The coronavirus pandemic has changed myriad aspects of how real estate businesses operate in just a matter of weeks. And as company leaders get to grips with how they can support colleagues, customers and the communities in which they operate during an unprecedented crisis, their strategies around environmental, social and governance issues are firmly in the spotlight.
“Any kind of challenge that you get is going to be an opportunity for companies to look at what they do and their role within society – both broadly, but then more locally within their assets,” says Louise Ellison, group head of sustainability at Hammerson. “And I would certainly hope that all businesses, where they are able to, are continuing to support those local community relationships.”
Ellison spoke alongside a group of her peers on an EG podcast to discuss how property can react responsibly to the Covid-19 pandemic. Also on the panel were Sarah Ratcliffe, head of the Better Buildings Partnership; John Davies, head of sustainability at Derwent London; and Philippa Gill, a director at Evora Global.
EG’s guests were unanimous that the unfolding situation the world faces presents great challenges for the real estate industry – but also the chance to learn valuable lessons and to reshape strategies around sustainability.
Derwent’s Davies hopes this crisis will lead to companies and consumers becoming more “resource appreciative”, the lockdown encouraging “a little less of a throw-away attitude”.
“That permeates across a number of different elements in the sustainability field, whether the resources that we use to build things or to power things,” he says. “I think people are beginning to get a little taster of, if things are being rationed or are no longer available to you, a slightly more inventive and appreciative attitude to things.
“Hopefully some of that might be able to filter back into their thinking within real estate. I think that is something that we can take away as real estate professionals to inject back into built assets and how we manage them – a wake-up call, if we did need another one.”
Rulebooks out the window
The pandemic is, of course, a very different type of challenge to the one company leaders have been working to address in the climate crisis. But will this crisis too help to reshape what is wanted from the built environment and how companies’ sustainability efforts should reflect that?
Ratcliffe thinks so. “In sustainability terms, it will be interesting to see how challenges are reframed as a result of what we are going through at the moment,” she says.
“I think the S in ESG will become more important, will come more to the fore in our minds… In terms of issues such as climate change, what we are going through is a crisis which really makes us focus on ensuring that the assets we do have are running efficiently. I don’t think that’s going to go away – it will be a really important thread.”
Ratcliffe praises companies’ approach to tackling the coronavirus crisis as “a shared challenge and to do it throwing rulebooks out of windows”. That is an approach she hopes businesses can keep hold of when addressing longer-term sustainability issues.
“It would be really interesting to see how we could apply that same kind of thinking to some of the big sustainability challenges that we face. And these challenges are very present, even though temporarily they may not be right at the top of the priorities.”
This crisis should be a further prompt for businesses and authorities to refocus and achieve what Gill calls a “resetting of priorities”. As she puts it: “Crisis always leads to opportunity – it’s just for the brave to take that opportunity as we come out the other side.”
But EG’s guests were wary of the likely rush to return to normality when the crisis passes, and the danger that too little is taken away from this period. “I do worry that the urgency to get the economy back up and running as soon as possible will prevent all that thoughtful thinking while we have some time,” Gill adds.
Squaring the circle
Ellison pointed to the opportunity for increased investment in clean technologies as an example of new ways in which economic growth could be put back on the agenda post-pandemic.
“The traditional method of kick-starting any economy is to throw an awful lot of what becomes cheap fossil fuel at it,” Ellison says. “We need somehow to avoid that being the reaction this time and to potentially look at ways in which we can encourage the economy to go in a slightly different direction – to kick-start the economy by throwing a different type of energy and a different type of fuel and different type of technology and thinking behind something which could bring huge benefits.”
Consumers may push for change on their own, Ellison hopes, appreciating some of the benefits – such as cleaner air – that have come from restricted social movement and economic shutdown. But balancing these potential upsides with the struggles that have been faced during this time is no easy task
“People being out of work, the curtailment of society that we’ve had – that creates quite a complex debate for us to have about what people are willing to give up,” she says. “And if this is seen as what you have to do in order to get to a point where the air is good enough to breathe, then that is very difficult for us to resolve. Squaring the circle is going to be hard and it’s going to take some clear thinking. As a species, we tend to go back to business as usual very quickly. It’s going to be quite challenging to capture the opportunities that have been presented here.”
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