Billions of dollars now chasing property investment for profit and purpose

One of the more encouraging investment trends is the growing interest in impact investing – the alignment of private capital with socially, ethically, and environmentally responsible developments in the commercial and real estate sectors.

According to the Australian Social Impact Investing Taskforce, an estimated A$1.02 billion in private capital is already available for affordable housing and ESG (Environmental, Social, and Governance) related projects – with the potential for millions more, given the right market conditions and partnerships.

This signals a strong demand for construction projects that balance profitability with positive impact on society and the planet.

Yet, challenges persist. Misconceptions, misaligned expectations, and structural barriers continue to hinder value-creation strategies. Left unaddressed, they risk stalling the momentum – and the true potential – of impact investing.

From metrics to meaningful action   

Impact investing is an investment strategy that aims to generate specific, beneficial social or environmental effects in addition to investment returns.

When I ask businesses and investors how they’re creating positive change, many point to their ESG policies or strategies. While it does reflect an organisation’s commitment to sustainability and ethical issues, ESG is just a measurement tool – a framework – not actual impact investing at all.

True impact investing goes further than a set of principles on paper. It starts when capital is directed toward initiatives that address real needs in today’s world, drives systemic change, and creates lasting outcomes.

ESG helps investors identify where to act and how to measure progress or evaluate risks in relation to their organisation’s interests. Impact investing is all that planning in action.

Investors inevitably ask how they can make the shift toward meaningful and measurable impact investing. A good place to start is by including sustainability metrics alongside traditional viability drivers like cost, time and quality during project assessments.

Construction currently accounts for more than 40 per cent of global emissions, with 15 to 20 per cent of that coming from embodied carbon within the construction cycle.

The Green Building Council of Australia now requires a 10–20 per cent emissions reduction across the entire construction lifecycle for Green Star accreditation – a benchmark that can significantly influence future property valuations.

Backing projects that reduce carbon through low-embodied-carbon materials is an increasingly a sensible move from a financial, environmental and risk-management perspective.

Likewise, investing in innovations like Modern Methods of Construction (MMC) that incorporate prefabrication, lean construction and digital technologies can cut waste and emissions from inefficiencies and reduce rework.

Aligning capital with sustainable, future-ready assets not only improves long-term value through regulatory alignment, but also delivers tangible, measurable impact across environmental, social and ethical dimensions for conscious and responsible investors.

Impact investment challenges, opportunities

What’s holding back impact investors today — and where are the opportunities hidden within those gaps?

One of the biggest challenges is the data divide.

Investors still struggle to access the full spectrum of data needed to accurately assess project viability and manage risk.

For example, embodied carbon assessments are often based on early-stage models and open-source data, which can result in accuracy variances of up to ±30 per cent, which limits their reliability for impact measurement.

The release of the NABERS tool is set to finally bring a standardised calculation methodology to Australia.

The release is anticipated to close embodied carbon calculation issues currently faced in Australia and set the pathway for all future embodied carbon calculation.

We expect that the tool and national EPD database being a publicly accessible document will motivate a lot of manufacturers to prepare and develop EPD data for their products to be included on this list and be considered for future projects.

Another major hurdle lies in planning and approvals.

Australia’s sustainability-related frameworks vary significantly by state – from NSW’s net‑zero building targets to Victoria’s stringent climate‑risk disclosures. Add in Green Star and NABERS ratings, and the regulatory landscape quickly becomes complex and difficult to navigate for both construction firms and investors alike.

The ability to navigate this regulatory maze while balancing financial return with social impact will be critical to successful impact investing.

That said, there are clear pathways for investors to overcome these obstacles – and unlock unique advantages in the process.

On the data front, investors can advocate for and implement Life Cycle Assessment (LCA) tools that track environmental impact across materials, processes, and the full construction lifecycle. Strategic partnerships with data analytics, CRE, and development advisory firms – especially those with quantity surveying expertise in the commercial real estate space – offer real-time insights into sustainability and ethical metrics that drive smarter investment decisions.

These partnerships can also open doors to working collaborations with government agencies, project owners, and fellow investors across commercial, infrastructure and residential projects. This not only helps investors better navigate local approvals and identify planning risks, but also builds the relationships needed to engage with regulators and shape policies – strengthening both their investment and ESG strategies.

Pursuing real and tangible impact

Real estate investors in Australia have a significant opportunity to embed impact at the core of their strategy – going beyond ESG compliance to unlock long-term resilience, value and purpose. As with most strategic shifts, it begins with better data. Understanding how specific decisions translate into societal, environmental and ethical outcomes is essential to making informed, impactful choices.

Success will hinge on the adoption of robust measurement frameworks, data transparency and strategic partnerships that bridge the gap between intent and action.

However they choose to approach it, impact investors should stay anchored to their ultimate goal: to drive meaningful societal and environmental change, while generating sustainable financial returns – a win-win situation for all.