'I don’t think political leaders have a detailed grasp on climate change - and I don’t think all that many real estate investment firms do either.'
The world’s focus was momentarily on COP26 in Glasgow this month.
To be honest, I don’t think political leaders have a detailed grasp on climate change. And I don’t think all that many real estate investment firms do either. I am not blaming them, however. They are definitely trying to get up to speed with what can be done to provide a better environment for all living things.
But I know for a fact that companies in the real estate industry are slightly blagging expertise in areas such as ESG that they do not really have. They are also pretending to have ESG credentials. When challenged on details that would satisfy investors’ requirements, I believe very few – maybe 5% - are able to do that right now.
The investors as much as anything are driving better responses from funds and asset managers across the ESG spectrum. That can be seen in so many ways - most notably in the last few weeks by companies declaring they will be net zero by the year 20-something or by their current GRESB score, or by appointments of a head of ESG.
It can also be seen from the way investment managers are expanding. They are definitely going into infrastructure and real assets generally, and then looking for synergies across the portfolio, wondering if solar panels can be placed across all logistics assets, for instance. Both Patrizia and Nuveen have made recent moves in infrastructure and they talk about these synergies and how they fit into the overall ESG agenda (see article on page 6 of our November issue).
Within that feature there is analysis of the underlying reasons behind such moves - in addition to the ESG synergies to be gained. But we are certainly at a point where there is more focus upon ESG than at any time, and equally more focus upon real assets, hence the cover of this month’s magazine.
There is no doubt these two big issues are converging across the investing world, and we will only see more of it.
But my personal challenge to those responsible for climate change and sustainability is to ask: ‘Have you really done your homework?’ I believe there are elements to the official narrative on climate change that are open to debate and at least the requirement of full, honest analysis.
It is no good trotting out various statements about climate change without looking into it properly and becoming more expert. As a journalist perhaps I am programmed to do so. The same goes for various official statements about the Covid-19 pandemic plus our response to it. Let’s leave it at that for the moment.
Enjoy the issue.
Editor in Chief