If there was ever any doubt as to the devastating realities of our climate crisis, the IPCC’s recent report highlighting the current state of the climate should confirm otherwise.
This major UN scientific report has confirmed the unequivocal damage on the atmosphere, land and ocean as a result of human influence. Sadly, for many of these consequences, there is no going back.
While the real estate sector has made tremendous strides in tackling its contribution to the crisis, more needs to be done. According to the IPCC’s headline statements, global warming of 2°C could be exceeded during the 21st century unless drastic reductions in greenhouse gas emissions occur in the coming decades.
Headlines like ‘Net Zero Carbon – when will we see the real winners emerge?’ are not things we should focus on. Tackling climate change and managing the level of risk we are all exposed to should not be a competition. We all need to work together to make sure this happens.
For any sceptics out there who still believe that addressing our impact on the environment is only about “doing the right thing”, let me reassure you that it is more than that; it is good business. The market is rapidly looking at ways to decarbonise and we want to be on the right side of that change.
At Fiera Real Estate UK, we have appointed a net zero partner to build a pathway to net zero carbon for all our funds. This pathway involves reducing our energy demand and then using renewable energy sources to meet our reduced demand.
We have a fiduciary duty to understand and manage the level of climate risk our assets are exposed to. Along with our net zero carbon roadmap, we recently subscribed to MSCI’s Climate Value-at-Risk (CVaR) service, which provides detailed transition and climate risk data at an asset level. Participating in industry services and benchmarks like CVaR will support our wider understanding of the impact of climate change on financial performance.
Managing climate risk and integrating ESG into our corporate operations and asset management responsibilities requires us to look beyond today. With COP26 around the corner, we need to look ahead – at future regulation, industry best practice and investor requirements – to protect our planet and to provide our investors with assets that are resilient to the changes that are coming.
Jessica Pilz is ESG associate director at Fiera Real Estate UK
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