COMMENT I read with interest the recently published Building Skills for Net Zero report by the Construction Industry Training Board.
It concluded that an additional 350,000 FTE workers will be needed by 2028 (mainly involved in delivering improvements to existing buildings that will reduce energy demand), representing an increase of around 13% on the current size of the workforce. The report breaks this down further, indicating that 59,000 plumbers and HVAC workers, 86,000 project managers and 27,000 building envelope specialists will be needed.
When I read this, I had two thoughts. First, what a fantastic opportunity to build back better, creating jobs and economic activity focused on delivering on the UK’s net zero ambitions. And, second, do we know how many real estate equity and debt fund managers, portfolio and asset managers, investment/transaction/development managers and investor relations specialists there are and if they have the skills to respond to the risks and opportunities that climate change implies?
Asset owners and managers are increasingly in the spotlight as key stakeholders in the net-zero-carbon economy. The Net Zero Asset Owners Alliance is made of up 35 institutional investors with $5.5tn (£4tn) of assets under management and the Net Zero Asset Managers Initiative has 30 signatories with more than $9tn AUM. Both of these initiatives aim to transition investment portfolios to net-zero greenhouse gas emissions by 2050.
A number of important initiatives have been set out to provide guidance specifically for the real estate sector, including the UNEP FI Sustainable Real Estate Investment Framework and the Positive Impact Real Estate Investment Framework. Closer to home, the Better Buildings Partnership’s own Climate Change Commitment and practical tools such as the Sustainability Acquisition Toolkit have sought to drive change through collective action and the provision of practical tools for the industry.
But making these commitments and providing guidance in isolation won’t deliver. The industry needs to move quickly to address the skills gap, integrating ESG considerations into real estate education and professional training. Our BBP members told us their ESG teams were becoming overwhelmed by requests from colleagues looking for training. Despite the plethora of ESG training courses available, it was hard to identify training courses that met the needs of their investment professional colleagues, speaking directly to their specific roles and responsibilities and equipping them with the practical tools they needed to take action.
A number of these members (Nuveen, L&G Real Assets, Hammerson and LaSalle IM) formed a syndicate to procure and develop a training course tailored to their needs. In doing so, they concluded the course would have much greater impact if it was made available to the whole industry through the BBP.
It is a very privileged position to be the one “calling” for the industry to respond, but this can be so easily undermined if one doesn’t walk the talk. So the BBP agreed to take on responsibility for facilitating the development of the course, funded by a steering group made up of the initial syndicate and additional members Derwent London, Great Portland Estates, Logicor, Picton, Royal London and Savills IM.
The training is being developed with input from the steering group members and has been designed in collaboration with ESG specialist Hillbreak. As ESG is a relatively new concept without established standards and qualifications, there is a strong focus on peer-to-peer learning.
In addition to reviewing ESG risks and opportunities, market trends, stakeholder expectations and the implications for investment portfolios, the course will consider how ESG can be integrated into investment disciplines such as appraisals and valuations, and utilise examples of due diligence questionnaires, asset management plans, case studies, 100-day plans and the metrics and targets used to measure asset risk, performance and impact. This will seek to enable participants to consider not only how ESG will impact on their portfolios, but also how they might reposition their portfolios to secure investment, attract occupiers and drive returns.
Time is short, and the industry urgently needs to find the most effective ways of upskilling a wide range of stakeholders, and not only in those practical skills highlighted in the CITB report. To do this requires a much greater understanding of how the business of real estate works and much greater collaboration with the organisations and mechanisms that define how real estate investment professionals operate.
This course is only one small part of this, but we very much hope that it will provide real estate investment professionals with some of the skills they need in a rapidly decarbonising world.
Sarah Ratcliffe is chief executive of the Better Buildings Partnership
Click here to find out more about the BBP’s course
