Sustainability in real estate: Insights from Sweden’s Almedalen Week

Sustainability is rapidly reshaping the real estate landscape, presenting both challenges and opportunities for industry players. At this year's Almedalen Week, Sweden's premier political forum, the intersection of sustainability and real estate was one area of focus.

Ebba Ramel, Lead ESG Analyst at Nordea, attended the event and shares some of the key takeaways from the discussions:

Circularity and reuse: From idealism to infrastructure

The real estate industry is sitting on a vast, untapped resource: reusable building materials. While the concept of material reuse is gaining momentum, the shift from pilot projects to widespread implementation remains a challenge. Industry leaders emphasised the need for integrated management systems, digitised material flows and centralised digital marketplaces to replace the current fragmented ecosystem. 

Some materials, like windows, are already cost-effective to reuse. However, many circularity efforts rely heavily on idealism rather than economic viability. There’s growing recognition that for reuse to become mainstream, it must be driven by financial incentives, client demand and supportive regulations. Common myths, such as “this particular building cannot be rebuilt,” need to be challenged. 

Collaboration in building a market for recycled materials offers more benefits than attempting to scale circularity individually. There are some signs that tenants are increasingly seeking circular initiatives, contrasting with past tendencies to conceal the use of reused materials. While increasing the share of recycled and reused materials in buildings may introduce aesthetic variations, attitudes are shifting, and these materials are now often highlighted as a selling point.

Climate and energy: From risk management to value creation

Climate risk is intensifying, with once-rare extreme weather events now occurring regularly. Sweden’s cities face challenges, with outdated water and sewage systems and insufficient adaptation planning. Real estate stakeholders emphasised the need to view climate adaptation as a value-creating investment rather than merely a cost. Property owners and their stakeholders are calling for updated risk data, clearer insurance incentives and aligned regulations.  

Real estate companies are actively revising their climate goals and requesting better tools to quantify avoided emissions. There is a growing need for companies to be able to show stakeholders not only the emissions that are actually emitted but also how the real estate owners and developers are working hard to reduce emissions from projects. Currently, stakeholders face difficulties in identifying which real estate companies are most effective at avoiding emissions in their projects. 

Social sustainability: Safety, belonging and the business case

Social sustainability has emerged as a theme with clear business implications for the real estate sector. Investments in community development, tenant engagement and local partnerships are contributing to increased safety, improved wellbeing, reduced vacancy rates and more attractive neighborhoods. In this context, active property management and strong tenant relationships are viewed as strategic assets. 

Cautionary examples from the US market were highlighted, where some buildings in deprived areas are no longer insurable. This underscores the importance of addressing social sustainability proactively. There is a growing call for better metrics to quantify social value and to rethink building models to address affordability gaps and investment needs in underserved areas. 

Biodiversity: The next ESG priority

While methods to measure biodiversity impact are still evolving, momentum is building in the real estate sector. Forward-leaning companies are taking proactive steps, including conducting site mappings, coordinating with neighboring property owners and participating in cross-functional networks. Industry stakeholders stressed the importance of setting biodiversity targets, even if imperfect, and integrating them into valuation and investment decisions. 

Supply chains were flagged as a key risk area for project developers. For instance, sourcing materials from ecologically vulnerable regions may become untenable if local ecosystems are at risk of long-term collapse. 

To drive meaningful progress, the industry requires more comprehensive data and a broader systems perspective. This approach should extend beyond individual assets to encompass entire city blocks, ownership structures and ecosystems.

Security and organised crime: An emerging risk for the sector

A sobering theme that emerged during Almedalen Week was the growing need for robust organisational security. Organised crime is increasingly permeating various aspects of society, and the real estate sector is not immune to this threat. Real estate companies were encouraged to review internal controls, conduct background checks and ensure that both partners and suppliers uphold high standards of integrity. 

Final Reflections

Conversations with clients during the week echoed the themes above. Real estate companies are actively addressing climate goals, biodiversity and social issues. However, they expressed a need for clearer guidance, more aligned KPIs and credible financial products to scale impact. 

Sustainability leaders are at a strategic inflection point, tasked with translating risk and policy into opportunity and measurable change. Moving forward will require innovation, collaboration and new approaches to building valuation and financing. 

Nordea is committed to supporting the sustainability transition of the real estate sector. We offer a range of solutions and products tailored to our large as well as small- and medium-sized corporate customers. Our team is ready to engage in further discussions with clients on how we can finance and support their sustainability initiatives.