why is sustainable property important?
We have £10.4 billion funds under management on behalf of our retail and institutional customers in Legal & General Property. Behind the scenes there is lots of work to campaign for the hidden value and to tackle some of the big issues that matter around built environment.
We have a strong and long-term commitment to sustainability by adopting or investing in pioneering solutions. Sustainability is now arguably one of the most critical agents of change in real estate ownership. From a fund management perspective, the drivers of behaviour are primarily about protecting the medium to long term value of portfolios on behalf of investors, as well as acting in a socially responsible manner.
We believe that through the integration of sustainable thinking and behaviour, we will deliver enhanced returns to our investors.
Our commitment to sustainability is driven by the recognition that the built environment has a very significant impact on UK society and its ecosystem, including contributing almost half of the UK’s greenhouse gas emissions. It’s our belief that sustainability already sits alongside location, tenant, building size and building quality as a key factor in real estate’s value and performance.
And, we think its importance will only increase over time.
SCale as the third biggest uk landlord
As one of the UK’s largest landlords we are highly conscious of our responsibility to go over and above the industry norm of only ‘greening’ part of a property portfolio or specific funds. So instead we aim to put environmental and social sustainability at the heart of our property investment decision-making.
Through consistently applying best practice, sustainability criteria, across our entire portfolio we have experienced numerous benefits, many of which are economic:
Reduced investor costs
- Those costs associated with purchasing, disposal, insurance premiums, regulation and plant replacement, by forward planning and adhering to our process to minimise climate change risk.
Reduced depreciationAchieved through the creation of assets that are ‘future proof.’
Enhanced rental growthAchieved through lower service charges, and minimising the effect of other costs to occupiers.
Our Asset Sustainability Plans (ASPs) allow us to minimise risks and costs, by future proofing our assets against future legislation, obsolete equipment and ‘outlawed’ products.
Improved Energy Performance Certificates (EPC’s)
Having undertaken EPC’s on the whole portfolio in 2008 and subsequently seeking to improve them we are in a strong position with regard to the Energy Act 2011 and the introduction of Minimum Energy Performance Standards (MEPS).
Better tenant engagement
Its especially important with green lease clauses that have been part of our standard lease for a number of years and are actively sought by some tenants, assisting in tenant retention
Added value from renewable installations
To not only provide cheaper electricity for tenants but improves our income streams.
Improved skill sets
By increasing training and our employees ability to participate in industry initiatives involving benchmarking, innovation and sustainability measurement.