Irish weather, ESG/SRI Screening and The Built Environment

A red sky in the morning is a sailor's warning. What’s the connection and what’s the problem currently?

We can easily understand why the sun-loving Romans chose not to occupy Ireland, but even the ferocious Vikings elected to give the emerald isle a pass!

Ireland's four-seasons in a day is definitely not a ‘recent’ global warming wet-weather phenomenon.

A prosperous economy, one of the fastest growing countries in all of Europe – an extremely buoyant property development and construction environment supported through robust economic growth, high population growth, inbound immigration and decades of under-development in key commercial office and retail builds to support that growth. Let's not even discuss residential!

A ‘complicated’ tax environment, with global multinational titans getting away with contributing miniscule tax, whilst local citizens fork out plenty in personal tax and VAT.

So what’s the big deal, and where does ESG/SRI come into the equation and why is this important?

Property Development and Construction relies on the allocation of capital. 

Most of the role-players in the Built Environment - Developers, Architects, Engineers, Construction companies et al mostly operate as ‘private enterprises’ and thus fall ‘outside scope’ of the vast pools of capital allocated to mainstream public domain asset managers by the industry gatekeepers – the large pension consultants, multimanagers, life companies and wealth managers.

Currently, there is sharp focus on rigour and substance being applied by mainstream asset managers in terms of their ESG/SRI substance, policies, and processes, including their engagement with target listed investment companies. Rightly so.

But in the Private Equity (PE) or bank lending space, there is substantially less visibility on ESG/SRI policies, practices, and engagement processes.

It is fair to say that the Built Environment role players have dynamically accelerated their efforts in the past decade, on the ‘E’ element of ESG ie incorporating many global advances in technology, materials, energy efficiency, use of natural light, green space etc.

However, much still needs to be done with respect to the ‘S’ factor – incorporating better Social aspects.

Constructing stylish and fashionably new office and retail developments, that look good both inside and out are of little comfort to the average person (staff/citizen) who has to trudge through rain and windswept streets in total discomfort.

Professional allocators of capital into the Built Environment (both PE and REIT managers), CAN and MUST start doing more in terms of holding the Built Environment role players accountable for improving their S rating.

From a regulatory oversight perspective, local authorities and An Bord Pleanála need to play a more active role in ensuring that adequate S measures have been incorporated into the design elements of the project. The corporate's have the balance sheets to fund this, and the citizens, based on their tax contributions, deserve better.

It's no use for the State and society at large to advocate people give up personal covered transport and adopt more 3rd world means of commuting (by foot/bicycle), if their needs are not going to be met. A good start would be to ensure that all new-builds provide adequate rain and wind shelter to pedestrians/cyclists.

At Coopman Search and Selection, we are playing our part in the evolution of ESG, recently gaining our B.Corp™ Certification. We actively encourage others to follow suit. We can all do more.