What is a key reason for demand increase related to ESG factors?

The increase in demand related to ESG (Environmental, Social, and Governance) factors is fundamentally tied to the growing recognition among investors and consumers of the importance of sustainability. Option B highlights the heightened demand for environmentally responsible assets, which stems from a broader societal shift towards valuing sustainable and ethical practices.

Businesses and investors are increasingly aware that properties that adhere to ESG principles not only contribute positively to the environment but also often realize better long-term financial performance. These assets are seen as lower risk and more resilient to regulatory changes related to climate change, energy efficiency, and resource conservation. The increased awareness and concern for environmental issues among consumers, along with governmental and institutional support for sustainable practices, underpin this heightened demand.

In contrast, lower construction costs, reduction in regulatory standards, and expansion of outdated properties do not address the shifting priorities of investors and consumers towards sustainability. These factors may influence other aspects of real estate but do not directly correlate with the significant uptick in demand for ESG-compliant assets.