European Property Sustainability Matters European Property ...

Introduction
The market reaction
This is the third annual King Sturge report under
the title “Property Sustainability Matters”. In less
than three years the concerns and media coverage
of this subject have exploded; hardly a week goes
by with out it being mentioned in the mainstream
media. Ignorance of this topic is no longer possible,
but denial is still high on many people’s agenda.
Firstly, some sceptical investors say:
“as it cannot be measured in quarterly or
annual monetary valuation terms, it cannot be
important”.
But now many realise that they may have invested
in “valuation time-bombs” which may come back
to haunt their complacency. For instance, research
from the international firm of architects Gensler,
which is discussed in this report, warns that 75%
of property developers believe that impending
legislation will have a negative impact on the
value and transferability of energy-inefficient
buildings from 2007.
This could lead to dramatic events in the commercial
property market throughout Europe, with investors
disposing of inefficient stock, upgrading those
buildings which can be adapted and demanding
much higher energy efficiency from new buildings.
Future-proofing investment values is of growing
importance.
Secondly, others take a more relaxed wait-and-see
attitude and simply say:
“we are doing things OK, but our PR is not good
enough”.
Thirdly, a growing minority are taking an
enlightened leadership role in the national and
international property market. Some of these
flagship examples are recorded in this report. CSR
(Corporate Social Responsibility) is accelerating fast,
especially among tenants. Investors, financiers and
developers need to be aware of this sea-change in
CSR attitudes, and “future-proof” their schemes
(see page 39).
Climate change – the basics
Scientists at the British Antarctic Survey have
recently revealed that the 35% increase in carbon
dioxide over the last 200 years is unprecedented in
over the last 800,000 years. Atmospheric analysis
from ice bubbles deep in the Antarctic shows
that CO 2 today is way outside the natural range of
variation.
The United Nations Framework Convention on
Climate Change (UNFCCC) co-ordinates policy on
climate change on behalf of the United Nations.
Part of its brief is to monitor scientific evidence
of global warming – it works closely with the
Intergovernmental Panel on Climate Change
(IPCC).
Evidence from the scientific monitoring work of the
IPCC suggests that even the minimum predicted
shifts in climate for the 21st century are likely to be
significant and disruptive. Estimates of upcoming
changes are wide-ranging:
• The global temperature may climb by between
1.4 and 5.8 degrees Celsius
• The sea level may rise by between 9 and 88 cm.
Climatologists now accept that the
consequences of climate change over the next
few decades could vary from “disruptive” at the
least, to “catastrophic” at worst.
Geographers and climatologists, according to the
UN, concur that:
“more severe storms and floods along the
world’s increasingly crowded coastlines are
likely, and will be a bad combination even under
the minimum scenarios forecast”.
It is no longer possible reasonably to explain the
occurrence of more frequent and powerful cyclones,
hurricanes, floods and droughts as random.
Scientists say it is an indication that climate change
has already begun. One climate variation appears
to be an increase in variation itself: there are wider
swings in what is “normal” weather.
For more information: http://unfccc.int/essential_
background/feeling_the_heat/