Crude oil prices have broken the $100/b mark four times in the last 25 years, each time triggered by a sudden global crisis. From the 2008 financial crash and the ‘Arab Spring’ to the invasion of Ukraine and escalating tensions in the Middle East, history proves one thing: energy volatility is not a rare anomaly. It is a recurring feature of the global economic landscape.

For real estate investors, these geopolitical shocks translate directly to the balance sheet. Rising energy costs erode occupier affordability, increase operating expenses and affect property values.

In this environment, passive assets can become liabilities. Building resilience requires a shift from defensive risk management towards a broader focus on performance. Sustainability is no longer simply a compliance exercise. It has become an important driver of physical, financial and competitive performance.

Moving past data
Many property owners become trapped in the data collection phase, treating reporting as the finish line. While audit-ready data is essential for accurate risk modelling and compliance, data alone does not lower an energy bill or protect asset value. It is the starting point for action.

Leading organisations are increasingly moving beyond manual tracking and using digital tools to turn sustainability data into operational improvements. Rather than becoming absorbed in utility bills and reporting requirements, asset managers are using more accurate and timely data to identify opportunities for action.

By benchmarking performance across portfolios, investors can identify underperforming assets more quickly and prioritise interventions where they are likely to have the greatest impact. The aim is not simply to collect more information, but to use it to guide decisions that improve performance before the next period of market disruption.

Investing for resilience
A common misconception is that sustainability initiatives are a drain on short-term liquidity. In reality, targeted investments in asset efficiency can strengthen long-term financial resilience.

Deploying capital into building upgrades such as smart building technologies, modern heating, ventilation and air conditioning (HVAC) systems, high-performance insulation and on-site renewable energy generation can deliver multiple benefits.

Energy-efficient buildings often attract stronger occupier demand and help reduce vacancy risk. They can also lower exposure to energy market volatility by reducing baseline operating costs. Advances in investment planning tools also allow managers to assess retrofit options across portfolios and direct capital towards projects that offer the strongest financial and operational returns.

A common misconception is that sustainability initiatives are a drain on short-term liquidity. In reality, targeted investments in asset efficiency can strengthen long-term financial resilience.

Performance is not static
Given the volatile nature of global politics and energy markets, a set-and-forget approach is increasingly difficult to justify. Maintaining performance requires continuous monitoring and ongoing improvement.

By establishing robust baselines and tracking asset performance before and after sustainability interventions, owners gain a clearer understanding of outcomes and returns. Sustainability becomes less of an abstract corporate objective and more of a measurable component of asset performance.

At portfolio level, these insights can support capital allocation decisions based on evidence rather than assumptions. They can also help demonstrate to stakeholders, lenders and regulators that physical and transition risks are being actively managed.

A strategic imperative
The past two decades have shown that resilience cannot be built in the middle of a crisis. It must be embedded into portfolio strategy long before disruption occurs.

Attitudes towards sustainability are changing. Some organisations still view it primarily as a cost, while others increasingly treat it as a contributor to long-term asset performance. Asset owners that understand how their buildings are performing and act quickly to address inefficiencies are likely to be better placed to navigate future periods of uncertainty.

Energy volatility shows little sign of disappearing. For investors, the challenge is no longer simply understanding energy risk, but determining how quickly portfolios can respond to it. Sustainability is becoming an increasingly important part of that response.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘What is EnCO, and why does it matter? Building an energy conscious future together’. Why is so much energy efficiency work not optimised after its launch, and what, if anything, can we do about it, asks Peter Allan, Executive Director of EnCO.
• ‘Vulnerabilities and opportunities: rebuilding the UK’s energy resilience’. The resilience of the UK’s electricity system, which is recognised as critical to national security, is being tested as never before, writes Stephen Horrax, Director of Energy, UK & Ireland, at global engineering and consultancy firm Ramboll.