Jacob Perkins on managing and measuring for a better future

Jacob Perkins bw

Contact Jacob Perkins, Head of Client Development

ESG is a major focus area for the built environment. But what do seasoned real estate professionals and investors really think of ESG? And how do we ensure businesses live up to their sustainability commitments and statements?

In September, Benoy’s Client Services Director, Jacob Perkins, went to Paris to find out.

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Last week, at the InterContinental Paris Le Grand, I attended Europe GRI 2022, which was billed as a get-together of senior investors, lenders and developers active in the European real estate market”. 

As conferences go, it was refreshing and informal. Small breakout sessions enabled interaction between speakers and audience, with attendees given the opportunity to question and challenge the views of panellists. An opportunity I really enjoyed.

During a series of lively conversations and exchanges, two things really struck me. The first was the startling disconnect between lending partners (LPs) and consumers in many areas of property development. 

I have always lived by the mantra that the consumer creates the market. We create great spaces and places in the built environment by listening to the consumer and finding solutions to their problems. Not so, according to the money men’ who spoke in Paris last week, many of whom seemed to think they create the market, despite having no idea about what the market actually wants. While outlining the financial products via which they lend to the sector, LP delegates displayed little awareness of, or interest in, the needs and expectations of end-users. 

Any real estate development – especially in consumer markets such as retail, resi or leisure – that doesn’t consult or consider the people it intends to serve will surely fail. Yes, money talks, but for those with their hands on the purse strings, a little more listening wouldn’t go amiss.

Perhaps the best approach to take, one that former Selfridges CEO Simon Forster often advocates, is simply to aim to create the very best customer experience’. Disregard the financial, social and environmental factors, and simply create the very best thing you can’. And nine times out of ten, all of those other elements will naturally fall into place. In the context of retail, creating the very best will, by definition, mean developing a socially inclusive, aesthetically vibrant, resource efficient and financially profitable asset. 

The second major takeaway for me was an overwhelming lack of foresight regarding ESG. In many of the discussions on net zero goals and sustainability, opinions seemed skewed and constrained by short-term asset lifecycles and investment horizons. Particularly among the older conference participants, there was a palpable lack of concern for the future beyond their 10 or 15-year funding cycles. 

As one representative from an online risk register pointed out, climate change is happening now and its impact on the built environment is terrifyingly real. You only have to think of last winter in the UK, when healthcare professionals couldn’t physically get to work and buildings couldn’t open. Forget financial loss; lack of preparedness and foresight can result in loss of life. 

But it wasn’t all doom and gloom. Many delegates voiced commitment to action on ESG, even if they weren’t necessarily sure why they need to act or what they need to do. I suspect a fear of censure and commercial fallout is a major driving factor, but an expression of commitment is a start. What this conference demonstrated is that we have to progress beyond corporate sustainability statements’, many of which aren’t linked to concrete goals, and develop robust and specific KPIs to keep businesses on track. 

As the saying goes, you can’t manage what you can’t measure. Which is why we need metrics that help us understand what an individual building asset or portfolio is looking to achieve. And why we need to measure value’ in every sense – economic, social and environmental – against stringent performance criteria. Only then can we begin to scrutinise asset and investment management objectives over longer time horizons, and begin to build a more sustainable future for the sector and the planet.’