In 2016, Landsec took steps to enhance their acquisitions process as part of a wider ambition to lead the built environment to a more sustainable future. This blog examines the characteristics of a resilient investment process and the benefits like-minded organisations can derive from implementing something similar.
GVA was commissioned to enhance Landsec’s acquisition process to reflect their sustainability ambitions. The key requirements of this review included aligning material sustainability impact areas with the business strategy and working with the grain of existing internal processes and teams.
The drivers for an enhanced acquisition process arose from the ever evolving number of current and emerging sustainability trends to consider, as well as the need for greater integration into an already robust governance process relating to acquisition.
To inform this project, GVA used a combination of employee interviews, the BBP Managing Agents Sustainability Toolkit and GVA’s own experience in acting for buyers to inform on sustainability trends to consider when acquiring a property.
The sustainability measures which were identified can be grouped as follows:
Energy and carbon regulations and voluntary standards or codes
Enhancements to the acquisition process at Landsec were achieved in several ways. These can equally apply to any company looking to future proof their acquisition processes:
Baseline review of existing acquisition processes: This included a review of the existing environmental and social metrics considered at acquisition.
Understand both the sustainability and business strategies: This included an understanding of the current sustainability strategy, materiality and strategic business aims.
Review of governance process: Ensuring sustainability measures were explicitly reported and considered.
Employee engagement: The perspectives of the complex roles of individuals involved in the acquisition process were captured. Once the new due diligence process was finalised, the buy-in from all other teams involved was an essential step to ensure a successful process change. Internal communications and training were important in this regard.
Regular reviews: As I mentioned earlier, sustainability does not stand still and neither can you. As your sustainability strategy evolves and the market keeps pushing boundaries, undertake regular reviews to ensure your teams are taking account of the latest risks and opportunities.
The key outcomes achieved following this project were:
With the adoption of an enhanced acquisition process, I recommend that any company promotes transparency in their processes to: engage their supply chain, provide investment agents and other third parties who act on their behalf with clear instructions and ensure the process is kept under review and updated as sustainability and the markets evolve.
Head of Sustainability, GVA