Investing in impact How ESG has moved from incidental to integral in the property industry

Damian Wild, Chair of LandAid’s Fundraising Committee and former Editor of EG

There was something strikingly different about MIPIM this year. Not so much that there were fewer people, though that was true.

Our willingness to get back out there has been swift – this is property after all – but Cannes wasn’t rebuilt in a year.

Nor was it that this was a more balanced event, both in terms of gender and of sector. The halls, platforms and cafes were less capital markets-dominated than previous years; and the two are almost certainly linked.

No, what was most striking was how the agenda has changed, and how quickly. In the last five years ESG has moved from incidental to important.

In the last two MIPIM-less years it has gone from important to integral: the lens through which all real estate decisions now have to be seen.

But it’s not just the environmental aspects of ESG that were front and centre last month; social was everywhere too.

It featured heavily on the programmes of the London stand and in the Palais. With levelling up propping up just about all of the sessions in the busy Department for International Trade pavilion, by Thursday ESG’s S was as prevalent as its E.

It made me cast my mind back to MIPIMs past. Not so many years ago talk would simply have been of returns, not of the wider benefits that those returns can bring.

How so?

Well with trademark ebullience, West Midlands mayor Andy Street leapt from stage to stage to remind everyone about real estate’s impact on jobs and skills.

The new (and current at the time of writing) housing minister Stuart Andrew urged real estate to change its language to connect with the wider public. He seemed to suggest government should do the same.

Both would be welcome and both will be necessary if communities are to accept that real estate can be a force for good.

More specifically, and no less importantly, Legal & General’s head of real assets Bill Hughes was making the case for quantifying impact investing. “The contribution to society from the built environment should be measured on a standardised basis,” Hughes said, “and investors should be held accountable.”

And perhaps that’s where the conversation will get to by MIPIM 2023. More time will be spent judging the S of ESG. And for those judgments to be authoritative, the impact of investment, development, lending and of advice will need to be measured.

Benchmarks and metrics will take time to be established, longer perhaps to be accepted.

MIPIM 2025?

MIPIM 2030?

But it does need to happen. And LandAid, with the very real impact it has, has a role to play, in delivery and in measurement too perhaps. Accountability flows from there and public acceptance might just follow.

This MIPIM was always going to be a different one. But there was tangible evidence of the extent to which ESG now matters.

Let’s treat it as just the beginning though, the point in time when we started measuring the impact of every aspect of ESG, though perhaps particularly, the ‘S’.