Conflicting logics within the real estate industry How real estate companies navigate green investments and tensions between profitability and sustainability
Typ
Examensarbete för masterexamen
Master's Thesis
Master's Thesis
Program
Management and economics of innovation (MPMEI), MSc
Publicerad
2024
Författare
Skoghäll, Tilda
Windh, Anna
Modellbyggare
Tidskriftstitel
ISSN
Volymtitel
Utgivare
Sammanfattning
The built industry is responsible for 42% of the world's annual CO2 emissions, which makes it
one of the most significant contributors to global warming. Adapting to sustainable practices is
therefore one of the most pressing challenges facing the industry in this century. One strategy
to handle this challenge is to make investments that have a positive impact on the
environment, commonly referred to as green investments. The aim of this thesis is to
investigate how companies in the residential real estate industry navigate the potential
tensions between profitability and sustainability when considering new investments.
The thesis is based on a case study, employing a qualitative research design. The data was
collected through semi-structured interviews with the case company, an investment advisory
company focused on residential real estate, and its portfolio companies.
The study starts from the premise that real estate companies are influenced by two different
logics: the logic of the market and the logic of the environment. Regarding market logic, it was
established that the real estate industry is characterised by investor requirements and
sustainability regulations that compel companies to make green investments. Additionally,
customers are unwilling to pay a premium for a sustainable home which creates difficulties for
companies trying to adjust to these conflicts between regulations and customers. To succeed
in this challenging environment, companies must integrate sustainability across their
operations and identify innovative ways to invest without increasing costs for tenants.
Regarding environmental logic, it has been observed that a greater proportion of companies
in the industry are making green investments. This is indicative of a growing norm within the
industry, whereby an increasing number of companies are focusing on sustainability work and
green investments. Furthermore, the focus is not solely on economic profitability, it also
encompasses the willingness to do good.
Finally, the interviews revealed that many of the institutional elements of the environmental
logic have influenced the market logic, leading to the conclusion that sustainability is no
longer an optional consideration for companies, but rather a necessity for maintaining
competitiveness.
Beskrivning
Ämne/nyckelord
Green investments , integration of sustainability , real estate industry , institutional theory , institutional logics , market logic , environmental logic