Homes, land and infrastructure offer low hanging fruit for net zero investment
Andrew Teacher, founding partner, Lauder Teacher and chair of NZI's upcoming Real Estate Summit argues that real assets have a key role to play in helping the UK transition to net zero
Sustainability has a jargon problem. Net zero can mean many things to many people, and sometimes the “acronym" bingo around disclosure systems – ISSB, IFRS, TCFD and CPD to name just a few – can mask thin environmental gains.
But look past the noise and three opportunities stand out for long-horizon investors who want returns they can touch and measure: upgrading homes, restoring land, and delivering green infrastructure within structured platforms (as in asset-backed operational companies).
First on the list is housing. Britain’s are old, leaky and inefficient. Residential retrofit is not just a regulatory necessity but “a huge value creation story” according to Anna Moore of Domna Homes, a retrofit one-stop-shop working with major social landlords and investors. It’s a “trillion-pound global asset class hiding in plain sight”, she says.
The UK has over 13 million substandard homes and requires more than £570bn in upgrades to meet today’s standards. Far from being an insurmountable challenge, it is the chance to unlock over £800 billion of capital value uplift by transforming “stranded assets” into future-proofed, low-carbon resilient homes - at a time when building new has never been more challenging.
That is not to suggest it’s a case of one or the other. Domna positions retrofit as “capex due-diligence – or a common-sense approach to solving a trillion-pound problem.” And results show that the value of combining big data with delivery can deliver day one results. By analysing outcomes from more than 20,000 retrofit jobs, Domna can identify where upgrades generate the greatest operational savings and valuation uplift. As Moore puts it: “By crunching information on costs and measuring performance and valuation before and after works take place, we can develop a laser-guided view on how different types of property will perform.”
From Birmingham to Ealing, councils are looking at tackling the challenge directly as local finance chiefs recognise cash literally going up in smoke. Major investors such as L&G and PIC both have strategies looking at upgrading social housing.
The investment case is reinforced by social impact. Many of the UK’s worst-performing homes are occupied by the poorest households, worsening the cost-of-living crisis through higher energy bills. Retrofitting therefore delivers not just decarbonisation but tangible improvements in health and affordability.
Second, land-based sustainability strategies are becoming more mainstream. The UK’s mandatory 10% Biodiversity Net Gain (BNG) requirement, introduced in the Environment Act 2021, has created a clear compliance market. Developers who cannot achieve BNG on-site must purchase off-site units or statutory credits, providing investors with predictable, policy-backed revenue streams.
Natural capital models are underpinned by “habitat banking,” where landowners proactively create habitats that generate a pipeline of BNG units for sale. These projects can also deliver verified carbon credits, with UK Woodland Carbon Units currently trading between £10 and £30.
It's a nascent but growing market – and the supply-demand imbalance for high-quality credits means early investors can secure long-term positions. The appeal is particularly strong where natural capital can be layered with other land-use strategies – for example, combining biodiversity projects with solar or regenerative farming – creating diversified income streams from the same land base.
None is as straight-forward as perhaps a toll road or a housing project may be - but that is part of the wider opportunity: to institutionalise nascent asset classes.
The final example is of a firm doing just that with a set of opportunities is emerging at the intersection of real estate, infrastructure, technology and sustainability. New York-based GreenPoint, a real assets investment platform which recently closed its inaugural flagship fund with over $1bn in equity commitments from global institutional investors, including some UK pension cash.
GreenPoint’s strategy is not just to own assets but to build vertically integrated platforms that combine the asset, the operator and the enabling technology. One of its flagship initiatives is Lysara, a business dedicated to expanding EV charging, fleet infrastructure and urban densification across Europe, with ambitions to scale towards £1bn of investment.
The lesson for institutional capital is that platforms like this move beyond traditional asset ownership. They use operational expertise, technology and scale to transform under-served infrastructure into investable real assets. Their structure allows capital to flow at scale while ensuring measurable, reportable progress toward net zero goals.
Net zero may remain a contested term, defined by competing acronyms and disclosure frameworks, but the routes that matter most are tangible. Homes, land and infrastructure are not abstract concepts – they are the foundations of everyday life.
In the end, the credibility of net zero will rest less on vacuous marketing but on the clear, provable impact that can be measured. And with the political context around net zero volatile on both sides of the Atlantic, building resilience in this arena really does begin at home.
