Moderate supply of ESG-compliant office space

The evaluation showed that there is a sufficient supply of ESG-compliant office space overall. In the six office markets surveyed − Zurich, Geneva, Bern, Lausanne, Basel and Zug − 292,900 m² of office space with sustainability-compliant attributes were identified. This corresponds to 30.8% of the total office supply in the corresponding regions.

Although there are significant differences between and within individual market areas. The degree of ESG compliance can also vary greatly. Unsurprisingly, offices with high sustainability standards are often located in new buildings because building or retrofitting to those standards is usually only economically feasible either at the beginning of a property’s life cycle or in the case of extensive refurbishments.

Geneva and Zurich have the most ESG-compliant office space

It is striking that sustainability certificates are sought more consistently in the large and more competitive office markets (Geneva and Zurich) than in markets with comparatively less competitive pressure (Bern and Zug). The two largest office markets, Zurich and Geneva, have the most ESG-compliant office space in both absolute and relative terms (129,000 m² respectively 120,500 m²).

It can also be observed that there are few ESG-compliant offices made available in the most central locations. While a total of 30.8% of provided space across Switzerland meets sustainability criteria, the proportion in city centers and CBDs is only 6.5%. However, this does not automatically mean that there is no sustainable office space in city centres. There are just very few available on the market. Reasons for the low availability of sustainable office space in the CBD (16% in Geneva, 3% in Zurich, 0% in Bern and Zug) include the lower level of construction activity and monument protection regulations.

Location and rent price more important for tenants than ESG

The sustainability factor is generally of vital importance for companies on site search. For various companies, corresponding certifications are not only desired, but in some cases are even mandatory. Some companies even prefer internationally recognised sustainability labels to national ones. For globally oriented companies in particular, it is important to them to reduce their carbon footprint when relocating.

However, experience shows that if a central location and accessibility are decisive criteria when looking for a new location, less well-located new buildings often do not make it onto the shortlist despite existing sustainability certificates. A central location, rental price, and utilization concept are currently still weighted more heavily than ESG conformity. Often, an office in an older building with low ESG standards but a high location quality wins the race in the end.

Trend reversal seems likely

However, various developments indicate that the weighting of decision-making factors will change in the future.

In Switzerland, for example, 157 companies have already committed to so-called “science-based targets“ and are thus endeavouring to achieve science-based climate targets in order to make their contribution to limiting global warming. The use of ESG-compliant workspaces is a key factor of achieving these targets.

In parallel to voluntary initiatives, statutory regulations are increasingly coming into force. The Corporate Sustainability Reporting Directive (CSRD) has been in force since 1 January 2024. This directive obliges European companies to report regularly on certain ESG criteria. The first reports will be due in 2025 and 2026 respectively. In order for this to succeed, appropriate processes must be established and the necessary data must be collected. Some of the required data comes from suppliers, producers and landlords. Many companies in Switzerland will also be affected by this reporting obligation − at least indirectly.

Methodology

The survey only took into account available office spaces in buildings that have been awarded one or more of the following certifications: BREEAM, DGNB, greenproperty, LEED, Minergie, SNBS, 2226, or 2000-Watt Site. If one or more verifications could be obtained, these spaces were declared as “ESG-compliant”. On an individual case basis, buildings meeting high sustainability standards but which are not certified were also included.

It's important to note since information on certificates or labels for buildings is sometimes difficult to access or is not available at all, there is no guarantee of completeness.

The data collection took place in the fourth quarter of 2023. The term “available space” in this study denotes the sum of all immediately leasable office space plus all of the office space that will become available within six months after the cut-off date.