Hopefully we all suffered some small inconvenience as a result of the Extinction Rebellion protest. Instead of grumbling, we should all be grateful for the wake-up call. That includes the investment community. Yet some treat token action on climate change as a burden they unwillingly have to shoulder, while others are happy to pay lip service without delivering or having an actual strategy.
We no longer have the luxury of time for either approach. In just 12 years, we need to half global emissions according to the 15th Special Report by the Intergovenmental Panel on Climate Change. That is just two investment cycles away. By investing more responsibly, real estate capital can play its part in helping make the target achievable. We need to recognise through our work that nature is not something to be consumed but defines our very existence.
As a property investor, that means making a commitment to investing in sustainable developments and investments. As individuals, our efforts might seem inconsequential – but small changes are cumulative and valuable. We can sit at our desks and support the revolution.
Of course, making responsible investment shifts the direction towards making triple-net investing – judged on planetary, social and financial impact – the norm will need a wider buy-in. But we can start, and be a small part of the solution.
Thankfully, that is starting to happen. It was reported recently that central banks are finally beginning to tackle climate change issues, recognising it threatens not just our planet but our financial stability. Bank of England governor Mark Carney has chmed in to the same effect. And there is a business case for responsible investing. More and more, investors are starting to refuse to put their monies into institutions that finance assets that are not beneficial for the environment.
As that momentum continues, financial institutions will be forced to adopt “green” investing policies if they want to keep their clients. All of us in the world of investment need to applaud and thank the rebels. They are the vanguard, they are ones who should be shouty and aggressive, they are helping us escape.
