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Unibail Prioritises Net-Zero Despite ESG Backlash

Westfield London and Westfield Stratford are at the core of URW's net-zero plans.

Paris-based Unibail-Rodamco-Westfield has urged the real estate industry to ignore any possible political blowback from environmental, social and corporate governance commitments in Europe as it reiterated its vow to transition to net-zero quicker than government requirements.

Amid wider initiatives to work with its retail, food and beverage, and leisure tenants to bolster ESG across its centres, it said that one day it may turn down a prospective mall tenant on sustainability grounds.

In June, URW embarked on a UK and Europe roadshow for stakeholders as it reported its latest Social Value Impact Reports for Westfield London and Westfield Stratford City, revealing a combined social value of £18.8M for 2023, about £9.8M and £9M, respectively.

URW Group Director of Sustainability Clement Jeannin and URW Chief Resources and Sustainability Officer Sylvain Montcouquiol sat down with Bisnow to lay out the company's long-term strategy.

“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,” Montcouquiol said. “That is why we have committed to £20M per annum of additional capex specifically on net-zero, plus £8M annually invested in the rollout of profitable green energy plans.”

Between 2024 and 2030, URW is also committing 30% of its regular capital expenditures to improve the sustainability and social enhancements of its offices and shopping centres. This does not include any government grants or subsidies, Montcouquiol added.

Despite concerns that several European elections, including in its native France, could see parties come to power less aligned with sustainability, Montcouquiol said this would have no impact on URW's business goals.

“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,” he said.

To that end, 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 2,500 stores across around 800 brands in the fashion sector.

“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 said. “We started with fashion, as it is such a core category, then health and beauty. Our leasing teams have been trained to discuss this in all lease negotiations to raise awareness.”

And while the conversations are designed to raise awareness and consider proactive initiatives between landlord and tenant, Jeannin said that this is likely to evolve.

“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 said.

Partnering with the Social Value Portal, URW's third annual impact report says that job creation for its London centres had generated a combined £10.9M of value and that UK social value had generated £60M since it first started reporting in 2021.

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