Managing sustainable buildings
Our approach to decarbonising our business is set out in our Statement of Intent “The Time is Now” Reducing the energy consumption of our occupied portfolio is key to achieving our commitment to become a net zero carbon business by 2030. By minimising our use of natural resources and improving the efficiency of our assets, we reduce the environment impact of our portfolio and contribute to a more sustainable London.
Our energy and carbon targets
target to reduce energy intensity by 40% and carbon intensity by 69% of buildings within our operational control
of our new build developments to be net zero carbon from 2030
In May 2019 we set out challenging targets for our occupied portfolio:
To reduce the energy intensity (kWh/m²) of buildings within our operational control by 40% and our carbon intensity (kgCO2e/m²) by 69% by 2030 from our 2016 baseline.
Our business model is to buy unloved assets and reposition them, often through refurbishment or redevelopment. This means that new acquisitions and property disposals are likely to take place during the target period. We have therefore set out the following parameters to deal with this when measuring our progress against our targets:
- Our energy intensity target applies to our occupied properties with landlord controlled areas. It does not apply to properties wholly controlled by our occupiers (on FRI leases) or those under development.
- Where we dispose of properties during the target period, we undertake a normalisation calculation based on floor area.
- Where we acquire assets we will include them in the target after 36 months. This allows us to identify a baseline, set the business plan for the asset and put budgets in place to start implementing energy efficiency improvements.
- Where we develop properties and they return to the occupied portfolio as a property with landlord controlled areas, we will immediately add them to the target as our development interventions, soft landings process and commitment to design for performance should ensure that the property is well understood upon handover.
This target was also included as a key performance indicator within our ESG-linked revolving credit facility announced in February 2020, with year on year percentage improvements required on our trajectory to a 40% reduction in energy intensity. These targets have also been incorporated within the remuneration of our senior management team.
Additionally, we have also committed to ensuring that all our new build developments are net zero carbon by 2030. For more on how we are designing energy efficiency buildings see Developing sustainable buildings.
Energy use and efficiency
100% of the landlord energy sourced and purchased by us at our properties is from renewable, zero carbon tariffs. However, we recognise that we must also drive energy efficiency improvements to meet our carbon emissions reduction targets.
As a signatory to the Better Buildings Partnership Climate Change Commitment we have set out Our Roadmap to Net Zero for our business. We are also working on an energy reduction trajectory for each of our buildings in order to meet our energy intensity target for 2030.
Our energy action plans help us identify where energy efficiency improvements can be made and also where we can work with our occupiers to reduce energy consumption across the portfolio. During the year we completed our submission under Phase 2 of the Energy Savings Opportunity Scheme, which identified 3771Mwh of savings to be made. These recommendations have been included within our Energy Action Plans.
Whilst Energy Performance Certificates do not address operational energy performance, we actively monitor our ratings and during the year we further reduced our exposure to F and G ratings with less than 0.1% of our rated portfolio lower than an E.
To see our performance on energy and carbon see our Sustainability Performance Data report.
Smaller scale refurbishments
It is important that we take the opportunity to improve sustainability whenever we refurbish space, irrelevant of size and scale. For smaller refurbishments we use the RICS SKA certification system, targeting a silver rating as a minimum standard with the ultimate aim of achieving gold. SKA provides a framework to ensure that our contractors consider sustainability and wellbeing within the design and refurbishment process. This supports us in integrating wellbeing measures into the design and refurbishment of our spaces including the retrofitting of cycle stores for low carbon commuting where opportunities exist.
A key commitment from our Statement of Intent “The Time is Now” is to increase biodiversity net gain across our portfolio. This has been included as a key performance indicator within our ESG linked RCF. We have committed to increasing biodiversity net gain across our portfolio by 25% by 2030. To achieve this we will need to retrofit urban greening across our occupied portfolio.
Waste management and water consumption
100% of waste from our occupied buildings is diverted from landfill. We support our occupiers in improving waste management processes, looking to segregate waste to ensure as a high a recycling rate as possible. Progress is monitored through occupier meetings and via the occupier app. For our performance see our Sustainability Performance Data Report.
We monitor water consumption on a monthly basis, providing data to our occupiers on a regular basis. Our climate change risk review has identified potential water shortages as a longer term risk to our portfolio. We are undertaking water audits to identify the potential for savings with new water targets to be set during the forthcoming year.
Working with occupiers
As occupiers move into their space, our Occupier and Property Services team ensures that their systems are fully integrated with our landlord-operated systems. By following a soft landings process, our design team is available post-handover, to address any issues as occupiers install their systems. We also fully brief our Occupier Services team on the sustainability features of our properties.
Key to long-term reductions in energy and resource use is engagement with our occupiers. We provide regular updates on sustainability performance in occupier meetings and through our occupier app including energy and water consumption data, waste recycling rates and updates on local community related initiatives.
Environmental compliance was identified as one of our material issues as part of our review of material risks. Our Environmental Management System is maintained to monitor legislative compliance, minimise the risk of pollution, facilitate the management of key environmental risks and assist in the achievement of specific objectives and targets.