How can we be sure that our investments are backing the most energy efficient buildings, at the lowest risk of climate change impacts? You wouldn’t buy a house that was dependent on unextractable gas and was about to be swamped by rising sea levels, so why invest your pension in a similarly stranded asset?
Backing the right horse? Understanding the link between investment and the climate emergency
05 Feb 20
Where do you keep your money? In your pocket? In a bank? In a pension?
Chances are, if it’s not stuffed in a mattress, it’ll be invested somewhere. Your expectation is that your investment will grow due to the thing it’s invested in becoming more valuable over time. This is the foundation of our capitalist system.
But what if your savings are backing an investment that can never be realised? It’s universally accepted that in order to avoid a runaway climate disaster, we need to stop extracting and burning fossil fuels. Yet billions of pounds, dollars and euros are invested in companies that do just that. Similarly, investment funds plough huge amounts of capital into real estate projects. This is your capital. How can we be sure that our investments are backing the most energy efficient buildings, at the lowest risk of climate change impacts? You wouldn’t buy a house that was dependent on unextractable gas and was about to be swamped by rising sea levels, so why invest your pension in a similarly stranded asset?
Firms like BlackRock and Microsoft are setting out bold strategies to reduce their climate impacts, divesting from fossil fuels and energy intensive buildings. The recently established Taskforce on Climate-related Financial Disclosure (TCFD) has been set up to consider the risks associated with climate change and encourage firms to align their climate risk related disclosures with investors’ needs. The TCFD has dedicated output on real-estate climate risk and you can be sure those at the forefront of investment risk management are taking this seriously.
This shows how sustainability is not just a planning issue, required to get across the ‘approval’ line. Genuine sustainability needs real leadership. It needs to be woven through the fabric of the feasibility, design, planning, construction, handover and operational project phases, considering the impact of the building throughout its lifetime. This approach requires high-level corporate strategies to be developed that straddle the entirety of the investment portfolio for developing and existing assets, including rigorous self-assessment, monitoring and reporting. Documents such as the recently published Climate Emergency Design Guide can be used as a framework to ensure our buildings are ready for the zero-carbon economy.
To ensure we’re walking the walk, as well as talking the talk, we’ve recently developed our own sustainability policy. You can find it here. This is owned, developed and driven by our staff, rather than dictated from above so we can genuinely respond to our colleague’s priorities. The way in which our policies have been developed shows how important the climate emergency is to people. They want to know that their employers and investments consider it to be critically important too.
Please get in touch if you’d like to discuss how Iceni’s Sustainable Development team can help with developing broad sustainability strategies that go beyond planning. We’re also planning to attend COP26 in Glasgow to engage on the front line of the climate crisis. Hope to see you there.
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