Written by Pooran Desai OBE
A few weeks ago, I had the privilege of joining Platinum Property Partners – a network supporting property investors – for their annual conference. I had been invited to address their franchisees on the challenges and opportunities ahead based on the latest climate science.
The challenge is enormous as laid out in the latest United Nations reports and at our event at the UN Climate Conference, COP26 in Glasgow last November. We are now very unlikely to avoid global shocks from climate change. It is increasingly likely that this will happen within the next ten years, and as early as this year.
Climate and Environment
Property investors think long term. Therefore climate and environment must now be a key decision-making factor in property investment decisions – with opportunities to reduce risks and enhance returns. Decisions can be categorised based on local and global environmental impacts.
Local environmental factors which need to be considered to reduce risk include understanding how more frequent extreme weather events might impact flooding and storm damage. For coastal properties, sea-level rise is an increasingly important issue, with the latest evidence of polar melting happening faster than predicted.
Global impacts of climate change will also likely lead to the mass migration of people and global food shortages. A major climate refugee crisis is extremely likely now. Global food shortages will likely add to the cost-of-living crisis so some property investors may see more tenants struggle to pay rent.
Actions to take
Positive actions that property investors can take can include making homes energy efficient and installing renewables. Going further than this, it is worth thinking how your property can support more sustainable lifestyles. When buying a property, you might want to consider how easy it might be for tenants to live without a car, or to install electric vehicle charging points for instance.
Have you made it easy for tenants to recycle? Can you help residents grow some of their food by creating vegetable patches in the garden? And for homes in multiple occupancy, how can you create a sense of community and create the psychological resilience which all of us will need to best cope with – and even thrive – as the climate crisis hits home in the near future?
If you would like to see my presentation at the PPP conference, here is a link.