Hermes Investment Management has published its latest Responsible Property Investment (RPI) report From climate risks to positive impacts: Time for action. The report calls on the industry to take action now, and highlights the Paris Agreement including the Climate Development Goals. They report also focuses on Hermes’ approach to responsible property investment governance, strategy and management.
Time for Action – Paris Climate Agreement
The Paris Climate Agreement demonstrated a clear shift in perceptions among the institutional investment community. There is now a sense among institutional investors that to finance the necessary transition to a low carbon economy, and the adaptation to the physical effects of climate change, requires a significant re-allocation and scaling up of current private efforts.
Despite this significant progress, however, many investors have yet to fully integrate environmental, social and governance (ESG) issues into their investment decision-making processes due to structural barriers as well as cultural issues which are preventing this transformation in practice. Hermes Investment Management believes investors have a positive duty to incorporate ESG risks into their investment practices and proactively engage with companies on these issues.
Managing climate risks and opportunities: Hermes approach
RPI has been a long-term priority for Hermes Investment Management, including mitigating the risks of carbon over the next 20 to 30 years. It has explored and developed a range of decarbonisation activities across the real estate asset classes it invests in, which would be applicable for the wider investment community.
There are four elements to Hermes Investment Management’s strategy to manage these risks including:
- Portfolio managers being aware of the carbon in their portfolios, which investments are the largest contributors and what are the associated carbon risks.
- Portfolio and specific investment decisions must be made using this data as another measure of risk.
- Directly-owned assets should be managed where funds hold assets with significant carbon risk.
- Finally, to engage with public policymakers and sector organisations to support the wider market transformation of the industry.
Continuous performance: Delivering positive impacts
Beyond the medium to long term impacts of climate risks and opportunities, we work to deliver continuous performance today. At Hermes we believe that in addition to delivering excellent performance returns to our clients and beneficiaries, we must equally aim to invest for the benefit of the broader society in which we operate. We have these additional responsibilities because our activities will have impacts on the world in which our beneficiaries live and work today as well as the one in which they will retire into tomorrow. A principle which guides our actions is therefore the aim to deliver holistic returns.
For real estate this means that as well as achieving a nominal financial return we also seek to deliver and manage sustainable cities, communities and buildings, communities which have positive social impact through education and job opportunities and energy efficiency and low carbon buildings.
The report draws on case studies to illustrate this approach in practice:
- Sustainable place making for the future at King’s Cross Central in London;
- NOMA sympathetic regeneration in Manchester to a create a new smart, digital and sustainable neighbourhood, and,
- Driving positive socio economic impacts in our communities through the active management of our shopping centres.
Saker Nusseibeh, Chief Executive Officer, Hermes Investment Management, commented: “Responsibility is ingrained in our DNA, and creating the right outcomes from our investment decisions is of vital importance. The right outcomes on a 30-year time horizon are those that mitigate risk, including carbon risk. This report highlights the importance of integrating environmental, social and governance issues into investment decision making and the welcome shift in perceptions that is taking place among institutional investors to do so. We now need to see action.”
Pension beneficiaries do not only want a good return on investment, they also want a decent and affordable economy to spend it in. Ultimately achieving this mission will mean putting the interests of clients and their underlying beneficiaries’ front and centre, stretching time horizons beyond quarterly performance figures and even beyond the tenure of a traditional mandate.
Chris Taylor, Head of Private Markets of Hermes Investment Management, said: “If we are to think about the future, rather than benchmark against the past, we as an industry need to change our approach to investment, ensuring that environmental, social and governance issues are integrated into investment processes across the sector. Hermes continues to champion these issues and to incorporate them into our investment strategy. This can be seen most clearly in our biggest regeneration projects – King’s Cross in London, NOMA in Manchester, Paradise in Birmingham and Wellington Place in Leeds – which benefit the communities and deliver responsible and sustainable investment returns. This report gives our strongest call yet for the industry to follow suit.”
How to be More eco-Responsible in 2018
Nowadays, more and more people are talking about being more eco-responsible. There is a constant growth of information regarding the importance of being aware of ecological issues and the methods of using eco-friendly necessities on daily basis.
Have you been considering becoming more eco-responsible after the New Year? If so, here are some useful tips that could help you make the difference in the following year:
1. Energy – produce it, save it
If you’re building a house or planning to expand your living space, think before deciding on the final square footage. Maybe you don’t really need that much space. Unnecessary square footage will force you to spend more building materials, but it will also result in having to use extra heating, air-conditioning, and electricity in it.
It’s even better if you seek professional help to reduce energy consumption. An energy audit can provide you some great piece of advice on how to save on your energy bills.
While buying appliances such as a refrigerator or a dishwasher, make sure they have “Energy Star” label on, as it means they are energy-efficient.
Regarding the production of energy, you can power your home with renewable energy. The most common way is to install rooftop solar panels. They can be used for producing electricity, as well as heat for the house. If powering the whole home is a big step for you, try with solar oven then – they trap the sunlight in order to heat food! Solar air conditioning is another interesting thing to try out – instead of providing you with heat, it cools your house!
2. Don’t be just another tourist
Think about the environment, as well your own enjoyment – try not to travel too far, as most forms of transport contribute to the climate change. Choose the most environmentally friendly means of transport that you can, as well as environmentally friendly accommodation. If you can go to a destination that is being recommended as an eco-travel destination – even better! Interesting countries such as Zambia, Vietnam or Nicaragua are among these destinations that are famous for its sustainability efforts.
3. Let your beauty be also eco-friendly
We all want to look beautiful. Unfortunately, sometimes (or very often) it comes with a price. Cruelty-free cosmetics are making its way on the world market but be careful with the labels – just because it says a product hasn’t been tested on animals, it doesn’t mean that some of the product’s ingredients haven’t been tested on some poor animal.
To be sure which companies definitely stay away from the cruel testing on animals, check PETA Bunny list of cosmetic companies just to make sure which ones are truly and completely cruelty-free.
It’s also important if a brand uses toxic ingredients. Brands such as Tata Harper Skincare or Dr Bronner’s use only organic ingredients and biodegradable packaging, as well as being cruelty-free. Of course, this list is longer, so you’ll have to do some online research.
4. Know thy recycling
People often make mistakes while wanting to do something good for the environment. For example, plastic grocery bags, take-out containers, paper coffee cups and shredded paper cannot be recycled in your curb for many reasons, so don’t throw them into recycling bins. The same applies to pizza boxes, household glass, ceramics, and pottery – whether they are contaminated by grease or difficult to recycle, they just can’t go through the usual recycling process.
People usually forget to do is to rinse plastic and metal containers – they always have some residue, so be thorough. Also, bottle caps are allowed, too, so don’t separate them from the bottles. However, yard waste isn’t recyclable, so any yard waste or junk you are unsure of – just contact rubbish removal services instead of piling it up in public containers or in your own yard.
5. Fashion can be both eco-friendly and cool
Believe it or not, there are actually places where you can buy clothes that are eco-friendly, sustainable, as well as ethical. And they look cool, too! Companies like Everlane are very transparent about where their clothes are manufactured and how the price is set. PACT is another great company that uses non-GMO, organic cotton and non-toxic dyes for their clothing, while simultaneously using renewable energy factories. Soko is a company that uses natural and recycled materials in making their clothes and jewelry.
All in all
The truth is – being eco-responsible can be done in many ways. There are tons of small things we could change when it comes to our habits that would make a positive influence on the environment. The point is to start doing research on things that can be done by every person and it can start with the only thing that person has the control of – their own household.
Top 5 Changes You can Make in Your Life to Reduce Your Carbon Footprint
In a world, where war rages and global warming threatens our very existence, the inhabitants of earth need to be extra vigilant in their efforts to go green. This includes reducing your carbon footprint on the earth and leading a more sustainable life.
Many homeowners feel perplexed by all of the options available to reduce their carbon footprint. They may even feel (falsely) that making their household more green will fail to make that much of a difference in the fight to save our planet.
Even a single home going green has a massive impact on the environment. We can win this battle on home at a time. If you’re interested in accepting the challenge of making your household a green home, read on below for a few of the top changes you can make in your life to reduce your carbon footprint. We all stand to benefit from making the earth safer for future generations – and your wallet won’t complain when you start to see the savings in annual energy costs.
Switch From Dirty Energy to Clean Solar
The ION Solar reviews tell it all–solar is the best way to go. Whether your goal is to slash your energy bills, or to reduce your carbon footprint, the sun is a fantastic source of renewable energy.
It’s important to get past the hype from solar installers. Instead, listen to the plethora of impartial customer reviews that mention everything from a $20 energy bill, to the incredible feeling of knowing that you are doing your part by going green and minimizing harmful emissions in to our atmosphere.
The average investment is $15,000 to $30,000 for installation and purchase of solar panels. Optional battery power packs can help provide consistent power during both night and day. And many government agencies provide federal, state or local grants to help offset upfront investments in clean energy.
Depending on which installed you choose, your household may qualify for low-interest or zero interest loans to cover the up-front cost of your installation. And the loan payments are usually less than your current monthly power bill.
It really is a win-win, as home buyers are looking for homes that feature this technology – meaning solar power installation improves the resale value of your property.
And there are a number of additional home modifications that can help improve the energy efficiency of your home. A programmable thermostat can better manage energy consumption from home cooling and heating systems while you’re away from home. And weather stripping your doors can help keep cool air in during the summer, and warm air in during the winter.
Of course, energy conservation starts at home. And this includes setting a powerful example for your kids. Teach your children how to close windows, strategically keep doors open or closed based on airflow, and encourage them to leave the thermostat alone – opting for adding or removing layers of clothing instead.
Unplug Appliances and Shut Off Electronics
Unplugging your appliances when they aren’t in use, such as the toaster and the coffee maker, has more of an impact than you might think. Set your TVs and stereos on sleep timers, instead of letting them run around the clock. The cumulative impact of wasteful electronic device usage is horrible for our environment – putting unnecessary strain on our electrical grid.
One of the simplest and easiest ways to reduce your carbon footprint is by recycling. You are already throwing this stuff away anyway, right? It doesn’t take much more effort to just put recyclables in a separate container to be recycled, now does it?
Oh, and did I mention that you can earn money for recycling? Yes! Many cities and towns have recycling centers that will purchase your clean plastic and glass bottles for reuse.
Minimize Your Water Usage
Water is one of the easiest things to forget about when it comes to reducing your carbon footprint. Preserve water by turning off the faucet while brushing your teeth. Shorten your shower by a few minutes and turn down the heat on that water heater. You’ll be surprised at how much lower your water bill and your energy bill will be.
Saving money and reducing your carbon footprint? What isn’t to love?
These are just a few of the top ways that you can reduce your carbon footprint and start living a greener lifestyle. And we aren’t factoring in all of the advantages that we’ll reap from public investments in a smarter energy grid.
From decreasing your water usage, to switching to solar for your home’s energy needs, you will feel good at the end of the day knowing you are doing your part to save the future of this planet for generations to come!
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