Real issues for real estate investors
If you can get hold of a copy of the Estates Gazette (Oct 7, 2017), it has excellent industry-contributed features on Sustainability in the real estate sector. A timeline starts in 1997 with the adoption of the Kyoto Protocol, binding signatories to lowering harmful emissions, through the overhaul of BREEAM standards for buildings (now more than one million in the UK are certified), the launch of the Global Reporting Initiative (GRI), various investment Codes, the first UK low carbon property fund (2010) and the adoption of ever increasing ‘Green’ measures by flagship investors such as the Crown Estate. Uniquely, the timeline continues into the future, where it becomes illegal to let energy-inefficient buildings, and regulators, investors and communities require increasing detail on carbon and water footprints. The message is to prepare to adapt to a very different future, when even a modest degree of climate change will push resilience planning to the top of management agendas, not primarily for ethical reasons, but to maintain functioning assets and profitability. Fund managers would do well to start assessing how their portfolios might stand up to such scrutiny.
Fortuna AMC has specialist expertise in assessing Environmental, Social and Governance (ESG) issues affecting investors, and how to address and communicate the risks and opportunities they present. If you would like to know more, please contact Caroline@fortunaamc.co.uk