ESG in real estate valuation in Portugal (IVS 104)

ESG in real estate valuation — Portugal (IVS 104)

Under the International Valuation Standards effective 31 January 2025, IVS 104 Data and Inputs has an Appendix on ESG: valuers should be aware of relevant ESG legislation and frameworks and consider significant ESG factors to the extent they are measurable and reasonable. In Portugal this applies to IVS and Red Book valuations alike. Guide by José Covas FRICS, Chair of the IVSC ESG/Sustainability Working Group.

José Covas FRICS is a Portuguese real estate valuation professional and RICS Registered Valuer. He chairs the ESG/Sustainability Working Group of the IVSC Standards Review Board (IVSC SRB update, March 2025, p. 35), chairs the RICS Standards Committee (since April 2026, RICS) and is RICS Principal Assessor for Europe.

What IVS says about ESG

Definition. The IVS Glossary (10.08) defines ESG as “the criteria that together establish the framework for assessing the impact of the sustainability and ethical practices, financial performance or operations of a company, asset or liability”. [IVS 2025]
Where it sits. IVS 104 Data and Inputs carries an Appendix, “Environmental, Social and Governance Considerations”. Appendices are part of IVS: “all IVS General Standards, Asset Standards and Appendices must be followed” for an IVS-compliant valuation. [IVS 2025]
Awareness. “The valuer should be aware of relevant legislation and frameworks in relation to the environmental, social and governance factors impacting a valuation.” [IVSC]
Significance. “The impact of significant ESG factors should be considered in determining the value of a company, asset or liability”; they “may impact valuations both from a qualitative and quantitative perspective and may pose risks or opportunities”. [IVSC]
Limit. ESG factors are considered “to the extent that they are measurable and would be considered reasonable by a valuer applying professional judgement”. ESG is evidence about risk and value, not a presumed premium or discount. [IVSC]
Dates. This IVS edition was published 31 January 2024 and is effective for valuations on or after 31 January 2025. [IVS 2025]

How the RICS Red Book side applies it

RICS’s global professional standard ESG and sustainability in commercial property valuation (4th edition, effective 30 April 2026) supports the application of the Red Book Global Standards and IVS, both effective 31 January 2025. [RICS]
RICS says it confirms requirements around ESG-related cost information, sets out the difference between valuation and strategic ESG risk advice, and for the first time includes jurisdictional coverage for the UK, EU and Australia. [RICS, PDF]
For Portugal, the EU jurisdictional section is the relevant one. Read it directly; this guide does not summarise Portuguese law.

Checklist: ESG in a Portuguese valuation instruction

Ask which standard the report states compliance with: IVS, RICS Red Book Global Standards, or both.
Agree in the scope of work which ESG data the valuer will receive (energy certificate, physical-risk data, capex plans) and which the valuer will not verify.
Expect the report to say how significant ESG factors were reflected in inputs (rent, yield, costs, void, obsolescence), or why they were not, given the evidence available.
Keep valuation separate from strategic ESG risk advice; RICS distinguishes the two.
Check the valuer is competent for the asset and market (for RICS work: RICS Registered Valuer).

FAQ

Does IVS require ESG to be considered in a valuation?

Yes, where significant. The IVS 104 Appendix says the impact of significant ESG factors should be considered, to the extent they are measurable and reasonable under professional judgement.

Which IVS standard covers ESG?

IVS 104 Data and Inputs, through its Appendix on Environmental, Social and Governance Considerations, in the edition effective 31 January 2025.

Does this apply in Portugal?

It applies to any valuation that states compliance with IVS or the RICS Red Book Global Standards, including valuations of Portuguese property.

Does ESG always increase or reduce value?

No. IVSC says ESG factors may pose risks or opportunities; the valuer reflects them only as far as market evidence supports.

Which RICS standard covers ESG in commercial property valuation?

ESG and sustainability in commercial property valuation, 4th edition, effective 30 April 2026, which includes EU jurisdictional coverage.

Who is José Covas in IVSC ESG work?

He chairs the ESG/Sustainability Working Group of the IVSC Standards Review Board, listed in the IVSC SRB update of March 2025.

Cite this page

Covas, J. (2026). ESG in real estate valuation in Portugal (IVS 104). josecovas.com. https://josecovas.com/guides/esg-real-estate-valuation-portugal/

Personal views of José Covas. Not a statement of IVSC or RICS, not an official interpretation of any standard and not valuation or legal advice. Quotations from public IVSC and RICS sources, checked 4 Nov 2026.