A leading UK wealth manager has embarked on a national campaign to encourage private investors to make their estates sustainable and net zero.
“Doing this protects value because sustainable estates are more resilient to rising energy costs, environmental risks and future regulation,” insists Junaid Afzal, Commercial Director with Haven Financial Planning.
Based in Altrincham, Cheshire but with a national client base stretching from London and the home counties to the far north, Junaid recommends investors think of future proofing as being key “given how government alongside markets are moving rapidly towards net zero.”
“Also, avoiding costly upgrades later is essential,” says Junaid. “This can be achieved by aligning your assets now. In addition, legacy plays a role because a net zero estate demonstrates responsible action, enabling wealth to be passed on reflecting a modern ethos which appeals to future generations.”
So what are the benefits of creating a sustainable and net zero estate? Junaid insists the benefits are many.
“They include environmental in reducing carbon footprint, and biodiversity protection, with sustainable land management approving ecosystems. The financial benefits include protecting asset value through the use of renewable energy, efficient heating and insulation to cut running costs.
“Then there are social and family benefits too as mentioned above in relation to how sustainable estates align with future generational values. There are also benefits in terms of community impact on jobs , eco-tourism and local Green initiatives.
“With regulation in the market only increasing, having a compliant asset in terms of energy, the building itself and the environment is increasingly attractive to buyers, tenants and institutional investors. ‘Sustainability’ here can also be referred to as preserving wealth through the generations and looking to plan accordingly to ensure assets are passed on in total where possible.
Junaid adds: “I would recommend that private investors consider the PESTAL framework, typically used by businesses and organisations to analyse macro-environmental factors in their planning. PESTAL can be used to consider political, economic, social, technological and environmental factors in the drive towards net zero.
“The economic and political dynamics are particularly significant for IHT planning, as new government policies change people’s minds and approach. So whilst the initial planning is paramount, ongoing reviews are just as important, if not more so, due to the changing landscape.”
Junaid also feels it’s essential that experienced private investors with existing estates, know how they can identify assets and investments with poor sustainability and change this.
“It’s about paying attention to energy performance and carbon footprint alongside e.g. reviewing energy performance certificates for properties. Lower ratings equal high emissions and greater regulatory risk! Carrying out a carbon audit of the estate is crucial. Any assets exposed to regulation need to be assessed for their vulnerability.
“In turn, sustainability can be improved by upgrading physical assets, gradually exiting unsustainable industries, and re-investing into renewable infrastructure or sustainable private equity.
“There are also many incentives and partnership opportunities out there in the market including grants, subsidies and collaborations for green estate projects.”
Junaid says key is to identify new sources of return and protect any long-term assets and their values.
“Also crucial is knowing the best ways for private investors to introduce new, sustainable assets to their estates,” maintains Junaid.
“Quite simply add energy efficient properties into the portfolio, and e.g. retrofit existing holdings.
“Also seek out opportunities to diversify and invest in sustainable agriculture and land use projects as well as renewable energy infrastructure which is becoming increasingly popular.
“There are many green financial products on the market now including bonds, ESG-screened funds and private equity in clean tech.
“The proliferation of technology and innovation companies developing low carbon tech, sustainable materials and energy efficiency solutions over recent years also continues to prevail.
“The volume of collaborative and co-investment opportunities with government, NGOs and impact funds on larger projects is on the rise too.”
To find out more, in particular, how net zero and sustainable asset classes will evolve over the next few years, contact Junaid via www.havenfinancialplanning.co.uk.
