Invest-ability bulletin 03/11/21: The trouble with transport

High jinks at COP26

Apologies for the late email today. I’ve been busy scribbling some thoughts on the once-mighty owner of London property Land Securities, which subscribers can read here. The short summary is that I reckon its takeover of urban regeneration specialist U+I is really interesting. I may have decided to flee London life, but there are still lots of people who want to live in cities and can’t really afford to do so, and redeveloping brownfield land to house them in places where people also want to work makes a lot more sense than sticking up thousands of identical – and often very ugly – boxes on the edge of every commuter town in England.

Apart from the eye-wateringly expensive season ticket, I actually didn’t mind commuting very much – my 2 hours on the train every day meant I got the chance to read a lot more books than I currently do. But for many it is pointless travelling. I didn’t like the office very much, either; like most I have worked in, it seemed like a triumph of style over practicality that, though brand new, also felt like an anachronism. The City’s skyline has changed beyond recognition in the time that I have been working there, working practices not so much.

Now it appears London’s workplaces will have to reinvent themselves again as companies work out how to ‘go hybrid’ to keep the TWATs (Tuesdays, Wednesdays, and Thursdays) happy. But it seems unlikely that it will be a return to business as usual. Commercial landlords need to be thinking ahead, and I think that’s what Landsec may finally be doing – according to analysts it needs to get a bit greener, but creating live/work environments that cut down commuting must help with that. And the shares are (almost) the cheapest in the Reit sector – it’s certainly at the opposite end of the valuation spectrum to self-storage specialist Lok’n Store, which Phil has written about this week (and which I can never remember how to spell).

Talking of commuting, it seems there were lots of fun and games as assorted dignitaries attempted to make their way to the COP26 climate summit in Glasgow. As many have pointed out, it was hardly the green display that the rest of the us would have expected from those telling us how we should curb our lifestyles to save the planet – a 40-strong motorcade for Joe Biden, rumours of diesel-powered charging points for the electric limos, tree-blocked train lines into the city, and a full squadron of private jets. There were even complaints about the amount of meat on the menu at its various venues.

I could go on, but lots of people are very angry at the apparent double standards, and I think what we have seen is that living net zero is going to be a lot more difficult than talking about it. It certainly seems doubtful that many of us won’t be jumping on a plane as soon as seems safe again to find some warm weather, which is why Phil thinks a recovery might eventually be on the cards for package holiday group Jet2

That may not seem very environmentally friendly, but nor it seems is clean vehicle poster-child Tesla (which has been causing more trouble this week after confusion over the Hertz deal that sent its share price into orbit). As I read with disbelief after writing about Shell last week, the oil giant has a better ESG score than the electric carmaker. And astonishingly it’s true: according to the latest Refinitiv data I could find, Shell scores 88 out of 100 while Tesla scores just 57.

You could, of course, put that down to the confusing and often contradictory way in which ESG scores are put together, something that was discussed at COP26 at the launch of a new International Sustainability Standards Board which intends to tackle greenwashing head on. Good luck with that. Or you could say that EVs aren’t all that environmentally friendly at all – emissions from driving them may be lower, but the footprint of making a new car is, as is often said, much higher than the old banger you already drive – not that Tesla’s telling us. And the electricity to power them has to come from somewhere – possibly diesel generators, or maybe the massive new nuclear power station that’s being built down the road from me, which can surely only be considered green if you ignore every other aspect of its construction and existence except for the fact that it doesn’t emit C02. But that’s a story for another time…

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