Climate Crisis Plans: 3 Actionable Steps to Improve Yours to Attract Investors
The UK Investment Association are now demanding that all companies under their management have a climate crisis plan by 2022. There’s no doubt that the IA is one of the largest investment groups in the UK. With 250 members and property value of £7.7 trillion under their management. This is massive news for anyone involved in real estate development or in commercial real estate, as the market is starting to demand more emphasis on greener and more sustainable businesses.
In this post, we’ll explain what has reportedly happened, how it will affect your company and provide 3 tips on what you can do next.
A Change in Investing Attitudes
This is the first time in the UK that an influential investment group is demanding that all of their UK-listed companies disclose how the climate emergency will affect their business. There is a real sense of urgency to it as well, they’re only giving their companies 3 years to get everything in order. It’s all stemming from a fear that shareholders’ investments could be worthless if they fail to innovate and change up their business models.
The IA is showing how serious they are about climate change and they’re showing how important it by starting at the very top. Andrew Ninian, IA’s Director of Stewardship and Governance has emphasised the importance of their new stance:
“Climate change could result in a significant loss of value in companies if risks are not effectively measured and managed, ultimately hitting savers’ pockets. Companies need to be looking at the impact of climate change on their business, products and strategy and set out to investors how they are responding to these risks.”
The goal of all this is to get companies reporting on climate-related risks in a clear, consistent and comparable manner. Helping investment managers make more informed investment decisions. It’s certainly going to make companies start to think about long term sustainability goals and how even incremental changes in their supply chains or the government can have huge impacts on their income.
What This Means For You
As climate change becomes even more of an issue it is vital for companies to start thinking sustainably and environmentally. With the world’s largest investor BlackRock signing up to Climate Action 100+, one of the largest investment groups that pressurise large companies to lower their fossil fuels usage. Managing assets of $35 trillion, they’re a force to be reckoned with. This is very important for the commercial property market as larger companies will be looking to improve their sustainability and Millenials will be looking to invest in more sustainable property and projects.
What You Can Do Now
There are plenty of ways to improve your companies sustainability rating and overall Environmental and Social Governance.
1. What gets measured gets improved
Start monitoring everything that has an effect on your sustainability score. Energy usage and utilities are a massive factor when it comes to commercial property. When you start measuring these things you will start to see some glaring errors and simple fixes that you might never have discovered. This is also very powerful when it comes to sustainability benchmarking for the likes of GRESB, BREEAM or LEED.
2. Upgrade Your Equipment
Retrofitting can be quite expensive but it can have a huge impact on the value of a property. Replacing old lighting with energy-saving LEDs. Replacing old appliances with much more efficient modern ones. Even improving insulation in properties can help lower heating costs. There’s plenty of new technology out there to make your property portfolio greener and cheaper to run long term.
3. Listen to the market
Studies show that the new millennial market cares more about being eco-friendly than any other previous generations. In fact, Millenials are willing to pay more for renting a property if it has green features. By focusing on what your market wants you can reap the rewards later.
Now is the time to take Action
So there you have it. Climate change is very real and this reflecting even more with the actions of investment groups and the market demands. With the UK’s largest investment group making these demands, it won’t be long until a lot of other investment groups follow suit. You can always improve your sustainability by measuring your output, upgrading outdated features while adapting newer technology and by listening to what the market is looking for.
If you would like to start measuring your energy usage whether it’s water, co2, gas, electricity or heating, ZiggyTec can help you monitor these with consistent, reliable and accurate data.
Get in touch if you’d like to learn more.