Ruth Moorhouse, Asset Manager at Ellandi talks sustainability
Sustainability is a challenge for the retail sector. The fashion industry is one of the world’s worst contributors to carbon emissions. It pollutes oceans with microplastics and is the second-largest consumer of the world’s water supply. The demand for fast fashion with throwaway items exacerbates these issues, generating huge amounts of landfill every year, and the appetite for this appears to have increased over the past few months. The impact of lockdown on the environment has been clear, with a huge reduction in travel and emissions. If this call for change is heeded, it could emerge as a longer-term positive from the pandemic.
Consumers and companies were already far more aware about the climate emergency before Covid-19. The issue is especially important for the young, with 73 per cent of millennials willing to pay more for a product that is sustainable according to a Nielsen report. UK retailers such as Ikea, H&M, Body Shop and Sainsbury’s have all made commitments to increase their sustainability credentials with an increased focus on a circular economy model and their supply chains. Investors too are increasingly committing to increasing their sustainability credentials. Larry Fink, CEO of BlackRock, has committed to increasing BlackRock’s sustainable assets from $90bn to $1tn within a decade and doubling the number of sustainability-focused exchange traded funds it offers.
When combined, these demand and supply-side commitments are important. They work together to increase sustainability with a consumer base who are willing to direct their spend to more environmentally conscious brands, and supportive investment and retail market to supply them. But there is more to sustainability than the climate emergency.
Just as people’s awareness of the climate emergency has been growing, so has their awareness of retail change. Even pre Covid-19 the UK’s retail places were battling to find their “purpose” in a changing landscape, and the “Death of the High Street” meme had been accepted by most as a simple truth.
And for many retailers it is true, their store portfolios and historic rent agreements had become unsustainable, particularly in places where this core purpose for shoppers had become lost. For a place to succeed, it must to be economically sustainable for its occupiers and visitors. It must fulfil the demands of visitors to generate occupiers’ revenue, which is correctly sized to sustainable rents for those who trade there. Places which offer viable space for employment, service and participation can bring all parts of a community together. They can sustain a shared identity as well as greater social equity. Creating the right environment for people and businesses to thrive also creates a sustainable investment.
At Ellandi we are committed to increasing our sustainability, in every sense. The first step of this is acknowledging that we can do more.
We have recently developed a vision for our business which is ‘creating the UK’s most sustainable and inclusive communities’. We are now on a journey to embed this vision fundamentally into everything we do. At its core this means true environmental sustainability, as well as social and economic sustainability. For example, for the first steps in this journey we are benchmarking our carbon emissions and looking at ways we can reduce them, but also assessing the voice our staff members have over key business decisions and reviewing the accessibility offering in all of our centres.
We have established a committee to hold the business accountable to its vision, ensuring sustainability and inclusion are at the centre of decision making. At Ellandi we see sustainability also encompassing the concept of legacy, that Ellandi can leave a community with a real purpose and resilience that can self-sustain once we have been and gone. This means that a place is financially sustainable for our investors, but this will only happen once a place is sustainable for its retailers, occupiers and customers.
We are committed to learning and improving our business. We understand the importance of sustainability to our investors, occupiers and customers, and with 27 retail places under management we have a responsibility to be at the front of this agenda. With the current pace of change in behaviour, as an industry we have an exciting opportunity to make it count.
Words by Ruth Moorhouse, Asset Manager at Ellandi