Paul Frances McNamara is head of research at PRUPIM, one of the largest property management firms in the UK, and among those responsible for the company’s sustainability policy that has permeated all its operations for ten years. He has a slightly unusual background for someone engaged in issues relating to sustainable property management. He is also an odd person to have views on the profitability of investing in properties with a sustainable or green profile.‘Fundamentally I’m a geographer, and for me there’s a natural link to the environment. I’ve also had a visionary boss who wanted to investigate the bearing that CSR (Corporate Social Responsibility) factors can have on investments in the property market. That was how I got involved,’ he says.
Power but no knowledge
McNamara points out two paradoxes that impede a full breakthrough of sustainable investments on the property market. One is that 98% of all sustainability modifications touch on only 2% of the problem.
‘There’s such a tremendous lot remaining to be done, and it’s not just a matter of building energy-saving houses. Historically, sustainable property management has been an issue for technicians, engineers and architects. But it’s now an equally important issue for investors,’ he adds.
The second paradox is that the people in the know about how we attain sustainable development have no power, while those in power lack sufficient knowledge. Architects, engineers and property owners often have knowledge but not the ability to convince investors and others of the correctness of investing sustainably.
‘To convince asset managers and investors, you have to talk to them in the kind of language in which they excel — that is, in terms of yield and risks.’
Slow and steady wins the race
‘These people’s function is to assume financial responsibility, and the day they realise that sustainable investments are profitable in the long term, or at least aren’t unprofitable, they’ll assume that responsibility,’ McNamara says.
He is a fervent supporter of his cause. Besides being head of research at PRUPIM, he is also a visiting professor at Oxford Brookes University, a board member at Investment Property Forum and honorary chairman of the Society of Property Researchers in the UK, to mention some of his commitments. And he recently received the Outstanding Industry Contribution Award, in recognition of his work on sustainability issues in the property sector. The award, bestowed by Investments & Pensions Europe (IPE), was one of the Real Estate Investor Awards and was based on nominations from investment and pension companies throughout Europe.
Surprising
‘I was surprised to be nominated, and then surprisingly enough I was given the award, and clearly it’s a kind of recognition. That means a great deal,’ McNamara confesses.
The road to recognition has, however, been a fairly long one. Paul McNamara must be counted as one of the pioneers in the area who have indefatigably argued for their cause. Back in the early 1990s, he wrote his first article on the subject of a sustainable property market. Ten years ago, he helped to draw up his company’s sustainability strategy, and for the past few years several of the major property investors in the UK have joined in efforts to promote sustainability.
McNamara is now in Stockholm to take part in a Sustainable Investment Platform seminar held by Mistra.
Power can make a difference
‘I see seminars like these as good opportunities to meet investors and asset managers, and try to convince them of the logic of investing and managing sustainably when it comes to properties. They’re the ones with power, who can genuinely make a difference. It’s just a matter of explaining it to them in a way that’s intelligible,’ he explains.
One of the arguments he puts forward is that there is skewed pricing or valuation of sustainable investments in properties.
‘The costs that are not fully visible at present are the rising costs of energy and heating. Soon, for example, we’ll reach a point in the global economy at which tax on energy use will be raised. Companies that don’t consider sustainable development will lose credibility, and ultimately lose their customers. And this applies to the property market as to all other business operations. It’s just a matter of convincing the right people, in the right way, that this is the case.’
