Landsec Leading with Science-backed Approach

10/08/2018

Having become the first property company in the world to set CO2 reduction targets based on accredited scientific methodologies in 2016, Landsec’s latest data shows the benefits of pursuing science-based targets. Landsec's leadership in this area has strengthened its reputation with investors, occupiers and other stakeholders, at the same time as reducing CO2 emissions, cutting energy costs and futureproofing assets.

28.6% lower CO2 intensity in 2017/18

£2.5m invested in energy efficiency and on-site renewables in 2017/18

£800,000 annual energy cost savings for occupiers

1.4 MW on-site renewable capacity

Situation

Landsec is the largest commercial property company in the UK. The company has a longstanding sustainability programme. In 2015, the CEO challenged the company to become the sustainability leader in the real estate sector. Drivers included investors increasingly asking about sustainability, growing interest from occupiers and increased focus on climate change in the run up to the UN Conference in Paris (COP 21).

Landsec’s Head of Sustainability and Public Affairs attended COP 21 and decided that Landsec needed to set a science-based reduction target for COemissions. She secured buy-in to take a lead to move the sector forward on this critical issue, committing to what is required to tackle the climate change challenge, not just what is achievable.

Science-based targets seek to deliver on the commitment made by leaders from 195 countries at COP 21 to keep global temperature rises below 2°C versus pre-industrial levels. This is based on the consensus of leading climate scientists that rises beyond that would be catastrophic.

Actions

Using the Sectoral Decarbonization Approach (SDA) developed by the Science Based Targets initiative, Landsec set a target to reduce CO2 emissions per m2 by 40% by 2030 and 80% by 2050, from a 2014 baseline1. This covers Scope 1 and 2 emissions, and a portion of Scope 3 emissions from downstream leased assets, for properties managed for at least two years. In pursuit of this target, Landsec leveraged £2.5m in support of energy efficiency and on-site renewable projects in 2017/18 alone.

The target has affected the way Landsec works across its three main areas of operations:

  1. Buying buildings: Landsec has introduced its first Responsible Property Investment Policy, considering the impact on its target of introducing a new building to the portfolio, and taking requisite measures to address any issues. This is an approach recommended in BBP’s Acquisitions Sustainability Toolkit.
  2. Developing buildings: Landsec now designs and develops buildings in a way that aligns with its agreed decarbonisation pathway and energy goals. For instance, there is an ultra-efficient heating and cooling system driven by air-source heat pumps at the new Westgate Oxford shopping centre.
  3. Managing buildings: Landsec developed an energy reduction plan for every asset in the portfolio. Initiatives include adjusting heating and cooling system settings, retrofitting LED lighting and fine-tuning lighting controls, e.g. shortening delays on time sensors. Landsec also retrofits innovations to maximise efficiency without compromising affordability for occupiers, e.g. installing 785 kWp solar PV system at White Rose, Leeds, and switching to natural ventilation at Bluewater, Kent.

Financials and benefits

The meaning behind the science-based target has engaged internal decision makers more effectively than previous targets and allowed for greater investment than ever before.

In 2017/18, Landsec achieved:

  • 28.6% lower CO2 intensity and 14.3% lower energy intensity than 2014.
  • £2.5m invested in energy efficiency and on-site renewables in 2017/18.
  • £800,000 annual energy cost savings for occupiers.
  • 1.4 MW on-site renewable capacity, with more in the pipeline.
  • 100% of corporate electricity contract from renewable sources, supporting decarbonisation of the Grid.
  • 18% of corporate gas contract from green sources. 

Landsec’s science-based target and reduction activity:

  • Supports its ambition for sustainability leadership in the real estate sector. Landsec was awarded a place on the CDP A-list 2017, reserved for companies demonstrating leading action on climate change. Having an accredited science-based target helped Landsec achieve this.
  • Enhances its reputation and relationships with investors, occupiers and other stakeholders. Landsec’s sustainability team is increasingly taking calls from investors interested in setting their own science-based targets or thinking of making them a requirement for companies they invest in.
  • Futureproofs Landsec for investor requirements on CO2 for the next 50 years, as long as targets are updated in line with the latest science.
  • Positions Landsec well for regulatory requirements, fully compliant with the UK Government’s existing CO2 targets and regulations and futureproofed for more stringent requirements in line with science.

Challenges & Achievements

ACCREDITATION

How to ensure your target is truly science based?

Landsec used the SDA methodology developed by the Science Based Targets initiative. This is the leading organisation for accrediting CO2 reduction targets, backed by credible partners including the CDP, WRI, WWF and UN Global Compact. The SDA methodology remains the most popular way for companies to set science-based targets. It includes a sector-specific approach for the property industry and allowed Landsec to easily compare its decarbonisation requirements with the wider industry. By May 2016, Landsec’s target was approved internally and presented to the initiative. However, due to an incomplete Scope 3 assessment, it did not fulfil the criteria for Scope 3, that is, indirect emissions such as those produced in developing buildings and by the occupiers using buildings. As a result, Landsec carried out a full Scope 3 assessment to understand the scale of these emissions and explore opportunities to reduce them. Landsec submitted a revised target to the initiative, which was approved in December 2016, one year after the COP 21 agreement was ratified. Landsec is now part of a consortium led by the World Business Council on Sustainable Development (WBCSD) to fine-tune the methodology for real estate and support other real estate firms in setting similar targets.

INTERNAL

How to secure buy-in across the business?

Landsec held a series of internal meetings and workshops to get people on board. They explored “what does sustainability leadership mean to you?”, using this to identify opportunities for change and start to build buy-in for ambitious targets. They then held further internal workshops that linked the macro issue of climate change, which people see on the news, to the specific details of a science-based target. These sessions started with the sustainability team and moved out, via more senior directors who the team knew were interested in these issues (the ‘early adopters’). Having people in different business areas on board helped generate support at all levels across the business. It was also empowering being able to show how the target links back to the global situation and is informed by science. There was enormous support from across the business. Landsec is now working with leasing agents and managing agents to upskill them in talking confidently about sustainability.

Find out more

Tom Byrne

Sustainability Manager

Landsec

E: Tom.Byrne@landsec.com

www.landsec.com

 

1 Landsec has also committed to the same reduction target for energy intensity, measured as kWh per m².

“The progress Landsec has made over the past two years is commendable. They are one of the most engaged landlords M&S works with on sustainability and this is evident in their achievement of becoming the first real estate company globally to set a science-based target.”

Lydia Hopton, Plan A Project Manager, Marks & Spencer