For anyone who made it to Glasgow for COP26, one of the biggest takeaways has to be the youth voice. The young were out in their droves protesting peacefully but purposely. Their purpose was to stop the politicians and businesses from just talking and to transition them to action. What the powerful youth no longer wanted to hear was declarations of targets and pathways. What they wanted was real action and evidence of change.
As one of the biggest contributors to the climate challenge, real estate also has the opportunity to be one of the biggest contributors to the solution. So as part of EG’s Sustainability Live event – held during COP26 – we gathered leaders from across the built environment to find out what real estate was, could and should be doing today to turn its well-intentioned pledges of reaching net zero carbon into real life action.
Expert speakers
- Greg Borel, managing partner, Ampersand Partners and CUBE
- Amira Hashemi, sustainability manager, Frasers Property UK
- Bill Hughes, head of real assets, Legal & General Investment Management
- Andrew Leiper, net zero carbon lead, Max Fordham
- Jane Wakiwaka, environmental sustainability director, the Crown Estate
For Bill Hughes, head of real assets at Legal & General Investment Management, what real estate needs to be doing right now is casting off its image as the villain and becoming the sustainability superhero.
“You could argue that in prior generations this industry has been the bad guy,” he says. “We have consumed on a grand scale. We have created buildings that are over specified. We haven’t cared too much about buildings for 15 years and then knocked them down and started again. We have also been responsible for the unequal distribution of wealth in society, where the rich get richer and the poor get poorer.
“But if you step back from that, why wouldn’t we reverse that? Why wouldn’t we actively think about conserving energy? Why wouldn’t we aim to be net positive rather than net zero? Why wouldn’t we think about levelling up? Why wouldn’t we think about how society could benefit from our activity, if not equally, in a much more sensibly, fairly distributed way?”
Bye-bye bad guy
“For me,” says Hughes, “that’s the big challenge about where the industry is at now and whether or not we are ready for it. I’m fed up with being slated as the bad guy. Now is the time to maybe change that.”
Changing that view will require real examples of good behaviour and best practice. And like all the other experts at EG’s Sustainability Live, the agreement was that this could not be done alone and should not be done in competition.
“The industry has to change as a whole and you need collective strength and force to do this,” says Greg Borel, managing partner of Ampersand Partners and CUBE. “I think we are at a turning point because net zero has been driven largely by competitive behaviour so far – my net zero versus your net zero. But what does it mean for any portfolio to say I’ve achieved net zero by 2030 if the planet is on a 5°C trajectory? Net zero is collective. It’s a zero-sum game in a good way that needs to be achieved.”
Borel, through his CUBE competition, which seeks to gamify energy usage in buildings, is trying to get the real estate community to compete on everything but the race to net zero.
“Compete on location, compete on design, compete on service, compete on everything you’ve got, but maybe not on net zero,” he says. “There is a lot of best practice sharing, a lot of knowledge sharing that can happen. Imagine the power of the big portfolios coming together to shape the supply chain to send some very strong market signals on circularity on low-carbon materials, for example. This is what’s going to enable the big step changes that happen next.”
Collective action
For Amira Hashemi, sustainability manager at Frasers Property UK, it is about making its actions as a landlord have a knock-on effect with its occupiers and the surrounding community.
“We are taking a really active approach focusing on how we can get our occupiers to utilise active travel coming in and out of our business parks,” she says. “Through that we are making the air cleaner around the area and also reducing emissions for our occupiers.”
She says around 20% of its occupiers by value have made their own commitments to reaching net zero and that with Frasers providing the infrastructure and facilities to enable its property users to reach their own targets, it not only brings landlord and tenant closer together but enables both to make a real difference.
Jane Wakiwaka, environmental sustainability director at the Crown Estate, is impressed with the momentum being built by the property sector but, like the young people at COP26, she wants more – and wants it faster.
“It’s great that there is momentum, but we need to build momentum, we need to move quicker,” she says. “One of the things we as a sector need to focus on is how do we invest in skills? We need to be investing in the skills, particularly around our facilities managers, property managers, as well as the wider supply chain. We also need to encourage innovation and much more agility. We just need to be moving a lot quicker as a sector so that we get to our respective net zero goals.”
Strong leadership
For Max Fordham’s net carbon zero lead, Andrew Leiper, that movement comes from good leaders.
“I have seen lots of young people looking for change and protesting for change,” he says. “The thing that makes change in life is good leadership. Leaders now need to be setting a good example, setting businesses on course to make the right transition and giving younger people the space and the opportunity to keep that energy and vigour going.”
Good leadership, collaboration and competition on everything, but getting to net zero first, all make for great ways to accelerate real estate’s transition from the bad guy to the good, but it will be regulation, policy and what the customer wants that will drive real action across the whole of the sector.
“We do need the right sort of policy and regulatory framework to be able to drive things forward,” says Wakiwaka. “But there is also a lot of disruption that is currently happening in terms of what real estate actually means, in terms of how people are working and living. And I think for us to continue to exist as a sector, we need to adapt to that, and carbon is one of the areas that we have to include.”
LGIM’s Hughes wants the sector to show off its positive credentials. For those young protestors asking for action not targets, he says those in the industry that are already the good guys need to be shouting louder.
“The organisations that are making a positive contribution and thinking it through and doing the right stuff need to show examples of what they are doing,” says Hughes. “They need to shout loudly about it and they need to be in the face of government and policy decision-makers. The industry can do a lot, but I do think the policy framework is going to have to be there to help it.”
To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews
