As Trump’s climate trashing agenda became clear, the more sensitive behemoths in the real estate industry, delicate souls that they are, started to immediately slash their sustainability teams and “cleanse” their language.
The big focus was no longer on ESG but resilience, and it was no longer carbon abatement but energy efficiency or energy security. Companies in Australia with US parents or US clients were especially fearful, as you’d expect.
We’ve seen that movie before. The work keeps going, but the language goes undercover.
Sadly, in the US there are real economic implications for using the “wrong” language –government contracts get cancelled unless the anti-climate agenda is followed and diversity and equity programs dropped.
Even Harvard has come under fire – with funding revoked if foreign students are not banned. But that could be great news for places like Australia as Nobel Prize winning intellectuals start to eye off the attractions of the Great Southern Land.
There’s been deepening pain in Australia too, however. It stemmed first from the economic overreach and inflation that followed the pandemic, along with the rest of the world. Then from Trumps’ wrecking ball. More than a few Aussie companies are owned by US parents who typically don’t know/don’t care what the local mood is; what counts is the optics in the boardroom back home.
So, sackings are sadly gaining momentum – for whatever reason. Several sustainability teams have been hollowed out or slashed altogether.
At one big company, with US parentage, ESG has been removed from a person’s title, but at least the job remains.
(There will be a recruiter seeded in the audience at Tuesday’s leaders forum to provide some deeper insights into what’s happening in the jobs market.)
Interestingly, as soon as the federal election result was clear, some companies in the property space started to reverse their decision, realising that sustainability and climate work were not going anywhere. First, we have laws and disclosure rules. Dutton the now former opposition leaders was not going to provide a “get out of jail” card.
At GHD, national practice leader, Leone Lorrimer said she noticed a widespread lift in sentiment for the sustainability and renewable energy outlook.
There’s no-one she’s come across at work or elsewhere who is not feeling relieved and optimistic for better times. This is especially so in the renewable energy sector and the growing work that spins off it.
More than a few contracts were hanging in the balance waiting to push “go” when the result was announced – and they have, said another source.
Lorrimer says that at a recent event attended by CEOs from across the renewable energy spectrum, “everyone from the banks to the wind farm people, the battery people, the CEOs of these companies – they are all ready to go.”
Major projects have been years in the making and they are set for launch. “I think that in the next three years we will see a lot of these projects realised.”
A big concern for Lorrimer was what might have happened to the National Construction Code if the opposition had gained power, given that its former leader Peter Dutton had promised to freeze the code for 10 years.
The biggest hit would have been to the energy transition, given the proposed changes were essentially “switching off Section J” the energy efficiency bedrock in the code.
“I was worried about that, but I think everyone’s pretty positive now, and I think we are isolated [from the US anti climate agenda]. I think there’s going to be a lot of job creation; there’s already 50 per cent to 80 per cent of the national power coming from sustainable sources and in three years’ time, we’re probably going to be 80 to 90 per cent renewables.”
Melbourne is dramatic – again
The big property lunch in Melbourne last week caused a ruckus that resonated all the way to Sydney. Up on stage we later heard from a third party was Max Beck, doyen of classic Melbourne property developers and Shane Quinn of Quintessential, who our readers will remember as one of our favourites in the early days of green makeovers for commercial buildings.
The pair took opposing views with Quinn saying Melbourne was “overtaxed” not just in property – but everywhere, payroll tax included, and would take seven to 10 years to recover. Beck was reportedly the big defender of the big beautiful southern city (we’re biased and besides we know Melbourne can go down to its knees, Collingwood style, then bounce back to win the Grand Final.)
Beck isn’t in our Rolodex, but Quinn was, so we got in touch to hear his views on how gnarly sustainable property was becoming in Melbourne and elsewhere as Australia feels the Trumpian anti-climate waves roll all the way across the Pacific. Or were they?
Quinn said no. Everyone he knows is getting on with it. It’s the law, he quipped on late Tuesday afternoon. “There’s mandatory reporting. And we want to be at the forefront of performance.”
Quinn’s happy place is taking lower grade buildings and pumping up their performance to an A or A+. But his company is also building new. The target is NABERS 5 star or 5.5, he said.
Are his investors asking for sustainability? “Absolutely”, he said. And ESG – whether tenants or owners, it was the same.
Quinn has built three of the last four buildings in Geelong, but the portfolio is spread through “every city but Darwin and Hobart”.
A big focus right now is Brisbane where he’s seeing “a lot of joy”, with rents rising. Assets include 58 Morgan Street in Fortitude Valley, which his company is “building from scratch”; 240 Queen Street, Brisbane, a 30,000 square metre building which he’s just bought and which is currently “leasing very well”, plus One Margaret Street.
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