Is sustainability the key to the future of real estate? Brendan McCarthy, Head of Real Estate Responsible Investment at Calvert Research and Management, explores how ESG (Environmental, Social, and Governance) practices are transforming the commercial real estate landscape. In this episode, Brendan shares his journey from traditional finance to sustainability-driven real estate, and how capital markets can be a catalyst for positive change. He delves into the financial impact of addressing climate risks and the importance of sustainable capital allocation.
You will learn about the economic and operational hurdles in implementing sustainable practices in real estate, from energy efficiency to managing climate risks. Brendan also addresses common misconceptions among real estate owners and emphasizes why tackling these challenges now leads to long-term benefits, including higher property values and reduced financing costs.
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What You’ll Learn in Today’s Episode:
- How sustainability is reshaping the real estate sector.
- The financial benefits of addressing climate risks early.
- Challenges of implementing sustainable real estate practices.
- The importance of energy efficiency and decarbonization.
- Why green leases are gaining popularity.
- The impact of stranded assets and how to avoid them.
- The role of human capital in driving sustainability.
- Overcoming objections from real estate owners.
- ESG integration into capital markets.
- Financial materiality of climate risks in property valuation.
Timestamps:
- 00:00:00: Introduction and welcome
- 00:00:17: Brendan shares his passion
- 00:01:01: Brendan’s career path and transition to finance and ESG
- 00:03:06: Calvert’s focus on sustainability and financial materiality
- 00:03:15: Future opportunities and challenges in sustainable finance
- 00:05:17: Shifts in real estate valuation and the impact of ESG
- 00:08:43: Solar panels and efficient capital allocation in real estate
- 00:11:26: Monetizing unused assets in the real estate sector
- 00:13:22: Risks from climate change and real estate
- 00:18:13: Real estate owners’ challenges with sustainability initiatives
- 00:22:57: Benefits for corporate tenants with net-zero goals
- 00:24:00: Potential downsides of ignoring sustainability in real estate
- 00:26:04: Implementing green leases and shared investments
- 00:27:22: Timing and initiation of sustainability discussions
- 00:28:37: Initiating Asset Conversations
- 00:29:19: Aligning Landlords and Tenants for Efficiency
- 00:30:03: Growth in Owner-Occupier Shared Investments
- 00:31:00: Sneak Peek into Calvert’s Approach
- 00:32:23: Importance of Human Capital in Real Estate
- 00:33:03: Role of Governance in Real Estate
- 00:34:15: Assessing Business Management and Technology
- 00:35:17: Efficiency and Returns with Better Human Capital
- 00:35:54: Holistic Understanding of Property Risks
- 00:38:07: Power Surge Questions
- 00:39:02: Perspective on Carbon Credits
- 00:43:17: Recommended Information Sources
- 00:45:42: Personal Drive for Sustainability
- 00:47:03: Where to Find More Information on Calvert
Resources In Today’s Episode:
- Brendan McCarthy: LinkedIn
- Morgan Stanley
- Calvert
- Gareth Evans: LinkedIn
- Dan Roberts: LinkedIn
- VECKTA: News
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