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Christiane Conrads
Partner and Global Real Estate ESG Leader at PwC Germany
Tel: +49 160 96219612
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Land sealing destroys habitats

The construction and real estate industries are among the largest contributors to species extinction and the destruction of natural ecosystems, particularly through land sealing and resource consumption. In Germany alone, around 30 hectares of land are paved daily to create new residential and commercial areas, roads, and parking lots. Urban development has had a profound impact on biodiversity, and the loss is strikingly apparent.

Without the commitment of the real estate industry, it will be impossible to reverse biodiversity loss. The PwC study “Biodiversity: An underestimated issue in the real estate industry?” identifies risks and opportunities for urban biodiversity and highlights measures that can contribute to preserving biological diversity and its ecosystems.

The study at a glance

Biodiversity comes into focus

Biodiversity, encompassing Earth's diverse life forms, is crucial not only for environmental health but also for the viability and sustainability of the real estate sector. It underpins ecosystem services like climate regulation, air and water purification, food systems support, and the mitigation of natural disasters – factors critical for maintaining healthy and valuable built environments. Despite the crucial role of these elements, the real estate industry is responsible for nearly 30% of global biodiversity loss, which threatens flood protection, air quality, temperature regulation, and reliable water supplies. Understanding this intricate relationship highlights the urgent need for action.

The industry heavily relies on robust ecosystems for success yet degrades them through land-use changes, deforestation, and resource-intensive construction practices. These actions exacerbate resource scarcity, driving up costs and increasing volatility, which heightens financial, operational, and regulatory risks. Despite growing awareness of the urgency surrounding biodiversity, integration into strategies remains fragmented. The global PwC survey shows 72% of real estate professionals acknowledge its importance, but only 31% have comprehensive strategies in place to address the issue.

Structured strategy development for biodiversity integration

To tackle these challenges, companies need a structured approach to developing their biodiversity strategy. This includes defining overall ESG ambitions and specific biodiversity targets, analysing applicable regulations and standards, and benchmarking against industry peers. Stakeholder engagement and thorough risk assessments are essential for aligning strategies with broader expectations and mitigating potential challenges. Establishing clear targets and sub-targets and conducting gap analyses help identify shortcomings and the necessary steps for achieving biodiversity goals.

Embedding biodiversity measures throughout the real estate lifecycle—from planning and construction to operation and divestment—ensures a consistent focus on ecological impacts. Tools like Geographic Information System (GIS) mapping, remote sensing, and natural capital accounting are essential for quantifying impacts and dependencies. Early adoption of these technologies offers a strategic advantage, positioning companies as leaders in nature-positive innovation.

Unlocking opportunities in sustainable finance

Driving innovation requires strategic investment, especially with biodiversity rapidly becoming a critical factor in sustainable finance, influencing how capital flows into the real estate sector. Global frameworks such as the Kunming-Montreal Global Biodiversity Framework and the EU Biodiversity Strategy for 2030 are redefining compliance requirements and guiding companies on sustainable practices. By integrating biodiversity into ESG strategies and demonstrating performance through credible certifications, real estate firms can enhance their market position and affirm their commitment to sustainability.

Innovative financing mechanisms – such as green bonds and ESG-linked loans – support nature-positive investments, facilitating access to capital and improved financing conditions. Nature-based solutions, such as green roofs and permeable surfaces, offer promising environmental and financial benefits. Integrating these solutions into lifecycle cost assessments and planning processes is crucial for unlocking their potential and ensuring long-term resilience.

While integrating biodiversity into real estate poses challenges, it also presents unique opportunities for growth and sustainability. By developing proactive strategies grounded in global trends and local contexts, companies can create resilient and valuable spaces that significantly contribute to reversing nature’s decline and preserving the planet.

Methodology

This study explores the complexities and nuances of biodiversity within the real estate industry, examining the challenges and opportunities that it presents. Our approach incorporates a robust mix of methodologies, beginning with a review of existing literature and online sources.

A meticulously conducted survey carried out between March and May 2025 is central to this study. With almost 100 qualified responses from investors, developers, asset managers, planners, and ESG professionals, representing a diverse cross-section of companies of different sizes, geographical locations, and functional roles. We incorporate findings from our consultancy practice to translate biodiversity objectives into actionable measures for real estate.

We also analyse the impact of regulations, frameworks, and market-based tools on incentivising biodiversity integration within real estate development.

Additionally, we  leveraged insights from existing studies to ensure our approach is both sector-specific and relevant within a broader global context.