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Private Sector Invests in Climate Change: Implications on Responsible Real Estate

ENDVEST Jul 27, 2015

Twelve of the largest, most impactful U.S. companies in the private sector have worked with the White House to make a commitment to investing over $140 billion to aid in climate change efforts. Companies include Walmart, Goldman Sachs, and Apple, among others.

This commitment comes on the heels of continued White House effort to prioritize global warming at the U.N. Conference on Climate Change, at the end of the year in Paris.

“They want not only to see a successful outcome in Paris, they want it to happen and are willing to commit in a manner that’s both advanced and energetic,” said Brian Deese, the president’s senior climate change advisor.

Although many of these companies have already existing climate change efforts, this represents an entirely new commitment from each of the 13 companies.  Goldman Sachs and Bank of America will finance billions in renewable energy. Google and Microsoft will purchase 100% of the energy for their hyper-consuming data centers from renewable energy. Walmart and Pepsico will modify their supply chains in environmentally conscious ways.

“These commitments will push the limits of companies that are already performing well with respect to climate change,” said Deese.

This commitment demonstrates the recognition of climate change implications in the business world. The companies’ total revenue exceeded $1.3 trillion last year, and have an aggregate value of more than $2.5 trillion. But, the list of companies lacks a fossil fuel company, and it’s uncertain if one will ever join such an effort. Deese said he expects “support from a multitude of sectors” in the not-so-distant future.

Although it seems unrelated, whenever large corporations form a commitment or agreement, other industries are inevitably affected, and real estate is no exception. 

The companies who committed to such change include: Alcoa, Apple, Bank of America, Berkshire Hathaway Energy, Cargill, Coca-Cola, General Motors, Goldman Sachs, Google, Microsoft, PepsiCo, UPS, and Walmart. Together, they comprise a collection of companies that is one of the largest players in commercial real estate in the entire country. They have a unique quality in that they can create a significant portion of demand for real estate with certain features, or a lack of certain features. 

So, if these companies are becoming increasingly more committed to efforts in climate change, then the real estate that they likely will demand will include green technologies, from construction of the building, to use of it. 

Furthermore, private sector investment in climate change means that investments these companies make (outside of their primary businesses) will be pressured to be environmentally sustainable. Real estate with special attention to environmental sustainability (Responsible Real Estate, or RRE for short) will garner interest.

Sites like ENDVEST.com are at the forefront of Responsible Real Estate investment. Our new agriculture field investment on the Filipino islands of Malaybalay and Negros will prove that, yes, investments can be both economically profitable and environmentally sustainable. 

Look out for a variety of new Responsible Real Estate deals, a part of our new Social Impact Initiative, on August 3rd, with the launch of ENDVEST 2.0, our new and improved website.