The investor and owner community is demonstrating an increasing desire to address problems and negative externalities through their commercial real estate (CRE) portfolio holdings. This shift can be attributed to several factors, including changing societal values, the growing recognition of the long-term risks associated with environmental and social issues, and the potential for financial returns from sustainable investments.
A typical investment management approach would include things like reporting on and reducing carbon emissions, adopting green certifications, building in governance and benchmarking social and environmental initiatives.
At Avison Young Investment Management, we’re taking this a step further, layering on exposure to clean energy occupiers, which reflects the rental premiums that can be achieved through the flight to green and flight to quality, and recasting landlord-tenant relationships through shared ESG goals and objectives.
Keeping up with a highly dynamic and evolving investment landscape makes every day a school day, filled with learning opportunities for all of us.
Here’s today’s lesson.
In the U.S. more than 20 million children ride the bus to school, and over 90% of these buses run on diesel, which has been linked to serious physical health issues like asthma and other respiratory diseases. However, as states and municipalities set net zero and electrification goals, and manufacturers scale production accordingly, school districts nationwide have started the transition to electric school buses.
Meet our occupier Lion Electric, a Canadian-based manufacturer of commercial vehicles. As the biggest electric vehicle manufacturer in its segment, Lion primarily produces yellow school buses and medium and heavy-duty commercial trucks — all products that feature zero-emission battery-electric powertrains.
Its school buses have ranges up to and exceeding 250km/155 miles on a single charge, which is a much longer range than most school routes require. In fact, the average urban school bus route is less than 32 miles, making the decision to switch a no-brainer.
For communities surrounding schools, making the shift to electric transport also means the air in and around the bus would be free of diesel exhaust, and riding the bus would be much quieter and cleaner for its young passengers – overall delivering a calmer, safer and more energy-efficient ride.