Does Greater Energy Performance have an Impact on Real Estate Revenues?

In order to further mitigate negative environmental impact, the European Union (EU) has adopted the so called “20-20-20” goals, in which a (primary) energy reduction target is included. Subsequently, the Energy Performance Certificate (EPC) for buildings (via the Directive on the Energy Performance of Buildings) has been implemented in EU member states. In this paper, we examine the impact of EPCs on office revenues. By and large, we find that better EPC ratings have a positive and significant effect on revenues. This research area is important as improved energy efficiency in the built environment is necessary in order to reach the EU reduction target.