Based on the energy reductions we have achieved over the last few years, we believe that base-build energy use (common parts and shared services) can be cut by around 20% at most properties through effective day-to-day management and behavioural change, without capital investment.
Managing buildings efficiently
Key stakeholders such as our occupiers, employees and investors expect us to lead on energy efficiency to cut costs for our occupiers, at the same time as reducing carbon emissions.
Progress against our medium-term targets
We're on track to achieve our 2012 target to reduce managed energy use by 20% per m2 for each property type, compared to 2009. We cut energy use (common parts and shared services) by 15% across our like-for-like portfolio in 2010/11, compared to 2008/09, saving 13.2 million kWh, 6,775 tonnes of carbon and £900,000 on occupiers' energy bills. Across our entire managed portfolio, we reduced energy intensity per m2 by 12% in our offices, 28% in our shopping centres and 22% in our retail parks. Intensity per m2 increased by 21% in our Continental European properties, and we are working with our managing agents to address this.
We're also on track to achieve our 2015 target to reduce managed water use by 20% per m2 for each property type, compared to 2009. We cut water use by 14% across our like-for-like portfolio in 2010/11, compared to 2008/09, saving 59 million litres of water and £70,000 on occupiers' water bills. Across our entire managed portfolio, we reduced water intensity per m2 by 7% in our offices, 1% in our shopping centres, 52% in our retail parks and 2% in our Continental European properties.
We've made some progress towards our 2012 target to divert all managed waste from landfill. At our properties, we diverted 84% of all managed waste from landfill in 2010/11, up from 83% in 2009/10. We do not expect to achieve this challenging target by 2011/12, due to lack of waste management facilities in some areas of the UK. We will, however, continue to focus on increasing recycling rates and diverting waste from landfill. We recycled 53% of waste in 2010/11, up from 43% in 2009/10.
For more information on how we achieved this and to see our progress against our 2010/11 targets:
All data is as at 31 March 2011
What we're doing next
Across our multi-let office portfolio, we are working closely with building management teams to achieve projected energy reductions where we have implemented our new energy metering system and optimisation process. This offers guaranteed reductions in base-build energy of at least 10% in each building and we expect it to result in greater savings (around 20%), based on a successful pilot at our Head Office. We have installed this in nine buildings and plan to roll it out at more buildings, with occupier agreement.
At two of our shopping centres, we are piloting our new energy metering system and optimisation process, following a successful trial at our Head Office. Subject to this achieving its guaranteed 10% reductions in base-build energy, we will roll it out at more of our shopping centres in the UK and Continental Europe, with retail occupier agreement.
We believe that within three years further energy reductions will require capital investment, and behavioural change by our occupiers. We are therefore undertaking base-build energy and water reviews to highlight opportunities for capital investment to drive further reductions in each building assessed, factoring viable initiatives into service charge budgets or asset plans. Where office occupiers are committed to energy reductions, we are also offering to fund energy reviews in their areas, which will highlight initiatives they can implement to drive reductions.
At many of our retail parks, where energy is mainly used for lighting, we believe that we are already reaching the limit of feasible energy reductions, and that the greatest opportunities for efficiency will be on parks we acquire. However, now that we have reliable floor area data for our retail parks, we are benchmarking their performance, to try to identify parks where there are still opportunities and exemplar parks that we can learn from.
As regards waste management, we are focusing on those properties which do not meet our 60% retail and 70% office recycling targets in 2010/11. We are investigating opportunities to bring them up to our required standards. For instance, at Meadowhall we are seeking a supplier partner to process contaminated food waste; this will raise the overall recycling rate to around 60%, from 33%. Across our managed portfolio, we are also undertaking spot audits to verify that our property management teams are accurately recording data.
2011/12 targets:
- Reduce like-for-like energy use (common parts and shared services) by 6% across our managed office portfolio, 4% in our shopping centres and 2% in our retail parks.
- Reduce like-for-like water use by 2% across our managed portfolio.
- Divert 95% of all managed waste from landfill, achieving a minimum 70% recycling rate in each of our managed office buildings and a minimum 60% recycling rate in each of our managed retail assets.
Key risks
Failure to manage utility consumption at each asset we manage
- Impacts: fiscal burden from environmental taxes; adverse impact on our reputation and ability to let assets.
- Mitigants: building energy and water audits; energy metering system and optimisation process; Sustainability Brief for Management.
Failure to implement flood risk adaptation strategy for each asset either during development or in our existing portfolio
- Impacts: inability to sell an asset for full value; difficulty in securing flood insurance cover; increased insurance rates for flood cover.
- Mitigants: portfolio flood assessment plan; flood defence investment where required; Sustainability Brief for Developments; Sustainability Brief for Acquisitions.
