Paul Frances McNamara is the Director of Research for one of England´s largest real estate investment management companies, PRUPIM, and one of those responsible for the sustainability policy that has permeated all of the company´s activities for the past ten years. He has a somewhat unusual background for working with questions about sustainable real estate management. He is also an odd person to have opinions about the profitability of investing in real estate with a sustainability, or green, profile. “Essentially, I´m a geographer, and for me there is a natural connection to the environment. I have also had a visionary boss, who wants to explore what Corporate Social Responsibility (CSR) factors can mean for investments in the real estate market. That´s how I got engaged," he says.
Power but no knowledge
McNamara points out two paradoxes that stand in the way of sustainable investments fully penetrating the real estate market. The first is that 98% of all sustainability measures address only two percent of the problem. “There is so very much left to do, and it is not only about building energy efficient buildings. Historically, sustainable real estate management has been an issue for technicians, engineers and architects. But now it is just as important an issue for investors," he says. The other paradox is that those who have the knowledge about how to achieve sustainable development have no power, and those who have power have insufficient knowledge. Architects, engineers and property owners often have knowledge, but not the capacity to convince investors and others about the correctness of investing sustainably. “To convince asset managers and investors, one has to speak with them in the language they understand — that is, in terms of returns and risks.
Perseverance pays
Their job is to take economic responsibility, and the day they see that sustainable investments are profitable in the long run, or at least not unprofitable, they will take that responsibility," says McNamara. He is passionate about his work. In addition to being the research director at PRUPIM, he is also a guest professor at OxfordBrookesUniversity, a board member for Investment Property Forum, and the honorary chair of the Society of Property Researchers in England, to name some of his commitments. And recently he received the Outstanding Industry Contribution Award; an acknowledgment of his work with sustainability issues in the real estate sector. The prize is awarded by Investment & Pensions Europe (IPE) Real Estate Investor Awards, based on nominations from investment and pension companies throughoutEurope .
Surprised
“I was happy about being nominated. Then I surprisingly received the prize, and it is clearly a kind of acknowledgment. It means a lot," says McNamara. But the way forward to acknowledgment has been rather long. Paul McNamara can be counted amongst the pioneers in his field, who tirelessly argued his position. Already in the early 1990s he wrote his first article on the subject of sustainable property markets. Ten years ago he participated in the development of his company´s sustainability strategy, and, since a few years ago, a number of the larger real estate investors in England have signed on to sustainability work.
Power can make a difference
McNamara is in Stockholm to participate in a Sustainable Investment Platform seminar organized by Mistra. “I see seminars like this one as a good opportunity to meet investors and asset managers, and try to convince them of the logic of investing and managing sustainably with respect to real estate. They are the ones that have power, and that really can make a difference. It´s just necessary to explain it in a way that is comprehensible for them," he says.
Imbalance
One of the arguments that he makes is that there is an imbalance in price setting or valuing of sustainable investments in real estate. “The costs that aren´t fully visible today are the increasing costs for energy and heating, for example. We will soon reach a point in the global economy where energy consumption will be taxed more highly," he says. Companies that do not take sustainable development into account will lose credibility and, in the end, will lose their customers. This is as true for the real estate market as it is for all other activities. It is just about convincing the right people in the right way that this is the case."
