Refining our strategy
Whilst we were very proud of the results achieved, in 2012 we recognised that it was time for us to refresh our sustainability and energy efficiency strategies in order to take into account the changing operating context and to develop a more future-looking orientation.
The global financial crisis and subsequent economic downturn had impacted upon our business, in particular in our core markets of Portugal and Spain where government austerity measures and stalled investor interest resulted in a drop in tenant sales and a decline in the Net Asset Values of some shopping centres between 2010 and 2013. These events put greater pressure on our business to contain costs and to ensure that our sustainability focus was delivering tangible value for the business, whilst they also emphasised how our shopping centres depend upon the continuous prosperity of the communities in which they operate.
At the same time, we saw a number of significant trends emerge, among them:
- The increased likelihood that natural resources will become scarcer and costlier, particularly as rapidly developing economies consumer greater resources and the impacts of global climate change begin to be felt;
- Technological and demographic changes, which are driving significant evolution within the retail sector as well as within the workplace; and
- Changing consumer preferences, including the growing interest in ‘healthy’, ‘ethical’ and ‘green’ retail concepts.
Creating shared value
In this context, we developed a revised sustainability strategy based around the concept of ‘creating shared value’ (CSV), focusing on five areas where we can turn these global challenges into opportunities to create value for both our business and society or the environment, namely: Resource Resilience; Prosperous Retailers; Leveraging Knowledge; Sustainable Lifestyles and Safe People and Eco-Efficiency.
With respect to energy, we recognised that whilst improvements in energy management had enabled us to reduce our environmental impact and avoid costs, research into solutions for effective resource resilience was vital to protect our assets against higher costs and penalties associated with natural resource consumption and environmental pollution, as well as the risk of energy shortages. We sought to turn the challenge of energy management into an opportunity – an opportunity for our shopping centres to exploit the latest technologies in order to operate as efficiently as possible, become energy independent or even net producers of energy.
The revised strategy was accompanied by a change in our governance structures. We created a Sustainability Steering Committee (SSC) which is responsible for overseeing the delivery of work under our long-term opportunities and risk management. The SSC reports directly to the Executive Committee and is chaired by our CEO. Senior-level employees have been appointed to champion each of our long-term sustainability priorities, including Resource Resilience, and they are required to report to the SSC three times per year on progress made. Our Sustainability Office supports the SSC around the definition and implementation of the sustainability strategy and Safety, Health and Environment (SHE) Management, which encompasses our climate change strategy and eco-efficiency, among other aspects.
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