Susta ina bility Inv estor & Ana ly st ev ent 2 July 2020 - - PowerPoint PPT Presentation

Susta ina bility Inv estor & Ana ly st ev ent

2 July 2020

Introd uction

Simon Carter, CFO

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Agenda

15.00 Introduction

Simon Carter, CFO

15.10 Environmental Commitments

Juliette Morgan, Head of Sustainable Development Matt Webster, Head of Smart & Sustainable Buildings

15.30 Transition Fund & Indices

Cressida Curtis, Head of Corporate Affairs & Sustainability

15.40 Sustainable Finance

James Pinkstone, Treasury

15.45 Questions 16.00 Social Commitments

Anna Devlet, Head of Community

16.10 1 Triton Square

Tim Downes, Regent’s Place Development

16.20 Conclusion & Questions

Simon Carter, CFO

16.30 End

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2020 Sustainability Targets – key achievements

• Strong track record of Sustainability at

British Land

• 2020 targets achieved or exceeded

– 73% reduction in carbon intensity (scope 1 and 2) vs 2009 baseline (target: 55%) – 55% reduction in landlord energy intensity vs 2009 baseline (target: 55%) – 1,745 people supported into jobs through Bright Lights, our skills and employment programme (target: 1,700)

• More challenging but excellent progress

– 96% electricity purchased from renewable sources (target: 100%) – 94% progress on our Local Charter (target: 100%)

Young Readers, Ealing

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Shaping our 2030 Strategy

• Clear focus on accelerating our progress

– Reflecting increased urgency across our stakeholder groups

• Alignment with corporate purpose

– Not a separate workstream – business as usual

• Learnings from our 2020 programme

– Refined our focus to two key areas where we can have the biggest impact

• Best in class Sustainability

– Guided by UN Sustainable Development Goals – Learning from other leading companies

Broadgate Connect

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New 2030 Environmental Commitments

[more appropriate pic]

• Net zero carbon portfolio by 2030

– All future developments to be net zero embodied carbon – 50% less embodied carbon on all major developments by 2030 – 75% less operational carbon across our portfolio by 2030

• Transition fund established

– From 2020 we will assume an internal carbon price of £60 per tonne for new developments – This will fund the offsetting of embodied emissions associated with developments through accredited offset schemes – The remaining amount will be paid into the Transition Fund to finance retrofitting of standing portfolio, including R&D

10 0 Liverpool Street

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New 2030 Social Commitments

• Place based approach

– Partner with local stakeholders – Education and employment partnerships at each place – Underpinned by our Local Charter, comprising 5 key commitments to local communities

• Piloting our approach at three locations,

building on successful partnership model at Regent’s Place and Fort Kinnaird

Tree Shepherd, Canada Water

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Our approach is driven by customer demand

• Environmental

– Companies signing up to science based targets has doubled since 2010 driving demand for more sustainable real estate – Research from JLL demonstrates that buildings rated BREEAM Outstanding or Excellent generally achieve a premium of 10% in Central London compared to prime buildings without a rating – Average vacancy rate in buildings rated BREEAM

• utstanding or Excellent of 7% vs. 20% for a

building rated Very Good, 24 months post completion

• Social

– Ability to make a social contribution increasingly important to employees – Creates loyalty, binding occupiers to places

Norton Folgate

Env ironm enta l Com m itm ents

Juliette Morgan Matt Webster

Building Construction Building Use End of building life Embodied Materials & processing Manufacturing & transportation Fit-out, maintenance & refurbishment Circular economy (materials re-use) Operational Efficient design Energy use Renewable energy Deconstruction

Net Zero: Red ucing ca rb on em issions a nd offsetting rem a ining em issions throug h a ccred ited schem es

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Net Zero carbon portfolio requires a whole life carbon approach to reduce embodied & operational emissions

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We have made good progress to reduce embodied carbon in development & improve operational efficiency

Embodied Operational Past Present: Good Present: Great >1100 kgCO2e/m2 <800 kgCO2e/m2 2030 Target: <500 kgCO2e/m2 >225 kWh/m2/year <170 kWh/m2/year 2030 Target: 55 kWh/m2/year The Leadenhall

(>1500 kgCO2e/m2)

Norton Folgate

(c.560 kgCO2e/m2)

100 Liverpool Street

(c.350 kgCO2e/m2)

Meadowhall

(2009, >300 kWh/m2/year)

Meadowhall

(Today, c.150 kWh/m2/year)

2/3 Finsbury Avenue

(55 kWh/m2/year)

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Minimising operational carbon will require investment in retrofits & use of renewables

Today k tonnes / CO2e

Tenant’s plans Grid decarbonisation Retrofits Renewables

75% reduction in operational carbon achievable through decarbonisation of the grid, complemented by retrofits, energy management and renewable energy

2030 <£1m p.a. offset cost

Energy management

Concept Design Commissioning & Procurement Construction Operation (incl. maintenance) End of Life

Embodied carbon reduction should focus on early stages of development process

Ability to influence whole life-cycle carbon

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Substantial embodied emissions from the Leadenhall building, largely from materials

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c.92,0 0 0 tonnes

• f embodied carbon

8 4%

Generated by materials

200 400 600 800 1000 1200 Floor Wall Foundation Framing Columns

Concrete is the largest contributor to embodied carbon, especially in flooring and walls

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210 140 45 35 30 10 50 100 150 200 250 Concrete Steel Glass Timber Stainless Steel Stone

Rebar Steel Concrete Embodied Carbon (Kg CO2e, k) Embodied energy (GJ)

1 Triton

A pragmatic and progressive approach to adopting new materials

Now

• Re-used / recycled materials
• Concrete & steel

manufactured using low carbon processes

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Short-Med ium Term

• Cross-laminated timber
• Ashcrete, hempcrete

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Longer Term

• Bamboo; Mycellium
• Requires R&D and increased

public profile

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Circular economy – Circular Offset

Buildings R&D Timber/ Bamboo Building Materials Offset Payment

Low carbon cement substitute High efficiency thermal heat wheel pumps Recycled & refurbished facade

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Opportunity to build on existing progress and deliver 1 Triton Square as an embodied carbon net zero building

Item Value Total Embodied Carbon 21,150 tonnes Assumed Price of Carbon £60/tonne Mitigation Cost to Deliver Triton Square as Net Zero £ 1.3m

0 .8 % of Total Construction Costs

Trialing new innovations…

0 .3% of Net Development Value

Exceeded minimum sustainability standards at 1 Triton Square Embodied

Significant retention structure Supply chain engagement 448 kg/CO2e/m2 embodied in construction

Operational

Operational performance prediction BREEAM Outstanding; EPC A (Offices) Green Energy

Low upfront payment to get 1 Triton Square to Net Zero

Pathway to net zero

20 22/ 3

Achieve scope 1 and 2 SBTi targets met – REGO / PPAs

20 25

Review strategy at interim stage Embodied carbon 750 kg C02/m2

20 29

Commence design of new strategy

20 30

Begin annual offset of portfolio emissions – BBP target 75% reduction in carbon emissions across the portfolio 50% reduction in embodied carbon emissions to <500kg/C02e/m2 UKGBC 2030 targets achieved.

20 22

Asset audits complete

20 20

Launch transition fund Developments net zero

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Tra nsition Fund

Cressida Curtis

21,150 tonnes CO2e

• £ 60 / tonne

Internal price

• f carbon
• £ 1.3m

m itigation paym ent

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In practice: 1 Triton Square

Retrofits, loans and R&D will help to reduce 2030 emissions and therefore future offset payments, and generate Net Positive impacts in the long term

£ 0 .4 m

• ffset paym ent

Other d ev elop m ents contributing 1

1 Includes 100 Liverpool Street, Norton Folgate, 1 Broadgate, 5 Kingdom Street, Phase 1 at Canada Water

£ 0 .9m

paym ent into fund

£ 5m p .a .

Green Loans from BL

£ 5.3m

paym ent

Net Zero Buildings

Higher rents & faster leasing Firm er values

Tra nsition Fund

Retrofit of Standing Portfolio

• Low er energy costs
• Clim ate resilience
• Firm er values

Customers / service charge loans

• Low er energy costs
• Closer custom er relationships

Research & development

• Low er carbon costs

1 2 3

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Environmental leadership – GRESB performance vs peers

10 20 30 40 50 60 70 80 90 100

British Land Peer average Management Policy & disclosure Risks &

• pportunities

Monitoring & EMS Performance indicators Building certifications Stakeholder engagement Construction & renovation Top quintile

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20 19 Perform a nce

Indices Performance and Responsible Business

MSCI disclaimer available http://www.britishland.com/sustainability/performance/benchmarks

Global Real Estate Sustainability Benchmark 2019: Green star for 10th year FTSE4Good 2019: 98th percentile Sustainalytics ESG Ratings 2019: 96th percentile Carbon Disclosure Project 2019: B 2018: A- EPRA Sustainability Reporting Awards 2019: Gold for 8th year MSCI ESG Ratings 2019: AAA rating

Resp onsib le b usiness com m itm ents Other benchmarks and awards Prom oting diversity & inclusion Against m odern slavery Mandating prom pt paym ent Integrating wellbeing Cham pioning responsible em ploym ent

Susta ina ble Fina nce

James Pinkstone

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Sustainable Finance Framework

• Aligned with the UN Sustainable Development Goals
• Our Sustainable Portfolio will primarily comprise of Green

Buildings, but will also include Other Sustainable Projects, as detailed in the framework

• We may raise Sustainable, Green and/or Social finance in an

amount up to the value of the Sustainable Portfolio

• We will develop the framework as best practice emerges

Sustainable Finance

Sustainability Linked Loan

• £450m Sustainability-Linked RCF
• Margin adjustments based on performance against 2 KPIs
• Incentivises our sustainable behaviour

Questions

Simon Carter, CFO

Socia l Com m itm ents

Anna Devlet

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Covid-19 demonstrated our strong local connections

• Community Investment Fund

– Established in 2008 – Now provides more than £1.3m funding pa for local initiatives

• Refocused to provide targeted support

– Provided expert strategic advice to community partners through the Cass Business School – Supporting partner organisations address local employment and employability concerns – Provided equipment to help community partners work from home – Providing books and activity packs to vulnerable families – Connecting occupiers with local volunteering

• pportunities

Julie Hutchinson, ELBA

“British La nd is help ing to cushion the im p a ct of Cov id -19, reinforcing sup p ort for p eop le w e ha v e p la ced into jobs, connecting them to new op p ortunities a nd d eliv ering tra ining so they a re resilient for the future”

Our long term investment strategy, track record, networks and local teams, give us a unique position

Place Based Approach

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Our priorities for social engagement

License to Operate Planning / Development Customer

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Created an effective platform, but need to build on successes to amplify benefits & respond to external focus =

Hy brid Ap p roa ch

Underway at Canada Water and Regent’s Place Next: Three different pilots, across the country

Pla ce-b a sed Initia tiv es Centra lised Fra m ew ork 

Delivery: Focusing on where we can make the biggest impact

Understanding local context Com m on them es Focused actions KPIs

• Review existing

progress

• Engaging with

stakeholders to understand their priorities

• Work at different

levels: local, regional, national

• Roll out customer &

supplier networks

• Undertake responsible

procurement review

• Identify three clear

priorities for local communities (case by case)

• Framework provided

by our Local Charter

• Identified key areas:

education, upskilling & reskilling, employment

• Providing support to

help people be more resilient in future

• Working with existing

local teams

• No. of partners

involved

• No. of beneficiaries
• No. of education

initiatives

• No. of employment

initiatives

Builds on the strong relationships we have developed over the past 10 years working in partnership to create positive local im pacts

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What does better look like?

Custom ers

Bespoke connections & programmes tailored to them Amplified local impact Part of a vibrant community

Com m unity

Amplified benefits for local people Greater value from pooled resources Local influence over decisions Closer customer relationships Vibrant places that meet customer needs Positive interactions with local people Empowered employees

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Conclusion a nd Q&A

Simon Carter, CFO