Orchard Street accelerates net-zero targets through new pathway
Commercial property investment manager Orchard Street has published a pathway to net-zero emissions, including a plan to reach the milestone for corporate and landlord emissions and refurbishments 20 years earlier than planned.
Orchard Street, which manages retail units, offices and industrial facilities worth more than £4bn, outlined plans to reach net-zero ahead of the UK government’s 2050 deadline at the start of this year.
The company has today unveiled a pathway to its net-zero ambitions. The pathway includes two new commitments – to reach net-zero across corporate and landlord emissions and refurbishments by 2030 and to reach net-zero for occupier emissions and fit-outs by 2040. These announcements are 20 and 10 years ahead of the original plans respectively.
The pathway was devised following extensive and direct engagement with its clients.
Orchard Street’s head of responsibility and ESG Lora Brill said: “The acceleration of our net-zero carbon pathway reflects our deep conviction that there is not only an environmental benefit of converting our portfolios to become net-zero carbon but a real financial driver.
“With significant regulatory changes on the horizon, and with rapidly increasing occupier requirements for sustainable buildings as businesses set out their own net-zero carbon targets, we would be failing in our governance and stewardship responsibilities if we failed to consider the financial impact.”
Occupiers’ emissions represent more than 90% of Orchard Street’s total annual carbon footprint. With this in mind, its net-zero strategy focuses more on its managed buildings than its direct operations.
To ensure that decarbonisation work starts across the broader portfolio as soon as possible, the business is targeting a 25% reduction in occupier carbon intensity by 2025. Occupiers will be supported to improve energy efficiency through retrofitting, digital technologies and behaviour change schemes. The company will also aim to have a maximum of 210 kgCO2e/m2 of embodied carbon on refurbishments by 2025.
Targets for 2035 and 2040 will be set in 2030 to ensure “they are sufficiently ambitious and reflect current best practice”, the pathway report notes. This is in line with the advice of the Net Zero Asset Managers Initiative.
The business has become the latest signatory to the Better Buildings Partnership’s Climate Commitment. Launched in 2019, the commitment aims to transform the real estate sector to deliver net-zero carbon buildings by 2050.
The firm has also outlined plans to report in line with the TCFD’s (Task Force on Climate-Related Financial Disclosures’) recommendations and has already undertaken scenario analysis – the process of assessing likely climate risk costs in a range of warming scenarios – for this financial year. Orchard Street claims it is already following most TCFD recommendations but will look to continuously enhance its disclosure in line with the TCFD’s going forwards.
“Client engagement has also been critical to setting the timeline and scope of our targets and informed our decision to bring forward our commitments to 2030 and 2040, ahead of the 2040 and 2050 targets that much of our peer group has committed to,” Brill added.
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