22 April 2020
The Year we Revalued What’s Valuable
Can 2020 be the year that a $228tn sector started to lead the way in wholescale system change? On World Earth Day, read James Raynor’s article on how we bounce forward green.
The property industry is a core part of the world economy. Valued at $228tn globally, [i] it provides spaces for business to thrive, production to occur and people to shelter and socialise.
It’s also seen by some as an industry that has played a part in rising global inequality. And yet over the last few weeks, many property companies have been tackling these issues head on: repurposing buildings, waiving rents, donating cash and making huge volunteering efforts.
During the pandemic, it’s also been interesting to see that the investments proving most resilient are often ESG investments. This isn’t new. Research from 2015 suggested that businesses who invest this way can have up to a 17% increase in profit over the longer term [ii] and the green buildings sector has been forecast to be worth a staggering $25tn.[iii] So the economics are stacking up fast.
What Covid-19 might therefore be teaching us is that companies who have a clear purpose and excel at sustainability are best placed to adapt to this new world. And make no mistake, significant disruptive scenarios like the ones triggered by Covid-19 will become much more frequent if global warming does not stay below two degrees. The science is clear on that.[iv]
Fundamentally, the coronavirus has shown yet again that economic, environmental and social issues are all inter-linked, and often in positive ways. We are seeing air quality improve as people find new ways to connect with each other that involve less travel. We’re valuing nature and celebrating people who often work the hardest and are yet lowest paid. Is it too much to think we might be starting to revalue what we believe to be valuable?
Last year, Grosvenor committed that every building we directly control will have net zero carbon operating emissions by 2030. All our new buildings will operate at net zero too and we will completely replace gas as a fuel source with renewable energy, while simultaneously finding ways to eradicate waste and enhance biodiversity.
This wasn’t about incremental change. We ripped up our rule book in an attempt to fundamentally transform the way that we operate both our buildings and our business.
Since then, we have launched new green leases, a staff sustainability academy, a supply chain charter and a development brief, and we will be shortly publishing our roadmap to net zero.
Many of our peers are doing the same and we can help each other with an open source approach to sharing solutions to shared challenges. This is collective self-preservation on a grand scale.
Many despaired at the postponement of COP26 in Glasgow. But in fact it presents an opportunity for business to lead this agenda. In the midst of Covid-19, the public sector doesn’t have the capacity right now. We need to step up and develop practical solutions that enable transformational environmental change.
Above all, we need to be investing in a way which drives the UN’s Sustainable Development Goals and addresses the inequality gap that our sector has partly enabled.
That way 2020 would be not just the year of Covid-19 but the year that a $228tn sector started to lead the way in wholescale system change. And in doing so we became known as an industry that works alongside communities, that cares about our planet and a sustainable economy, sharing ideas and being open about the challenges. Now that really would be worth celebrating.
James Raynor, CEO, Grosvenor Britain & Ireland