Major developers are now challenging themselves more than ever before to become the champions of change in sustainability and to have as carbon-neutral projects as possible.
What was a decade ago a tick-the-box exercise to have a green star building, looking after the environment from the ground up is now as important as generating profits.
Under the title of Environmental, Social and Governance (ESG), buildings owners are being required to exercise social responsibility to not only ensure the comfort of their paying tenants, but make the assets as less harmful on the environment as possible.
Bringing it to the fore is also the investor’s first question when buying a property: just how green and carbon-free is its credentials?
When asked whether ESG continues to be a focus for managers, Luke Briscoe, managing director, office & logistics, confirmed it was, stating that “ESG is now a focus for both managers and investors alike. When AMP Capital Wholesale Office Fund (AWOF) went to investors with a zero carbon target, it was met with universal support. This strong mandate afforded us the confidence to fast track the project, resulting in the managed portfolio achieving the zero carbon target nine years ahead of plan.
“The focus on ESG is not just with existing managers. As capital looks to acquire assets, a strong focus on the investment’s ESG credentials is now a clear focus. This was evidenced with the recent sales campaign at 200 George Street, Sydney,” Mr Briscoe said.
The campaign attracted strong interest from both domestic and global investors. Mr Briscoe said it surprised on the upside how many of these groups had ESG as a major consideration, when looking at the asset.
He said the growing focus on ESG by capital will certainly have a positive impact, with all developers and managers now more than ever needing to deliver great ESG outcomes across their projects, if they want to maximise value and returns.
Diversified developer and landlord Mirvac is one of many office, retail, industrial and residential landlords that has embraced the (ESG) with gusto and the steps it will take to reduce carbon emissions include continuing to maximise energy efficiency and developing all-electric buildings powered by 100 per cent renewable energy.