The power of money.
In the US Trump pulls out of the Paris climate accord but 1200 of the biggest corporates, states and cities in the land have told the Paris accord, “We are still in”. They’re worth a third of the US economy, about US $18 trillion. And that’s just the early days of this new campaign.
Rebel leader and former New York City mayor Michael Bloomberg on Monday published a letter from the group that defies Trump’s decision to leave the accord and promises to keep lowering emissions.
The POTUS says he’s pulling out to protect jobs but those that create many of the jobs and certainly the jobs of the future say he’s wrong.
In Australia, the weak links in our supply chain to survival (economically and environmentally) jumped in instantly behind Trump before they could pause for a second to see where the true weight of influence fell.
Among the six ministers who instantly fell to their knees was our the built environment’s own minister for cities, Angus Taylor.
Taylor is touted as a future leader of the Libs because he’s clever and a clean skin. We think he’s picked the wrong horse to back.
Josh Frydenberg’s star also tarnished quickly when he was handed the energy portfolio and had to say such silly things about renewables and so on. What happened to his friend Greg Hunt in the environment portfolio under Abbott should have been a warning.
The other MPs who wanted to follow Trump are Eric Abetz, Andrew Hastie, Tony Pasin, Craig Kelly and Ian MacDonald.
Amidst the furore one MP said that Mr Turnbull was “playing with fire” on climate policy. We don’t buy it. The ones playing with fire are the ones standing next to the coal pit, coughing up coal dust and watching the reef die.
Also in Australia leading Aboriginal academic Marcia Langton took a scathing swipe at “extreme environmentalists in her speech to the Minerals Council in Melbourne on Wednesday because they want to deprive Indigenous communities of the economic benefits of mining. She has a deep dig (oops) at activists against the Adani coal mine in particular.
In the same speech she bemoans that technology is robbing those same people of the opportunity for jobs in mining. So who’s surprised mining is about dirty money and not sustainable businesses that at least try to place people alongside the environment and economics.
In corporate property land the money increasingly tries to clean up its act, sometimes openly as on the GRESB hustings as reporting season gets under way, but often in total secrecy in a mysterious determination of many companies to hide their light under a bushel.
So what’s happening on the commercial front while the coal fires are burning?
According to consultant Simon Carter who tends to specialise at the corporate end of ESG (environmental social and governance) there are a lot of nerves around driven by the wildcard Trump and the cyclonic wake he trails, making many people feel that “anything can happen” but not in a good way.
We were talking about the big focus on wellness right now and Carter remarked that after the GFC a lot of his clients then were also concerned about wellness. Mental wellness in particular. Well, it’s stressful living under conditions imminent potential radical change.
Climate risk doesn’t help.
Carter says the work of Michael Bloomberg and Mark Carney from the Bank of England on risk disclosure is impacting globally.
“It’s been worked through with a lot of the world’s biggest financial solutions and driving an agenda with disclosure of risk, which in property, will be more about adoption and extreme weather,” he says
“Certainly there’s been a real hardening of resolve in certain areas, particularly finance.”
In Australia though, it’s still mixed signals.
“There’s often a lack of correlation between what investor representatives and managers are dealing with around ESG and what the organisation is otherwise doing and that’s part of their evolution.”
It’s about different parts of the business lining things up and that takes time, with sometimes quite a bit of misalignment in the run-up.
Why the big secret?
But one thing we don’t understand is why some corporates do good work on ESG or sustainability but then don’t want to share the news.
We think that’s akin to being a fabulous philanthropist and then keeping your good works under wraps. It’s missing a great opportunity for influence.We think there is a moral obligation to share the news and watch the influence spread.
But Carter confirms that among investors (and many property companies, we reckon) there is a predilection for keeping schtum.
In a world of much-trumpeted transparency, open markets free markets and stratospheric levels of comms technology we ironically have its opposite, extreme “message control” and enough secrecy to rival the FBI (at least before Donald Tump came along with his Twitter account and made a mockery of it and state secrets besides).
Carter says it’s “not really total secrecy or operating in the shadows per se, but some investors/investment managers trade on providing a high degree of discretion for their private clients and so maintain a low profile across all activities and are inclined not to promote interesting initiatives, sustainability or otherwise…”
Hmmm, we’ve said what we think about that.they should do.
Then, of course, there are others who who have every reason in the world to stay in the shadows because they do nothing/don’t care.
Sharpen your pencils for GRESB
Meanwhile, GRESB sustainability reporting season is back and everyone is sharpening their measuring sticks, including a bunch of smaller second tier companies that have made it to the hustings.
For the new entrants the pressure must be tough, given the outperformance of the top tier property companies.
Among the new names that don’t necessarily trip of the tongue on a daily news basis are CorVal, Fife Capital Management and Fortius Funds.
According to our sources the Sydney based Fortius, run by former BT execs Nicholas Sproats, Ragavan Sivanesarajah and Dave Curran – all formerly of BT Funds Management – invests in “unloved and under-appreciated” stocks around the world underpinned by nice chunks of real estate.
Fortius told the AFR it liked Mirvac because it was trading at a substantial discount “mainly due to its exposure to residential assets”, an Irish home builder and a company with Russian assets (now there’s some contrarian thinking going on).
Others new to GRESB include Logos Investment Management, Scape Australia, Growthpoint Properties, Hyprop Investments and Redefine Properties Limited. Let’s see how we go trying to find out a bit more about this batch.
Nice to see these new entities signing up to GRESB. And with its Asia Pacific head Ruben Langbroek moving to Australia, we can probably expect an even bigger crowd next year, happy to go on the record with their sustainability profile.
So here’s to companies that are proud to be green, clean AND seen.