Why Are Clients Pulling Back on Sustainable Construction Investments?

A few years ago, sustainability was a major driving force in construction. Developers and contractors were actively integrating green technologies and clients were more than willing to invest in sustainable solutions. By early 2025, the enthusiasm seemed to be waning. Conversations that once centered on achieving net-zero buildings or using circular materials were shifting toward cost-cutting, project feasibility and risk mitigation.

This guide brings together European Architectural Barometer and Contractor Monitor findings from 2018–2023 and commentary published in 2025. Interest in sustainability, willingness to invest and actual project spending are different measures; the dated findings below are not new 2026 fieldwork.

This shift is concerning – not just for businesses looking to be future-proof but for planet-wide environmental goals. The research discussed here shows that interest in sustainability does not automatically become willingness to invest. What’s behind this slowdown and what can the industry do? Here’s what you need to know.

The Numbers: Interest and Willingness to Invest

The Q4 2020 Baseline: Country Differences

The extent to which sustainability plays a role in projects by European architects varies a lot. However, in all countries except Poland, a majority of architects are involved in projects in which sustainability is one of the aspects that play a role in the design. What stands out is that a third of Polish architects reported in 2020 that they are still not aware of the concept of sustainability. In this, Polish architects are lagging behind other countries. The Netherlands and the UK, on the other hand, are ahead of the other countries. There, over three-quarters of architects are actively involved in projects in which sustainability plays a role, quite a lot more than in the other six countries.

In many European countries, the effect of sustainable solutions being taken into account in many projects is evident. But in many cases, architects will have to propose solutions that are not more expensive than other less sustainable solutions. The willingness to invest in sustainability projects remains low among principals. No significant development can be seen in this yet. Architects in all European countries experience a demand for sustainable solutions from these parties, but only one in five principals also seem willing to invest in them. The willingness to invest is relatively high in the Netherlands, the UK and Belgium, which provides a plausible explanation for Dutch and British architects being more involved in projects in which sustainability plays a role.

How Willingness to Invest Changed Between 2018 and 2023

To measure the temperature of the topic of sustainability in the European construction sector, we regularly ask architects from eight countries whether their clients ask for sustainable options. Sustainable options often come at a higher price, which is why we also ask architects what share of their clients is willing to pay that price.    

The results of our European Architectural Barometer show that the share of clients of architects that show interest in sustainable options has increased steadily over the past years. This is reflected in the decreasing share of clients who do not ask for sustainable options. That share has slowly decreased from 27% in 2018 to 19% in 2023. Architects see a vast share of their clients showing interest in sustainable options.  

Interest does not mean that clients are willing to pay the price for those sustainable options, however. In contrast to the gradual and consistent trendline of interest in sustainable options, the willingness to invest in them has fluctuated wildly over the past few years. In 2018, architects reported that 35% of their clients were willing to invest in sustainable solutions, while two years later, that share had dropped dramatically to a mere 20%. 

After the threat and turmoil of those COVID times disappeared, architects saw their clients’ willingness to invest in sustainable options return slowly, up to a share of 27% in 2022, and 31% in 2023. And that is where it gets interesting because that growth seems rather low compared to the surge in attention to sustainability over the past year or so.   

Contractors and Architects: Different Client Profiles

The H1 2023 Contractor Monitor provides a separate contractor perspective. These are different professional samples, not the same clients followed from design through construction.

But what about other stakeholders in the building construction value chain? For a more solid picture of willingness to invest in sustainability in the building construction sector, we also asked general contractors from eight European countries to what extent their clients are asking for and willing to invest in sustainable solutions.   

Similar Willingness to Invest

According to the contractors we interviewed for the H1 2023 Contractor Monitor, in 30% of the cases, their clients ask for sustainability and are actually willing to invest in it as well. This share varies per country, though. The highest share of contractors’ clients willing to invest in sustainability is found in the UK, Germany, and the Netherlands. In Poland, that share is only 15%, however.      

When taking the answers of contractors from all countries together, the share of 30% of clients willing to pay for sustainability is almost exactly the same as the share of architects’ clients that were willing to invest in sustainable solutions. So, the contractors’ perspective confirms what we measured among architects, at least when it comes to willingness to invest.  

Contractors’ Clients Asked Less Often

Although there is a similar willingness to invest in sustainable solutions among the clientele of contractors and architects, there is a significant difference when it comes to asking for sustainable options in the first place. In the H1 2023 results, in 36% of the cases, clients of contractors do not ask for sustainable options at all. Among architects’ clients, that share was only 19% in 2023. 

So it appears that on average, clients of contractors are less interested in more sustainable options than clients of architects. A possible explanation for this, is that sustainable options are more often taken into account in new-build projects. Architects are generally more involved in new build but contractors more often also do renovation projects, in which sustainable options are generally less prevalent or applicable than in new build.  

This line of thought provides an outlook for the adoption of sustainability. Pressure on the new build segment, for instance, due to higher costs for material and labour or due to higher interest rates, could severely hamper the adoption rate of sustainable construction in projects by contractors and architects alike. Higher costs make investors more hesitant, and in many cases, more sustainability requires higher investments.  

Economic Uncertainty in the 2023–2025 Discussions

Again, there may be an economic reason. The construction industry boomed after the pandemic but has slowed down a bit more recently, especially in the new-build segment. This is a consequence of the rising costs of both construction materials and labour and of higher interest rates. That means developing a new building has gotten more expensive, which has consequences for the willingness to pay extra for more sustainable options.  

Crisis-Driven Change: The 2025 Outlook

There was a spike in sustainable attention around 2022, driven mostly by the war in Ukraine and skyrocketing gas and energy prices. Suddenly, the drive for sustainability was less about climate and more about energy independence. No matter the denominator, things shifted to alternatives. We adopted state-backed incentives to move away from fossil-based systems, creating a short-term surge in electric heating, renewables and energy retrofits.

As energy markets stabilized and gas bills shrank, so did the perceived urgency. Post-pandemic budget constraints limited public investment. Private developers, hit by high inflation and even higher interest rates, pulled back. By 2024, waiting for more favorable conditions resulted in builds across Europe dropping, especially in Germany and France.

What’s Holding Sustainable Construction Back?

Quite simply, a lot. Clients are pulling back because real-world obstacles are making them second-guess their investments. From labor shortages and rising costs to political shifts, quite a few things are making sustainability a tougher sell.

High Costs and Funding Challenges

Sustainable solutions promise long-term savings, yes, but they also require significant upfront capital. Clients are well aware of this, and grow increasingly cautious, particularly with uncertain economic and political conditions. Government support for green initiatives varies by country, making long-term financial planning difficult.

When the Cost Plan Arrives

The September 2025 discussion of the cost–sustainability trade-off focused on what happens between the brief and the specification.

The first cost plan comes back, and the air in the room shifts instantly. Discussions that were about impact and values turn into talks of premiums and payback periods. Everyone starts scanning the spreadsheet for places to trim. And sustainable measures become a line item. And line items are negotiable.

The psychology here is critical. As soon as sustainability is shown as a separate package, it feels optional. If the PV system, higher-grade insulation or timber façade are grouped under a heading called “sustainability upgrades,” that’s usually code for “cut this if we need savings.”

Lifecycle Costs and Risk Premiums

A big one. Developers carry the capital cost and tenants carry the operational cost. That split incentive breaks most arguments. If you show a five-year payback, and the developer plans to sell in three, they won’t care. Add to that higher discount rates used in many financial models, and 10-year savings look irrelevant.

Contractors don’t like unknowns. If they don’t know how to install it, they load risk into the price. If supply chains are thin, they load even more. If detailing is new, they add on time, which inflates prelims. That risk premium makes sustainable options look even pricier, even when the base cost is competitive. The size of that risk premium can differ between projects and markets.

Labor Shortages and Knowledge Gaps

When clients do want to invest, there’s often a lack of skilled professionals to actually execute sustainable projects. Practical training and knowledge of sustainable materials can help close the gap between sustainability demands and a savvy workforce.

Material and Technology Adoption in the May 2025 Outlook

It’s not just about whether sustainability is strived for – it’s about what that actually means and how it’s done. Even among architects and contractors actively involved in sustainable construction, the use of advanced sustainability initiatives remains limited.

For example… only 10% of contractors and 8% of architects reported using material passports.

These are the professional groups identified in the May 2025 outlook; that article did not specify a separate fieldwork period for these figures.

How Can Industry Professionals Adapt?

Sustainability isn’t necessarily off the table, but it does need a more practical approach that keeps the conversation going. Construction professionals can shift their take on eco-friendliness to make these solutions more accessible and financially viable. Here’s how…

Make the Sustainable Specification Easier to Defend

Is there a way to stop sustainability dying at value engineering? Maybe. The reality is that every project negotiation is a process of its own, and there’s no secret strategy that’ll work on everyone. All you can do is stay on top of new developments and keep talking green. And that’s not insignificant, because sustainability gets a strong and continuous pitch. You’ll change some minds, and the practice will stack up. Here’s what you could do.

• make sustainability part of the base specification, not an extra upgrade
• use whole-life cost models side-by-side with capex, not buried in an appendix
• bundle measures; a “sustainable spec” that includes insulation, glazing, HVAC and renewables together is harder to pick apart
• bring contractors in early to de-risk unusual products and cut contingency loading

More Cost-Effectiveness

Clients are more likely to invest if they see immediate benefits. One way to demonstrate these is by using hybrid building materials that balance affordability with sustainability. Prefab and modular constructions, for instance, can help reduce material waste and labor costs, making green projects more appealing. Additionally, smart energy management systems can reduce operational expenses over time, which can help offset initial project costs.

Push for Policy Stability and Incentives

Policy uncertainty is a major one. The industry needs to actively engage with policymakers to push for stable, long-term incentives and standardized regulations that create a more predictable investment landscape. Green financing options – like sustainability-linked loans – can provide financial incentives for companies to prioritize sustainable practices.

Addressing the Knowledge Gap

Education is key to overcoming hesitation toward sustainability investments. Construction professionals – and clients too – need practical, real-world and hands-on education to make informed decisions about sustainability. Here, collaboration with suppliers who provide detailed, verifiable sustainability data on materials will be crucial.

Prioritizing Renovation Over New-Build

When new-build activity is slow, renovation projects are a realistic and opportune option to showcase sustainability. Retrofitting existing buildings with energy-efficient solutions, such as improved insulation and alternative energy sources, can produce measurable carbon footprint reductions and performance improvements. Addressing grid capacity limitations is essential to facilitate the expansion of local renewable energy generation.

The Bottom Line

2030 is getting closer and closer, and construction clients are making tough choices: while they see the value of sustainability, short-term financial pressures are making them hesitant. This doesn’t mean the industry is at a standstill, but rather that professionals need to adjust their strategies to align with the current economic and political framework.