To paraphrase Goebbels, to whom the quote is often attributed in a different context, when I hear the word Sustainability, I reach for my revolver. Goebbels was talking about the ubiquitous use of the word Culture, deemed always and everywhere to be a Good Thing. While doubtless culture has its merits, the rise of Sustainability, or Nachhaltigkeit, as the supposed panacea for all ills, carries with it the same danger of being rendered meaningless by indiscriminate over-use.
Like “liberty” or “justice”, the concept of sustainability threatens to become nothing other than a feel-good buzzword with no real meaning or substance. If, two years from now, the talk is still all about sustainability, it will be obvious that we are still in a deep and ongoing recession, and the real estate industry hasn’t come up with significant new ideas to get the markets moving again. Sustainability will still be top of the agenda, but green-fatigue will have to be countered by specific commercial marketing of the individual merits of a waste-reducing, energy-efficient, employee-friendly building that can provide solid financial returns to investors and tenants. It will soon have to be more narrowly defined, if it is to continue to have any meaning.
Now, don’t get me wrong. Sustainability, in all its facets, is indeed an admirable goal and clearly more than just a passing fad. At a recent conference I was chairing on corporate real estate, the senior managers on the discussion panel all confirmed the key role that sustainability now plays in their decisions. The impetus is coming from big enterprises, with their corporate mission statements committing themselves to the highest standards of green and eco-friendly manufacturing. A Google or a Coca-Cola, or any leading consumer products company, will now never move into anything other than a state-of-the-art sustainable building, given the potential negative impact on their bottom line. With the world-wide threat of lower consumer spending looming, the perception of health and eco-friendliness associated with their products is their business raison d’etre, their very life-blood.
By contrast, the real estate industry, until recently bedazzled by the glare of abnormal financial returns, is scrambling to catch up. But it’s scrambling fast, and never faster than in the last twelve months, as it seeks to jump aboard the great sustainability gravy train.
If anything, the priority given to sustainability has risen markedly since the onset of the financial crisis. Given the extra costs involved in improving energy, water and material efficiency, this may come as a surprise in these cash-strapped times. In fact, it’s likely to prove the catalyst in shaking out the older, financially-engineered speculative investors in the recent boom years, from the new wave of capital that will drive property markets into the next upswing. With the current over-supply of office space in Germany’s leading cities, owning outdated and energy-inefficient properties will not be an enviable place to be for investors who are short of capital. That’s a lot of investors.
We all now know that buildings use 40% of the total energy consumed in the US and Europe, and are responsible for 38% of carbon dioxide emissions – far more than all the cars, ships and jet airlines that criss-cross our highways and continents. The sustainability industry can look forward to years of lucrative contracts in reducing the environmental impact on buildings. These specialists are already proving the beneficiaries of this new awareness, hiring staff and expanding into overseas markets, while the ‘classical’ real estate industry continues to shrink and consolidate. Accountants and other cost-cutting specialists are enjoying a new field-day, while over-leveraged investors with over-priced investments are trying to come to grips with the changed environment Under water and faced with higher bank charges, for them, clearly, the situation will soon prove unsustainable.
Related posts:
