Letters from Larry to tackling real estate’s uncomfortable truths

Chris Ireland, JLL UK CEO, discusses the importance of balancing purpose and profits and his focus on engraining sustainability into JLL’s culture.

We have all become much more aware of the environmental and societal issues facing us and are responding by examining how we change our behaviour.

Letters from Larry

Blackrock CEO Larry Fink, who runs the world’s largest fund management company, writes an annual open letter to the companies in which Blackrock invests. They are a refreshingly frank synopsis of the fragile world in which we live in and an excellent barometer of what’s to come. He addresses them to CEOs, because as leaders we have a responsibility to drive change, but the content is pertinent to everyone.

His letter of 2018 was particularly powerful and highlighted the inextricable link between purpose and profit “Purpose is not the sole pursuit of profits but the animating force for achieving them.” This resonates with me because it’s something that I’m struck by on a regular basis when I talk to clients and colleagues alike – the need to balance profits and purpose for the long-term. Clients like L&G are leading the debate by focusing on social investment opportunities to meet their pension liabilities. Larry Fink’s letter called for companies to play an active role in improving the environment, working to better their communities and increasing the diversity of their workforce.  And I couldn’t agree more.

Responding to Real Estate’s uncomfortable truths

For someone like me, working in the real estate industry all my professional career, these themes are hard hitting and highlight some uncomfortable truths. We, as a company and a sector, will be judged on how we respond.

  1. The built environment has an enormous environmental impact. It generates 40% of carbon emissions and half of the world’s raw material consumption is in developing and operating buildings and infrastructure. At JLL UK, we are proactively engaging with clients and industry bodies on designing out waste and tackling climate change. In 2018 we replaced over 2 million items of single-use plastic with eco-friendly alternatives and electricity from certified natural renewables powers over 550 buildings managed for our clients, as well as 90% of the ones we work in.
  2. Homelessness is an issue close to my heart. Everyone should have a place to call home that form the framework for communities. We have extended our long-standing strategic relationship with charity partner Crisis to 2020 and are on track to raise £1.2 million to get hundreds of people out of homelessness. Plus, our affordable housing team values over 650,000 social housing units a year.
  3. I strongly believe that the more diverse the team, the better the results. Our sector does not reflect the diverse world in which we live, and we need to change. For example, the median gender pay gap in real estate is 30%, more than double the 14% of all UK companies Put simply, we don’t have the balance especially in senior roles. At JLL, we have been working hard to make our own business and industry more diverse and inclusive. I’m pleased to say we’re now the only property advisory firm in both the Top 50 employers for Social Mobility and Top 100 employers for Stonewall Equality indices and have recently been ranked 6th in LinkedIn’s Top 25 companies to work for.

Embedding a sustainable approach to everything we do  

Our Building a Better Tomorrow Programme represents our leadership ambition and provides a framework to ensure sustainability is a natural part of everything we do. In other words, we’ve taken a lens over each aspect of our strategy and if it’s not sustainable we’ve changed it. Not only is it the right thing to do, it’s what all our stakeholders want to see. Indeed, over the last year we’ve seen a significant increase in the number of clients who want to partner with us to meet their own sustainable targets.

We set thirty ambitious 2020 sustainability targets in 2017, we’ll meet some but not all by our deadline. Progress is too slow in some areas and we’re redoubling our efforts to embed sustainability into our culture for the long-term. At the same time, I’m realistic enough to appreciate that legal requirements and marketing campaigns are a helpful nudge in the right direction.  They raise awareness, spark a debate and shine a much-needed light on action.

So, whether it’s a letter from Larry Fink, Gender Pay Gap reporting, or World Recycling Day, we can all benefit from educating ourselves on these critical issues to find our own purpose.  Once more people and companies are driven by purpose, we’ll see more positive shifts in behaviour.

About the Author

Chris has over 30 years’ experience in the UK investment market and specialise both in up and let investment product including portfolios as well as development funding projects. Chris has worked with a wide range of institutional property company and international clients including GIC, M&G, Hermes, Schroders and Legal and General. Chris has also been at the forefront of the development of the Alternative Investment areas within JLL (Student Housing, Health, Senior Living and Platform deals). Within the JLL Capital Markets offer the investment teams now work hand in glove with the sophisticated Debt Advisory business and the Corporate Finance and M&A side. Chris was Chairman of the Investment Property Forum from June 2015 - June 2016 and then sat on their Strategic Advisory Group. Chris joined King and Co as a graduate in 1979 and has worked his whole career dealing with various aspects of the UK Investment Property Market. He ran the Investment teams at King Sturge and became Joint Managing Partner and subsequently Joint Senior Partner prior to the merger with JLL in 2011.

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