integration and accountability.
Looking ahead
Sustainability in 2026 is not stalled - it is maturing. Regulatory uncertainty and framework proliferation have prompted a more disciplined market response. The long-term direction - towards net zero carbon and greater operational transparency - remains clear. What has changed is the expectation of measurable performance and credible commercial alignment.
Organisations that focus on fundamentals, strengthen operational data and integrate sustainability into long-term asset strategy will be best positioned for the next phase of market evolution.
How G&T helps
G&T supports clients through this transition by combining sustainability expertise with commercial and delivery insight. Our experts work closely with our Cost Management, Project Management and Infrastructure Management teams to ensure that carbon strategy is grounded in practical delivery and financial certainty.
As an independent consultancy, we do not promote certification schemes. This enables us to assess frameworks objectively and advise on their strategic relevance rather than advocating for any single tool. Our focus remains on measurable performance, cost clarity and long-term resilience.
Through detailed cost modelling and scenario analysis, we support clients in evaluating redevelopment and refurbishment options, quantifying embodied carbon implications and planning phased retrofit programmes aligned with capital cycles.
In a market where confidence depends on clarity, G&T provides the technical depth, data-led insight and partner-level accountability required to move forward with assurance.
References
[1] “Part Z,” that addresses embodied carbon emissions, has been introduced as an amendment to Building Regulations, but has yet to be adopted.
