Unibail-Rodamco-Westfield Outlines Carbon Neutrality Plan

The group will invest 28 million euros a year to reach carbon neutrality on direct carbon emissions by 2030 and launches the Sustainable Retail Index.

— Unibail-Rodamco-Westfield aims to cut its carbon emissions by 90 percent by 2050, the mall operator said Tuesday.

“Since the onset of COVID and following the abnormal weather events we have lived in the past years, sustainable development and climate are the heart of all preoccupations,” said chief executive officer Jean-Marie Tritant at a press conference outlining a sustainability road map he described as following an approach that is “serious, solid and geared toward value creation.”

The group plans to reach carbon neutrality by 2030 on its Scope 1 and 2 direct emissions through a 90 percent reduction, using 2015 as a baseline, and compensating the remaining 10 percent.

It also intends to cut overall emissions, including those from clients and retailers located in its centers by 50 percent by 2030 and 90 percent by 2050. It is the first retail real estate company in Europe to get net-zero certification from the Science-based Targets Initiative.

Though 85 percent of its assets located in Europe and with URW's intention to sell its U.S.-based ones in the medium term, the carbon emission reduction plan is geared toward its European operations, although the overall reduction goal applies to the entire group, said the executive.

The U.S. accounted for 17 percent of overall emissions in 2022 and the group put in place an action plan focused on the energy saving and entirely financed by current maintenance spend. Tritant said 60 percent of the company's value in the U.S. was positioned in California.

Not only do consumers want to be “confident that the products they buy and the places they patronize are by definition sustainable,” according to the executive but “retailers want to implant themselves in durable spaces that reflect their sustainability commitments and be surrounded by [others] as committed as they are.”

Demand for "environmentally competitive" assets is growing and the number of retailers pursuing science sustainability targets has been multiplied by five since 2019, Tritant said.

The mall operator also saw itself as a key partner for cities pursuing their environmental transition. “It's not just about carbon [emission reduction],” said URW's chief resources and sustainability officer Sylvain Montcouquiol. “We must reinvent a way of living together that integrates the protection of our natural resources.”

Actions will include better insulation to bolster the energy efficiency of its buildings, which also include office spaces and convention centers, by upgrading heating and cooling systems; renaturation projects around its entire portfolio, as well as initiatives around water saving and waste reduction.

URW will be stepping up its renewable energy production, mainly through solar photovoltaic panels, aiming at producing 30 percent of on-site consumption by 2030.

To reach those goals, Tritant said the mall operator would invest 28 million euros a year over the next seven years, including 8 million euros dedicated to enhancing its capabilities for solar-based energy production and the installation of some 4,000 electric vehicle charging stations across its centers.

The commercial real estate company also plans to support its tenants through the implementation of the “Better Places” certification, which aims to evaluate assets and rate them depending on their performance, and the “Sustainable Retail Index,” that will track the progress of retailers along a sustainable trajectory, developed in partnership with specialized Australian start-up Good on You.

The index will extend the notion of green lease in use in the sector by adding notions of recycling or secondhand offers, with 25 percent of the rating relying on store-level action evaluations.

Individual store ratings will not be disclosed but collated into an asset-wide rating. URW is committing to covering 80 percent of revenue generated in centers within the next three years, with the caveat of a methodology still being in development to evaluate activities such as services.

“We believe omnichannel and commitment to environmental transition are fundamentals to the success of retailers,” said Tritant, adding that URW was “open to sharing it with others to make it an industry standard.”

URW also announced a 5 million euro investment in the Climate Fund for Nature of Mirova, a B Corp certified investment management firm dedicated to sustainable investment and which is affiliated with Natixis Investment Managers, as well as a 350,000 euro contribution over three years in WWF.