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Performance on sustainability

Highlights performance on sustainability 2021

  • Improved GRESB rating to 5 stars (total 90 points);  

  • 98.6% of portfolio has a green energy label, with an average EP2 of 237 (87.4% A label);

  • 96.0% of floor space is BREEAM certified, with 94.2% scoring BREEAM-NL in-Use Good or better;

  • Total of approx. 349 kWp solar power installed by year-end 2021;

  • 39.9% like-for-like reduction in energy consumption; 77.4% decrease in GHG emissions;  

  • 204 rental contracts with a sustainability clause (green rental contracts), which is 42% of the total portfolio;

  • 90% of construction sites registered under the Dutch Considerate Constructors (Bewuste Bouwers) scheme; 

  • 98% coverage of AEDs within six minutes walking distance.

Focus on sustainability

The built environment consumes around 40% of the world’s energy and accounts for up to 30% of the world’s annual GHG emissions. Additionally, the building industry is a large user of raw materials. As a global real estate investor, Bouwinvest feels it is part of its responsibility to contribute to a CO2-neutral, sustainable, circular, resilient and healthy living environment, and to enhance stakeholder value by investing in sustainable real estate. Bouwinvest is convinced that its approach reduces risk, increases client returns and makes its real estate assets and portfolios more attractive.

Sustainability is a hot topic in the retail market, especially in terms of supply chain transparency. The complexity of the retail supply chain and the wide range of both social and environmental side-effects, has increased the attention being paid to this sector, including the sustainability of assets as a part of the total retail chain.

Environmental, social and governance (ESG) factors will continue to play a major role in the Fund's investment strategy. The Fund is targeting a net-zero carbon, nearly energy-neutral and resilient portfolio before 2045 (approx. 93 kWh/m2 per year). This will include an analysis of asset-level climate risks, including a plan on how to mitigate these risks. The Fund has set out clear targets for the reduction of its environmental footprint and improving its positive social impact.

To make a start, the Fund has formulated the following Paris Proof objectives for the mid term:

  • 2021-2030: A year-on-year 5% reduction in GHG emissions for the total portfolio (general and tenant consumption);

  • 2030: The portfolio has an average energy label A.

Furthermore, the Fund devotes attention to the Dutch policy position on transitioning towards a circular economy in 2050, with the focus on the use (and reuse) of resources. The real estate industry needs to be transformed into a circular ecosystem. The Fund is committed to circular building projects. 

The Fund also performed data-driven analysis related to physical climate risks, such as heat stress, flooding, heavy rainfall and drought. For the total portfolio, the Fund analysed what the impact of those risks is on its assets based on location. In 2022, the Fund will continue to analyse these risks based on asset characteristics and focus on how it can mitigate the risks.

The Fund supports the United Nations Sustainable Development Goals (SDGs). The Fund actively supports four SDGs, as presented below.

Highly sustainable Fund

In 2021, the Fund obtained a GRESB 5-star rating for the first time. The Fund improved its overall score by seven points, taking the total score to 90 points, from 83 points in 2020. The Fund’s peer comparison position also improved, since the Fund became fourth out of six in 2021. The higher score was based primarily on two items, both related to performance indicators: data coverage and performance on like-for-like reductions. To retain a GRESB 5-star rating next year, the Fund will continue to increase its focus on performance indicators.

GRESB score 2021

Investing in sustainable buildings

Sustainable buildings

Sustainable building certificates enable the Fund to show where it is in terms of sustainability at asset level and how far the Fund still has to go. The Fund uses internationally accepted sustainability certificates such as BREEAM to measure and assess the overall sustainability of its assets. Certificates measure criteria that go beyond legislative requirements and provide the Fund with instruments to encourage more responsible tenant behaviour, such as cutting waste and reducing energy consumption.

The Fund's goal was to obtain 100% insight into its assets' sustainability performance, to have 100% BREEAM-NL in-use certified shopping centres and to have at least 80% of its assets certified as BREEAM-NL in-use Good or better at management level by the end of 2021. In addition, benchmarks help the Fund to make informed business decisions to mitigate environmental, social and governance risks and enhance its long-term returns. By year-end 2021, the Fund had obtained BREEAM labels for 96.0% of its portfolio. In addition, the Fund saw a significant increase in the percentage of BREEAM-NL Good certificates to 83.8% (2020: 77.0%) and of BREEAM-NL Very Good certificates to 10.4% (2020: 1.4%).

For the coming year, the Fund has set its target to more than 95% BREEAM-NL in-use Good or better of all assets in the portfolio by the end of 2022, with a coverage of 100%.

BREEAM scores shopping centres (% of standing lettable floor space)

Green portfolio

The number of assets that qualified for a green energy label stabilised at 98.6% in 2021 (2020: 98.4%). This indicates a high level of energy efficiency for the portfolio. At the end of 2021, 87.4% of the portfolio had an A label (2020: 87.7%). Due to relabelling and newly acquired assets, this figure decreased slightly. The Fund's goal is to obtain A labels for 95% of the portfolio by the end of 2022 (NZEB2 <245). The Fund has not realised this target yet, and it may be too ambitious. The target may therefore be adjusted downwards. The biggest challenge is improving the rating of Experience assets, as the Fund depends on the cooperation of its tenants and some of these assets are qualified as listed buildings.

Distribution of energy label by floor space (m²) in %

Environmental impact

Bouwinvest committed itself to the Paris Proof commitment of the DGBC. To become net-zero carbon (Paris Proof) at the end of 2045, the Fund is in the process of drawing up roadmaps to realise this ambition. In 2021, the Fund has implemented the technologies, measures and costs related to the implementation in its strategic maintenance plan for the coming years.

Energy consumption and GHG emissions

In 2021, the Fund realised a reduction in energy consumption of 39.9% (2020: 6.0%) on a like-for-like basis. The GHG emissions decreased by 77.4% (2020: -12.4%). The decrease is mainly related to the pandemic. In 2021, the Fund recalculated its targets for the coming years. The Fund now aims for an average reduction of 3% per year. 

Renewable energy production

In 2021, the Fund installed solar panels on the supermarkets in Zoutelande, Kapelle and Enschede. The installation of Enschede has been commissioned in 2021, which brings the total capacity of on-site solar power in the Fund to 349 kWp in 2021. The installations on the roofs of Kapelle and Zoutelande will be commissioned in Q1 2022 (+292 kWp). The Fund's target was to generate 1,000 kWp of renewable energy from on-site solar panels by year-end 2021. Partly due to the lack of sufficiënt technical staff at its suppliers, the Fund experienced delays in the realisation of the projects. The Fund works on several promising new locations, so the Fund expects to come close to the goal of 1,000 kWp by the end of 2022. For the long run, the Fund also expects to be able to further increase the share of renewable energy across its portfolio. 

On-site solar panels (kWp)

In 2021, the Fund recalculated its targets for the reduction of its environmental impact in the period 2022-2024:

  • Renewable energy: increase percentage of renewable energy;

  • Energy consumption: average annual reduction of 3% as from 2021;

  • GHG emissions: average annual reduction of 3% as from 2021;

  • Water use: average annual reduction 2%;

  • Waste: increase recycling percentage.

Improving client services and communication

Bouwinvest does its utmost to optimise long-term alliances with all its stakeholders. The organisation has methods and means in place to understand, meet and respond to its stakeholders needs and to engage with the issues that its stakeholders find important. In addition to this, Bouwinvest takes an active approach to raising environmental, social and governance awareness throughout the real estate industry, partly through membership of various real estate sector organisations, such as the Association of Institutional Property Investors in the Netherlands (IVBN) and the Dutch Green Building Council. 

Stakeholder engagement

Bouwinvest keeps its clients up to date on the Fund's activities and performance, as well as the Dutch real estate market and important topics such as ESG-related developments (e.g. climate risk). 

In early 2021, Bouwinvest conducted a client survey among its investors, which resulted in a score of 7.1 (out of 10) for client satisfaction. This survey provided us with a lot of valuable feedback. One of the outcomes was that the Fund documentation needed to be updated. In a constructive dialogue with all shareholders, Bouwinvest modernised its full set of fund documentation in 2021. Having made improvements in - among others things - liquidity, more say for the Advisory Committee and modern liability clauses, the Fund’s terms and conditions are now completely up to date. The new terms and conditions were formally adopted at the General Meeting of Shareholders on 14 September 2021. The new Fund documentation came into effect on 1 January 2022.

These and other actions will help Bouwinvest improve its client services and communications. Bouwinvest's ultimate aim is to achieve a steady long-term client satisfaction score of 7.5 (out of 10). In the second half of 2022, the organisation will conduct another client satisfaction survey to check if the various improvement initiatives have indeed improved client satisfaction.

Tenant engagement

In a dynamic retail environment, it's important to stay in touch with tenants. This contact gives the Fund insight in their daily business activities, developments and trends in the retail industry, but also into the potential improvements in its assets. It provides relevant information that can be used in the management of the Fund.

Due to ongoing impact of the Covid-19 pandemic on the retail market, the Fund had to make a large number of arrangements with its tenants in 2021, just as it did in 2020. Because of the lack of clear rules or legislation and the variety in  tenant situations, these arrangements were tailor made. Again, the Fund succeeded in making all these arrangements without judicial interventions. Frequent and direct contact with tenants was also the key to success this year.    

The Retail Fund conducts a bi-annual tenant satisfaction survey, which provides insight into the satisfaction of tenants and highlights potential improvements. Despite the difficulties in the retail market, the Fund scored 6.5 for the quality of the assets and 6.3 including satisfaction with the Fund’s property management. These scores were largely the same as the outcome of the 2019 survey (respectively 6.4 and 6.3). The survey response was lower, with 180 participants in 2021 (38%) and 230 in 2019 (45%). In the circumstances, the Fund feels quite positive about the results. Of course the scores will be used to initiate improvements to the Fund's services and assets. Finally, the Fund’s target is to obtain an overall score of 7.0.

Green leases

The Retail Fund continued its green lease initiative in 2021, adding 37 green leases. This took the total number of green leases in the portfolio to 204, which is 42.0% of all leases. This meant the Fund achieved its goal for 2021 (40% by the end 2021). These lease agreements incorporate sustainability clauses, with the aim of increasing and enhancing the information exchange between the Retail Fund and its tenants. This in turn creates opportunities for combined efforts to improve environmental performance. Combined with the installation of smart meters at tenant level, the Fund sees this as the first step towards more far-reaching green leases in the future.

Sustainable stewardship

The Fund takes an active approach to raising environmental, social and governance awareness throughout the real estate industry. The Fund encourages its partners to enhance their sustainability performance. The Fund focuses on: health & safety at construction sites, active participation (memberships) in industry associations and community programmes. To further improve the climate for real estate investments, the Fund is an active member of boards and committees of sector, industry and cross-disciplinary networks, such as NEPROM, IVBN, Holland Metropole, the DGBC, INREV and ULI.

The Retail Fund strives to register all new-build projects and redevelopments with the Dutch Considerate Constructors (Bewuste Bouwer) scheme. This scheme ensures that contractors deal with the concerns of local residents and address safety and environmental issues during the construction phase.

The target was to have 100% of construction sites registered under the Considerate Constructors scheme by the end of
2021. However, only one of its two construction sites is registered: Arnhem Schuytgraaf II. The construction site of PC Hooftstraat 125 is not registered. Considering this site has a small (140 m2) footprint and it involves renovation works predominantly, it was agreed with the constructor not to apply for registration. Based on the value of both investments, 90% of the Fund's construction sites were registered in 2021.     

AED

Bouwinvest was the first company in the Dutch real estate investment sector to contribute to the establishment of a national AED (automatic external defibrillator) network, which it is estimated could save up to 2,500 lives every year in the Netherlands. The use of an AED offers the highest probability of survival within the first six minutes after a heart attack. At the end of 2021, 98% of the Fund's tenants and communities had an AED available within six minutes walking distance.