Climate Change and Investment Roundtable with the City of London
On Thursday 20 June, World Cities Network and The City of London joined forces to host the Climate Change and Investment Roundtable at the Guildhall London, focusing on how real estate investors and developers can be incentivised to consider resilient design.
Following introductions from CEO of World Cities Network Brian Kilkelly and Head of Sustainable development at the City of London Simon Mills, the participants discussed the following points:
▪ How to relate climate change risk to systemic business risk for developers, investors, and owners of major property and urban infrastructure assets?
▪ How can businesses respond to the risk of a 4 - 6 ‘C rise in temperature?
▪ How can real estate investors and developers be incentivised to consider resilient design?
▪ How to make the potential impact of climate change clear so that it will drive change in the behaviour of individuals and organisations?
The representatives from the City of London explained that the capital is taking steps to future proof itself to mitigate risks. The Thames Barrier has decreased the risk of flooding, although sea level rising is unlikely to stop and London is sinking at 1.5mm a year. However, flooding was not top of the agenda. The two major concerns for London at moment is to have a resilient power network and water supply.
To diminish these dangers, the question was posed to the panel if the tenants of buildings were aware of these dangers and desired the buildings they invested in to be resilient? The response was rather bleak. Tenants who on average take up 5-10 year leases were not interested in investing in future proofing commercial stock, as they would not see a return on investment. Building standards have transformed energy efficiency yet some participants argued that there needs to be regulations put in place from national government for real change to happen. The city of London challenged the notion, as they felt that policy change could happen from mayoral level. ‘It will be mayors who will identify how these infrastructure changes will take place. I don't think we can look to national government to save us as they are too fragmented’- Simon Mills.
An example of where change had been driven by investors can be seen at Kings Cross. Lydia Dutton, Project Manager from property developers Argent explained key that the tenant wanted a district heating system for security. ‘As regards to resilience, one of the things we concentrated on with our occupiers was to make our buildings BREEAM outstanding and to get outstanding we need the occupiers to be engaged in continuing the buildings to be as energy efficient as possible. ’
The panel agreed that Kings Cross is a great example of how investors and developers can take a long-term view and that there can be resilient districts. This moved the debate to explore if cities can be resilient on a larger scale. The notion spilt the panel. Ben Ferrari, Director of Corporate Relations at The Climate Group argued ‘I think it is important to have flagship developments but this conversation sums up the difference that we can make a resilient district but how can we make a resilient city’. However, Tim Reeder Regional Climate Change Programme Manager at the City of London focused on the positive issues ‘The City of London does have its own adaptation strategy. The mayor and the GLA have addressed strategically the issue. We have recognized the problem and the good news it is being talked about. We now need to get those legal and financial sides pulled together.’ He also pointed out On the 2nd of July, the government will be publishing the national adaptation programme and within that there is a chapter on the built environment.
As the discussion drew to a close the panel concluded that major property firms are beginning to invest in short-term property investments and are adapting to mitigate climate change. However the majority of the table agreed that governments should introduce new regulations to mitigate risks. Brain Kilkelly concluded ‘If there is a will from real estate and business communities to make buildings resilient, perhaps governments will recognize this and it will give them more desire to drive forward regulations’.
The Climate Change and Investment Roundtable is a series of debates happening throughout the year. This discussion will continue at the next roundtable. The date will be confirmed shortly.
To view the list of participants at the workshop, click here