Adapting to the ESG Criteria in the Real Estate Value Chain: A Multiple Case Study Analysis in Italy

Abstract

How can the adaptation to the Enviromental, Social, and Governance (hereafter ESG) criteria contribute to the sustainability of the real estate value chain? Specifically, what lessons can we learn from key best practices in Italy? Although the introduction of ESGs dates back to the beginning of the new century, to date the goals associated with the Agenda 2030 have definitely boosted their importance. In this commonly acknowledged landscape, the real estate industry seemingly constitutes no exception (e.g., Deloitte, 2021). However, field research covering the topic in this industry still appears scant. Thus, as its main value, this research project aims to address the questions above through a multiple case study analysis (e.g., Lee and Saunders, 2017) investigating on the antecedents, processes, and outcomes of some key players in the Italian real estate value chain. Specifically, the best practices object of the case analysis will be chosen among selected firms currently members of Confindustria Assoimmobiliare, the leading Association of real estate players in Italy. At its core, the project draws on the key economic role always played by the real estate industry both at national and international level. This industry, as known, currently witnesses new behavioral dynamics (e.g., Cafferata and Mari, 2015). For example, the radical changes occurring in the real estate value chain have considered important processes regarding the concentration (or outsourcing) of the construction activities; in turn, from a service perspective, these activities have grown in parallel with the equally significant growth of finance as their necessary support (e.g., Filotto et al., 2018). In fact, borrowing logics typical of the stock markets, emphasis has been increasingly put both on the economic nature of buildings and on real estates as purely investment assets (e.g., Morri and Mazza, 2013; Mattarocci and Pekdemir, 2015). Relatedly, another significant change has regarded the growing tertiarization of the advanced economic systems; in the real estate value chain, in turn, this change has contributed to the birth and development of new working processes and new professional roles absent before (e.g., Mari and Poggesi, 2014). Over time, all what we have introduced above has originated not only the relevant rethinking of the buildings’ specific features, but also the rethinking of the ways to use them. In particular, the overall organization of the construction activities has been radically modified, together with the nature of all the different players involved, at various degrees, in the production and selling of the good and services offered (e.g., Dawson et al., 2015). An evolved real estate production guaranteeing, at the same time, functionality, efficiency and (always increasing) attention towards the environment; technological and organizational innovation; demand and offer of services targeting a specific audience and real estate ownership: these are only some among the elements highlighting the ascending, in the real estate value chain, of the growingly diversified structure of the activities performed. From all this, there emerges an industry whose boundaries cannot be easily traced (e.g., Abatecola and Cafferata, 2014). In this industry, in fact, together with the traditional players, a growing amount of more specialized players is emerging, which physiologically impact on the industry’s co-evolving relationships (e.g., Abatecola et al., 2020). To date, in substance, we find ourselves in front of an industry made of players whose value chains result always more interdependent (e.g., Mari, 2011; Dobson, 2015). Relatedly, it is a matter of fact that, affecting the real estate value chain as a whole, the dynamics illustrated stress the attention towards the adoption of management processes oriented towards sustainability (e.g., Morri and Soffietti, 2013), these including ESGs. Thus, the results from this research project can be of interest both for real estate scholars and practitioners, with the latter also including policy makers. In particular, by comparing the similarities and differences from key best practices in the Italian real estate value chain, the project aims to develop a conceptual framework potentially useful to contribute to the extant literature on the topic. In parallel, the framework can result useful not only for cross-industry comparisons, but also as a “how to” guide for all those real estate players currently and prospectively committed in the adoption of ESGs.