Aberdeen Standard Investments’ Airport Industrial Property Unit Trust (AIPUT) has established a strategic target to achieve carbon neutrality by 2025. AIPUT will work closely with teams across its business and supply chain to embed the objective in all decision making, as well as partnering with occupiers. Initiatives include enhanced warehouse design, solar PV installations and improving operational efficiency.
Significantly reducing AIPUT’s carbon footprint
Reducing operating costs for occupiers and supporting their ESG goals
Helping make airports cleaner, safer and vibrant for local communities
Futureproofing assets for the long term
As a long-term responsible investor, Aberdeen Standard Investments (ASI) takes stewardship and environmental, social and governance (ESG) factors seriously.
ASI’s Airport Industrial Property Unit Trust (AIPUT) is a specialist owner and manager of industrial property on and near major UK airports. AIPUT has 18 years’ experience owning and managing warehouses at Heathrow and other major UK airports, embracing a responsible long-term investment approach. The occupier base includes airlines, cargo handlers, freight forwarders, airline catering and specialist airport-related services. AIPUT has achieved GRESB Green Star status in each of the last five years.
In 2018, AIPUT investigated how it could play a meaningful role in helping the aviation sector act on CO2 emissions. Key drivers included:
As a result, AIPUT has launched a target to be recognised as a carbon neutral fund by 2025. This will involve AIPUT reducing CO2 emissions from the property portfolio and associated activity to as close to zero as possible over the next five years. An internal carbon price will be set and the resulting Carbon Innovation Fund reinvested in the portfolio to deliver further savings. Any residual emissions will be offset through ‘Gold Standard’ carbon credits in 2025.
AIPUT first established its baseline carbon footprint, estimated to be 10,680 tonnes of CO2 per year.
Emission sources included:
Emission sources excluded:
Informed by the carbon footprint data, AIPUT has developed an emissions reduction plan for an initial five-year period to 2023, so that the new culture and framework are embedded by 2025. The focus is on major emission sources where AIPUT can have an impact. Scope 3 emissions comprise 98.7% of AIPUT’s footprint, mainly arising from occupier energy and fuel use, as well as embodied carbon from new developments.
Prior to establishing the target, the AIPUT team stress tested it with property managers, portfolio managers, designers, developers and advisors, as well as investors, occupiers and other stakeholders. Their supportive response was encouraging.
AIPUT is now working with environmental specialist consultant WSP to implement the plan, engaging closely with teams across the business, supplier partners and occupiers.
Key initiatives include:
Each year, AIPUT will review its carbon emissions and apply a carbon price to ring-fence a sum of money to support abatement projects.
In 2025, AIPUT will offset any residual emissions using ‘Gold Standard’ credits. The intention is to minimise the need for offsets as much as possible.
AIPUT will follow the guidance set out in the internationally applicable PAS 2060 specification for the demonstration of carbon neutrality. This will support stakeholder confidence in the framework and best practice approach.
How to embed carbon neutrality into all decision making?
Having engaged with the AIPUT team and supplier partners on the carbon neutral target before it was established, ASI’s Head of ESG, Real Estate, AIPUT’s Fund Manager and WSP then held an initial training workshop for portfolio managers once the plan was launched. Together, they explored some of the plans in detail. Informed by this, they will roll out workshops for the wider team and partners in the coming year, so that everyone understands AIPUT’s expectations, shares their vision and pulls in the same direction. For suppliers, some requirements will be formalised through policies and contracts. ASI’s sustainability policies are already written into contract agreements with suppliers. These will be expanded for the AIPUT portfolio. However, the main focus for the first year is on engagement to embed carbon neutrality into decision making at every stage. For instance, so that property managers have operational efficiency on their radar when they engage with occupiers; and that project managers consider new practices, materials and technologies to reduce environmental impacts on every new development and refurbishment project.
How to engage with occupiers on carbon neutrality?
Businesses serving the airline sector tend to be environmentally conscious, often with corporate objectives and strategies to reduce emissions. AIPUT has sent a short survey to occupiers to gain insights into their low-carbon aspirations and gauge interest in collaboration on low-carbon initiatives. This will inform AIPUT’s activities in the coming year, helping them prioritise opportunities for occupier partnerships. They are also engaging with occupiers on solar PV opportunities, explaining how the installation and maintenance would be managed without impacting occupier operations and securing agreement to purchase the clean power generated. Over the medium-term, there are exciting future opportunities for AIPUT to support occupiers in improving operational efficiency, sharing best practice from across the portfolio.
Nick Smith, AIPUT Fund Manager
“Airports are gateways to innovation, home to dynamic businesses that are essential for UK growth. Our carbon strategy seeks to deliver a positive impact for our customers and local communities, and in turn meet strategic objectives for our investors.”