Investors seek climate resilient locations

CLIMATE resilience and sustainability top the concerns of property and fund managers when making long term investment decisions, a new survey shows.

The Evora Insights Survey, which details the views of 121 real estate investors and professionals, found that 60 percent believe climate resilient locations and sustainable property management are their most important considerations when considering how to ‘future-proof’ investments.

The survey found that the impact of climate related events, such as flooding or extreme temperature changes, and new legislation designed to prevent climate change weighed heavily on the minds of property and asset investors.

As a result, many were reassessing the way they looked at investments, undertaking materiality assessments and regularly used sustainability metrics, often referred to as environmental, social, governance (ESG) data.

The report says ESG data is now a “mainstream theme” for investors, with 92 percent regarding it ‘as material’ for decision making.

Chris Bennett, managing director of sustainability services company Evora Global, which conducted the research, said future-proofing is becoming a key concern for investors.

“Investors are seeking climate resilient locations. They are concerned their properties and assets are going to be hit by climate change and legislation designed to tackle it.

“As a result, we are seeing a shift from short term thinking towards longer term, sustainable asset investment. But there’s still a long way to go to see real change.”

The survey found that 87 percent of investors were concerned there were reputational and financial risks regarding their assets.

Meanwhile, when asked if they had witnessed the impact of legislation at either a corporate, fund, product or asset level, 55 percent said they had done, at more than one level.

Bennett said the report’s findings show that the world of investment is being changed by ESG data and long term concerns about sustainability.

“Regulations designed to promote sustainability are affecting the way property and fund managers operate. It’s no longer ‘business as usual’ for investors.

“ESG data are now critical metrics for decision making as they are very much about how an asset or fund can be sustainable in the long term. As a material investment risk, ESG data governance is now central to our clients’ investment processes.

“I can think of no better way to ensure your investments are future proofed than by integrating ESG and sustainability into the heart of your decision making.”