At Legal & General we take our sustainability credentials very seriously. As a responsible property investor and developer, we believe the most valuable way of making our properties more sustainable is by changing the way we manage every single one of the properties that we own. This approach currently makes us unique in our industry.
We have all been made increasingly aware of climate change and our impact on the environment in recent years. Significant levels of carbon emissions and waste going to landfill comes from buildings. The property sector could therefore make a big contribution to reducing the UK's environmental footprint.
The UK has legally signed up to reducing CO2 emissions by 80% by 2050 and the Mayor of London has also set targets to cut 60% of CO2 emissions by 2025, creating green collar jobs and a low carbon economy. Also, the Carbon Reduction Commitment is a new piece of legislation designed to encourage energy saving. It is a mandatory emissions cap and trade scheme, which will affect property management businesses.
As one of the largest UK institutional investors and property fund managers in the UK, acting on behalf of a large and diverse range of clients, LGP places sustainability at the centre of all investment decisions and its working culture.
Making our people the best people
In 2009, we became the first property investment management firm to provide a 6 month training course on sustainable investment. This is compulsory for all our property fund managers. 'Sustainability for Real Estate Investment' was devised in partnership with the College of Estate Management to embed sustainability into our investment mindset. Following the success of the course, it has now been rolled out externally, and LGP hopes it will play a fundamental role in setting industry standards.
We have identified a set of sustainability issues and have grouped these into the following focus areas; climate change and energy; resource use and environment; sustainable communities; robust risk management:
Climate Change and Energy
- We implemented an energy/carbon reduction programme targeted 24 key assets, which account for 80% of energy spend, and accounting for £90,000 of savings across these properties in 2009.
- In partnership with sustainable research specialist, Upstream, LGP piloted the benchmarking of a selection of its funds, to embed the implementation of sustainable strategies for each asset.
- LGP completed Energy Performance Certificates on over 99% of its buildings.
Resource Use and Environment
- A Three-year programme was implemented to achieve ISO 14001 accreditation across all directly managed properties. To date 69 properties have been accredited.
Sustainable Communities
During the year Legal & General Property has been bringing in expertise from the Third Sector to run and better inform its business. We believe that these experts can help make both new and existing properties more efficient. Measures in 2009 have included:
- Adopting the BBP Green Lease Principles across all service charge properties
- Produced the 'Sustainable Property Office Occupier's Guide', distributed through to support key office tenants deliver efficiency measures
- Working in partnership with numerous stakeholders – including investors, employees, schools, and local groups – to help create a sense of community around the Central St Giles project in central London, due for completion in 2010.
Robust Risk Management
- Independent sustainability reports are obtained on all acquisitions, ensuring new stock has the ability to outperform over a number of criteria
- Introduced operational standards on building refurbishment to ensure existing stock is not left behind in sustainability improvements.
The management of sustainability covers four main areas: Fund Management, Asset Management, Property Management, Development and refurbishment. More detail on how these four considerations are embedded in our business is available in our first Sustainable Property Review, a new publication for 2010.
Our main targets this year are to consolidate the research and data collection on each property, to form it into a cohesive plan for improving sustainability and deciding where we can have the most impact. Our biggest challenge is going to be to engage our occupiers and gain their buy in through highlighting the financial and operational benefits.
We also need to work hard to influence the wider property industry to raise awareness of and encourage the adoption of sustainability best practice that impacts all areas of the property industry as together we can make a difference.
Targets for 2010 are described in the Our Performance section of the report, and cover:
- New lettings
- Energy and carbon reduction
- Carbon Reduction Commitment compliance
- Standards for occupiers
- Good environmental governance
- Sustainability plans for funds; and
- Supply chain management
LGP Literature
We have a number of publicly available documents that show our commitment to sustainability, including:
The LGP Sustainability Policy
A sustainability guide for office occupiers
Websites
We are a member and contributor to shaping industry standards with the Better Buildings Partnership which is part of the London Development Agency.
We also contributed to the Better Buildings Partnership's Green Lease Toolkit.
Other projects we've collaborated on with the Better Buildings Partnership include
Details of the sustainability course we created with the College of Estate Management is also available online.
We are dedicated to raising awareness of sustainability in the wider property media. Recent headlines from Property Week have included:
The English Cities Fund's portfolio has brought forward six schemes with an estimated total completed development value of around £2 billion. Together these will produce over 8.5 million square feet of mixed-use floor space, including more than 4,000 new homes, and bring back into productive use almost 100 acres of brownfield land.
Finally, more about the Central Saint Giles project is available online.