EPP is consistently reducing the environmental impact of its operations, while actively building the resilience of the managed real estate portfolio against climate change and risks associated with sudden atmospheric phenomena. In its second Climate Risk Report, the company summarises its progress towards achieving these goals, including a 22% decrease in greenhouse gas emissions compared to 2019. The report follows the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

EPP environmental priorities

The company’s key environmental focus areas include: reducing GHG emissions to achieve the strategic goal of zero net operational carbon emissions across all EPP-managed buildings by 2050, improving energy efficiency of properties, responsible water and waste management, biodiversity protection, and property certification. Over the coming years, EPP plans to significantly reduce its carbon footprint, contributing to global efforts to combat climate warming and its effects. At the same time, the company is proactively identifying the threats associated with climate change, such as high temperatures, floods, heavy rainfall and droughts, and is building resilience for the properties it manages to withstand these phenomena.

– Building a robust climate resilience strategy for the property portfolio we manage is critical to creating long-term value for our stakeholders and EPP’s leading position in the market. This goes hand in hand with efforts to mitigate climate change by making our operations more sustainable and environmentally friendly. We are aware that the journey to net zero may take some time. However, we believe that with proper preparation and consistent implementation of our strategy, we will achieve our goals within the timeframe we have set – stated Rafał Kwiatkowski, COO EPP Poland, asset manager of the EPP Group’s property portfolio.

The journey to net zero

EPP has ambitious greenhouse gas emission reduction targets, with a strategic one to achieve net zero emissions in all managed properties by 2050. By setting science-based targets through the Science Based Targets initiative (SBTi), the company committed to reducing absolute Scope 1 and 2 GHG emissions by 50% by 2030 and by 90% by 2050 compared to 2019 base year. With these targets reviewed and validated by SBTi, EPP is confident that its planned goals are both ambitious and achievable.

As part of its decarbonisation strategy, the company is implementing a series of measures incl. upgrading energy management systems, using energy-efficient LED lighting (already installed in 82% of its properties’ common areas), optimising the operation of equipment, installing heat pumps and ensuring optimal use of resources. Thanks to these efforts, energy consumption has been reduced by 11.5% compared to 2019. The company also purchases energy from alternative sources. Currently, 100% of the common areas in office complexes and 20% of retail properties are powered by green energy. In the 2023/2024 financial year, the share of electricity from renewable energy sources in all retail assets is expected to increase and reach 25%.

Efficient water management

EPP is currently working on long-term water strategy considering standards such as ESRS E3 Water and marine resources. This policy will cover water management in operational activities and collaboration with suppliers. One of EPP’s targets for reducing water consumption is to equip 100% of the common areas in its retail and office properties with water saving taps by 2025, a process which is now 95% completed.

Responsible waste management

EPP aims to reduce the carbon footprint by effectively monitoring the resources it uses and the volumes of waste generated by tenants, property users, visitors, and the organization itself, contributing to the company’s ongoing efforts to reduce its carbon footprint in the value chain. EPP promotes environmental awareness and educates property users on proper waste segregation to streamline the process of its selective collection. The company is also in dialogue with tenants about the use of reusable bulk or easily recyclable packaging. Additionally, EPP works closely with waste collection entities to minimize the amount of waste ending up in landfills.

Protecting biodiversity

In 2023, EPP developed a biodiversity strategy aimed at caring for local habitat for the benefit of present and future generations, recognising them as a common heritage that needs to be protected and restored. This strategy includes the active use of ecosystems across the company’s managed portfolio by 2025, in line with the EU Taxonomy’s ‘Do No Significant Harm’ criteria. At the same time, EPP is enhancing biodiversity around its properties and using local ecosystems to strengthen the properties’ resilience to the impacts of climate change. By 2030, seven shopping centres in EPP’s portfolio will participate in the EU-funded LIFE Archiclima project, which involves assessing the properties’ adaptability to climate change and identifying risks from current and future natural events, leading to a climate adaptation plan that relies on nature-based solutions.

Property certification

EPP is committed to providing a credible and transparent assessment of the properties it manages from independent, recognised accreditation bodies such as Building Research Establishment’s Environmental Assessment Method, “BREEAM” and International WELL Building Institute, “WELL Health-Safety Rating”. Currently, 86% of the office buildings and 72% of the retail assets under EPP operational control were certified with BREEAM In-Use. The company’s goal is to have 100% of its office and retail properties BREEAM certified by 2025. In addition, the office complexes Symetris Business Park, O3 Business Campus, Malta Office Park and Park Rozwoju were awarded with the WELL Health-Safety Rating.

About the report

The scope of EPP Climate Risk Report includes 35 projects (29 retail properties and six office complexes) managed by the company and covers the 2022/2023 financial year, i.e. the period from 1 September 2022 to 31 August 2023.

The GHG emissions presented in this report were calculated according to the international methodology for calculating emissions for enterprises: “Greenhouse Gas Protocol – A Corporate Accounting and Reporting Standard”, “GHG Protocol Scope 2 Guidance Amendment to the GHG Protocol Corporate Standard” and the “Corporate Value Chain (Scope 3) Accounting and Reporting Standard, Supplement to the GHG Protocol Corporate Accounting and Reporting Standard”. The carbon footprint assessment was audited by PricewaterhouseCoopers Polska sp. z o.o. sp. k.

The full version of the EPP Climate Risk Report can be downloaded at:
https://www.eppnv.nl/app/uploads/2023/12/CLIMATE-RISK-REPORT.pdf

EPP, presenting its second ESG report based on the international standard for non-financial reporting, the Global Reporting Initiative (GRI), outlines the company’s performance for the 2022/2023 financial year. The organisation’s activities are focused on reducing its environmental impact while strengthening the social commitment. EPP has achieved a 22% reduction in greenhouse gas (‘GHG’) emissions in its directly managed portfolio, compared to 2019. At the same time, it has invested nearly 1,700 hours of employee volunteer time in initiatives addressed to local communities, supporting more than 31,000 beneficiaries.

– We prioritise managing the impact of our business on EPP’s stakeholders, which includes the environment and local communities living near the managed properties. We began with implementing our ESG strategy in 2021, and are continuously updating it to meet new challenges and regulatory requirements. Transparent and regular reporting is the second step of our strategy. Our plans are ambitious in all areas, but we know that by working together with our stakeholders, we can succeed – stated Rafał Kwiatkowski, COO EPP Poland, asset manager of the EPP Group’s property portfolio.

ESG strategy based on four major pillars

The ESG policy, which has been an integral part of EPP’s business strategy since 2021, is based on the premise of being responsible towards the Planet and people. EPP strives to run its business responsibly, focusing on four pillars that are linked to the Sustainable Development Goals (SDGs) set by the United Nations. EPP reduces its environmental impact (Earth citizen), creates a space accessible to all (Space for everyone), focuses on building trust among stakeholders through transparent and coherent communication (Trust through transparency) and develops a system of responsible governance (Mindful management).

Environmental responsibility

One of EPP’s key priorities is to reduce GHG emissions in order to achieve net zero by 2050 in facilities under its management. In 2023, the company has committed to reducing absolute Scope 1 and 2 GHG emissions by 50% by 2030 and by 90% by 2050 compared to a 2019 baseline. These targets were reviewed and validated by the Science Based Targets initiative (SBTi). The company is on a track to achieve its goals, with a 22% decrease in GHG emissions in the directly managed portfolio in the 2022/2023 financial year compared to 2019.

Further improvements, including an energy-efficient LED system, already installed in 82% of the managed buildings’ common areas, the modernisation of the BMS systems or optimisations of equipment operation, have contributed to an 11.5% decrease in energy consumption compared to 2019. As part of the commitment to its long-term plans, EPP is already using electricity from renewable sources in the common areas in 100% in office and in 20% in retail assets.

Social value

The company focuses on increasing the positive impact of its activities on local communities. EPP aims to improve diversity and inclusion, strengthen local economies, analyse and respond to local social challenges, while taking care of the environment and human rights in the supply chain.

EPP supports local communities through actions in four areas. These include portfolio-wide initiatives, local ‘Five Good Deeds’ activities, employee volunteering and additional grants funded by EPP to support local communities. In the 2022/2023 financial year, EPP teams carried out 221 initiatives and contributed 1,686 hours of employee volunteering. As a result, there are more than 31,000 beneficiaries of EPP support.

The company cares strongly about the wellbeing of its employees, offering regular training sessions and an extensive benefits package. All employees have been trained on business ethics issues, 88% of employees are covered by the employee development program and a further 82% completed various ESG training sessions. On average, one person has invested more than 28 hours in self-improvement, knowledge and skills development. The company’s highest standards in human resources management were recognised by the Polish Human Resources Management Association with the “HR of the Top Quality 2023” certificate. In addition EPP was included in the Diversity IN Check, a list of the best employers for Diversity and Inclusion in Poland.

Corporate Governance

Good governance and transparency are an essential part of the company’s ESG strategy. Accordingly, EPP’s operations are reviewed by leading and independent third parties. For example, in the Carbon Disclosure Project’s (CDP) ranking, recognised as one of the key tools for assessing the transparency of corporate disclosure on climate change, EPP received a B grade. EPP also aims to work with responsible companies that share similar values and ensure ethical supply chain operations. Therefore, key business partners sign a EPP’s Suppliers Code of Conduct.

In addition, to annual ESG progress reporting based on GRI standards and TCFD recommendations, the company implements a number of internal practices, such as EPP’s Code of Conduct, Diversity Policy and Suppliers Code of Conduct. EPP also ensures appropriate certification – 86% of the office buildings and 72% of the retail assets under EPP’s operational control have achieved BREEAM In-Use certification. In addition, WELL Health-Safety Rating was awarded to Symetris Business Park, O3 Business Campus, Malta Office Park and Park Rozwoju.

A double materiality perspective

EPP’s activities impact both environmental and social aspects of various stakeholder groups. Therefore, in this reporting cycle, the company has incorporated the principle of double materiality. It entails monitoring and disclosing the environmental and social impact of EPP’s activities and the impact of ESG factors on the company’s financial position. In this financial year, EPP has also included the Planet as a stakeholder influenced by the activities of the properties it manages. It also has an impact on the portfolio managed by the company, as disclosed in EPP’s Climate Risk Report, prepared in accordance with the TCFD’s recommendations.

About the report

ESG report published by the EPP based on the Global Reporting Initiative (GRI) international standard for non-financial reporting version 2021. The document provides data for the 2022/2023 financial year, covering the period from 1 September 2022 to 31 August 2023. The information contained herein relates to all of the company’s business entities and value chain. The report may exclude certain targets and results for properties in the M1 portfolio.

The full version of the EPP ESG report can be downloaded at:
https://www.eppnv.nl/app/uploads/2023/12/ESG-REPORT.pdf