Mainstreaming sound and sustainable investments

Martin J Brühl FRICS

Past President 2015/16 (RICS)

The end of last year was marked by an historic achievement: a global climate change agreement that will hopefully chart a new course in limiting global temperatures to below 1.5 degrees centigrade.

image_finance_economy_money

Today, along with a group of global partners from the finance and investment sector, we've helped launch an investor framework aimed at helping our sector advance the commitments we made in Paris.

The partners are the United Nations Environment Programme Finance Initiative (UNEP FI), the Institutional Investors Group on Climate Change (IIGCC), the CERES – Investor Network on Climate Risks, the Investor Group on Climate Change (IGCC) and the Principles for Responsible Investment Initiative (PRI). 

An action framework

Sustainable real estate investment - Implementing the Paris climate agreement: An Action Framework" aims to make the environmental, social, governance (ESG) and climate-related risk analysis a routine part of how we do business.

This framework is important for both investors and for our qualified professionals. It's a user-friendly map of tools that can support us with actual implementation of ESG and climate risk strategies, aligned to the climate agreement made in Paris.

Pay attention - this matters

At RICS we set professional standards. This is how we can approach these ESG goals and mitigate climate change risk. The standards we develop and promote provide a basis for reliable and consistent energy metrics and emissions monitoring. They also make it easier to value sustainable buildings, create market transparency and ultimately de-risk investments.

All investment decisions depend on transparency and comparability. If a deal lacks transparency, it is risky. If you cannot compare investments on a like for like basis, they are risky. Currently even the way we measure the size of buildings varies by as much as 24% from one country to another.

As professionals, we reduce these inconsistencies by developing and applying consistent standards in measuring buildings size, construction costs and valuation. We can also advise clients on the benefits of sustainable buildings from the construction phase, throughout their use and when they are decommissioned.

Martin Bruehl on stage

At COP21 (image above) we committed to increase market confidence in climate change commitments by supporting internationally standardised and vertically integrated measurement and reporting

Our commitments at COP21

This was the message we took to Paris last year when the United Nations hosted global climate summit called 21st Conference of the Parties (COP21). We committed to strengthening the business case for energy efficiency measures by building capability among valuers. We have already made sustainability an integral part of the Red Book professional valuation guidance.

We also committed to increase market confidence in climate change commitments by supporting internationally standardised and vertically integrated measurement and reporting. We will play its part in defining sectoral climate goals, promoting transparency, information exchange and greater energy efficiency in the built environment.

The framework goes to the heart of these commitments. If COP21 is going to mean anything at all, estate asset owners, investors and related stakeholders, must now recognise they have a clear fiduciary duty to understand and actively manage and climate-related risks. Not as an add-on. Not as an after-thought. Not as a “nice-to-have”.

It must become a routine component of our business thinking, practices and management processes.

Comments (1)

  1. Well said Martin and let us not forget that the best way to change the world is by starting with ourselves. All Chartered surveyors have a responsibility to actively study and understand and become involved in ways to improve efficiencies in their own sector and not just pass on but encourage their clients to do the same. Chris Green.

    Christopher Green Christopher Green, 22 February at 09:38AM

Only Registered Members and Registered site users can comment on our content.

Please use the log in button to sign in and leave your comment.


Read the next page in this section