URW

In June, Unibail-Rodamco-Westfield (URW) headed over to London as part of a European roadshow for its stakeholders and the media that was focused not on retail performance or the leisure mix but purely on sustainability. Since 2021 URW has reported its initiatives via an annual Social Value Impact Report, and when it came to the UK the company estimates Westfield London and Westfield Stratford City’s combined social value at €22 million for 2023, about €11.6 million and €10.4 million respectively.

To discuss the figures URW brought over two of its most senior figures, Group Director of Sustainability Clement Jeannin – who spoke on the second day at MAPIC 2023 – and URW Chief Resources and Sustainability Officer Sylvain Montcouquiol.

As they reiterated URW’s?vow to transition to net-zero?quicker than government requirements across Europe, the eye-catching comment was speculation that one day URW may be prepared to turn down a prospective mall tenant on sustainability grounds.

So what does that mean in practice? Well firstly let’s put that into perspective. URW has established a brand rating exercise?that evaluates the sustainable practices of each retailer,?its product sustainability and the energy efficiency of its stores. The initial assessments have covered about 2,500 stores across around 800 brands in the fashion sector.

And the company is keen to make clear that this exercise is about carrots, not sticks.?

“What we want to stress is that this is not designed as a way to judge our tenants but rather as the start of a conversation, which we can facilitate,” Jeannin told me. “We started with fashion, as it is such a core category, then health and beauty. In addition, our leasing teams have been trained to discuss this in 100% of lease negotiations to raise awareness.”

Right now the rankings and the lease discussions are designed to provoke conversations to both raise awareness and to consider proactive initiatives between landlord and tenant that can help both improve their sustainable performance.

And Jeannin stressed that while there is no “blame and shame”, at some time further down the road, amid wider URW initiatives to work with its retail, food and beverage, and leisure tenants, the landlord may determine that a tenant does not meet its minimum ESG requirements.

“Who knows? Perhaps one day in the future we will decline a tenant coming to one of our centres on the grounds of sustainability,” he speculated.

The company has engaged with around 82% of the brands operating across its retail estate and reckons that just over half (52%) are active in ESG, with 37% on the journey, 14% what URW calls ‘advanced’ and 1% it describes as ‘leaders’.

“Our belief is that we need to go beyond any government requirements, and we are also looking at how we work with our tenants in retail centres to see how we can work with them on the sustainable evolution of retail,” Montcouquiol said. “The company sees the transition to net-zero and the commitment to ESG in its widest sense as core to the future of the business.”

Between 2024 and 2030, URW is committing 30% of its regular capital expenditure to improve the sustainability and social enhancements of its shopping centres, offices and event spaces, or more if it can access government grants or subsidies.

URW’s social value report is aligned to its Better Places strategy. Partners contributing to its social value initiatives include Mitie, Ethos Farm, Grosvenor and OCS, plus local organisations such as community organisation West Youth Zone in Hammersmith and Fulham, and Birkbeck University.