The vital need to fill real estate’s sustainability skills gap

The biggest surprise of Covid has to be how it has failed to curtail the real estate sector’s focus on sustainability. Green initiatives and environmental spending largely slipped down the agenda of many real estate and investment companies during the global financial crisis. The same cannot be said during this global pandemic. Some may say it has moved even more rapidly up the agenda.

Progress is, of course, welcome. But an increased focus on real estate’s role in the climate crisis has identified a sizeable gap in skills bases. Climate change is not an easy problem to fix. It requires insight, intelligence and continual learning.

Race for talent

This skills gap has led to intense competition for talent in the real estate sector. Barely a week goes by without a new appointment of a head of sustainability or climate champion. According to a recent study of real estate owners, developers and asset managers of some 7.9bn sq ft of commercial space, around a third are planning to hire in the areas of climate, sustainability and ESG, with more than half of those respondents planning to expand their existing team with new hires and 19% planning to hire a chief sustainability officer or head of sustainability.

There is a new market developing for sustainability skills in real estate, and if any individual (or company) wants to be real estate’s hottest property in this new market, then an environmental education is key.

And that is exactly what the Better Buildings Partnership and its members are seeking to deliver. Late last year, BBP chief executive Sarah Ratcliffe used these pages to declare a sustainability skills emergency, outlining the scale of the skills gap that exists in the sector. A survey by the London Property Alliance had just found that pretty much all of the sector (93%) thought they could do with knowing a bit more about the climate crisis.

Really, we all need to know a lot more. Investors need to understand enough to know where and how to invest capital, property owners need to understand how to operate their buildings, developers how to develop sustainably and then the supply chain needs to have the skills to respond to increasingly greener briefs. The list, to use Ratcliffe’s word, is gargantuan.

But it can be bridged – through bringing new skills and people into the sector and through peer-to-peer learning, which is exactly what the BBP is aiming to do.

Jon Lovell is co-founder of sustainability consultant and trainer Hillbreak and is delivering the BBP’s ESG Training for Real Estate Professionals course.

“The environmental, social and corporate governance agenda in its broadest sense has been broadening, deepening, becoming ever more complex over a period of time, but that process of change and dynamism has accelerated in even the last six months, let alone the last year, two years or so,” says Lovell. “So, keeping up with that very dynamic agenda, which is gaining in significance for all stakeholders within the real estate value chain, is a real challenge even for ESG specialists and professionals. It’s a tough job to stay on top of it. So, what really needs to happen and what we are really hoping this training will achieve is some demystification and simplification of that complexity.”

Complexity is one of the biggest barriers to change when it comes to the climate crisis, with multiple definitions of terms making it increasingly difficult for a single set of actions to be taken.

For Sophie Carruth, head of sustainability at LaSalle Investment Management – one of the key real estate peers that will be helping with the training – increasing understanding and having a clear view of what even net-zero carbon means for the sector is vital for progress.

She also points out that, whether the industry understands climate change or not, it is going to have an impact on how the industry operates.

Integrated approach

“For every real estate professional within our organisation and across the real estate sector generally, their job is going to have to change shape,” she says. “They are going to have to incorporate ESG more generally and net-zero carbon more specifically into almost every single function that exists in this industry. And that can’t happen overnight.

“We need everybody to understand not just what the issues around sustainability are, but what the implications are for their particular roles. And that’s where this training is going to help move people away from ‘business as usual’ as it currently stands today towards the future of real estate and what everybody needs to bring into their everyday decision-making in order to help us in the right direction.”

For Louise Ellison, group head of sustainability at Hammerson and chair of the BBP, real estate will know it has closed the sustainability skills gap once it sees an improvement in its assets. If the sector has the knowledge to make the right decisions to move real estate in the right direction, it will be evident in the physical properties.

“Of course, our sector needs to have achieved high status in terms of its education and understanding of ESG. But the proof of that will be in how the assets perform and the extent to which our sector is making its contribution to those net-zero carbon targets that we’ve set nationally, locally and globally. That’s where we need to be moving,” says Ellison. “What I would like to see from this is that we have a real step change in the performance of the assets.”

But until that change in performance of the assets comes, there is a huge opportunity for individuals in the real estate sector to attract and retain the creative thinkers needed to make a difference.

“One of the real privileges of working in this space is that we get to do work that aligns with our values,” says LaSalle’s Carruth. “For me at least, it’s a really, really important part of why this is a great space to work, because it’s purpose-driven and quite important work. And ultimately there’s an important reason for doing it.”

“For this subject matter, you can really light a spark in people individually and collectively when the understanding is there, when the points of connection are made between what I do as an investment manager or as a development manager or as a sales and distribution specialist,” adds Hillbreak’s Lovell. “Understanding the connection between that role and the role of real estate and its place in the world in the context of those challenges and issues and crises and emergencies that we’re now facing – that can be really motivating and really empowering.”

And it really needs to be empowering, and individuals need to step up to fill the sustainability skills gap as there is no other option.

“Real estate has, as we know, a very significant impact in terms of climate change and therefore the solution,” says Ellison. “So, this kind of programme and making sure our sector is improving its skills and really taking its responsibilities seriously is really very important in terms of us being able to achieve the targets and the goals that we need to achieve. If the sector doesn’t step up, then it’s going to be incredibly difficult.”