Keynote address by Dan Labbad, CEO of The Crown Estate

0:11 – 0:23

Thank you, Erica. Hopefully you can hear me. Thank you to the connected places catapult for putting on the event and also giving me the opportunity to speak to you all this morning.

0:25 – 1:26

I’ve only got 10 minutes, so I’m going to cover off a number of high level issues that are very close to our heart at the Crown Estate, but also my heart personally that go to the issues that I think we’re all facing in the context of being involved with places. But before I do, it’s probably worth acknowledging the fact that there is a lot of noise in the world right now and a lot of noise that creates volatility, that stresses people. We all carry the stress and fatigue of that noise into our daily lives, into the businesses we run, into, our families, and sometimes it’s easy to get lost in that noise. And obviously with that noise comes a lot of different political agendas and a lot of philosophical differences. One of the things I think that is really, really important is to remain grounded.

1:26 – 2:05

Because when it comes to the challenges that we face in the context of places, those challenges are not going away. There is a reality to them, a truth to them, and having been a practitioner in this space for many, many years, an obligation and a responsibility to do our our part in making a difference and addressing those challenges. So there’s three things that I wanted to address this morning. The first one is the contradictions that we face in our day to day work. The need for holistic thinking, inclusive engagement and partnerships, new types of partnerships.

2:05 – 2:41

And then I’ll talk a little bit about what the Crown Estate is doing in this space. A little bit on us to begin with, for those of you that don’t know us, we’re a 16 billion pound organization. We are here for the nation. Our remit comes out of an act of parliament where we are obligated to serve the long term interests of the country, ensuring that our investment is activating for future generations. We have land across the countryside, a lot of urban ownership, and also the seabed around England, Wales and Northern Ireland.

2:41 – 3:34

And so we’re involved in sectors like agriculture, obviously, place making, but also industries like the rollout of renewable energy on the seabed. So turning to the contradictions, the whole system is set up against the economic cycle, which is a 25 to 30 year time horizon cycle. And everything we do is set to the short term. And we face the paradox of being in that world every day, dealing with the pressures of that world and every now and again turning up to a conference like this and talking about some of the long term challenges we face and it doesn’t take away anyone’s commitment to long term change and the need to deal holistically. But we can’t take away from the fact that we’re drawn into the everyday.

3:36 – 4:35

I was talking to a property chief executive a few months ago who was talking about the relationship between the financial return that they need to maintain their share price and the best that he can do with regards to minimizing embodied carbon in their development portfolio. So basically to make a 12% IRR they could get their properties down to 540 kg per meter squared on a new build basis. Not bad in today’s standards. Not good, not bad, but a big problem because when you look at the Paris Protocol, it is nowhere near what it needs to be to hit the trajectory to set ourselves up for a 1.5 degree world. And he said to me, what am I meant to do, Dan?

4:36 – 5:33

I said, I’ve got shareholders, I’ve got investors and eventually if I keep cutting carbon further, I’m not going to get the returns because it’ll cost me too much to achieve it and ultimately my investors will lose hope and ultimately my board will lose hope and eventually I’ll lose hope, my job and I won’t be able to influence everything. And I have some sympathy for that. And I think in some ways we’re all facing similar contradictions in our day to day. What I don’t have sympathy for is the question around whether we are collectively investing enough in dealing with those systems challenges so that in five years from now a 12% IRR doesn’t equal 540 kg per meter squared, it equals 440 kg per meter squared. So we talk about the future, but I don’t think collectively we’re doing enough about the future.

5:34 – 6:39

I was in Cambridge yesterday, we have a major development there and we’re looking at how we set that up for the future. And one of the things that I was confronted by was a presentation by one of the partners that we’re working with talking about the fact that billions of pounds are going into life sciences, clean tech, climate tech, but the spread in life expectancy across Cambridge from the most affluent to the least affluent is 12 years. Yet all that investment in new technologies, new medicines, new place making will make an iota of difference in improving life expectancy. So how do you put a value, how do you put an economic value on life expectancy? And what I’m talking about in Cambridge exists in London, exists in Manchester, it exists everywhere, everywhere in the Modern world, in fact.

6:41 – 8:05

And this is why I think we need to come back to this importance of holistic thinking. Not pretending that we can do more right now, given the constraints we face, but investing more in changing for the future. It’s why we’re so passionate about our partnership with the connected places catapult, drawing on international best practice, drawing on best practice thinking, developing partnerships like we’ve never partnered before. And whilst we invest in delivery today, putting an equal amount of investment into how we solve some of the systems issues in the future, whether that’s embodied carbon in buildings, developing new materials and being part of partnerships and ecosystems that are trying new things where we can afford to try them, grow things at work, fail fast where they don’t work, or if it’s moving all the way along to the social spectrum and putting a value on good education, on vocational education and training, on health and ultimately on life expectancy, these are important matters, these are essential and these partnerships are essential. At the Crown Estate, across our portfolio, we are investing between 3 and 4 billion pounds in placemaking over the next 10 years.

8:05 – 8:42

We’ve announced a 1.5 billion investment over the next 15 years in life sciences and tech. We’re spending a lot on the rollout of renewable energy. We’re involved in places across the country, from the northeast, the southwest, London, the regions, Cambridge, Oxford. And one of the things that we are passionate about, in fact, we’re compelled to do this under our act, but we’re passionate about it, which is what I think is more important, is starting to figure out new ways of solving some of these issues by not doing traditional consultant led community engagement, but actually doing authentic community engagement. Because our brand, if we’re in a place, is going to be there forever.

8:42 – 9:35

Our brand depends on how well we leave the places that we are part of creating behind. We also, in the development world, having grown up in that space, would like to go into places and curate from A to Z, control everything. But ultimately, I think to do this properly, you’ve got to let go and you’ve got to give communities a say in their future. And with devolution now being our future, a good future, putting the hands of the future into local communities, as practitioners, we have to get better at working in partnership, but making sure that from an inclusion perspective, we’re taking everyone with us, not just those that turn up to engagement sessions, but those that need us the most. And I know some of what I’m saying might sound idealistic, but I’ve been around the block a few times I’ve managed a lot of business in my time.

9:35 – 10:23

I’ve taken the hard knocks. And what I can say is the island of business that we operate in the future won’t be the same if we don’t address these issues because our brands will be the ones that are up for question. But ultimately, what’s important to me, and I’m sure is important to you, is putting so much effort working in this space and being part of conferences like this, working with the connected places catapult and all the good work that they’re doing is you’ve already made the decision that you don’t want your legacy to be mediocrity. I certainly don’t want my legacy to be mediocrity, which means that we need to grab the future, take it into our own hands, have the tough conversations, challenge that those are influence and are in power and I certainly am one of those that are an influence and I welcome challenge. Talking about what we’re doing wrong.

10:24 – 10:44

Great question earlier about procurement and how difficult that is for innovation. You know, honest questions, honest challenge so that we can actually start to take on board what changes that we need to make so that in five and ten years from now, we’re not at a conference like this talking about the same challenges in the same way. Thank you very much.