Category

Economic Growth

Better Connected than Ever? – How Connectivity boosts Indian Real Estate.

By Affordable Housing, Blackstone, Construction Technologies, COVID-19, Economic Growth, Environmental Policy, Housing Need, Housing policy, India, Natural Capital, News, Real Estate Markets, Sustainable Growth

All roads lead to other roads: a dizzying complexity of cables, rail and road networks have literally girdled the earth, making us better connected than ever before. A hundred years ago it took twenty days to travel by steamship from London to Mumbai, now it takes nine hours by plane.

Subject to lockdown restrictions, you can cross the English Channel in two hours by ferry (plus three more waiting for the driver in front to get back to his cab), or else zip through the Tunnel in 30 minutes; and the electrons that carry your Internet messages travel at 2,200 Km a second, which is probably why Zoom is doing so well at the moment.

But none of this happened by accident: it was all planned, built and delivered to meet economic demand…except, of course, the electron, which does what it does by itself. Economic progress is everywhere driven by connectivity.

And that’s where Big Government comes in: periodic swings in the private funding cycles needed to build all those airports, roads and railways are increasingly being offset by government deficit spending programmes (or quantitative easing as it’s now known: the deficit’s more attractive, younger sister). Only big government is big enough to dampen regular (and inevitable) private sector investment fluctuations, which is why most advanced economies over the last forty years have set fiscal spending targets of up to 20% of GDP.

Nothing less will level out the swings and troughs, and without it the roads, railways and airports won’t get built at all…the Channel Tunnel started out as a private venture, ran out of money and finished up nationalised in all but name. Without Big Government you wouldn’t be able to zip under the Channel …you’d be stuck behind a lorry at Dover.

It’s a lesson India has taken to heart.

Connectivity boosts Indian real estate. How?

Over the next ten years the subcontinent is expected to invest a staggering $715 Billion in its new rail networks, with full electrification expected by 2024 and the entire system becoming carbon neutral by 2030 (www.ibef.org/industry/indian-railways).

By 2050 India’s railways will comprise 40% of rail services across the world, meeting a surge in passenger numbers driven by an increasingly wealthy travelling public. All of this is being powered by Big Government (Prime Minister Modi’s Government to be precise): including a programme to expand investment in new rail terminals, new stations and more extensive container operations across the subcontinent (www.outlookindia.com).

And the picture is pretty much the same on India’s highways where the network has doubled in size (from 71,000 Km to 142,000 Km) in the last ten years. As with rail, the expansion is being driven at pace to meet unprecedented levels of demand from a burgeoning and increasingly wealthy population, in stark contrast with the United Kingdom where road traffic levels have increased by 80% over the last twenty years, but capacity has risen by a sluggish 10% annually: and even that unimpressive figure is falling off year by year.

All of which means India is now better connected than ever before; and in combination with those same (unprecedented) demographic trends on the subcontinent, enhanced connectivity is also having a radical impact on India’s domestic housing markets. New Science parks in Chennai and Bangalore and new railways and highways in Mumbai are pushing prices through the roof as an increasingly urbanised population embraces the opportunities offered by better communication systems.

The improvements to connectivity boosts Indian real estate. So with all roads leading to other roads, it means we’re better connected than ever before…but nowhere is that more apparent at the moment than India.

Invest in Red Ribbon Asset Management

Red Ribbon is committed to identifying and building on investment opportunities that are fully in compliance with its core Planet, People, Profit policy: not only offering above market rate returns for investors but also protecting our Natural Capital through innovative programmes like the Eco Hotels Project.

Executive Overview

I suppose it’s a truism that property values are all about location (and location, location): but what’s interesting in India at the moment is just how radically the location itself is changing.

Taken together with an increasingly wealthy, tech savvy and burgeoning population, the Modi Government’s radical infrastructure programmes are re-shaping the commercial environment and pushing property prices higher than ever before.

Back Again, Front and Centre…Joe Biden has Climate Change Top of his Agenda and he’ll find a Key Partner in India

By Climate Change, COVID-19, Eco Hotels, Economic Growth, Environmental Policy, India, Natural Capital, News, Sustainable Growth

Joe Biden intends to reverse Trump’s “dangerous and destructive climate policies” (Joe’s words), and whatever delusions Trump might still entertain on Twitter, Biden is the President Elect of the United States.

Under his stewardship the United States will re-join the Paris Climate Accordson day one” of the new Administration, work to “seek higher ambition from nations across the world” (Joe again), and “follow the science” to reduce emissions while protecting precious resources. So climate change mitigation is back, front and centre …and it’s about time too.

Over three turbulent years Donald Trump systematically cut a swathe through a raft of environmental protection measures: enabling mining companies to dump waste in local rivers, removing prohibitions on methane gas emissions and even abolishing prohibitions on (endangered) species of birds being shot out of the sky and their lifeless bodies made into ashtrays for sale in tourist shops (I’m not making that up). So whatever you might think of Donald Trump’s chutzpah and mutton headed resolution, he was demonstrably bad for the environment.

The stage is finally set for the United States to resume its role in climate change mitigation across the globe, and the totemic significance of Biden’s intention to reaffirm the Paris Climate Accordson day one” simply can’t be ignored.

The US will now be freed up to move to zero carbon emissions from power plants by 2035 (instead of actively promoting fossil fuel dependence under Trump); freed up to dramatically expand solar and wind energy production and to stop endangered birds being made into ashtrays.

So, how are Joe Biden and climate change the perfect partners for each other? Well, the new Biden Administration will also look to build 60,000 new wind turbines, new community solar infrastructure and 500 Million more solar panels across the country within the next five years: and the obligations imposed by (and freely accepted) under the Paris Climate Accords are the backbone of those commitments.

Joe Biden and Climate Change

The Biden Administration’s Green Deal (www.joebiden.com/climate-plan/) is budgeted to cost an eye watering $3 Trillion.

But take a look again at the elements of that package, and in particular the central part played by solar and wind power generation: those are positive and eye catching strategies in contrast to (negative if necessary) emission controls.

On that front India is already a world leader in the production of renewable resource energy: by September this year 36.7% of its capacity was sourced renewably and the subcontinent was also the first in the world to create a Ministry of New and Renewable Energy. It is a net exporter of wind turbine and solar technology to the United States and, especially in its Northern States, India has the perfect climate to power those technologies as well. By 2022 Prime Minister Modi’s Government is planning to install 40 GW capacity of new solar panels on rooftops throughout the country and intends to generate 57% of its total energy needs from renewable sources by 2027 (www.sustainabledevelopment.un.org): 17% in excess of its Paris Climate Accord commitment.

So this much we can certainly be sure of: as the world turns slowly back onto its axis, Joe Biden won’t find a better environmental partner than India.

Red Ribbon Asset Management (www.redribbon.co) has placed the subcontinent at the heart of its investment strategies since the company was founded more than a decade ago. Drawing on an unrivalled knowledge of local markets with an expert team of more than a hundred advisers working in India’s economic hotspots, the Red Ribbon Private Equity Fund (www. redribbon.gi) offers unique opportunities to share in this potential.

Find out more about Eco Hotels

ECO HOTELS

Red Ribbon Asset Management is the founder of Eco Hotels, the world’s first carbon neutral mid-market hotel brand, offering “green hospitality” as part of a progressive roll out across India which intended to take full advantage of current market opportunities on the subcontinent.

Executive Overview

I don’t know how history will finally judge the last three and three quarter years of US foreign and domestic policy, but I do welcome the change signalled last week by the President Elect for a new approach to climate change mitigation.

And, of course, that approach isn’t really that new after all. Most nations across the world have maintained their commitment to the Paris Climate Accords since 2016 and will, I’m sure, welcome the US back into the fold.

Nowhere more than India…

A Disruptive Innovator…Modular Construction has become Housing’s Future

By Affordable Housing, Construction Technologies, COVID-19, Economic Growth, Environmental Policy, Housing Need, Housing policy, Modular Construction, News, Productivity, Sustainable Growth

“The arrogance of success is assuming what you did yesterday is enough for tomorrow”: William Pollard wrote that 100 years before Disruptive Innovation theory was formulated in 1955’s Harvard Business Review, but he perfectly captured the essence and importance of understanding disruption innovation in a modern economy.

Think of established companies like Amazon, Google and Uber, business models that have all disrupted existing markets and delivered outcomes that are radically reshaping our future (and our present come to that).

But disruptive innovation is driven as much by market need as invention, and burgeoning housing demand across the planet is currently driving change like never before…so welcome to the world of Modular Construction, and a new future for housing.

Using outmoded technologies, traditional construction companies have become increasingly focused on long-term (high value) projects, where profit margins are high enough to nurture a culture of inefficiency.

All those piles of rusting steel and timber left scattered around when the project finishes, fossilised remnants of yesterday’s world: all those days lost to rain when workers huddle in huts waiting for the sun to come out, and still more days lost waiting for delayed (piecemeal) deliveries, brought slowly to the site by a seemingly endless convoy of lorries.

But, by definition, all that waste matters more if margins are tighter: on lower margin projects, waste and delay on such an industrial scale can turn a viable development into a loss-making disaster.

That’s why traditional developers have (traditionally) paid far less attention to affordable and mid market housing projects, preferring to focus on profitable customers and build yet another penthouse studded glass tower: the inefficiencies of their business model matter less when the client is a Russian oligarch.

Which means more rusting steelwork, more days lost and more time wasted waiting ankle deep in mud for the latest lorry full of bricks to make its way at walking pace through another inner city traffic jam. This outdated model largely ignores speed of delivery, because speed of delivery largely doesn’t matter. Russian Oligarchs have all the time in the world…they can wait.

But the homeless can’t wait: according to Shelter (www.shelter.org.uk) 320,000 people are currently homeless in the United Kingdom (one in 201 of the population), in the United States the figure is 567,000 (a year on year increase of 40% since 2017), and in India 1.77 Million are in housing need despite the Modi Government working to deliver its ambitious Affordable Housing Programme (www.bajajfinserv.in/housing-schemes), striving hard to meet the demands of the fastest growing population on the planet.

And that’s where disruptive innovation comes in…

Adopting smarter and more efficient technologies, smaller construction companies can challenge these dinosaur incumbents: targeting market segments they either can’t or won’t reach, and that means in particular the homeless and those in housing need.

Economic orthodoxy tells us these smaller (disrupter) companies will then move on to gain a progressive foothold in increasingly higher margin segments by delivering better functionality at a lower price.

By making use of their core technological advantage: and finally, the dinosaur developers will also adjust their own business model as disruption takes root: bad news for Russian oligarchs looking for another penthouse, good news for the rest of us.

Modular Construction is a paradigm case in point: units are fabricated off site and delivered in ready to build panels, so no more convoys of lorries delivering materials piecemeal and no more waiting endlessly for them to arrive.

Built to order in a controlled environment, modular units are also higher quality and waste levels are lower, and costs are lower too.

It enables modular platforms to deliver projects at a third of the cost of traditional alternatives, which is why they are moving into (and will eventually take over) lower margin segments in a way traditional developers at the moment find unfathomable.

And it’s why in time dinosaur developers will be forced to change their business model …that’s the power of disruptive innovation.

What we did yesterday is no longer sufficient for tomorrow: Modular Technologies are important for all our futures.

Find out more about Modulex

Modulex modern method of construction

Modulex is setting up the world’s largest steel modular buildings factory based in India. It was established by Red Ribbon to harness the full potential of fast-evolving technologies and deliver at pace to meet the evolving needs of the community.

Modulex is setting up the world’s largest steel modular buildings factory in India.

Executive Overview

According to McKinsey more than 80% of developers are now to a greater or lesser extent committed to modular construction models: that should come as no surprise to anyone. Modular construction delivers faster, at lower cost and with higher quality thresholds than traditional alternatives.

And now, more than ever, we need those benefits to meet the planet’s burgeoning housing need. It’s time for the world to move on…

COVID or no COVID…Demand Trends across the Indian Housing Sector are signalling stronger growth

By Climate Change, COVID-19, Eco Hotels, Economic Growth, Environmental Policy, News, Sustainable Growth

India’s Real Estate sector is the second biggest source of employment on the subcontinent, and a key driver for meeting housing and infrastructure demands across the fastest growing population on the planet. But, of course, COVID lockdowns brought a sudden halt to construction, with many workers returning to their hometowns and leaving sites at a standstill. So, as the industry emerges from its enforced slumber, what do current trends in the Indian housing sector demand tell us about the wellbeing of this vital part of the economy?

Well, the first point to make is that, like most economic shocks, COVID will inevitably be short lived in the long life of the country, but it will also accelerate key changes in the near term …

Phased construction activities have already resumed and more property sales were registered on the subcontinent from June onwards than in COVID blighted March to June. As a result developers are reporting that between 80% and 90% of their labour force is now back on site, and there has been a parallel blizzard of Government MOU’s inviting tenders for new public sector building projects, especially in Bangalore and Chennai (more of which in a moment).

The Indian Government has been particularly anxious to kick start supply side metrics by offering developers a wide variety of incentive packages, including a recently announced six-month extension in project deadlines under the RERA Force Majeure clause.

And back in March The Reserve Bank of India announced a three-month moratorium on developer loan interest (later extended to the end of August: (www.rbi.org.in), as well as a typically aggressive quantitative easing programme which injected a further $ 24.4 Billion into the economy, enhancing short term liquidity for developers and home buyers alike: stamp duty was also reduced as were property registration fees in many States. 

On the demand side, rates for buyers looking for loans are currently running at their lowest for twenty years (about 7%), with added tax exemptions too including a rebate on loan repayments up to $4,747 annually. Small wonder then that key economic indicators have been showing an uptick in the subcontinent’s property markets since September, with a much more positive growth trajectory (expected to tick up further over the next twelve months). 

JLL India reported recently that the first signs of this recovery in the housing market are being seen in major conurbations (with IT magnets like Bangalore and Chennai leading the way: www.jll.co.in), manifesting itself in particular in the affordable and mid-price segments: the Survey found more than 50% of prospective homebuyers are expecting to complete their purchase within the next six months, so it seems the uncertainties of COVID have actually reinvigorated that most basic of human instincts: a home of your own…and one you can move into quickly.

The way Indian homes are being bought is changing too: consumers are determined to move in as quickly as possible and that, combined with GST exemptions, means so called ready homes are currently winning out over off plan sales (which, by their nature, take longer to deliver). That trend will inevitably favour developers making use of modular technologies. Speed of delivery is, after all, everything in the post COVID era and Modular Technologies deliver three times quicker than conventional construction techniques (www.modulex.in).

In turn this has led to a demand side shift in property price structures: off plan properties for completion in six to eight months may not qualify for stamp duty exemption, but the inbuilt delay in completion means they are now 10% cheaper than the ready home alternative: this will fuel greater near term demand as buyers seek out less expensive options, so both models should see benefits as we emerge from the cloud of COVID.

And as we pointed out on this site recently, government funded programmes are also playing their part. India continues to expand its infrastructure base like never before (COVID or no COVID), and that brings us back to Chennai…

Property prices in in and around the conurbation were more or less static between April and June, but from June onwards analysts reported a rapid increase in demand for the ready home, affordable and mid-price segments (see the Insite quarterly report produced by property portal www.99acres.com). Demand for affordable housing in Chennai has risen by more than 60% this quarter, and a key factor is public infrastructure. Affordable properties within easy reach of the new Siruseri IT Park saw a 9% increase in demand (for sales and rentals), and new highways and improved connectivity to the northern and southern belts of the City have seen sales from Sholinganallur to Tambaram skyrocket. The influx of IT workers together with all those new highways and science parks are pushing prices the roof.

So across the vast territory of the subcontinent, demand in the Indian housing sector is trending inexorably upwards…COVID or no COVID. That can only be good for the future of the economy.

Invest in Red Ribbon Asset Management

Red Ribbon is committed to identifying and building on investment opportunities that are fully in compliance with its core Planet, People, Profit policy: not only offering above market rate returns for investors but also protecting our Natural Capital through innovative programmes like the Eco Hotels Project.

Executive Overview

The subcontinent’s real estate markets are starting to move steadily forward: supported by innovative Government and Central Bank initiatives, but most of all by resurgent levels of consumer demand.

Construction is already (and always has been) a key element of the economy so that can only bode well for the future.

Growing Better by Being Smarter… Sustainability and Economic Growth go Hand in Hand

By Climate Change, COVID-19, Eco Hotels, Economic Growth, Environmental Policy, News, Sustainable Growth

According to NASA figures (and who’s going to argue with them), we’ve just lived through the hottest September ever: wildfires raged in California, the Amazon Rainforest is still on fire (as it has been since August 2019) and Donald Trump was driven to muse about new “Forest Cities”.

The United Kingdom recorded its wettest September day ever, with a single day’s deluge producing enough rain to fill Loch Ness. And over the last twenty-five years, the Great Barrier Reef has more than halved in size, having been around (undiminished) for more than 500,000 years before that. Every successive decade since 1980 has been hotter than the last, and the previous five years have been the hottest ever.

Only the most swivel-eyed, gimlet lipped climate change denier; only Forest City fantasists of the most extreme kind, could fail to see the signals. Our precious planet is in trouble…

Which is precisely why most countries around the world (except for those currently led by swivel-eyed fantasists) are now committed to ambitious climate mitigation programmes of various stripes and colours: and even in the United States, Joe Biden’s Democrats are committed (if elected) to deliver their Plan for Climate Change which will cost something in the order of $ 2 Trillion. The European Green Deal has been costed at $180 Billion, and China’s National Strategy for Climate Change Adaptation is expected to cost a nose bleed inducing $6.6 trillion: all of those figures daunting, but doing nothing isn’t exactly an option (see above).

So where’s all this money supposed to be coming from? Most economies across the globe are still struggling to come to terms with the impact of COVID-19, and we aren’t exactly living through a period of sustainable economic growth.

Added to which most climate mitigation programmes slow down traditional growth vectors, especially so in economies with a high dependence on fossil fuels (like China), those undergoing rapid economic expansion (like India) and those experiencing exponential population growth (India and China).

So how can effective mitigation actually be delivered in an employment and growth-friendly way, protecting key economies and ensuring, perhaps above all else, that the world’s poor aren’t left behind in the process? How can a policy with a built-in tendency to slow down an economy also create the growth it needs to move forward? As Hamlet might have said (in an expanded script) that’s a very interesting question…

And it turns out there’s an equally interesting answer.

The IMF this month produced a blueprint for sustainable economic growth of precisely the kind required, dauntingly titled “A Long and Difficult Ascent” and structured around the central thesis that climate mitigation strategies can also foster growth, even in those vulnerable economies with high levels of fossil fuel dependency and fast-expanding populations. It can do it through a twin-track strategy of creating “an 80% subsidy rate for renewables production” and then combining it with a ten-year public investment programme, which the IMF calls a “Green Investment Push”. And not only is that a much more jaunty tagline than the puritan sounding “long and difficult ascent”, but it is substantially based on policies that have (to a greater lesser extent) already been tried and tested. Analysts predict that in conjunction with a programme of steadily increasing carbon prices (which has also been tried before), the “Push” can increase growth rates annually globe by 0.7% over the next fifteen years and decrease carbon emissions to zero by 2050.

And that 0.7% may not sound a lot, but based on Global GDP last year it amounts to $994,000,000,000 every year for the next fifteen years, or $14.9 Trillion in all: more than seven times the amount needed to pay for Joe Biden’s Climate Mitigation Plan and enough to make the European Green Deal look like a pocket money project. And that, in a nutshell, is how climate change can be addressed, mitigated and paid for in our rapidly changing world.

With the typical understatement of a bureaucrat wearing hush puppies and checking for typos, the IMF’s Chief Economist predicted The Green Investment Push would put the global economy “on a stronger and more sustainable footing over the near term”.

You can say that again…it certainly beats watching more forests blaze into flames live on Fox News, and Loch Ness brimming over with rain. It just takes a little ambition and pluck (as Hamlet might also have said).

Red Ribbon is committed to identifying and building on investment opportunities that are fully in compliance with its core Planet, People, Profit policy: not only offering above market rate returns for investors but also protecting our Natural Capital through innovative programmes like the Project.

Find out more about Eco Hotels

ECO HOTELS

Red Ribbon Asset Management is the founder of Eco Hotels, the world’s first carbon neutral mid-market hotel brand, offering “green hospitality” as part of a progressive roll out across India which intended to take full advantage of current market opportunities on the subcontinent.

Executive Overview

We desperately need to square the circle and reconcile economic growth with sustainable, planet friendly programmes; and to my mind the newly unveiled IMF Green Investment Push is capable of doing just that. 

It’s certainly a programme we as Red Ribbon can happily buy into, having placed Planet, People and Profit at the very heart of our vision since the company was founded more than a decade ago.

Energy saving lamps and planting trees on the soil ground Electric energy saving concept

Is Donald Ducking Out?…Setting the Restart Button for Sustainable Growth

By Climate Change, Eco Hotels, Economic Growth, Environmental Policy, Mainstream Impact Investment

Whatever the outcome of November’s election, Donald Trump has already made his mark on history: more carbon dioxide in the skies above Delaware, rivers more polluted than they’ve been for decades (think Flint) and wildlife reserves destroyed to make way for ever more drilling gantries. The fact is most environmental regulations dating from Obama’s era have either been abolished or fatally weakened in the last three years and with what, even for him, amounts to a depressing lack of perspective, Donald Trump justified dismantling no less than seventy key regulations by claiming they were “unnecessary and burdensome to the fossil fuel industry”. And despite the ravages of COVID 19 (with more than 176,000 deaths in the United States, by far the worst fatality figure in the World), Trump has still found sufficient time since March to scrap thirty more regulations …Thanks a lot, Donald.

So is this really the sort of freedom most Americans are yearning for?

Freedom for coal-fired power stations to start discharging mercury emissions into the atmosphere and dump mining debris in rivers; freedom for oil companies to ignore “burdensome” wildlife protection measures and liberated to drill across nine million acres of previously protected heritage land (including the Arctic National Wildlife Refuge): free to forget those tedious methane emission reports that aren’t needed anymore. And fracking can start up again on federal and Indian lands (let freedom ring); in California, farmers are free to drain rivers without worrying about killing (endangered) salmon and smelt and protected migratory birds are once again fair game: free to be to shot from the skies and their “parts” used to make novelty gifts for tourists stopping over in Juneau (I’m not making that up).

But the three years of the Trump Administration (maybe eight all told, who knows), these three years are a fleeting moment in the long life of our planet: no more profound in the greater scheme of things than the blinking of an eye, and the shocks caused by COVID 19 on existing social and environmental policymaking across the globe are likely to be around a good deal longer than Donald Trump, especially when it comes to climate policy. Because traumatic as it might have been (and is), written off and misunderstood by Trump on a weekly basis, this pandemic has presented us with a series of challenges and opportunities from which to plan a better and more focussed climate change policy in the future, policies that are capable of delivering genuine sustainable growth.

Dr Tara Shine (author of “How to Save your Planet One Object at a Time” and co-founder of the influential Change by Degrees Group) has described the Pandemic as a “restart button”, clearing the way for developments including the new EU Green Deal as well as the UK Government’s own Environmental Programme (launched in June): in her own words, “To be resilient to the next pandemic we have to build some of the same core skills and capabilities that we need to be resilient to climate changeThe point is this is what societal change looks like when something changes”: traumatic, pervasive and long lasting.

In other words, Donald Trump has merely been traumatic…but the perfect storm of social and economic shocks we are experiencing at the moment might well bring pervasive and far-reaching change finally within our grasp, and that has potential to change all our lives for the better.

 Invest in Red Ribbon Asset Management 

Red Ribbon is committed to identifying and building on investment opportunities that are fully in compliance with its core Planet, People, Profit policy: not only offering above market rate returns for investors but also protecting our Natural Capital through innovative programmes like the Eco Hotels Project.

Executive Overview

So much is happening to divert our attention at the moment, socially and economically, with rolling news accumulating on an increasingly pressing and hour by hour basis: it’s all too easy to lose sight of the importance of thoughtful environmental planning, not to mention the need for short and medium term policies capable of supporting sustainable growth. 

And that, in a nutshell, is why we need to put Planet, People and Profit at the heart of our common vision for the future, and we need to do it now: that’s not a lesson any of us can afford to lose sight of, least of all now.

Plant small plants on coins stacked on the concept of saving money and growing money.

Its Time to Take the Blindfold Off: New Visions for Sustainable Growth

By COVID Slowdown, Economic Growth, Housing policy, Mainstream Impact Investment, Natural Capital

Any blind, unthinking pursuit of money can still return a profit (and sometimes does), but its very exclusivity of focus (money) also obscures those unintended outcomes that can be (and frequently are) so disastrous for our planet. And this dynamic between fiscal growth and sustainability isn’t just another variable in some global game of blind man’s bluff, with economies across the world stumbling helplessly between one unexpected outcome and the next, trading growth for hope and indifferent to the chaos left behind: it can also be matter of life and death. All of our futures, yours and mine, are dependant on the sustainability of natural resources: from the food we eat, to the buildings we live and work in, our capacity to meet disease (particularly at the moment), right down to the very air we breathe: Natural Capital is our bedrock, and it’s vital for economic growth too…

That’s why we have to start treating our stock of Natural Capital (including plant life, clean air, minerals and soil resources) in precisely the same way we do any other item on the macro economic balance sheet: in precisely the same way we account for Built Assets, including roads, railways and hospitals, because there is no acceptable trade off between the two: Natural Capital and Built Assets together make up the sum total of our wealth and they both belong on the same side of the ledger.

All of which makes it alarming that according to the UN Environment Programme, per capita Natural Capital has decreased since 1992 by 40%, while over the same period Built Capital has increased by 13%. Currently leading an economic diversity review for the UK Government, Partha Dasgupta points to these statistics and warns that “the very language of economics is failing us, making us miss the message”: by which he means we’re not seeing the connection between Natural and Built Capital properly: with Natural Capital in the debit column, the balance sheet’s out of balance … its time to take the Blindfold off. 

Perhaps now more than ever, we need economic planning that is both robust and clear sighted in its objectives but also sustainable by reference to its impact on the environment: in other words, we need to have a holistic regard for Planet and People as well as a clear recognition that in the long run (and the short run come to that) there is no Profit without Planet and People: joined up planning that is capable of making a difference to all our lives.

So why is that matter of life and death?

Well, the wholesale destruction of our natural resources (remember that 40% debit entry) has also increased the risk of life threatening diseases crossing the wildlife to human barrier, which brings us (inevitably) back to COVID 19. The clumsily but appropriately named Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) warned earlier this year that “Rampant deforestation, uncontrolled expansion of agriculture, intensive farming, mining and infrastructure development, have all created a ‘perfect storm’ for the animal to human spillover of diseases.” And that was before the full, horrific impact of COVID became a daily feature of all our lives: so rolling back on those key drivers identified by the IPBES has literally become a matter of life and death…

COVID has changed our world in so many ways, most of them all too visible: but the way in which we respond to those changes also has real potential to create a better world for the future. We don’t have to go back to the way things were done, we don’t have to keep playing blind man’s bluff…it’s time to take the blindfolds off.

 Invest in Red Ribbon Asset Management 

Red Ribbon is committed to identifying and building on investment opportunities that are fully in compliance with its core Planet, People, Profit policy: an investment policy that not only offers above market rate returns but also protects Natural Capital through caring meaningfully for the environment.

Executive Overview

Like most of us, I suppose, I’m concerned about the potential consequences of a headlong rush for short-term economic growth: essential though it is to secure growth in these difficult times, we can’t afford to lose sight of the importance of environmental responsibility.

They aren’t alternatives: this isn’t a zero-sum game and there is no acceptable trade-off. We need to build growth in a responsible way by putting the Planet, People and (yes) Profits at the heart of our strategic thinking.

about creating wealth

It’s the Environment Stupid…Build, Build, Build’s only half the battle

By COVID Slowdown, Eco Hotels, Environmental Policy, Fiscal Stimuli, India, Mainstream Impact Investment, News

In 1991 Bill Clinton handed out boxes of campaign buttons to his staff (not by himself obviously, he was too busy running for office), and all of them had a simple message, “It’s the Economy Stupid”. Nowadays it’s still about the economy, but other badges may be available: how about this for a start, “it’s the Environment as well Stupid”. That could be a popular (and prescient) choice in these difficult COVID times, as we witness eye-watering levels of government debt being taken on to shore up and expand economies across the world: in the United States, more than 80 Million cheques for $1,200 were sent out to 80 Million people as part of a $1.4 billion stimulus programme (although a million of them would have difficulty cashing them as they had been dead for several years: nice one Donald). And across the Atlantic, Boris Johnson is promising to “build, build, build” his way to a new Jerusalem: determined to spend, spend, spend his way out of the country’s deepest recession since the Great Frost of 1709. The UK Government borrowed £35.56 Billion in June alone, which is five times the equivalent figure from June 2019 and its all starting to make the 2018 bank bailouts look like bargain bin day at Primark.

So, for obvious reasons, economic growth is getting a lot of attention at the moment…and so it should.

But along the way, and almost uniquely (increased levels of social cohesion also spring to mind too), the COVID pandemic has had at least one good outcome: a sharp reduction in air pollution levels across the planet, particularly in urban areas, and ironically as a direct consequence of the very economic slowdown governments are so desperately trying to reverse. So here’s the question: are we now at risk of inflicting even greater harm on our precious planet in pursuit of a full-throated policy of rapid and short term economic growth? Or, put it another way, do we really have to have one at the expense of the other? As our alternative campaign button might have said, “it’s the Environment as well Stupid”.

Happily, it doesn’t seem to be a message wholly lost on the UK Government. In July George Eustace (the Environment Secretary) announced a £5 Million Pilot Programme as part of a new Natural Capital and Ecosystem Assessment that will (we hope) ultimately sit at the heart of an improved planning process capable of strengthening “baseline understanding of habitats and species abundance”; paving the way for more environmentally friendly decisionmaking in future real estate programmes. As George said, it will “leave the environment in a better state than we found it”. Nice one George, every little helps…but how about putting environmental awareness at the heart of the entire construction cycle?  Especially as new homes are one of the things we need most of at the moment, and how about securing economic growth and looking after the environment at the same time? How about building green…

That’s exactly where Eco Platforms have come into their own over recent years: setting a new paradigm for sustainable construction methods that are both environmentally responsible and resource-efficient: not just putting up quickly what will be torn down quickly (and for the most part discarded), but demonstrating real concern for the entire life cycle of the building at every stage from planning through to replacement and recycling of materials. It’s all about Planet, People and Profit, delivered thoughtfully across the supply chain, and it has dramatic potential to make a real difference to all our futures.

Eco Hotels are a case in point: key consumption variables are taken into account at the very start of the design process, including water-saving devices and waste reduction technologies, and from the beginning, solar tubing systems are built in to reflect light across the property day and night with the result that electricity consumption levels are roughly half those of a conventional hotel. A single, centrally located kitchen reduces the carbon footprint of the entire building, instead of the usual scattered, ill-thought-out and inefficient catering facilities in a conventional hotel. That’s precisely where “Planet and People” come in, by way of practical, environmentally friendly technologies; and as for “Profit”, well, all those savings go straight to the bottom line so the Eco Hotel Model makes good commercial sense too.

It’s about the economy and the environment…

 Invest in Red Ribbon Asset Management 

Red Ribbon is the founder of Eco Hotels, the world’s first carbon neutral hotel brand which offers “green hospitality” as part of a progressive roll out across India designed to take advantage of market opportunities while at the same time caring for the environment. The brand meets all sustainability criteria without compromising on quality or standards of hospitality and caters for commercial and recreational travellers alike.

Executive Overview

Nobody can seriously doubt the importance of government stimulus measures in addressing the profound economic impact of COVID slowdowns across the globe: after all, we all share a common economic future and the more that can be done to secure it the better.

But we also share our planet’s future as well, and it’s important not be distracted from the importance of environmental responsibility: particularly as the slowdown has given us a graphic example of what ill thought out economic growth can do.

I believe these aren’t alternatives; this isn’t a zero sum game. We can build growth in a responsible way by putting the Planet, People and (yes) Profit at the heart of our strategic thinking.

Growth tree young plant Natural green

We know what the answer isn’t… So what’s the question?

By Climate Change, Economic Growth, Global Risk Report, India, Mainstream Impact Investment, News

If short term thinking isn’t the answer (and it’s not), what exactly is the question? Well, a few candidates spring to mind: why build a house with an expected life of twenty years and then use so few materials that can be reused when it comes to putting up a replacement? That’s short term thinking. Why build a factory that creates jobs, but then closes down inside a decade and in the process pollutes the local river system? Short term thinking (again): and, perhaps more than anything else, how are we planning to address the profound economic and social challenges posed by climate change? Not, that’s for sure, with short term thinking…

Global economies are now more threatened than ever by climate change. In this year’s Global Risk Report The World Economic Forum ranked various biodiversity and ecosystem vulnerabilities as the top five threats to future economic sustainability: and that should come as no surprise to anybody because more than half global GDP, a staggering $44 Trillion, is to some extent (and often more than less) dependant on natural ecostructures, to such an extent that “Nature loss”, as the Report terms it, is now a key variable in worldwide commerce, supply chains and markets. So it’s not just a “green” issue: climate change couldn’t be more important for business.

Since the Industrial Revolution economic activity has extinguished 83% of wild mammals and half of the world’s plant species, fundamentally altering ecosystems on three quarters of ice free land and two thirds of marine environments: one million species are now at risk of extinction within the next twenty years (a rate many hundreds of times higher than at any point since homo sapiens first sparked up fire).

So what’s the question? 

It’s this: how can we can create and sustain essential economic growth but at the same time reduce the adverse social and environmental impacts of the value creation process? Not, as should now be obvious, by short term thinking, but by adopting instead Mainstream Impact Investment strategies: creating wealth by investing in well regulated and profitable businesses, operating in mainstream markets and succeeding because they look to the long term impacts of their decisionmaking. And by being responsive to global conditions, and the challenges of climate change in particular, these are more robust and better businesses too: better equipped to be profitable over the long term because they are prepared to engage successfully with the complex issues posed by sustainability, not because sustainability is an end in itself. 

That’s why the Global Risk Report ended by saying “Business leaders have a crucial role to play, by putting nature at the core of their processes and decision-making and systematically identifying, assessing, mitigating and disclosing nature-related risks to avoid severe consequences. Businesses can be part of the global movement to protect and restore nature”.

Despite the credibility of the source, Donald Trump and his cohort of climate change deniers will probably find all this difficult to accept, but he (and they) are creatures of the short term too. Even if he wins in November, he’ll still be gone in four years, and the strident voices of denial will inevitably fall silent in the face of increasingly undeniable facts.

Now, more than ever, we need to work together to build low carbon economies and formulate long term solutions capable of reducing carbon emissions: Mainstream Impact Investment not only helps us formulate the questions as we embark on that task, its also a crucial part of the answer…

 Invest in Red Ribbon Asset Management 

Red Ribbon Asset Management has been investing successfully in groundbreaking, environmentally friendly projects across the globe for the last thirteen years, adopting cutting edge Mainstream Investment strategies and gaining expertise on Indian and the UK projects in particular. With more than 100 skilled employees, corporate leaders and innovators, it brings together a wealth of experience in every sector it invests in.

Executive Overview

The World Economic Forum’s Global Risk Report makes striking reading, reviewing a wide range of economic variables it finishes by finding the top five risks faced across the planet are all environmentally based. That’s the first time this has happened and it should give us all serious pause for thought.

Commercial and Investment strategies should now have climate change and environmental impact front and centre of their thinking, not only because it’s good for the planet but because it’s good for business too. And I’m sure Impact Investment strategies play a major part of that shift of paradigm: not only, as the article says, because it helps us understand the questions, but it’s part of the answer too.

Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

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