Sustainability in the Property Industry with Debra Dorrington

Relab's Knight Hou and Stacey Fairclough as they talk with Debra Dorrington about her journey from Property Lawyer to Sustainability Advocate.
 
We discuss why it's important for property professionals and business owners to consider climate issues as part of business strategies and how the law comes into play when businesses want to have sustainability at the forefront of what they do. This is certainly a must-listen!

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Transcript

Stacey: 0:55

Kia Ora koutou and welcome to the property collective podcast brought to you by Relab. I'm your host Stacey Fairclough content manager here at Relab And today I'll be joined by my cohost Knight Hou CEO and co-founder of Relab.

1:14

In this episode, we are joined by the wonderful Deborah Dorrington. Property lawyer and sustainability advocate. Debra talks us through the importance of considering sustainability and climate change. No matter your role in the property industry. Let's get started

Stacey: 1:31

Can you tell me. But but about your background and also what influenced you to shift from lawyer to climate change and sustainability advocate.

Debra: 1:41

Oh, okay. Sure. Well, I'm definitely still a lawyer. I'm still a property lawyer. I think I will be, A property lawyer forever, you know, was a, I was a teenager when I decided that's what I wanted to do, and I think that's me. But around about, you know, even from that very early age, I've been interested in issues around sustainability and with different language. Then sustainability wasn't necessarily what we were talked about. But those have been issues, although, you know, all the way through, I guess my, my life and, and then That took a bit of a backseat where career and family took over, you know, for a couple of decades really. And so focused on that. But now kids have grown up. The succession planning at work all came to be, and you know, here, here I am, so. Yeah, my background is definitely as a property lawyer and practicing in that area for a long time. But now what I'm particularly interested in is teaching advisors, particularly legal ad advisors, but others around sustainability issues. And I still work part-time as a property lawyer for claim order. Cool. I guess we were talking yesterday, there's, you've got a, there's a lot of presentations about around climate change and sustainability at the moment, and I guess that's due to everything that's going on and, and like governments and just in society in general. What are the main things that are happening in the industry at the moment? Yeah, you are right. There are lots of presentations and there's been a really big kinda upsurge in, in the amount of activity around that, even in. Few months and definitely during the course of this year. So I'm sure part of that is because cops happening at the moment, but also I, I think it's becoming more mainstream to talk about these things. I think, you know climate change is on the news and in the media, for example, for a far greater extent than it was e even last year. So that's, there's, there's kind of a trend about those sorts of changes, but from what's happening in the industry, there's a big range, you know, from doing nothing about it, through to really innovative designs, building contracts, attitudes to things. So I guess like all industries, there's this. There's this big range, and I think too, there's probably more action happening at the big end of town. You know, where people have, or organizations are willing to have the facilities to think further ahead, perhaps are willing to put time and effort in into that. But at the same time, across the board, there's definitely more engagement, particularly about the risks that are around climate change and, and increased climate action too, that we are.

Stacey: 4:16

Yeah. And what do property professionals in particular need to focus on at the moment? And in terms of even with property lawyers? Are people aware of this in the, in the industry at the moment?

Debra: 4:28

You mean the legal side of things are, are they aware of it? I, I think there's a range of views and opinions about that. I think that you know, there are. There are some who are right up there and know what's coming and what's expected because there are significant changes happening in the law, significant changes in policy, significant changes in expectations about businesses done. And and that includes in the property world. So some lawyers aren't getting it. And I kind of think when it comes to property too, it's a little bit about be careful what you wish for, because in my time of practice I've seen quite a trend from a, a change in the pace that things happen and a change in the pace that legal advice has given and, and accompanying that has been a trend from Trusted Advisor involved at multiple different stages through to a focus on getting the transaction done in the fastest possible time. Don't worry about too much about what else is going on. And so I think that many lawyers feel that they don't have the space within the expectations of what the client wants from them to actually be thinking about these bigger pictures and, and bigger things and what's going on. So given that space and that time, they'll definitely be able to investigate these things. And if they don't, they can talk to me about what's coming. Yeah. And for, I'm, I'm guessing a lot of our audience will be like real estate agents, property developers small to medium businesses within that area. What is, what do all these changes mean for them in particular? Yeah, I think one of the biggest things about these changes and, and simply looking at it from the business perspective is a differing approach, a sustainable approach will enable us to make better decisions that take into account relevant risks and risks that might not have been known before. That's, that's kind of the. In a nutshell, I guess that's what it comes down to. And these are risks that are not just coming from trends and expectations of, of some these are risks that are coming from. It also include changes in the law, significant, you know, changes in the law. We've heard about the Climate Change Response Act specifically in, in creating expectations about zero carbon within a certain time period and reducing. the carbon emissions. And that's just one example, but, but it might be useful perhaps to tell you about some specific risks that can be addressed by sustainable approach by people who are within within the industry. Maybe that, that might be useful be because the. The sorts of circumstances where these issues come up include buying property, selling property making assumptions about how things have been done before that proved to be not relevant, or that mean that you don't get contracts that you've been used to getting contracts in the past. A purchase of property is a really good example to. There's so much information around at the moment about the impact of climate change on on. Property as far as sea level rise, risk of flood from storm surges or from increased rain. That this sort of information ought to be, as a matter of course, forming part of due diligence inquiries when properties are being purchased. And whether those are lawyers making the inquiries or others making the inquiries, they're definitely should be part of it because, There's a lot of information available about what properties are susceptible to these sorts of risks. And if it is a property that's susceptible to this risk, then there's a very real possibility that insurance is going to be a difficulty. You know, there you can. there's plenty to read about the prospect of insurance retreat from these sorts of buildings within within New Zealand. And if insurance has gotta be a problem, then funding is gonna be a problem. So it is very easy to see how, how one issue can actually e evolve into a number of, you know, a big problem, a big problem for a property, but are the other side of things when selling a property. That's, that's another circumstance where, Perhaps this should be taken into account because real estate agents in particular have got very clear responsibilities about the information that they need to make available to potential purchases when they're selling a property and they must tell somebody about a defect and they must provide information that is reasonable that they will provide. I'm pretty sure that the fact that a house is going to be not be usable within a decade or 20 years, or perhaps even 30 years, I don't know, from something that is. Is it likely to be a defect? So real estate agents in particular should be aware of these sorts of responsibilities, but so to anybody who's making representations about what can happen. A couple of other examples too, though, there are changes to procurement requirements that are happening. So large organizations or governments and the government they're starting to. You're starting to bring in issues relating to sustainability in choosing who they want to do business with. Just last night I was listening to I was in a meeting with somebody who is in the procurement team at the Warehouse, for example, and they were talking about how how sustainability issues are becoming far more. what they take into account in relation to choosing people that they're doing business with. And she was specifically talking about not the supply of the things that they sell, but the services that are provided and the people that they're dealing with on the other business. The other aspects of business earlier this June, I think it was the government put out a, a paper that was. Talking about their changing procurement requirements in relation to property and carbon emissions. So, you know, making it really clear that this is something that is going to be taken into account. Yeah. Go forward. I think there's a couple of other things too. You know, there are opportunities that are there from taking a sustainable approach and they might be opportunities that without turning in mind to this, issues of sustainability might be missed. And one, one opportunity is funding. You know, there might be funding that's available that wouldn't have otherwise been available if you're willing to achieve certain KPIs. For example, and Knight was talking yesterday about the, the a NZ facilities that are available to home buyers who will buy HOMESTAR six, you know, top properties, Homestar six.

Knight: 10:36

Yeah, absolutely. Yeah. I think it was a a new build loan by ASB Bank earlier in the year, like mm-hmm. 1 69. Don't quote me Super low rate that you can acquire for a loan for a new build. I think it's very encouraging to see one of our main banks you know, actually setting a home star rating as part of the, the building apartment.

Debra: 10:57

Yeah, and it's happening in several of the, you know, the banks too. I think the B N Z has said that they've got 10 billion of sustainable finance that they wanna spend over the next few years. So, yeah, it's kind of happening. And, and again, just last week listening to a presentation of a, a practitioner, a lawyer who works in the area of finance. And her view was very, very soon. There's not gonna be a distinction between sustainable finance and finance. Sustainable issues will be part of what we what what borrowers are expected to comply with.

Knight: 11:27

How binding are the actions and targets in local government long-term plans related to taking climate action? He's already concerned that some targets are way behind schedule and not making any progress which makes meetings such as commitment less and less likely. So is there, what's your thoughts and comment on Nathan's question of concerns?

Debra: 11:46

Yeah, Well, that's a really tricky question. I mean, well, a really good question. And it's way bigger than just the property area, isn't it? Because I think that the same question could be asked about internationally, the expectations that we have and the, and the actions that have been taken. And we are way behind what's going on. So, I can only really acknowledge the point that's, that's been made. How binding are the actions and targets. So I guess that kind of depends on how they've been entrenched and what specifically they are and how far they're coming down into our regulations or be different answers for different parts of the question. But I, I think that the concern is very real and I think actually that it beholds all of us not to wait for these regulations. We don't have to wait. Yeah. You know, we can make our own decisions and do things quickly. Mm-hmm. Yeah.

Stacey: 12:36

Are there any benefits for property professionals who, who don't wait for the, for those regulations to come into play?

Debra: 12:44

Yeah, I think, I think there are, and you know, one of them is just about being a good ancestor, you know, feeling good about what you're doing. So that, that's one thing. But, but also you know, I, I think. the regulations and I'm gonna talk about some of them in a minute actually, but the, the regulations, the changes that are happening are going to hit us quickly that they're out there now. There's plenty of information about them if you are entering into contracts or project right now that are gonna last for the next. 18 months, you will be affected by these things right there. So making, being proactive, finding out about it, making decisions right now, rather than waiting until you're told to do it, will means that there's less risk that you purchase a stranded asset or that you are not able to go ahead in the way that you might have done previously. Yeah, I definitely get the sense that people often think it's like 10, 20 years away, but it's, it's not, that's not their reality. So. Well, one really good example about that actually, Stacy, is the you know, the climate change Commissioner recently released the advice to the government about their emissions budgets and the New Zealand government is obliged to have emissions budgets in place and in place really soon. End of this year, or maybe it's partway through next year, but you know, straight away we're at missions budgets, and those emissions budgets are going to impact significantly on property professionals because a lot of the expectations about how we will achieve those budgets are to do with planning. How we plan, how we live, how we build, you know, what, what we're gonna be able to do how we transport, how our transportation system works, et cetera. So, you know, that's one example where, okay, it's not right here, but it's just there, you know? Yeah.

Stacey: 14:34

Cool. I have a question for night. As CEO and co-founder of Relab, what role does Relab play in this area?

Knight: 14:45

Yeah, it's a really good question and, and I, I would like to maybe start by sharing some personal experience, if I may, and then we'll talk about the business because you know I'm, I'm a co-founder of a startup and I think as co-founders and leaders o offer a small company our personal values and our personal belief system actually do play quite a big role in terms of shaping our future strategy. And the moment for me was December, 2019. Now I've got two boys two young boys in my family. My second boy, Anthony was just born early that year, so I was, I remember holding him and and it was, I can't remember exact date, but it was when the bush fire was burning in a. December, 2019. We live here in New Zealand. I don't know if you guys remember on one or two particular bad days, our sky was completely orange. Mm-hmm. and was the moment when I was holding an eight month old. You know, toddler looking outside of window and I can even, you know, the sky is, is orange. It's dark, it's gloomy. Some ash was actually falling off from the sky. I was like, wow. What, what, what's going on? And is this going to get worse and west does it link to climate change and our action? So that's the moment when I start thinking and digging. More and more I wouldn't say that, you know, that was a moment that I suddenly be, became the quote unquote converter, but that has definitely made me think and ask questions and seek my own truth from being open-minded. so, so that's, you know, basically got younger ones. How do we be a good parent, good grandparents, and good ancestors in terms of what that has impact our business. Now, Relab, we we're a software business that help pro property professionals, and what we do is we provide 360 degree unbiased information for proper professionals, investors, biased, and sellers, so that they can make the best decision that they need to. So, you know, on Relab's interface, you can see what's going on in terms of flooding stormwater system. You can see what's going on in terms of, you know, topography as well as all the other information you need to gather to make due diligence, de information. So I. Impact the, the impact of climate change that might have on the industry is already quite real. We already have some of the information on relapse that people can look up. For example, the flat zones, right? Flat plane, flat sensitive areas. And how does the infrastructure need pan out over the next, you know, 10, 20, 30 years? So so in terms of what it means for Relab, we will continue to bring. Unbiased and independent information, whether it's topography, whether it's stormwater, wastewater, whether it's infrastructure, whether it's planning related information to our customers so that they can make You know, data driven and smart decisions. The second thing is based on those data, we actually extract certain features about properties. For example, if your house is close to the co coastline what is a distance between a property and coastline? Are there any flat zones overlays on the property? We actually highlight that there are very useful for property buyers or property sellers in that regard. we've also been looking at what's happening internationally. In the US there is a property platform called realtor.com cuz their agents are called realtors, not register agents. Right? So on realtor.com last year they started to give a flooding risk score on all their properties. Started from Florida because we know Florida is one of the states that's most impacted by rising sea levels and. it was quite a controversial move for them because on their platform people are looking to buy properties, right? Why would you say something that has potential negative impact on on your listings? But that was a right move by them and now it's just a norm. Now that's what what's happening for some of the international examples. So we are always looking at what's happening in other countries. challenges people are facing in the property industry, and how can we adopt some of the good practices here in New Zealand?

Debra: 18:50

Cool. Yeah. And Debra, do you have any examples of what of what is happening at the moment in terms of yeah, like what's happening physically in, in the property?

Knight: 19:03

Yeah. Yeah. And, and it's interesting what you say Knight about realtor.com because a similar sort of circumstance could happen in relation to limbs here in New Zealand. You know, there could be information and, and a few years ago, one of the councils, I think it was down carpet coast, I think that's where it was, wanted to put some information about onto properties that were at risk and the, the outcry from the community. And I think actually there was court action taken, caused them not to do it because people didn't want this information made available. But I think that there's been a bit of a change in understanding since then. And we might see this might see something like that, you know, start to happen. But that'll be a bit more ad hoc. So if it's. a single place like on Relab, that's gonna be really, really useful. Yeah. Yeah. Because I'm a lawyer, the first example I wanted to tell you about, about things that are really happening in sustainability and property sort of things is a change in the law that's coming and, and then that might lead on to talking about something very briefly that's actually happening. So for a couple of years now, A little bit more than one. One year now, MB has, has had available publicly information about its building for climate change program. And this has been out for consultation and then has been revamped as a result of well have influence as a result of that consultation. And ultimately it will lead to regulations and hopefully by the end of the year, which is not very far away now, but we will find out when these regulations are coming in. But people are starting to take them into account anyway. So the MBS Build of Climate Change Program is about. Carbon emissions and identifying carbon emissions that are created through the building and the operation of a building then. And publicly identifying what they are and then reducing them over a period of time. And this, this Building for Climate Change program is something that's gonna impact everybody in the property industry. It relates to all new buildings. There are two parts of it. One part of it is about looking at the operation of the building and the carbon emissions that come from the operation of it, and also the water that that is used and the health and safety side of things. So it's those three elements of it. The other part of this program is about the whole of life of a building. So it's interested in the carbon emissions that might be generated. right from the very beginning when the resources are first first gathered together in order to make the building when the trees cut down to make the timber all the way through to when the, the building comes to the end of its life. And it might be recycled or it might be demolished and going to waste, or it might be refurbished or whatever happens. And the expectation is that for the whole of that life, there will be a measurement of the carbon emissions that are happening and there will be a public recognition of what they are, and that the carbon emissions will be subject to a cap and that cap will reduce over time. and this is going to tie in with the building consent process. So before you can get your code of compliance certificate, for example, you're going to have to have complied with these requirements. So what this is gonna mean is that it's not just those who are. In the business of construction now who are going to be influenced by everybody who is in this train along the way or in this cycle, is going to have to get used to identifying their carbon emissions and publicly making them available. So that includes, you know, the do that owns the logging truck that moves the logs from where the trees are through to where they're gonna be manufacture. Into timber, anybody, people who've got components from. So so in order to be able to deal with this, there need, there's gotta be a massive upskill and new technology that will be required. And although this program is going to be implemented in stages and led by the go, And the larger organizations, it's definitely coming. And so anybody who contracts with the government, for example, or need to be starting to be looking at these sorts of things. And at the moment we'll know, I guess that COP 26 is underway and Glasgow. And as part of that, there is a a. A virtual exhibition, I guess, of innovative building proposals and things that are happening around the world. Yeah, so do, I would encourage you to go and have a look at this pavilion and just kind of poke around and have a look at the different properties of there. You'll see flat pack houses houses that are made with a 3D. with clay, you'll see bridges that are can be constructed and then deconstructed and moved. There are 17 different things that are there, and one of them is a New Zealand something from New Zealand and which is pretty cool. And it's a a development that comma order. This getting underway and it's in Glen Doey or that's where it's gotta be built and it's called Future Homes. Homes of the Future. And it's it's pretty cool in that it's five different buildings altogether. I think there are about 30 homes that are in it, so five different buildings. these buildings are made from a range of different products and in different ways. And, you know, I'm no builder, so I don't know the details. I really know what I have read about it. But the idea is that they are examples and opportunities to try out and this reduction of carbon emissions and to see What really works and what can be done there and for that information to be made available. Not just here in New Zealand, but around the world. So pretty neat that of 17 around the world. One a sub, a suburban housing development in New Zealand has managed to get in there. So that's quite an. development in we talked a little bit about Homestar too, and home Homestar six as well, and there's a new version of Homestar six. That's available as I understand it, and that it will be the operational version in June of next year. And that's been evolved and developed with a view to meeting these requirements under MBS Building with Climate Change program. For example. There's another sort of legal or tool example, what was going on. It might be worthwhile, perhaps acknowledging some of the misconceptions that people have about sustainability and the property side of things. Because I think, I think that there are, and there are a lot of reasons why people don't want to engage on this topic. You know, lots of reasons. Like, it's too hard, it's, it's too big, it's too hard. I dunno what to do. And I think it's worthwhile, perhaps just acknowledging some of those. One, one of the things that I think a lot of people are concerned about is that others don't want to know about this. You know, people in property actually, Don't, don't wanna know about it because I've got plenty to do. I'm really, really busy. There are so many different opportunities, and I just need to keep on going and it's gonna be all right, operating as normal because I've been operating in this way for ages and, you know, it'll just be fine. And it, it won't be you know that, that's a risk analysis in itself, isn't it? It's about going. Until you really can't go forward and, and taking, taking the punt that you'll be stuck with some land that you can't develop, or a consent that you thought you could rely on that you can't rely on any anymore because of overarching changes or something like that. So, there's one mis one misconception I think that people don't wanna know about it because people are concerned about it. Lots of people are concerned for their children like NTUs talked about, you know? Yeah. Another one is that one person can't make a difference or that you know, there's nothing that I can, I can do. And yeah, I could talk for quite a while about why I don't agree with that. you know, one person can make a difference and one plus one plus one makes, you know, a whole lot more. So I would encourage anybody who, who is kind of thinking this way to just keep on asking questions and keep on start to think about sustainability issues or if that's, if that's too broad, start to think about climate change. In relation to everything, just kind of start asking yourself questions in your head, perhaps if you don't wanna get it out loud, but just about what's the impact of what I'm doing today on climate change. Yeah, so I think that that can be useful. Hey Deborah, that's a really good point, and, and also, you know, being a very experienced professional lawyer, I think coming at this from a risk mitigation and risk identification process is, is, is, is quite good. It's quite real. If I may, I might just look at the other side of the same coin, which is looking at the benefits. I think you already touched on it before. Yes. A lot of our. Our, our audience, our, our, our customers are, you know, agents, mortgage brokers, builders, developers, project managers, and the, there is a commercial reality that they do need to meet, whether it's timeline, whether it's roi but I think you can do both. And the reason why you can is, I'm just looking at the Kianga Ora example. Mm-hmm. Yeah. So looking at some of the technology, some of the processes and some of the methodologies that implemented in this, in this project, right. They're using light or mass timber hybrid for the structure. They're using concrete where wherever it's appropriate, they're using light frame timber. I'm just reading it off the, the Kianga Ora website. They're using cross laminated timber, et cetera, to I guess stretch out the. Life cycle or a lifespan of the structure that that we're putting our land or near our waterways. For example, a couple weeks ago we had a different host, webinar host, and his name is Wafaey he's a New Zealand entrepreneur who's pushing 3D concrete printing technology in new. Yeah, his, his company is called Coks. And as someone who's got over 20 years experience building commercial residential projects internationally, his assessment of how we build our residential homes here in New Zealand is really, what's the word he used? Hasn't changed for decades. Right. And the buildings that we erect our land only have very, very short. Lifespan compare with some of the structures that's happening offshore, partially because of the material we use mostly timber, and partially because how we look at these projects, right? We put something up there which think, you know, in 10 or 15 years time, I'm gonna knock it down and, and build a new project, which is really not very sustainable the way you look at it. So what I'm trying to say is by looking at your next development project or and how you design and position your product, you can. Achieve a better outcome for your customers who's gonna buy and live in these buildings and be, achieve a better commercial outcome because you're using a more sustainable material. And think of better and smart ways of building and see that you can build a good brand and reputation for your work. So those who will be my comment to anybody who's, you know, looking at this and, and juggling between the long. you know, outcome versus the short term commercial reality. How can young New Zealanders get involved in the sustainability and what's a role of employers? Let, let's all share our, our perspective

Debra: 30:44

that, that is a great question. And it is a lot of the energy around this is coming from the younger part of the community as well. It seems to be on people's agendas a whole lot more the, the younger people. So how can, how can you get involved in sustainability? So I guess it depends whether you're talking. Working it or just incorporating it into your life generally? First of all, there's, there are so many jobs out there, all sorts of different jobs in the sustainability area. Both from the sustainability as a professional and also in sustainable teams within particular types of work now that might be undertaken. So that's one thing. There's. A lot of study that can be done if you wanted to actually formally do work around this. I think there's even a bachelor in Climate Change for the first time has been, is being offered here in New Zealand might be a world first, but online there are all there's all sorts of study as well. And I'd go back to that point that I might of just keep on asking questions because there is a great sharing of information in a way that we're not used to in other aspects of business. So where people have been a bit more willing to bit more expecting to keep things to themselves, their own private advantage in the in seconds. That's now, now when it comes to climate change, people are willing to share so much information. So start talking and speaking to, to others.

Stacey: 32:09

If you are an employee, I'd ask your managers, start, start making the conversation yourself. Even like trying to push it as much as you possibly can. Or on the other hand, if you if you have an employees maybe talk to them. how important is to them? Try and get everyone on the same page, I think, and yeah, just keep having those conversations.

Knight: 32:39

Cool. My perspective on this is in terms of how young New Zealanders can get involved in sustainability my, my advice is be the change you want to see and I think there's so much Confrontational sort of angers in terms of the social sound bites, whether it's on social media or offline. I think in, in a complex issue such as climate change, we need everyone's contribution. So quite often the solution is not binary. It's not whether you are for or against climate change. Ask the questions, be the change you want to see and bring the people around you, your parents, your grandparents, your employ, your friends people down in the cafe on the same journey with you. Cuz unless you influence. those with facts, with how you feel with impact. This could potentially have it, it will be a, an argument and it will just stay there. No change will happen. So my, that's my first advice is be the change you want to see and bring people along the journey with you. It doesn't have to be binary. My advice to the role of employer is create the safe environ. For everyone, everyone in your company and people you deal with to have a reasonable discussion. Again, it's along the path of discovery, discussion, not argument, debate or, you know, for against because quite often a solution requires more than just a binary choice.

Stacey: 34:09

And that's a wrap.

34:12

Thanks to my guests today, Debra and Knight. This was a wonderful chat about how we can all include climate change and sustainability into our business strategies. Thanks so much for tuning in. Mā te wā.