The UK has an exciting opportunity to reset its economy along a sustainable development pathway, says Gillian Charlesworth of BRE
Meeting our net zero ambitions depends on more than just government pledges. Businesses have a vital role and investors need to make a compelling case for sustainable finance.
It is now clearer than ever that, when businesses consider the social and environmental impact of their investments or buildings, they yield greater value down the line – both from a financial and environmental standpoint.
In the world of real estate, sustainability certifications can help building owners and investors to achieve exactly this.
Ultimately, they help to drive sustainable improvements in the operational performance of buildings, by providing a holistic assessment framework which building owners can use to assess the social, environmental, and economic sustainability performance of their properties. You need to know where you have started from to understand how much progress you have made, and certification can be the start and end point for this.
To give an example, CTP Invest is a European property development and investment company which runs logistics parks across central Europe and has adopted BREEAM, BRE’s globally recognised sustainability certification scheme, which was used to drive green bonds for investment, raising a total of €4bn. CTP Invest used BREEAM In-Use as a lever to raise the investment grade of its business and subsequently launched on the Dutch stock market.
The decision to actively evaluate and improve parks within CTP’s portfolio played an important part in enhancing the company’s value and allowing its business to flourish, reinforcing the benefits of sustainability certification schemes.
We know from new research by Knight Frank that buildings which can show that they have the highest levels of sustainability performance can drive higher rental yields, minimise voids and drive client satisfaction – in London, the rental premium for BREEAM Outstanding buildings is up to 12.3%.
We believe that the industry has a responsibility to inform the property market of how to better take ESG considerations into account, not just so they too can contribute to the global decarbonisation drive, but so that they can take advantage of its benefits.
If building owners fail to act, they risk falling victim to compliance failures, a depreciation of assets, negative public opinion, and an eventual and significant loss of income later down the line.
Now is the time for those in the built environment to step up and take action to decarbonise their assets. Failure to do so will see them left behind in the UK’s decarbonisation push.
The UK has an exciting opportunity to reset its economy along a sustainable development pathway, from which we will all benefit.
Gillian Charlesworth is the chief executive at BRE
Ideas for positive change
This is part of our Countdown to Cop26 coverage in the lead up to the world climate conference in Glasgow in November. We will be publishing more big ideas about ways to tackle the climate emergency over the coming weeks and you can find more here.