Having written about property for a long time, I’m not shocked by much.
But I was genuinely appalled by RICS research published last week showing that almost half of UK property investors are not concerned about climate change risks (10.05.19). What planet are they from? Clearly not the same endangered one the rest of us are.
What makes the findings all the more depressing is that, as we reveal in a special feature on climate change, property is a major contributor to the problem. According to the latest data from the UK Green Building Council (UKGBC), buildings account for around 30% of the UK’s carbon emissions. That so many investors either are not aware of this or, worse, choose to ignore it – and the risks entailed – surely makes them the very definition of climate change deniers.
They may not be able to get away with being in denial for much longer. Thanks in no small part to the extraordinary impact of teenage activist Greta Thunberg and Extinction Rebellion, climate change has become the issue du jour, even relegating Brexit to the news sidelines over recent weeks. So prominent has the climate change issue become both socially and politically, the pressure on companies to do more to tackle it is only going to mount.
The Task Force on Climate-related Financial Disclosures has already developed a voluntary framework for companies to disclose their climate-related financial risks that some experts think could be a game changer for real estate if it becomes law. Meanwhile, shadow chancellor John McDonnell warned last week that if Labour comes to power, it would delist UK companies that failed to tackle climate change from the London Stock Exchange.
It is easier said than done, of course. The big challenge for the property sector is embodied carbon – carbon dioxide emitted during the manufacture, transport and construction of buildings – especially when it comes to refurbishing existing stock. Much of this stock is old, inefficient and could cost hundreds of pounds per square feet to upgrade and make more environmentally friendly – money that landlords are unlikely ever to recoup.
The good news is that some property companies are making headway. The likes of SEGRO, British Land and Hammerson have all significantly reduced their carbon footprints in the last few years and have set suitably ambitious reduction targets for the future. The bad news is that others are lagging way behind.
In this week’s poll, 91% of respondents agreed that investors should put more emphasis on sustainability. The whole industry needs to raise its game if it is to hit the UKGBC’s target of ensuring all new and existing UK buildings are net zero carbon producing by 2050. If it doesn’t, there is a danger that buildings and the entire industry could be seriously devalued, which no one wants.
Another issue the industry needs to tackle more proactively is mental health and this Mental Health Awareness Week, I am pleased to report that for the first time, we have been inundated with comments and letters on the issue. We have run two in the magazine and one online. Let’s hope we can finally get rid of the stigma surrounding mental health issues – it’s about time, given that most of us will experience them at some point in our lifetime.