A Critical Note on ESG and Social Governance in Real Estate Valuation
DOI:
https://doi.org/10.11113/intrest.v20n1.442Keywords:
Real Estate Appraisal, Environmental, Social, Governance, Social governance, ValuationAbstract
This short paper critically examines the relevance of social governance criteria within real estate valuation. While Environmental, Social and Governance (ESG) principles have become increasingly visible in real estate investment, reporting and asset management, their direct application to valuation practice remains conceptually and methodologically contested. The paper argues that only social factors that are observable, market-relevant and capable of influencing property performance should be considered in valuation analysis. Through a conceptual review of selected ESG and real estate valuation literature, the paper distinguishes between broader corporate social governance ideals and valuation-relevant property attributes such as accessibility, safety, social infrastructure, neighborhood quality and user demand. The paper concludes that ESG considerations should not be rejected wholesale, but should be applied cautiously, transparently and only where they can be linked to market evidence, professional judgement and recognized valuation principles.
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