Flex and coworking operators still in the early stage of ESG adoption

Operators are still in the early stages of their ESG journey, according to the first ever ESG survey undertaken in the flex and coworking sector, carried out by technologywithin.

Between February to April 2025 technologywithin conducted a survey and interviews with flex and coworking operators, with survey respondents predominantly from the UK (78 per cent) and the remaining 22 per cent representing operators from Europe and other global markets.

Among respondents, 19 per cent currently have no ESG policy, while 22 per cent are in the process of developing one. However, there is progress, with nearly half (47 per cent) having already created a combined ESG policy, and 25-28 per cent having introduced additional policies focused on areas such as diversity, equity and inclusion (DE&I) and sustainability.

Progress remains relatively recent. A significant portion (41 per cent) have only developed their policies within the last two years, while just 19 per cent have had an ESG policy in place for more than three years. Encouragingly, 59 per cent of operators review their policies annually, indicating efforts to embed ESG considerations into both strategy and operations.

The UK is legally committed to net zero by 2050 and has set an interim target to reduce emissions by 78 per cent by 2035. With buildings contributing to 42 per cent of global emissions (Architecture 2030) – 15 per cent from embodied carbon (building materials) and 27 per cent from building operations – and global building floor areas set to double by 2060 (International Energy Agency), it has never been more important to move forward with business’ ESG efforts.

Samuel Warren, Sales and Marketing Director at technologywithin said: “At its heart, ESG means having a well-run, ethically guided business, which is thoughtful about its impact on the planet and community. Practically it means having meaningful policies in each of these areas, setting objectives and creating clear plans to deliver.”

The technologywithin survey demonstrates that leadership ownership is a key indicator of how deeply ESG is embedded in an operator’s business strategy. Warren added: “Alarmingly, 18 per cent of respondents report that no one in their senior leadership is responsible for ESG, while only nine per cent indicate that responsibility is shared across the board. The most common roles overseeing ESG initiatives are the Managing Director/CEO and the Operations Director, both at 27 per cent. To bridge the leadership gap, some operators are appointing dedicated ESG specialists (24 per cent), a trend that is expected to grow.”

Adding to the need to accelerate the ESG journey, pressure from stakeholders to improve ESG transparency is increasing. Nearly half of respondents (49 per cent) rate ESG reporting pressure between 5-7 on a scale of 1-10, whilst a further 27 per cent experience significant pressure, rating it between 8-10.

When it comes to new client demands, 51 per cent of operators reported that no more than 20 per cent of their new clients request ESG credentials. However, this trend is shifting, with 27 per cent stating that 40-80 per cent of new clients ask ESG-related questions before signing a deal. The top client priority is sustainability, with 84 per cent identifying environmental concerns as the most common inquiry (above social and governance).

Client ESG engagement extends beyond contract signing, however. A strong majority (73 per cent) of operators already include ESG updates in their ongoing communications, via newsletters, social media, websites and annual reports. And internal engagement is just as crucial.

Implementation is the challenge 

Implementing ESG policies across diverse, legacy portfolios presents significant challenges for many operators. Operators cite major barriers such as budget constraints (64 per cent), unclear return on investment (42 per cent), process complexity (33 per cent), and difficulties in uniform policy implementation across sites (30 per cent). Crucially, 46 per cent of respondents also acknowledge a lack of expertise as a key barrier to progress. 

When asked about factors that would accelerate ESG adoption, financial incentives emerged as the top motivator (71 per cent), followed closely by enablement from knowledge-sharing initiatives, including industry best practices and peer discussions (63 per cent). Other important drivers include government incentives such as tax breaks and grants, as well as support from landlords and property owners (both at 59 per cent). Occupier demand is also a factor, with 56 per cent of operators stating they would be influenced by tenant expectations.

Operators are struggling with measurement but drawn to certification 

ESG tracking and measurement remain in its infancy. Currently, 36 per cent of operators do not measure any ESG initiatives, and 33 per cent rely on manual methods such as spreadsheets. Only 20 per cent use external auditing services or dedicated ESG platforms, with cost likely being a barrier to broader adoption.

A critical question is whether operators are measuring their portfolio’s carbon footprint – currently, only 40 per cent do.  This is likely due to the challenges of gaining information from the landlord in leased spaces.

Polly Bryan, Implementation & Quality Director, Orega, said: “The situation that almost every flex space operator faces is that we have diverse portfolios, with buildings of differing ages and states of maintenance, owned by a cross section of landlords, whose level of interest in supporting a consistent set of sustainability and wellness goals varies hugely.”

To bolster credibility, nearly half (46 per cent) of operators have obtained some form of ESG certification, with BREEAM, B Corp, Planet Mark and the WELL Coworking Rating amongst the most recognised standards.

Paul Nellist, Managing Director of Koba has a clear approach to defining what matters when it comes to certification: “What I’ve learnt is that landlords are not interested in which certification you’ve got. They’re more interested in the story and what you can do for their building. Having a WELL Coworking Rating certified sticker on our front door in Barbirolli Square Is probably 100 times more valuable to the landlord than a generalist certification because it’s real and it attracts the best companies.”

Environmental initiatives show strong progress

Operators appear to be more advanced in action than in policy. An overwhelming 97 per cent of respondents have implemented active ESG initiatives with the top environmental priorities including:

• Recycling and waste reduction (81 per cent)
• Energy-efficient lighting and appliances (69 per cent)
• Renewable energy adoption (59 per cent)
• Sustainable procurement policies (44 per cent)
• Use of eco-friendly building materials (28 per cent)
• Paperless office operations (20 per cent)

Who bears the financial responsibility for ESG investments is contentious

A key point for debate – bearing in mind how much of a barrier budget constraints pose to action – is who should bear the financial burden of improving building sustainability. Only 21 per cent believe operators should bear the full cost. The majority (63 per cent) favour a shared financial responsibility between landlords and operators, highlighting the need for collaborative investment in ESG initiatives.

Social impact and community engagement

Beyond environmental concerns, operators are considering the social value creation opportunity through their spaces, whether that is the local geographic community, or by supporting Not for Profits.  A significant proportion:

• Support charities or social causes (75 per cent)
• Partner with local businesses (71 per cent)
• Host free community events (57 per cent)
• Offer coworking scholarships or incubator programs (10 per cent)

The ESG journey has started but there’s a long way to go 

So, where do operators consider they are on the ESG journey? When asked to rate their ESG progress on a scale of 0-10, operators assess their position at an average of 5.3, indicating that most see themselves as midway on the ESG journey

But what could help them progress more quickly? The majority want clarity on the long-term financial benefits (72 per cent) and cite that knowledge sharing and the creation of industry best practises are vital to continued improvement (63 per cent). Several operators cite support from their investors ESG teams as key to their analysing the long-term value of investing in ESG initiatives and creating actionable plans.

To download the full report click here.