The sustainability revolution
Published: 16 June, 2011
When Shopping Centre launched 20 years ago sustainability was barely on the agenda. But it has come to dominate management practices, finds Sean Kelly
Delegates attending the BCSC conferences in the 1990s may remember encountering Edwin R Lucas. And hopefully some still have his corporate calling card – a grey and green ruler made by his company “Rethinking Recycling” branded “This ruler is made from 7 recycled plastic cups.” Lucas was an early recycling champion within the shopping centre industry.
However back then his message may have been falling on partially deaf ears. Over time, however, ‘recycling’ has been subsumed into the wider 1960s-born environmental umbrella Corporate Social Responsibility terminology. And in the middle of the first decade of the new millennium CSR seems to have evolved into what is now termed ‘sustainability’.
Whether it’s a generation of “Wombles” watchers who have grown up into senior management and board level executives or just that eco-education is at last making an impact, sustainability has leapfrogged up to centre stage on the boardroom agenda.
The shopping centre sector had its sustainability epiphany in 2006. That year Shopping Centre editor Graham Parker called sustainability “The biggest issue facing the industry today” in the joint BCSC/Shopping Centre publication What’s In Store. That same year Capital & Regional’s Mall Corporation launched its far-reaching EnviroMall initiative.
Sustainability was cemented as an industry cornerstone in early 2007 when incoming BCSC president John Bullough made it his focal theme and created a Sustainability Taskforce, launching a sustainability web portal with benchmarking company Upstream.
“It is entrusted to us to strike the right balance between the drive for commercial dominance and the individual long-term needs of the community,” Bullough who was then at Grosvenor, said at the time.
“The issue is as dominant as ever and should remain at the top of any retail property developer’s corporate agenda,” says Bullough, who recently retired as CEO of Abu Dhabi-based Aldar Properties and is back in the UK now enjoying an “active retirement” undertaking strategic consultancy.
And it continues as a primary message for the organisation. BCSC has just announced its support for two Henley Business School executive education courses focusing on sustainability – one in collaboration with Harvard Business School.
One executive far ahead of the industry curve on environmental issues was Paul Cornes. Cornes, who can be said to be the industry’s first corporate eco-warrior, worked at John Lewis and Habitat before leading property giant PruPIM’s environmental efforts from 2002. He made the job title switch from director of corporate responsibility to director of sustainability in 2006 – the same year PruPIM began purchasing green energy and achieved the industry-focal ISO 14001 certification for environmental management. About 18 months after rolling out that single initiative PruPIM had saved around £2m in costs.
“In the early days there were only a few organisations that ‘got’ CSR including PruPIM and Land Securities,” says Cornes who used a mix of trademark affable charm and determination to drive the eco-agenda to board level at PruPIM. “As matters developed the board could see sustainability didn’t just look good to stakeholders but it could underpin the business.”
Today Cornes, who operates his own eponymous sustainability consultancy, still believes that the shopping centre sector is demonstrating eco-leadership – even to retailers.
“M&S and John Lewis may have been an exception but even to the mid-2000s retailers didn’t want to know,” he says. “I think some of them still don’t get it. Sustainability is a corporate battle that must be waged daily but there can be financial benefits from being sustainable.”
Paul Edwards was in Australia working for Arup when he had his first sustainable project encounter – a convention centre/museum in Canberra. He moved to San Francisco when California was suffering from brownouts and blackouts – a scenario that, as he says “suddenly made low carbon buildings much more interesting to everyone.”
Edwards, who returned to Sydney with Arup, soon found himself pitching a sustainable headquarters project to developer Lend Lease. Arup didn’t win but Lend Lease headhunted him to become the first head of sustainability in 2002. He became Hammerson’s head of sustainability in February 2007.
Two projects in particular meant a step-change for Edwards and his colleagues.
“One was an internal exercise that linked environment and social issues with financial outcomes,” he says. “That’s when we got people to understand that there were financial implications – positive ones – for being sustainable.”
Another project was simplicity itself with high impact results.
“We re-lamped a car park with lower voltage lamps and that saved us 35 per cent in energy costs,” he says. “We’re now rolling it out across the portfolio.”
And it makes a difference. Hammerson spends about £10.5m a year on energy alone and has saved 21 per cent of those costs in the last two years. A further saving of £500,000 in landfill tax was achieved by recycling 150 tonnes of waste.
“Sustainability has definitely risen up the industry agenda,” Edwards adds. “Has it risen far enough? Probably not yet. The problem remains one of communication. People still think of sustainability as ‘energy’’, climate change and carbon emissions. But we need to communicate that it’s also about society. There’s a plethora of aspects that sustainability covers including jobs and skills training.”
And nothing is sacrosanct from a sustainability review:
“The industry will look pretty hard at whether air conditioning can be reduced or removed from our existing shopping centres,” Edwards says. “At Highcross, Leicester, for instance, we knocked off 25 per cent of energy costs by taking it out.”
Jamie Page, head of construction and real estate at leadership advisory company Heidrick & Struggles, sees more companies pursuing talent to embed and drive the sustainability agenda.
“We have seen a significant increase in the level of priority given to sustainability in the shopping centre sector,” he says. “From a commercial perspective as retailers fight to differentiate themselves from their competition through the creation of more robust CSR agendas, shopping centres are also having to embrace this to attract the higher calibre tenants.
“With 40 per cent of greenhouse gasses coming from the built environment there has been a significant increase in legislation around ‘green building’. This in turn has meant that developers are having to take a closer look at sustainability both through their new build programmes and retrofit of existing stock.”
And going forward legislation will continue driving sustainability. The European Union’s “Roadmap for building a competitive low-carbon Europe by 2050”, highlights the aims to reduce greenhouse gas emissions from within the EU to 80 per cent to 95 per cent below 1990 levels by 2050.
Hammerson’s Edwards predicts there will be push in the UK for Energy Districts – something he believes will be a £7bn industry come 2020. “The push for more green roofs and bio-diversity and social projects will grow,” he says.
Helen Dickinson, head of retail at KPMG, points out that sustainability is spreading via retailer supply chain vetting that is increasingly frequent and tough. She says the industry must embrace sustainability or get left behind.
“If you look back 20 years ago to where retail was at you see how much technology has changed the way the market operates. The same is true of sustainability. If you roll forward 20 years there will be much more change. There’s a lot of good sustainability work going on but it’s not across the piste and it’s going to catch up with those who don’t stay on top of it – in the same way that technology did to companies over the years.”
