Sustainability Report 2020 - OUR JOURNEY TO NET POSITIVE - ResponsibilityReports.com
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SUSTAINABILITY REPORT 2020: INTRODUCTION Contents Hammerson 1. INTRODUCTION P. 2 Our approach to sustainability, key ESG figures for 2020, process for managing risk, and our response to the TCFD. 2. OUR PERFORMANCE P.18 An overview of our journey to Net Positive, including headline performance against targets and progress in each of our four Net Positive areas. We also share our 2021-2022 targets, long-term targets and highlights from our Transition Pathway to Net Positive. 2.1 2.2 2.3 2.4 Carbon Water Resource Socio- Use economic impacts P.28 P.34 P.36 P.38 3. OUR DATA P. 4 6 Comprehensive disclosures of the environmental and social impacts of our business activities, our basis of reporting, methodology, boundaries and GRI index. COVER IMAGE: Pulse, part of the Festival of Light at event at Westquay, Southampton.
SUSTAINABILITY REPORT 2020: INTRODUCTION 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 2 Welcome from our 3 Chief Executive Hammerson “Hammerson’s forward-thinking approach to sustainability has positioned the business well in responding to the rising ESG expectations of the investor community and our wider stakeholders. Our long-term vision is to ensure we continue to optimise our assets to thrive in a low carbon, city-based, 21st century economy. Our Positive Places sustainability strategy underpins this vision. Rita-Rose Gagné, CEO £8m Hammerson’s sustainability PERFORMANCE TO DATE A DIFFICULT YEAR FOR MAINTAINING A CLEAR POWERED BY RENEWABLES strategy has long been a key AND THE IMPACT OF OUR COMMUNITIES FOCUS ON MATERIAL strength of the business. Taking COVID-19 ISSUES Our strategy recognises the critical over as Chief Executive, I made The strong relationships we have role renewable power has to play in it clear that this is a position that Unsurprisingly during 2020 with our communities has been My immediate focus moving the transition to a net zero carbon we outperformed our annual important during the pandemic. forward remains on minimising economy. Almost 3% of our landlord of ESG focused investment will not change and that I expect environmental targets. The trend We were immediately conscious our negative environmental electricity demand was supplied by planned 2021 - 2023 sustainability to become even more central to our strategic thinking. has been sharply downwards of the intense pressures placed on impacts through our ongoing our on-site renewable assets in 2020 but the impact of closures due to local third sector organisations energy, water and resource use and additional capacity is planned COVID-19 makes 2020 a poor year with reduced funding and increased efficiency programmes, whilst for 2021. 92% of our electricity -39% for comparisons. The trend over demand for services. A series extending our positive social demand in the UK and Ireland is the previous four years is more of projects was put in place to impacts. Work to reduce key currently sourced from REGO- useful and has been very strong. support local organisations help environmental impacts through backed clean electricity contracts. Carbon emissions intensity of our the most vulnerable within our optimising asset resource However, we plan to source at least portfolio fell by 39% over the 4 years communities. Our investment in efficiency and investing in clean 50% of electricity for our UK assets carbon emissions intensity to the end of 2019, and absolute positive socio-economic projects technology will continue over from additional renewable power for managed retail portfolio emissions by 30% even though will obviously continue and we are the short and medium term. We from the end of 2021. This will bring over 4 years to end 2019 unsubsidised new capacity to the our portfolio has increased in size. particularly alert to the challenges have almost £8m of ESG focused Water intensity for landlord services facing local communities in 2021. investment included in asset grid and set a new standard in terms fell by 28% over this period. We are already working with local business plans to 2023, which we of power purchasing for our market. service providers and community expect to deliver financial as well as It will also support the transition of We have yet to achieve our target of foundations to target specific areas environmental and social returns. individual assets to net zero carbon becoming Net Positive for landlord of need, such as employment and over the coming years, helping us carbon, water and resource use, skills and financial exclusion. achieve our Net Positive targets for however setting this ambitious target the business as a whole. has driven the business to deliver truly exceptional medium term performance in these areas. Three of our flagship assets were Net Positive for landlord water demand in 2020.
SUSTAINABILITY REPORT 2020: INTRODUCTION 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 92% 4 The successful businesses 5 of the future will have sustainability at their core and be designed Hammerson to thrive in a net zero of electricity for our UK carbon economy. and Ireland portfolio from REGO-backed contracts. City Quarters at Martineau Galleries, Birmingham < Continued from previous page THE POWER OF Sustainability and the risks of climate carbon, climate risk, resource use, Looking at climate risk specifically, THE NEXT 12 MONTHS We remain focused on our Net COLLABORATION change are a shared business agenda water and our social impacts is right our portfolios have relatively low AND BEYOND Positive targets over the next and the power of collaboration is for the business and supports our exposure to physical risks. Where Our Net Positive targets include the One of the few certainties for the 12 months and beyond. They already clear; it will continue to be wider business strategy. these do present, our planned impacts from the tenanted space next 12 months and beyond is the represent a clear call to action a central element of our approach. programmes of maintenance and within our assets. These represent As signatories to the Better Buildings growing threat of climate change for colleagues and are driving Our customer base is set to change upgrade will build in resilience in over 70% of total carbon emissions Partnership Climate Commitment and the urgent need to act. Whilst excellent outcomes. The successful and with it, the expectations and a cost effective, well managed way. for the business according to our we published our Net Zero Carbon we can and will ensure our assets businesses of the future will have opportunities we must respond to. Transitional risks presented through latest data. Thanks to our extensive Transition pathway in December remain resilient to direct physical sustainability at their core and This, along with a clearer focus on increasing regulatory and legislative environmental foot-printing model 2020. Setting out Net Positive targets risks and transitional risks, we are be designed to thrive in a net performance-in-use, are pushing new standards in the UK, Ireland and and data sharing agreements within 5 years ago enabled us to publish a indirectly exposed to the risks that zero carbon economy. This is an boundaries within the sector that we France are well managed across the our leases, we are already able to detailed pathway that includes all our other stakeholders, particularly important opportunity for us as we fully support through our own work portfolio. For example we are now calculate the carbon emissions from our directly managed assets and our customers, face. reach out to communities within and our active industry engagement. planning for 2030 MEES risk. Having these areas (Scope 3 emissions) and encompasses operational, embodied our cities and look to provide the established processes in place to For this reason I have tasked my this data is set out in the report. MANAGING THE and Scope 3 carbon emissions. This local infrastructure they need and ensure opportunities are taken to senior management team with TRANSITION TO NET ZERO directly aligns with and supports deserve and that will serve the Reducing these emissions is essential upgrade units to higher standards at carrying out detailed climate CARBON ECONOMY our wider Net Positive targets and business and our shareholders and requires positive collaboration the most effective opportunity within scenario analysis this year to better Positive Places strategic approach. in the decades to come. with our brands. Our work so far The challenges and changes the leasing cycle, has enabled us to understand these risks and the to encourage improved fit-out experienced through 2020 made This is particularly important as we minimise exposure to 2023 MEES potential opportunities that flow standards has delivered 900 tonnes clearer than ever the value for our look to develop our City Quarters. risk and will ensure we are well from them, to inform our wider of carbon savings within stores, business and others like ours of We have set the highest standards prepared for the next phase. business thinking and strategy. reducing carbon emissions and taking a leadership approach to for our design teams, including retailer operating costs over multiple sustainability. The sharp increase achieving net zero carbon and years. We are also working with in focus on climate change Passivhaus standards, and this strong stakeholders beyond our corporate and related risks and stronger steer is delivering exciting results. boundaries to support carbon, water public expectations of corporate The buildings that we create now and resource use savings elsewhere. responsibility, place businesses that and that will drive the performance We started this work for water in are ahead of the curve in a positive of our business for years to come 2019 and are looking to expand it to position. I am confident that our have to be ready for the challenges carbon in 2021 and 2022. long-term focus on energy and climate change and a net zero carbon economy will present. Rita-Rose Gagné
SUSTAINABILITY REPORT 2020: INTRODUCTION 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 6 2020 in Figures 7 Headline performance and portfolio figures from 2020. Hammerson Net Positive portfolio CO2 EPRA LfL CO2 EPRA LfL CO2 intensity EPRA LfL TOTAL ENERGY DEMAND 3 flagship -55% -29% -29% -18% assets NET POSITIVE v 2015 Year-on-year Year-on-year Year-on-year FOR LANDLORD WATER DEMAND 57,258 £180K 2,214 LOCAL PEOPLE COVID SUPPORT £2m MWh engaged in our socio- FUNDING for economic projects local organisations INVESTMENT RENEWABLE ELECTRICITY in environmental produced on-site initiatives BENCHMARK SCORES PORTFOLIO VALUES DAYS OF OPERATION 253 Rating 92% AA Reduced due to COVID closures REGO-BACKED ESG Risk £6,338m assessment: (avg.) electricity for UK LOW RISK and Ireland assets Flagships UK £1,511m 24% £2.2m Flagships France £1,147m 18% Flagships Ireland £757m 12% UK retail parks £384m 6% Score: Developments & UK Other £615m 10% 4 STAR/78 Premium outlets: Value Retail £1,924m 30% ENERGY SAVINGS Sustainability score: 72
SUSTAINABILITY REPORT 2020: INTRODUCTION 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 8 What Sustainability 9 Means to Us Hammerson FOR MORE Our approach to Net Positive is explained overleaf FOCUSING ON MATERIAL ISSUES CREATING POSITIVE PLACES The materiality review conducted in These material issues drive our 2018 identified a clear list of areas we sustainability strategy. Each of these is need to focus on to achieve the most addressed directly in a variety of ways sustainable outcomes for our business. through our Positive Places strategy Our top six material issues are: and Net Positive targets as set out in 20 RE the graphic opposite. Our Materiality R FO 30 1 Governance and reporting SO review is completed every four years, E : V N and will be reviewed in 2022. TI ET 2 Energy security and pricing S I N U P O O Climate change B O P 3 S ET R IT FOR MORE N R Community engagement IV C 4 n Re tio E : A See the Sustainability pages of u E 30 uc se FO Waste / Resource use ns tr our website for more details of C th Su 5 20 io ons en U sta R ns er n, c our Materiality Review 2018 N re in tio Sustainable product o ity c ab SE 6 op sig ra yc w at rs le as e l nd de ve in op pr te g di on oc of nt to io rb e ur lb m la ci ca a em at fi nd ca ef er w en lo fil gy ia Lo l to g ls er tin fm En or CONTRIBUTING TO THE GLOBAL SUSTAINABILITY GOALS at pp er Su ia Proactive ls Our business activities support the following 10 UN Sustainable Development Goals: management of climate t en risks m W ris loy at p er em pe e le ef g op se on ein d fic CT Our socio-economic work focuses on Health We invest in renewable energy, work with rp an e W ie c to b e id l nt nt at s and Wellbeing, Skills and Employment, partners to reduce resource consumption, el ci d Su pr ill ng e er w d sk pp es g ou d tha nd Young People, and Enterprise. We work with and encourage innovation in design and ea sp vi ef PA or lin g ig or y in fic cr t re a ab n tin g er local organisations to deliver locally relevant procurement to reduce carbon emissions. ie ge lac lth an n En iv g nt t i ea d el lo projects to support our communities. o D h an es co pp ca pe in IM ng ns Su lb ra 20 R i tr nc ita p t io io uc FO er ing ha di ns 30 t io ve En lh t a n r ca Cre sit : E IC y IV N ET IT W lo O M S T P O S P A IT Our City Quarters strategy extends our Positive Our cross industry collaborations E ET O IV Places sustainability strategy to the city level, with business partners and R E FO 30 : N N to support investment in infrastructure and industry organisations promote the R 20 C O the transition to sustainable communities. achievement of the UN SDGs. - E O SO CI
SUSTAINABILITY REPORT 2020: INTRODUCTION 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 10 Explaining the Net 11 Becoming Net Positive for our Becoming Net Positive means: environmental impacts is the most FOR MORE – Measuring and publishing significant contribution we can make our environmental and Our footprints are Positive Approach as a business to the battle against socio-economic footprints available online climate change. Launched in 2016 as – Setting ambitious targets including - True Value of Hammerson a 15 year commitment, it is extremely all emissions sources and our Retail: our socio- ambitious but inspirational for Scope 3 upstream emissions economic footprint colleagues. The earlier reductions – Focusing on minimising our own - Our Environmental in environmental impacts are made Footprint Becoming Net Positive by the end of 2030 means reducing and the deeper they are, the better, impacts ahead of the use of offsets Net Positive particularly for carbon emissions. – Reviewing and updating business our carbon emissions, water demand and resource use to less for CO2 Our Net Positive programme is processes to ensure decision- than zero, and delivering Net Positive socio-economic impacts. designed to encourage us to move quicker and think bigger. making is aligned with our strategy – Measuring and reporting annually on our progress Key Features of Net Positive 2016 - 2020 2021 - 2025 2026 - 2030 for Water our Net Positive Phase One Phase Two Phase Three commitment: Transparent We published material on Net Positive for our approach, definitions and Resource Use We have completed the first 5 years of We aim to be operating with negative Scope 1 Phase Three includes Scope 3 environmental footprint at the our 15 year Net Positive targets. This and 2 absolute carbon emissions, water demand emissions. We aim to be operating launch of the targets. Progress has report sets out what we have achieved. and resource use across our operational and on a Net Positive basis including been published each year since development activities from 1 January 2026. these emissions from 1 January 2031. launch, in our sustainability report. + Socio-economic impact Ambitious Net Positive for Our targets include Scope 1,2 and 3 so include the environmental impacts of the tenanted areas of our assets and include embodied By the end 95,000 tonnes 350,000 cubic 131,000 tonnes Net Positive WHAT carbon. They go well beyond what of embodied and metres of water of resources for our would be required to align with the Paris Accord, and exceed Net Zero. of Phase Two: operational CO2 to be reduced to be reduced socio-economic + Reduction focused to be reduced and offset and offset and offset impacts We prioritise reduction activities, only exploring offsets for those We plan to A constant focus on good + Investment in efficiency + Working with local community + Working with our stakeholders to + Offsetting any remaining emissions we cannot remove. Where achieve this Full data HOW we do use offsets we will endeavour management initiatives and organisations to reduce impacts emissions to tables technologies address specific outside our direct bring us to less to deliver these through localised projects, an area which we hope through: areas of local need control but within our than zero by to build and share learning on. value chain - insetting the end of 2030
SUSTAINABILITY REPORT 2020: INTRODUCTION 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 12 Strong Governance 13 CHART 1.1: Risk Matrix and Proactive Risk Hammerson HIGH 8 8 3 3 1 1 1 7 Management We have always adopted the principle of a precautionary 8 3 8 6 approach to climate and other sustainability related risks, and continue to do so. We have a four-step process for managing sustainability risk. MEDIUM IMPACT 4 5 5 4 4 5 6 7 7 7 1: Identify Key sustainability risks are monitored by the Sustainability Team, reviewed by the PP Corporate Working Group and reported to the Corporate Risk Group and the Group Executive Committee which has oversight of the Sustainability Risk framework (see pages 100–101). Risks are 3 4 5 2 2 2 2 1 6 6 assessed over 1, 1–5 and 5–10 year periods. The chart opposite shows the probability and potential impact of key current sustainability risks, reflecting management and mitigation “Using the CRREM tool, we measures. It also shows our assessment of how we expect these key risks to change have developed pathways for each of our assets and, LOW over the 1–5 and 5–10 years time frames. using asset specific carbon reduction targets, are exploring how to minimise LOW MEDIUM HIGH their transition risk” PROBABILITY Louise Ellison, Group Head of Sustainability 2021-2022 2 - 5 years 5 - 10 years >10 years Non-compliance with good 1 Transitional climate risk 5 governance standards within the business and within the supply chain 2 Physical climate risk 6 Rising regulatory/fiscal charges for utilities Failure to address sustainability 3 within our development programme 7 Rising commodity charges for utilities and achieve corporate standards 4 Non-compliance with UK, Irish, French and 8 Lack of engagement of stakeholder EU Environmental regulation and legislation on sustainability matters
SUSTAINABILITY REPORT 2020: INTRODUCTION 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 14 2: Respond 15 CHART 1.2: SUSTAINABILITY GOVERNANCE STRUCTURE Sustainability Responses to key sustainability risks are developed Governance by the Sustainability team working with the relevant Organogram business and asset teams. Responses focus on either Hammerson mitigation of the risk, for example through reducing Reports to PLC Board exposure to energy pricing, or managing the risk, for example through upgrading physical resilience of an asset to climate change. Projects are agreed at an asset level through the business planning process. The GEC reviews and sets Chief Executive GROUP EXECUTIVE COMMITTEE (GEC) strategic priorities and has board level targets, as well as overseeing responsibility for how risks are being managed. 3: Manage sustainability, including Each business stream and jurisdiction the response to risks, is represented on the GEC Sustainability and chairs the GEC. Our Sustainability Governance structure (shown represented on GEC with to the right) facilitates consistent monitoring of dedicated time quarterly CHAIRED BY CHIEF EXECUTIVE focused on sustainability. delivery against our sustainability strategy and targets, and allows us to identify and manage sustainability risks to the business and impacts of the business. As internal subject matter experts, our Corporate Sustainability Team drives strategy across the Group, supporting the Asset Management, HAMMERSON FRANCE CR BOARD UK & IRELAND MANAGEMENT BOARD Operational and Development Teams in delivering against specific objectives. Environment and Community Overseeing delivery of PP strategy Coordinators within the UK and Ireland flagship Overseeing delivery of PP strategy in France in UK & Ireland operations assets, manage the EEMS and support the delivery of projects and data collection at a local and regional level. Members of the Corporate Sustainability Team attend CHAIRED BY MD HAMMERSON FRANCE CHAIRED BY MD HAMMERSON UK AND I each working group identified on the organogram. POSITIVE PLACES DEVELOPMENT POSITIVE PLACES OPERATIONAL POSITIVE PLACES CORPORATE WORKING GROUP WORKING GROUP WORKING GROUP Manage and report corporate Manage and report on Manage and report on 4: Communicate sustainability in development sustainability in operations sustainability including identification of key risks Our exposure to and management of climate-related risks are communicated to the CHAIRED BY GROUP HEAD OF CHAIRED BY GHOS CHAIRED BY GHOS Group Executive Committee and Plc Board through SUSTAINABILITY (GHOS) regular updates by the Group Head of Sustainability. Our Sustainability Risk Management Framework (page 100-101) is monitored by the Positive Places Corporate Working Group and shared annually in our Sustainability Report. UK, Ireland, France
SUSTAINABILITY REPORT 2020: INTRODUCTION 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 16 Responding to the TCFD Managing Minimum 17 Energy Efficiency Hammerson In 2017 the Task Force for Climate-related Financial Standards Risk Disclosures (TCFD) published a set of reporting recommendations designed to support businesses in reporting climate-related risks. The current minimum standard of an E rated energy We expect these recommendations This latest TCFD response, providing “As we transition to become a regulatory requirement references to further detail within to a net zero performance certificate for new lettings will apply to in 2022. We included our initial our 2020 Sustainability Report and response to the recommendations Annual Report and Accounts, can carbon economy existing leases from 1 April 2023. in our 2018 Sustainability Report, be found at Hammerson.com. This extending this in 2019 and 2020. In covers our Governance approach, it is essential that We have worked with our retailers through lease events a B as the minimum for EPC ratings from 2030. We 2020 we published our response to strategy and objectives, approach to we understand the and the retail delivery process to manage F and G rated will continue to implement our existing strategy of the TCFD as a standalone document, risk management and the metrics and have updated it to reflect and targets used to assess climate implications this has energy performance certificates out of the UK retail identifying opportunities to improve units to achieve portfolio. Less than 7% of units are now F or G rated these standards through the asset management process. progress over the last 12 months. related risks and opportunities. for our business and and there is a management plan in place to improve This will enable us to manage this work effectively as part stakeholders. The these. We are now planning for the next iteration of of our maintenance and upgrade works. Our MEES risk is Hammerson Board MEES where we anticipate an increase from an E to currently very limited as can be seen in the chart below. GOVERNANCE takes responsibility for overseeing our response to the risks FIGURE 1.1: G: 5% A: 1% STRATEGY EPC ratings UK and opportunities portfolio 2020 presented by climate RISK change and our F: 1% MANAGEMENT Senior Management E: 8% Team are committed B: 18% to ensuring our business thrives METRICS & in this changing TARGETS environment.” EPC Rating Alice Darwell General Council, Hammerson C: 39% FOR MORE Our response to the TCFD can be found at D/D+: 27% Hammerson.com
1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 2 19 2.0 THE JOURNEY P. 2 0 Net Positive TO NET POSITIVE About PERFORMANCE AGAINST ANNUAL P. 2 2 TARGETS FINANCIAL OUR BENEFITS OF P. 2 4 SUSTAINABILIT Y OUR KEY ESG TARGETS P. 2 6 PERFORMANCE 2 0 21 - 2 0 2 2 P. 2 8 Net Positive 2 .1 for CO2 CARBON P. 3 4 Net Positive 2.2 for Water WATER P. 3 6 for Resource Net Positive 2.3 RESOURCE USE Use 2.4 P. 3 8 Net Positive for Socio- economic SOCIO-ECONOMIC impact IMPACT 2.5 STAKEHOLDER P. 4 2 ENGAGEMENT 2.6 OUR LONG TERM P. 4 4 Other TARGETS
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 0 6 202 202 20 2.0 The Journey Phase Three Net Positive targets to 21 to Net Positive launch bringing Hammerson tenant water and Five years on from setting energy use into Net Positive targets we have: scope Hammerson’s sustainability journey started back in 2006 when Reduced absolute we set our first sustainability targets. Our work since has gone carbon emissions by RE E 66% v 2015 baseline TH from strength to strength and that early foresight has reaped PH A SE benefits for all of our stakeholders. This section of our report Reduced landlord water demand by shares the latest on our performance, and our next steps. 77% v 2015 baseline 6 8 Three assets achieved 201 2 01 Net Positive for water O Phase Two Net Positive TW A SE targets bring Paris Climate Accord signed PH development by 197 countries impacts into Minimum Energy Phase 1 of Hammerson’s scope Efficiency standards Net Positive commitment come into force We plan to: begins and includes: continue working Hammerson with tenants to reduce commissions Published Net Zero embodied carbon in CARBON portfolio-wide climate risk study Carbon transition pathway retail fit out in accordance with the RESOURCE work with design and BBP Climate Commitment USE construction partners to minimise resource use Generated 2,214mWH WATER on major refurbishments E renewable energy from target net zero carbon or ON onsite PV arrays, 3% of A SE new developments SOCIO-ECONOMIC PH our electricity demand IMPACT for landlord services collaborate with industry Reshaping Retail Report with partners to establish a Bioregional published. Invested £180k in local route map to certified community organisations Net Zero embodied Elliott’s Field Rugby through Giving Back carbon emissions. Hammerson Hammerson signs BBP Climate project to provide support 2 5 Target to 20 Phase Two opens as during COVID19 pandemic Commitment along with 22 the world’s first BREEAM Outstanding retail park, other major prop cos and become asset managers. Work with our design carbon neutral for regulated energy UK Government sets teams at Dublin Central is Net Positive Hammerson purchases three Net Zero Carbon target by 2050. establishing how our City 0 new assets in Ireland and 1.94MW PV installed across Quarters developments will achieve Net Positive. 3 20 opens office in Dublin Hammerson assets 7 9 201 201
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 22 Performance Against TARGET RESULT TARGET RESULT 23 Annual Targets Hammerson 70% 57%
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 24 Financial Benefits 25 of Sustainability Hammerson Our Positive Places strategy delivers good financial outcomes for the business and our partners. Our focus on efficiency and investment in renewables continued to provide positive financial returns, driving down operational costs in 2020. Cost of energy Energy efficiency investment Energy savings Energy Efficiency Our focus on energy efficiency has driven year-on-year cost 2020 2020 £2.2M reductions to both service charge and the business. Energy costs ENERGY £8.9m £1.5m £0.9M were significantly reduced in 2020 during periods of closure. Our metering systems enabled us to monitor residual loads on a 2019 2019 daily basis to identify and eliminate unnecessary consumption. £11.4m £2.3m Our flexible energy procurement plans also enabled is to 2019 2020 reduce demand and therefore cost, at short notice. Renewable capacity (MWp) Renewable energy generated (MWh) Income from renewables Renewables (Mega watt peak) (Mega watt hours) RESOURCES £98K Our investment in solar PV delivers consistent income to 2020 2020 £78K the business. We now have 11 arrays across 6 assets 2.9 2214 and produced 2,214MWh of power in 2020. This represents over 3% of electricity for landlord services in 2019 2019 2018 2020. We expect this to increase in 2021 and beyond 1.94 1149 470 as we look to expand our onsite renewable capacity. 2019 2020 Cost of water for landlord services Investment in water management Water savings Water 2020 2020 £642K Water audits were completed at 3 assets in February £1.6m £20k WATER 2020. Over 120 leaks were identified and fixed in tenant units, saving almost 45,000M3 of water from being needlessly wasted – enough to fill 18 Olympic swimming 2019 2019 £50K pools. These savings have made these 3 centres Net £2.2m £191k Positive for water for landlord services in 2020. 2019 2020 Income from sale of waste Waste savings from landfill avoidance Cost of waste management Waste Management 2020 2020 Total waste declined in 2020 due to centre closures, particularly £4M of dry, mixed recyclable waste. Organic waste increased as a £73k £1.4m WASTE £2.7M proportion due to F&B continuing to offer a take-away service through lock-down periods. Our long-term focus on managing 2019 2019 organic waste and investment in the Bio-Whale anaerobic £166k £2.7m digestion facilities on site has supported us in managing the 2019 2020 associated environmental and financial costs.
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 26 Our Key ESG Targets EPRA LfL portfolio Net Positive portfolio 27 2021 - 2022 Recycling rate for the Recycling rate for the Hammerson managed retail assets managed retail assets Each year we set 12 and 24 month targets for 2021 2022 2021 2022 the business. 2019 is our baseline for 2021 -75% -75% -75% -75% targets due to 2020 being an extraordinary year. EPRA LfL portfolio Net Positive portfolio To deliver a given number of projects locally that tackle our four key areas Year on year reduction Year on year reduction in absolute Scope 1 in absolute Scope 1 Health and wellbeing Employment and skills and 2 CO2e emissions and 2 CO2e emissions 2021 2022 2021 2022 2021 2022 2021 2022 15 15 16 16 -17% -11% -17% -11% Year on year reduction Year on year reduction Young People Enterprise in carbon intensity for in absolute operational 2021 2022 2021 2022 landlord services landlord energy 22 22 12 12 2021 2022 2021 2022 -15% -11% -8% -5% Both quantitative and qualitative (LfL) and Net Positive portfolios EPRA LfL portfolio Net Positive portfolio targets are set reflecting our focus differ as they reflect plans for a FOR MORE on continually improving how we different group of assets. The like-for- operate as well as what we achieve. like targets enable our stakeholders Our 2021 Transition Year on year reduction in Year on year reduction to see year on year performance Pathway targets landlord water intensity in absolute landlord Our short-term targets are designed for the same group of assets. are shown on page to support our Net Positive 33. Our Long-term water demand targets. Targets reflect anticipated Due to closures in 2020 Targets are shared energy efficiency investments and our short term targets are on pages 44–45. 2021 2022 2021 2022 management savings from metering based on 2019 figures. The targets set for our like-for-like -5% -7% -7% -7% 1: EPRA LFL Portfolio - Operational control basis 100% share 2: Net Positive Portfolio - Directly asset managed portfolio on a proportionate ownership basis
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 28 2.1 Net Positive for Carbon 22,000 -29% -60% 29 PROGRESS TONNES CARBON YEAR ON YEAR REDUCTION Hammerson EMISSIONS avoided REDUCTION IN CARBON We have achieved significant reductions in carbon emissions in 2020 v. 2015 IN CARBON INTENSITY over the last 5 years, driven by ambitious targets and clear EMISSIONS expectations for colleagues across the business. Net Positive for CO2 From 2021 carbon emissions from our development activites are including in our Net Positive targets. Our forecast for these is shown in chart 2.1.1. Onsite renewable Investment in Partnership with capacity increased smart metering Thassalia to deliver Carbon Emissions CHART 2.1.1 to 2.9MWp estimated 44% This investment proved invaluable Our renewable facilities generated during 2020 as we are able to reduction in CO2 Net Positive for 35,000 over 2000 MWH of clean electricity monitor utility demand remotely Terrasses du Port will be Carbon means 30,000 in 2020, over 3% of total landlord on a daily basis during lock-downs Net Positive connected to Marseille’s 72% for Water emissions avoided demand and enough to power more identifying and then addressing 25,000 Thassalia marine heating and exceed emissions than 500 homes. We completed excess demand. At Union Square, 20,000 cooling system in Marseille 2 additional arrays in 2020. our Smart metering system 30,559 generated. REDUCTION in Q1 2021, reducing landlord 27,543 25,404 15,000 identified two boilers running in carbon carbon emissions by over 40%. 5,819 17,873 10,000 constantly overnight despite emissions 11,677 building management systems 8,539 5,000 v. 2015 baseline. being programmed. Correction Exploring local of the boilers saw an immediate offset projects Net Positive for mtonnes Resource Use 2015 2016 2017 2018 2019 2020 2021 CO2e drop in gas consumption of 15%, we expect an 8% reduction in gas We have established a partnership Over the last 5 years we have: These, along with vigilant management and many other smaller projects have: used annually. An air handling unit with a Housing Association to – Invested £9m in energy efficiency and renewables – Made our assets more efficient (AHU) was found to be 41% up support investment in insulation – Relamped with 15,000 LED lights on previous years consumption. and upgrades to improve the – Implemented smart meters across 11 assets – Reduced our negative environmental impacts After inspection, a problem energy performance of hard- – Reduced costs for our retailers Socio-economic impact – Improved energy efficiency standards was corrected, and savings are to-treat homes in Croydon. If of fit outs for 100s of retail units – Delivered savings and revenue to our approximately 700 kWh per month. successful we will scale up this – Replaced 2500 tonnes of cement with business and our partners Net Positive for proof-of-concept project. recycled, low carbon content – Installed 50+ electric vehicle charging We elected not to purchase offsets for our stations across our assets remaining carbon emissions but to invest in developing local offset projects. LOOKING AHEAD KEY AREAS FOR PHASE 2 We will continue our reduction and offset work over the next decade as we look to transition our assets to net zero carbon. Our plans include: Embodied Carbon and our City Quarters strategy – Investing a further £8m in energy efficiency – Working with tenants to drive further operational Phase 2 of Net Positive extends the targets We have used the London Energy and renewable energy over the next 3 years savings in the retail units to development impacts including embodied Transition Initiative (LETI) research – Procuring clean electricity directly from – Ensuring new buildings are designed to achieve carbon and resource use, bringing our City to set emissions targets for our a renewable facility bringing additional net zero carbon standards for both embodied and Quarters developments into scope. Our ambition developments. The project team on Dublin Full data renewable power onto the grid operational carbon is therefore to create Net Zero Carbon, climate have developed early baseline estimates tables resilient, biodiverse, inclusive Positive Places. of embodied carbon for each plot and – Continuing to upgrade and improve – Working with stakeholders both within and We have already set best practice operational and appraised the impacts of alternative equipment across our assets through planned beyond our value chain to deliver further, embodied carbon and resource use targets for materials and solutions, making maintenance and replacement programmes additional carbon emissions reductions. the design teams working on our Dublin scheme, impressive progress towards these targets. including working towards Passivhaus standards.
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 30 Industry Response to Real Estate Environmental Benchmark - Monitoring Operational Performance in use 31 Climate Risk and the Hammerson The BBP’s Real Estate Environmental Benchmark (REEB) is the only comprehensive energy-in-use benchmark currently available for commercial property assets in the UK. Accurate benchmarking of in-use performance is Carbon Challenge critical to driving real cross-sector reductions in carbon emissions but as yet is not commonly available. REEB is an important initiative and is informing Government thinking on energy policy. It contains data from Net Positive almost 1000 assets including over 500 office buildings and 290 shopping centres and retail parks across the UK. for CO2 This is used to provide sector specific Typical and Good Practice benchmarks of energy and carbon performance. As real assets investors become increasingly concerned Monitoring asset by asset carbon intensity performance against this comprehensive benchmark enables us to to understand and reduce exposure to physical and assess relative performance and focus attention on key areas for improvement. transitional climate risk across portfolios, the sector is Overall our assets’ performance continued to improve against the REEB benchmark in the year to 31 March 2020. Highcross in Leicester and Oracle in Reading continue to perform exceptionally well within the responding with a range of benchmarks and monitoring benchmark group. Bullring has also shown significant improvement over the last 2 years as a result of continued Net Positive investment in energy efficiency initiatives. systems. We collaborate closely with industry peers on for Water Assets that perform less well are those subject to extensive renovation plans or those with complex operations these initiatives and set out here our response to some of such as Grand Central and Union Square which accommodate railway stations. those we consider most useful for our business. The benchmarks are available on the BBP website. We would encourage commercial property owners who do not participate in REEB to consider doing so and to contact the BBP for more information. Carbon Risk Real Estate Monitor (CRREM) Net Positive for Resource Use Successfully minimising global warming to within 2°C requires a rapid transition to a Net Zero carbon global BBP Real Estate Environmental Benchmakmark CHART 2.1.2 economy by 2050. The policies and actions required to achieve this present significant transition risks for real assets and systems are emerging to enable owners to better understand and manage these risks. Using the 120 CRREM tool, we have developed pathways for each of our assets and, using asset specific carbon reduction targets are exploring how to minimise their transition risks and move them to a Net Zero position. As our scope 3 emissions are part of these pathways, we use our existing data from the tenanted areas of our assets to 100 Socio-economic impact model this, and we will be extending our existing programme of work with our tenants to achieve this. Net Positive for 80 Scope 3 Carbon Emissions Tonnes CO2e 60 Our Net Positive carbon footprint includes the Scope 3 emissions of our assets. We update this annually using data collected from tenants across our sites. As a result of long-term tenant engagement we currently have energy data from 83 tenants covering 24% of our portfolio. 40 We use this data to set regionally specific benchmarks for a set of retail uses across the portfolio. These benchmarks are then applied to the portfolio to provide an estimate of our Scope 3 emissions on a regional, portfolio and asset by 20 asset basis. Using this model our Scope 3 carbon emissions have been calculated and are set out in Chart 2.1.2 below. 0 G hop Ce op Bu nt Br op Ca hop U op s tre Si hop art O ent H op W W Vi Vi ig p pin ni p lv p ra p ra re en p Scope 3 Carbon Emissions for 2020 ct ct S Sh Ce Sh S Sh rcu en S C Sh hop llr re es hi nt pi bo pi TABLE 2.1.1 on in er in hc in nd in cl or or in tg t C ing ra ng tQ bu g t C ng e ro g g ia ia ift Sq g C le C Ce g C ua ro C S ss Ce r n Ce Sh i C G Q ua en ss en y nt en op at u 35,277 ra tre re tre UK Shopping Centres e pi l en er ng nt nt g tre tre re re UK Retail Parks 23,549 Full data Ireland Shopping Centres 21,094 2018-2019 CO2e/m2 CPA 2019-2020 CO2e/m2 CPA tables France Shopping Centres 7,909 REEB Benchmark Typical practice REEB Benchmark Good practice *The latest scope 3 footprint has been updated with data from 2019 as 2020 data is not comparable.
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 32 33 Our Net Zero Carbon Transition Pathway Hammerson As signatories to the Better Buildings Partnership Climate Commitment, we published our Net Zero Carbon Progress against Transition Pathway 2020 targets TABLE 2.1.2 Transition Pathway in 2020 and are reporting here on our progress against first year targets. Our transition 2020 TARGET 2020 RESULT pathway includes operational, embodied and Scope 3 tenant emissions for assets in which we have a direct or Net Positive indirect equity holding. Full details of the pathway and targets are available on Hammerson.com. This a very 14% year on year reduction -36% ambitious target but will allow us to focus attention on specific challenges faced within the ecosystem of an in carbon emissions for CO2 individual asset. We will be inviting our tenants, particularly those using gas, to work with us to achieve this. 4% reduction in energy demand -18% Installation of 1 additional PV array 2 PV arrays installed: Cabot Circus and Terrasses du Port Our Transition Pathway CHART 2.1.3 Achieve 3MWp installed renewable 2.9MWp capacity installed across the portfolio energy capacity across the portfolio Net Positive 90,000 Incorporate best in class industry Design Teams working to LETI and Passivhaus for Water benchmarks within design briefs standards for new schemes in Ireland 80,000 Materials standards included within standard tenant fit out Set materials standards through fit out process guides and monitored through retail delivery process 70,000 Continue to monitor contractor Contractor performance reported at least monthly on active sites performance on materials and waste 60,000 Net Positive for Resource Use Tonnes CO2e 50,000 40,000 Transition Pathway targets for 2021 30,000 Socio-economic impact — 26% reduction in absolute — Agree PPA to deliver additional carbon emissions v 2019 renewable energy for up to 50% of UK Net Positive for 20,000 — Recycle or reuse 75% of operational Shopping Centre portfolio demand waste across managed assets — Review oppotunities for further on-site 10,000 renewables across flagship assets — Continue to purchase remaining electricity throgh REGO-backed electricity contracts — Continue working within tenants to reduce 0 embodied carbon and resource use in fit out — Establish route map to tranistion 2040 2024 2034 2020 2022 2023 2025 2026 2028 2027 2029 2030 2032 2033 2035 2036 2038 2039 2037 2021 2031 new developments to certified Net Zero embodied carbon status Scope 1 + 2 Emissions Embodied Carbon Hammerson CO2e Emissions Scope 3 Emissions (Proportionate Ownership Basis) FOR MORE Our full 2021/2022 Full data targets can be found tables Support for the BBP Climate Commitment is indicative of the heightened expectations of businesses across the industry on pages 26–27. today. Whilst at different stages of their net zero carbon journey, 20 BBP members had published their pathways Our long term targets by the end of 2020 and have committed to publishing performance against those pathways on an annual basis. can be found on pages 44–45.
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 34 2.2 Net Positive for Water WATER DEMAND FOR LANDLORD SERVICES LANDLORD WATER INTENSITY 3 FLAGSHIP ASSETS 35 NET PROGRESS -68% -11% POSITIVE Hammerson Setting ambitious targets keeps our focus on driving down Net Positive portfolio Net Positive portfolio for Landlord water water use. Overall we have reduced absolute water demand demand in 2020 by 260,000M3 over the five years to the end of 2020. Net Positive for CO2 Partnership with Innovative water 3 assets Net Water Demand CHART 2.2.1 Thames Water saving mobile bin Positive for In 2019 we established a partnership cleaning plans water in 2020 Net Positive for 350,000 with Thames Water to provide water at The Oracle As a result of our work Water means water 300,000 52,333M3 audits, water saving technologies with Thames Water and WATER and leak correction to our tenants at The Oracle has over 200 bins, which replenished by 250,000 engagement with retailers SAVED The Oracle. The partnership proved all require cleaning to maintain Net Positive external projects to fix leaks, the three for Water 200,000 THROUGH successful, with 98% of tenants signing H&S standards. Investment in a exceeds water participating assets were 75,679 150,000 LEAK up. 69% of them had leak fixes and mobile bin washer which can re- Net Positive for water 335,593 314,576 281,695 259,797 236,000 consumed from use water thanks to inbuilt water 100,000 FIXING FOR installation of devices such as urinal demand for landlord 123,000 mains supply. TENANTS cleaning technology, and the setting 50,000 controls, we estimated savings of services in 2020. Water SINCE 108M3/day - that’s 108,000 litres. out of new housekeeping practices demand was low in 2020 but 2018. is expected to deliver good water In 2020 we extended the partnership two of the three assets would M3 2015 2016 2017 2018 2019 2020 2021 savings. The pay back period is work to Centrale and Brent Cross have achieved Net Positive expected to be less than one year. Net Positive for against 2019 water demand. Resource Use To achieve this we have: where 81 tenants were audited and – Invested £500k in water efficient equipment – Partnered with Thames Water to audit we estimate a further 261M3/Day of over 170 tenants across three assets savings. A further saving of c. 19M3/day – Installed smart meters and submeters for water across 9 assets – Fixed 124 water leaks saving an estimated was made in landlord managed areas. – Carried out water audits on landlord managed water use 306M3 of water/day for tenants Plans for businesses local to our across three assets, finding and fixing leaks of c. 90M3/day – Fixed leaks in a local school, saving an assets to participate were curtailed by Socio-economic impact – Created action plans for those assets to reduce estimated 1000M3 of water the pandemic, but we will continue consumption i.e. new cleaning schedules with these initiatives in 2021. Net Positive for LOOKING AHEAD KEY AREAS FOR PHASE 2 Over the coming years we will continue to focus on reducing demand for water for landlord services and identifying projects beyond our corporate boundaries to achieve additional water savings. However as we move to Phase 2 of Net Positive water demand from our developmetn activities comes into scope. Our current forecast Water Efficient Development and Reducing Tenant Water Use for 2021 is set out in chart 2.2.1 above. To work towards our Net Positive water targets our plans include: As the focus of our Net Positive targets moves We also aim to make a long term positive to our development activities we are looking impact on site flood risk including an allowance – Working with cleaning services to identify – Working with regional water companies at how to reduce water demand within the for 2080 climate change through the use of opportunities to reduce water demand to support water reduction projects construction process and ensuring the buildings Sustainable Urban Drainage techniques such as beyond our corporate boundaries we design now are able to minimise water landscaping and green and blue roofs. Achieving – Increasing rainwater harvesting facilities – Including grey water and rainwater demand in the future. For the in-use phases our 2030 Net Positive targets requires water – Continuing the installation of water efficient harvesting systems in our developments of our City Quarters developments, we are demand to be minimised within the tenanted Full data equipment and waterless urinals both in landlord tables identifying opportunities for grey-water and space at our assets as well as those areas we areas, and in tenant fit out via our water saving – Working with contractors to minimise the rainwater harvesting. We have set ambitious control. We are already working on this through partnerships and fit-out guide use of potable water in construction targets for our designers to meet including our submetering programme in the UK, which – Supporting tenants to reduce water demand – Continuing to engage employees in a 65% reduction in water consumption over will be extended to Ireland in 2021. We will also within retail units through behaviour change/ water saving behaviours at home ‘typical’ levels in similar developments. look to expand the partnership model created engagement activities with Thames Water, to other water regions.
SUSTAINABILITY REPORT 2020: OUR PERFORMANCE 1.0 INTRODUCTION 2.0 OUR PERFORMANCE 3.0 OUR DATA 36 2.3 Net Positive 2559 99.9% 37 for Resource Use Hammerson TONNES OF WASTE DIVERTED RECYCLED MATERIALS FROM LANDFILL specified in construction since 2018 across the group in 2020 PROGRESS Our waste management processes Cabot Circus Net Positive We have a clear responsibility to ensure waste on our behalf drives demand for recycled content, drive good practice and relatively Supporting Reuse for CO2 streams from our assets are minimised and diverted reusable products and the highest standards in high quantities of reuse and recycling. of Materials produce enough into the highest value waste stream possible, i.e responsible sourcing. We have reduced our Net Positive Our average recycling rate was green gas through In spite of lockdown, during 2020, reuse, and that any construction procurement done resource user footprint by 2,100 tonnes in 2020. 74% over the 4 years to 2019, and the Highcross team managed anaerobic 57% in 2020. During lockdown food and beverage outlets were the to prevent nearly 3 tonnes of digestion to Resource Target CHART 2.3.1 main activity within the centres. resources from vacated units and run centre 2.5 lost property from being wasted. This generated an unusually high times over The team recovered and logged as Net Positive proportion of organic waste leading to for Water 20,000 many items as possible and offered Thanks to our partnership Net Positive for high rates of contamination of other them to local partners such as with Organic Waste Logistics Resource Use 10,000 waste streams and lower recycling charities, food banks and artists, (OWL) we have anaerobic means waste and reuse rates. Food disposal 2,744 8,000 who would be able to re-use the digestion systems in place avoided, recycled increased 30% year on year in 2020, items therefore extending their at 2 assets reducing the or re-used exceeds 6,000 whilst total waste fell by 50%. 3,415 TONNES end of life and simultaneously emissions from transportation 8,539 materials used 7,776 7,764 4,000 of organic helping us achieve our Net Positive of food waste, producing 1,265 4,734 that are neither waste to AD 2559 tonnes of much needed green gas for Net Positive for recycled, renewable 2,000 targets of reducing waste too. Resource Use or sent to landfill. recycled content Our partnership with Globechain the grid. At cabot Circus in 2020 our Biowhale processed Tonnes 2015 2016 2017 2018 2019 2020 specified for aims to increase these outcomes in 2021. We will be working with 287 tonnes of food waste concrete and steel them in three UK cities to help which generated 700kWh of To achieve these things we have: in construction divert items from becoming waste. gas - 2.5 times Cabot Circus gas demand in 2020. – Worked consistently with retailers to – Developed relationships with re-use organisations to divert Socio-economic impact Construction work at our French improve separation of waste at source un-wanted food and hard-wear from the waste stream assets was limited in 2020 due – Implemented on site sorting tables to – Updated our internal processes to ensure opportunities to lockdown. However, we have Net Positive for improve separation of waste streams to re-use fit out are captured during leasing maintained our expectations – Installed two Bio-whales to increase the quantity – Set clear standards within our fit out guides to regarding recycled content within of organic waste going to anaerobic digestion encourage the use of materials with recycled content and divert waste from landfill and waste to energy concrete and steel being used on site. This has driven demand for 2559 tonnes of recycled content, significantly reducing demand for natural resources. LOOKING AHEAD As we move into phase 2 of our Net Positive targets, resource use from KEY AREAS FOR PHASE 2 our development activities is brought into scope. Resource use in our developments To address this, over the coming years we will continue to focus on maximising the reuse and As our development programme progresses we too. Specifying recycled materials and materials recycling of operational waste and ensuring we drive uptake of sustainably sourced materials will have the opportunity to work with our design with recycled content will be supported by through our procurement process and through encouraging innovation. Our plans include: teams to bring principals of circular economy considerations of re-usability of key materials Full data tables – Continuing to specify low impact and recycled – Extending our relationships with specialist into our developments. This presents significant when the building is at end of life, including materials within our developments re-use platforms to maximise re-use of resources challenges in the quantity of materials required considerations of the practicality of dismantling. for our development work, but opportunities – Working with our on-site teams and – Working with our operations and waste contractors to improve waste development partners to bring circular separation and optimise recycling economy thinking into our asset management and development work streams.
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