Tritax is an asset manager investing in critical supply chain real assets aligned with structural trends shaping the future economy. Its investments aim to deliver sustainable, long-term income and capital growth. ESG is central to Tritax’s approach, as it seeks to minimise both its own impact and the impact of the assets it manages on the local and wider environment.
Alan Somerville, ESG Director, explained how collaboration and data sharing between landlords and occupiers was absolutely crucial in order for all parties to determine how to meet their decarbonisation targets. Green leases are an effective way to document the parties’ intentions on this. For the real estate industry to achieve net zero, the market, policy and science all need to align to allow entities to improve their sustainable credentials. Clear policy and incentives to act will help drive the change that is needed.
Read on to learn more about Tritax’s targets, achievements and future plans.
Net zero and your business targets
In 2020, Tritax set out its net zero carbon target, outlining its aim to achieve net zero carbon for its Scope 1 & 2 emissions by 2030 and for its construction projects by 2040. Given the recent acceleration to enhance energy performance and sustainability, we are currently reviewing those targets with a view to updating them. As part of our commitments, we would like to continue our evolution of numerical KPIs to make them more measurable and specific to what we will achieve so we can be more accountable. Our challenge is to work out and deliver our Paris-aligned decarbonisation targets based on actual building performance data.
Are you seeing a change in approach between landlords and tenants becoming more collaborative and inclined to share data?
We have found that our occupiers are generally happy to share their energy performance data, with 80% providing this for us last year. However the amount of requests that occupiers are now receiving in respect of sustainability data has increased, meaning managing such requests can often be a resourcing challenge, particularly for smaller businesses. We are currently working to find ways to address this.
However, some occupiers perceive energy performance as one of their advantages over peers, so they do not want to share performance data in case it could be used by other businesses to give them an edge. Again, we are finding ways to make sure that our occupiers can share data with us with confidence.
Do you insist on incorporating green provisions in your property arrangements?
We have incorporated “green provisions” into our leases for quite some time, as we would like to establish each party’s ESG intentions from the outset to avoid any disputes or misunderstandings during the lifetime of the lease. Our most important priorities go beyond contractual arrangements and are centred on our day to day relationships with our occupiers and really understanding their needs.
What has been your biggest challenge in implementing sustainable strategies?
It is crucial that we work in collaboration with our occupiers; sharing data, understanding their needs and aligning our combined priorities are the key to success. This takes time and resource from both parties and needs real focus from our perspective.
Will you rely on off-setting to meet your targets?
Off-setting is the last resort for decarbonisation. As part of our net zero roadmap we are spending time looking at options to ensure that any off-setting is minimal.
What are the biggest drivers in environmental sustainability?
We rely on government to drive regulation and create the market conditions for investment into low carbon power infrastructure. Ultimately, the market, policy and science all need to align so we can deliver to the Paris pathways.
Global investors and large corporates are now driving markets with their requirements for ESG performance within their supply chains. We are operating in a market place where the drive for profit is aligned in many cases with a clear purpose. This does present challenges to some smaller businesses and this sector of the market needs support.
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