Reconnecting at MIPIM and the Trillion Dollar Shift

The tree only

It was a bit weird to be back at MIPIM and part of a big crowd again without any social distancing or masks, albeit still constantly sanitising our hands. Initially we were all greeting colleagues and business relations at the Redevco booth by just waving and giving fist bumps. After some preliminary hesitation though, things were soon back to normal and before we knew it, we were giving handshakes and even exchanging some kisses!

It was great to see our colleagues and contacts in person and discover that they’ve actually got legs, to steal a quote from our CEO Andrew Vaughan during his welcoming speech at the Redevco Networking Lunch we organised for investor clients and business partners. Meeting in person always generates positive energy and a sense of optimism and it was wonderful to see people re-connecting.

The overall attendance at MIPIM was good and there was quite a positive buzz despite the daunting times we live in due to geopolitical and economic threats, rising inflation and the increasing urgency of taking action on climate change. Some potential visitors were no doubt put off by the extremely high prices of air fares and accommodation, but we need to pay a fair price for air travel given its impact on the environment and the owners of the apartments where we were all staying naturally had to make up for two years of lost revenue.

On day three we organised a client event just outside Cannes at The Old Course, an amazing venue. Although there were doubts initially about taking everybody away from the Croisette and the Palais, it turned out to be a welcome quiet oasis after several intense days of back-to-back meetings. The Redevco Networking Lunch was focused on ESG challenges, and we had a great line-up of speakers who shed light on several big themes while our guests enjoyed a delicious lunch.

Action – and capital – needed to combat rising risk of stranded assets

Marga Hoek, moderator of the panel discussion, and author of the book: ‘The Trillion Dollar Shift,’ told the room it was now time for investors ‘to put their capital where the mouths are.’

The world is way off track on reaching its climate change targets and implementing the UN’s sustainable developing goals Marga said, adding that she’d been shocked to discover that around 70% of so-called sustainable investment funds don’t comply with the Paris Climate Accords, including 50% of funds specifically focused on the decarbonisation transition.  

Willemijn Verdegaal, Co-head Climate and ESG Solutions, at consultancy Ortec Finance, said her institutional investor clients are extremely concerned at being left with stranded investment assets in their portfolios stemming from climate change.

“The Dutch central bank just came out with a report last month saying they expect between 35% to 45% of Dutch real estate portfolios are going to be stranded before 2030, which is just not far away under a Paris climate scenario. The central bank also said from a physical risk perspective they’re worried that if a building is no longer resilient to physical risk it cannot get insurance, which may also cause an asset to be stranded,” she noted.

Building with wood can accelerate decarbonisation process

But Willemijn added that the real estate investment industry should be well-placed to benefit from the massive investments underway in decarbonisation and renewable energy technologies, because private markets in property, infrastructure, forestry and agriculture are now widely seen as the areas where the greatest impact can be made in the battle against climate change compared with listed equities and fixed income.

James Drinkwater, Head of the Built Environment at the Laudes Foundation, said building with wood could also accelerate the decarbonisation process within the real estate industry:

“We develop about 180 million square metres of residential properties a year in Europe. Arguably more is needed now. If 80% of that was done in wood, this wonderful stuff you see around you, it could actually sequester, because of the forest it comes from, around 55 million tonnes of CO2 per year, from the atmosphere,” he said.

Clemens Brenninkmeijer told the networking lunch that the urgency around climate change and its possible effects on our investments has increased dramatically in the past three to four years. “Redevco now has 280 assets in the portfolio, and we are aiming for net carbon zero by 2040, because we felt the World Building Council target of 2050 was too far away – the urgency has to be higher. So, in the past year, we’ve established a science-based target to reduce emissions by 50% by 2030.”

Proud to hear that Redevco is doing its part in the Trillion Dollar Shift.

Blog by Priscilla Tomasoa, Head of Corporate Communications

Priscilla tomasoa lr