“The building and construction sector accounted for over 34% of energy demand and approx. 37% of energy and process-related CO2 emissions in 2021, making it a key priority in the race to reach global net zero.”1 EPP N.V. – an Amsterdam-based company that strategically manages a real estate investment platform that is entirely invested in Poland – has published its first Climate Risk Report. We have asked Pieter Prinsloo, Chairman of the EPP N.V. Board, about the company’s plans and goals to reduce its environmental impact, and ways to achieve them.
What is your guiding principle for the management of the assets?
We drive value by investing wherever we identify the best market opportunities for sustainable growth. Our priority is to unlock value through active asset management involving the enhancement, growth and protection of our portfolio with the use of development activities and capital recycling. Our approach must be agile and able to adapt quickly to new opportunities, and market conditions while mitigating risks.
Last year you published your first ESG report. What has driven the decision to separate the 'E' area and publish a single report focusing on climate risks this year?
We are aware that the real estate industry has a significant carbon footprint. As the manager of the largest shopping centre investment portfolio in Poland by GLA, we believe that our role is to create trends and inspire the industry to be more proactive in protecting the environment. That said, we need to address the wider concerns and challenges of climate change and take responsibility for our environmental impact. In 2021 we implemented the ESG strategy with four main pillars – one of them is being a responsible Earth Citizen. We aim to achieve this by better understanding, addressing and disclosing climate risks in our operations. Now we are taking another important step by publishing our first Climate Risk Report, which follows the majority of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) – the leading market standard for climate risk reporting.
Given that, what are you aiming to achieve?
Recognising that it is crucial for the real estate industry to invest in non-polluting and energy-efficient buildings, we have implemented several strategic initiatives, calculated and monitored the carbon footprint of our operations and assets, and set targets in key environmental impact areas. Above all, we aim to improve the climate resilience of the portfolio we strategically manage in line with the EU Taxonomy and other environmental guidelines and to align our climate risk management processes with the TCFD recommendations. We believe that the climate change resilience strategy of our assets is critical to creating long-term value for our key stakeholders, including users of the properties, tenants, business partners, our owner – Redefine Properties and its shareholders, as well as financial institutions. It can also help us to ensure access to attractive financing. We believe that the transition to climate neutrality will provide us with new opportunities for responsible investment and sustainable growth that respects both society and the planet. A further step towards net zero is joining the Science Based Targets initiative (SBTi). By setting new, ambitious goals with their help, we would like to accelerate the decarbonisation of the retail and office assets we manage.
Could you explain what the abovementioned strategy includes?
Our strategy concentrates on reducing greenhouse gas (GHG) emissions to achieve the strategic target of net zero operational carbon in all of our existing buildings by 2050. We want to accomplish this by switching to renewable energy sources and technologies, improving the efficiency of resource use and ensuring that properties are equipped with environmentally friendly and energy-efficient technologies that minimise energy consumption by tenants and visitors. Therefore, in 2022, in terms of property management, we have continued to implement energy-saving initiatives, such as LED lighting, upgrading the BMS systems, installing CO? control systems and photovoltaic panels, or making changes to the mode of operation of powered appliances. In the fiscal year 2021/2022 the total emissions associated with all buildings under our operational control decreased by 9% compared to the FY2019 baseline.
We are working on our long-term water management strategy taking into account ESRS E3 (water and marine resources) standards and the specific water-related risks for the assets. We need to address water retention issues caused by the large-scale built environment and are currently involved in the LIFE Archiclima project by Investeko SA implemented with financial support from the European Union under the LIFE Financial Instrument for 5 assets as pilot projects. The intermediate target set in 2021 is to equip 100% of the common areas in the shopping centres and offices we manage with water-saving taps by 2025. This process is currently underway and is approximately 70% complete.
We focus also on providing a reliable and transparent third-party assessment of managed properties by external accreditation bodies, through the BREEAM and WELL Health-Safety Rating. In total, 33% of office buildings and 72% of retail assets were certified with BREEAM In-Use. The WELL Health-Safety Rating was awarded to Symetris Business Park, O3 Business Campus and Malta Office Park office complexes.
What will be the impact of the implemented solutions on your business?
By leveraging climate-related opportunities to transform our business, we can retain our market leadership in the more sustainable world of tomorrow. A sound climate resilience strategy is key to creating long-term value, but this is not limited to our key stakeholders. We do not only take measurable actions for our own gain, but we also have in mind future generations, which are also reflected in our ESG strategy.
1The Global Status Report for Buildings and Construction (Buildings-GSR) by the UNEP-hosted Global Alliance for Buildings and Construction (GlobalABC)