Adjust your business model or die

Doing something is better than nothing, but we should focus on what has the most impact. You probably recycle at home and think you’re doing your bit for the environment. This is a start, but if you work in the real estate industry it’s a tiny element considering the potential impact you can have in your profession.

A report by environmental charity the Ellen MacArthur Foundation found that 40% of carbon reduction targets could be met through the circular economy. In a circular system, nothing is thrown away. Products are designed and built with materials that can be removed and reused in their existing state, and the materials are only recycled if you can’t repair or repurpose. This means less waste.

So far from being the first step, recycling is the last resort in a truly circular economy. We must prioritise preventing and reducing waste, before we recycle.

The case for eliminating waste in building construction is well documented, but did you know there is £15bn of waste each year from office buildings in the UK? This is an open goal for the real estate industry, so why are we not doing more?

Because we are not prepared to change our business model. Investors work in a very linear system: the value of their investment is based almost entirely on rental income. No value is attributed to other aspects such as zero waste, efficiency in use, embodied carbon, aesthetics, quality of wellbeing and ease of repurposing/disassembly.

Many in our industry seem blind to the protests and uprising of passion from the younger generation. Look at charity shops. To many baby-boomers, they’re the carbuncle of the British high street, but if you ask my 16-year-old daughter, she thinks they’re brilliant. A circular economy with low environmental impact is of high personal value to her – and she gets designer clothes on the cheap!

Occupiers are going faster than investors. In Manchester, we’re about to open our first circular economy JLL workplace. Trying to deliver a low-carbon, low-waste workplace in the UK has not been easy… but not that difficult either. Yes, in general it’s more expensive and requires planning, but things like reused furniture cost less. The result is a more attractive environment and some inspirational stories about your place of work.

At a recent event, the head of real estate at Diageo was asked why an environmentally friendly building was so valuable. Consumer demand? Corporate responsibility? Or just a good thing to do? He said it was for employees. A business simply cannot attract talent unless it creates a working environment that has zero or positive impact on the planet.

In 2018, the government released its Waste & Resources Strategy, and I wonder how many property professionals have read it. The summary is only a few pages long. So you can waste time figuring out whether the plastic film wrapping on your supermarket pizza is recyclable, or you can read a blueprint for eliminating avoidable waste by 2050, work out how it applies to the built environment and make a real impact.

Over the next 10 years, you can be guaranteed the UK will see many stranded real estate assets that are simply not investable because their owners lacked the foresight to consider the environmental impact. This is the real world. Adjust your business model, even if it costs more money. If you do not, be prepared to die, along with the dinosaurs.

Guy Grainger is EMEA chief executive of JLL