How Trump’s Paris Exit Could Mean US$4.2bn UK Property Boost
When US President Donald Trump withdrew the United States from the Paris Agreement in January 2025, the global sustainability landscape faced significant uncertainty.
However, for the UK's green construction market, the move has created an unexpected opportunity.
With an estimated US$1.3tn in US ESG funds seeking real estate opportunities abroad, London has positioned itself as a key destination for institutional capital that no longer finds a home in the United States.
A shift in global capital
In the wake of Trump’s decision, investment flows have begun favouring markets where sustainability is a priority.
The UK’s well-established net zero policies, stringent environmental regulations and attractive green financing mechanisms have made it a preferred choice for investors looking to deploy ESG-focused capital.
Joey Aoun, Sustainability and Net Zero Lead at Savills Investment Management, notes the scale of this shift.
“When Trump pulled the US out of the Paris Agreement, few predicted the long-term impact. Fast forward, and the UK is now the go-to destination for institutional green capital that can’t find a home in the US,” he says.
Joey highlights that more than US$4.2bn is expected to flow into the UK’s green real estate sector by 2026.
London, in particular, has emerged as a global leader in sustainable investment, benefiting from its robust environmental policy framework and a growing demand for energy-efficient, net zero buildings.
The growing value of sustainable assets
Sustainability is no longer a niche concern but a defining factor in asset valuation. Green buildings are outperforming traditional structures, with higher rental premiums, increased occupancy rates, and greater long-term value.
The market is now seeing clear financial incentives for adopting sustainable practices, and those who fail to adapt risk obsolescence.
“No matter where markets move and how macros change, sustainable real estate will always be more valuable,” says Ranjeet Bhalerao, CEO and co-Founder of MapMortar, a start-up that specialises in digital mapping for net zero retrofits.
With stricter regulations on energy performance and carbon emissions, institutional investors are actively reshaping their portfolios.
They are divesting from assets unable to meet sustainability criteria and shifting towards properties that align with net zero commitments.
Green bonds and ESG-focused funds are driving this change, reinforcing the UK’s reputation as a leader in sustainable construction.
Inside the retrofitting boom
As the UK works towards its 2050 net zero targets, refurbishments and retrofits are becoming crucial to the country’s sustainability agenda.
With 80% of the buildings that will exist in 2050 already standing today, upgrading existing structures is a key priority.
The trend is already taking hold, with a surge in demand for deep energy retrofits, heat pump installations, and smart energy solutions.
The regulatory landscape is accelerating this shift.
The tightening of Minimum Energy Efficiency Standards (MEES), the introduction of the UK Green Taxonomy, and the adoption of Sustainability Disclosure Requirements (SDR) are all pushing ESG compliance from an optional benefit to a legal necessity.
“By embracing innovation, sustainability and digital transformation, we can create a built environment that not only meets the needs of today but safeguards the future for generations to come,” explains Gillian Charlesworth, CEO of the Building Research Establishment.
These retrofits are not just an environmental imperative but also an economic opportunity. Companies that proactively invest in sustainable upgrades are commanding higher valuations and stronger market positioning.
The widening gap between green-certified and stranded assets is evident, as sustainability shifts from being a competitive edge to an industry standard.
Positioning the UK as a global leader in sustainable construction
The UK’s net zero economy has already demonstrated impressive growth.
In 2023, it expanded by 9%, significantly outpacing the country’s overall economic growth rate of 0.9%. This trend underscores the increasing role of sustainability in economic resilience and investor confidence.
Ankita Dwivedi, CEO and Founder of sustainable construction firm Firstplanit, is a proponent of the financial benefits of corporate sustainability.
“In the end, 'green' isn’t just about ideology—it’s about opportunity,” she explains.
While the US has stepped back from its international climate commitments, the UK has seized the opportunity to attract capital that prioritises sustainability.
The challenge now lies in ensuring that this momentum continues, with policymakers, developers and investors working together to solidify the UK’s position as a global leader in green construction.
“The construction industry’s green momentum is building," says Lee Jones, Head of Sustainability at Hubexo, referring to the UK's sustainable construction sector.
“Whilst much more must be done, the sector is progressively aiming for a sustainable future.”
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