FTSE100 company, Hammerson is one of Europe’s leading property companies with a real estate portfolio in the UK and France worth £5.6 billion - including 20 major shopping centres and 18 retail parks. 2degrees caught up with head of sustainability, Paul Edwards to find out about some of its latest initiatives to tackle sustainability.
Communication is key
"I think one of the challenges for our business recently has been around communication," says Edwards. "We’ve been doing some great stuff but how do we communicate that?".
Hammerson's response has been its 'positive places' programme, which it introduced at the end of 2012. This is the banner under which everything the company does on sustainability will be badged. "It’s basically saying we’re going to move from a company that does efficiency to one that does effectiveness. This programme will enable us to do this as a business, whether you’re cycling into one of our assets or standing up as ceo and making corporate statements about where we’re doing. Everything drives towards delivering positive places; that’s for us, our staff and the communities we work in".
Retrofitting shopping centres for natural ventilation
Improving the energy efficiency of its shopping centres is a key goal for Hammerson. It started by targetting the easy wins; a £3.4m programme to re-lamp the lighting in its car parks delivered double digit savings in the carbon emissions across its entire portfolio. The challenge now is how to tackle the more difficult stuff.
At its Queensgate shopping centre in Peterborough and the Oracle in Reading, Hammerson is removing the air conditioning and making the buildings naturally ventilated in a bid to curb energy use. This has definite business benefits says Edwards. At the Oracle removing the chillers and air handling units will create more car parking space which in turn brings in more income. Taking away the ductwork provides the opportunity to create double height spaces which are more valuable in terms of aesthetics and desirability amongst tenants. This comes out in higher rents or shorter void periods. “All of that adds around a £6.4 m uplift to the asset, so the money we are saving on energy is miniscule compared to what the intrinsic value is to the business,” says Edwards.
There is a concern that removing the air conditioning plant will lead to tenants installing their own kit. Hammerson worked with Breathable Buildings Cambridge to model its shopping centres to see which could benefit from natural ventilation and to ensure there wouldn’t be issues with overheating. After converting those which can be naturally ventilated, the next step will be to look at the buildings which can’t be fully naturally ventilated but could be mechanically ventilated without the need for cooling.
In a bid to improve the efficiency of its waste management, Hammerson has gone from individual waste contracts for its properties to one centralised waste contract. This is starting to save the firm and its tenants money says Edwards. At Silverburn in Glasgow, which it bought a year and a half ago, recycling rates for the waste generated by tenants and the public have gone from 9% to 97% in three months.
“But all of our assets have made huge leaps forward. We have the target that by the end of 2013 we’ll achieve 75% recycled waste. Given that we’ve been rolling this centralised system out since the beginning of 2012 and we’re already at 71%, we’re going to finish a year early. It saves the company money on landfill tax, that’s the business benefit and that’s really what’s driven it”.
Improving supplier engagement
In November Hammerson introduced a new supply chain questionnaire. Every supplier who works with the company and who it spends over £100,000 with a year – there are around 250 such companies – has to complete the questionnaire.
The first questions asks whether the supplier complies with Hammerson's supply code of conduct, which covers health and safety, environmental policies, measuring and monitoring, the bribery act and other legal requirements. "If they don’t comply with that or won’t agree to comply with that, they can’t continue with the questionnaire and basically won’t work with Hammerson,” says Edwards.
There are a further 34 questions and once completed the supplier is scored and will be reassessed annually. "We’ve set guidance of three years to improve to get to a pass mark, which we have set at 70%. If we see a company that in three years has gone from 25% to 25% to 25% then we won’t be working with them anymore. If we see a company that has gone from 25% to 50% to 62% and our pass mark is 70% then we’ll engage with them and see how we can help.
"We’ve always said we’re only as good as our supply chain, an easy example is if we go and create all these fantastic recycling programmes but the waste contractors tips it all into one bin and it goes off to landfill, we haven’t achieved anything. So we need to engage our entire supply chain".
Driving better tenant engagement
Hammerson is looking at green stores with M&S, H&M, Costa, Kingfisher and in talks with others including Arcadia and Swarovski. “And when I say green I mean practical green," says Edwards. "Not wind turbines on the roof".
For Hammerson, the motivation to get involved with its clients is simple: anything it can do to improve sales is good for business. "We need our customers to be sustainable and they are only sustainable if they can sell enough products to pay the rent and the operating costs".
The company has a programme for its customers based around four key areas. “One was on green leases, and every lease we now sign is a green lease and it says we want you to measure energy, water and waste and work with us to improve your performance, that’s it".
Secondly, Hammerson recognises that some retailers don’t have that skills set, or don’t have the money to invest in the skills to develop and improve sustainable fit-outs. "So we created a tenant’s sustainability guide which we give out to new tenants. It gives key recommendations about what they can do to improve sustainability together with the facts and figures of how much it might save them around transport, energy, water and waste,” adds Edwards.
The company has also worked on creating lighthouse stores, which bring together the latest thinking around energy efficiency and sustainability. This has been difficult admits Edwards, partly because a retailer will roll-out 60 stores and by the time it gets to store number 38 it is reluctant to make changes to that design. One way Hammerson has tried to influence design improvements in such situations is through its ‘retail lab’ set up a year and a half ago with De Montfort University. This is a space where retailers can and try out test ideas around improving the sustainability of their store fit-outs before making them live. "This can totally transform their thinking".
The fourth area is knowledge exchange and here Hammerson is setting up green groups so retailers can share best practice.
Biodiversity moves up the agenda
Hammerson’s plan is to have biodiversity action plans for all its assets in place and implemented by 2015. This includes measures such as installing beehives, creating communal staff vegetable gardens and green roofs.
One of the more interesting initiatives has taken place at Silverburn in Gasgow. The shopping centre includes a natural park with a lake that makes up part of the development’s flood defences. Staff came up with the initiative of using the lake to establish a fishing club. "One of the problems we had was fly tipping and people poaching," says Edwards. "But by creating a fishing club you’ve got a passive security mechanism because the fisherman want the fish so there is less poaching, there are people there all the time so there is less fly tipping and they also pick up litter and keep it clean.”
EPCs versus DECs
"To improve the performance of existing buildings the government needs to introduce a robust energy labelling system that everyone believes in," says Edwards. Introducing minimum energy performance certificate (EPC) doesn't go far enough he argues as this is based on the theoretical performance of a building and not its actual energy use.
Edwards chairs the Better Buildings Partnership, a collaboration of London’s leading commercial property owners supported by the Mayor of London and the Greater London Authority. “We are developing a landlord energy rating, which is a display energy certificate and we are doing this because we think it is the one thing that can really change the industry. We’re not going to come out of it perfectly, we’re not all going to get an A-rated building we know we are going to have to change some of our buildings”. The energy rating tool will be piloted soon amongst BBP members before it is made available to the wider industry.
Paul will be attending January's 2degrees Live event, 'Raising The Energy Performance of Your Properties', which will take place on 25th January 2013. If you are interested in attending please contact Matthew Eastick on +44 (0) 1865 597 640 or firstname.lastname@example.org