Act - now!

"Europe is experiencing the worst drought in 500 years" - I read this sentence on a German news portal a few days ago. I would like to add two more news items to the message, currently coming from the retail real estate investor market: "Although awareness has increased due to regulation, it seems that capital flows of investors in the retail segment have not yet been redirected to ESG-compliant properties on a large scale. Nor is it possible to observe or even quantify extensive (energy-related) renovations of existing properties in the direction of ESG conformity. This is surprising given the high proportion of institutional investors in this segment." The resulting storyline: "Likewise, sustainability assessments are increasingly being considered in the purchasing process, but purchasing decisions are mostly unaffected by their outcome."

Leading buildings onto the sustainability path together

Have you let this news sink in? For me, we can only draw one conclusion from this: We have to act and we have to act now! This is not just a request, but meanwhile the duty of the real estate industry resulting from the EU taxonomy and it starts with the investors. Starting to comply with this legal requirement is not that difficult, because the great potential to put buildings on the sustainability path is in every real estate investor's network. It has to be activated by all players, from the fund manager to the asset and property manager to the facility manager, jointly defining the sustainability goals, developing a suitable strategy and implementing it in property-specific solutions.

It doesn't always have to be the big revitalization projects. Energy-efficient measures already achieve a sustainable effect in day-to-day real estate operations. These measures also cost money, but it is money well spent. An investment that does not always pay off in euros, but in a future worth living for our children in a country with healthy, green forests and no water shortages.

Climate protection has a price tag, it is worthwhile, but it is not a yield turbo - at least not yet. The real estate industry, and therefore real estate investors, also have a duty to change their perspective. Anyone who calculates today that the markdowns for a "gray" property are lower than the investment in a "green" building and therefore opts for gray is walking into a trap. Not acting means having to bear immense costs for the consequences of climate change, and these costs are guaranteed to rise inexorably, getting on top of us and causing our business models to fundamentally stumble sooner or later - for sure!

ESG is team sport

So: get your head out of the sand and accept the challenge. Understanding climate protection through sustainable real estate as a team sport. In our industry, this means: There are no masterminds or subcontractors. There is only the powerful "sustainability" team. This means that finance, and therefore asset management, should be on the same playing field and in the same team as property and facility management - and on an equal footing. Each player is a specialist in his or her player position and thus strengthens the team's success. It becomes even more effective when the interfaces in the team are reduced by those players who can play different positions in this match on an interdisciplinary basis due to their business model. This makes the team faster and more successful.

We must now deliver on the promises that many of us have been making for some time in the media and on social networks. We should not just talk green but act sustainably. "Manage to Green" is a mission, not an appeal.

By Christian Schröder, COO of MEC