Net Zero Pathway (2022 update) by CadoganLondon

Net Zero Pathway

Introduction

Cadogan has a 300-year history of property ownership, management and development in Chelsea, with stewardship at its heart. Our longterm commitment comes with responsibility to ensure that we are making a positive contribution towards a sustainable environment, protecting the area’s unique heritage and supporting a thriving community.

Our goal to become a net zero emission Estate by 2030 is part of our wider sustainability vision for the future, Chelsea 2030. This document sets out how we will become a net zero carbon business by 2030, reducing our emissions across our areas of impact to drastically reduce our carbon footprint, with responsible principles of offsetting the remainder.

We recognise our role as one in which we can bring people together, supporting innovation and acting as a catalyst for change. With the next few years probably the most important in our history in terms of global climate change, proactive, radical collaboration and true working in partnership is more vital than ever.

AIM TARGET 2030 DETAIL

CARBON EMISSIONS NET ZERO EMISSIONS

Net zero emissions across Cadogan’s scope of influence

AIR QUALITY

GREEN INFRASTRUCTURE

SUPPLIER CONSOLIDATION

ZERO-EMISSION SUPPLIERS

ELECTRIC VEHICLE INFRASTRUCTURE

IMPROVED GREEN INFRASTRUCTURE

WASTE

WASTE REDUCTION

WATER WATER USE REDUCTION

At least 40% of commercial tenants to join offsite consolidation scheme

80% suppliers to deliver by zero-emission transport

All service bays and residential parking lots to have EV charging by 2025, and all new developments after 2021 to include EV charging

Improve quality and quantity of green infrastructure, including a 25% increase in the Urban Greening Factor

Send zero commercial and operational nonhazardous waste to landfill

Reuse or recycle over 90% of commercial and operational non-hazardous waste

Reduce absolute mains water consumption by 50%

WELLBEING & CULTURE

EMPLOYMENT & SKILLS

HEALTH & WELLBEING

COMMUNITY COHESION

Increase local employment and support skills development

Make a measurable improvement to our communities’ health & wellbeing

Enhance community cohesion between local stakeholders

Baseline

Our net zero target has been developed in line with the parameters of the Estate’s reach and influence. With £5,104m of gross property value1, Cadogan’s assets include retail, residential and commercial property. The target boundaries are set by the limitations of geography and function, including all assets under management2 and direct operations, along with upstream/downstream impacts that can be influenced by Cadogan3

A holistic assessment of emissions for the year to 31 December 2019 resulted in a carbon footprint of 35,664 tCO2e - with 88% of our impact being Scope 3 emissions4 as indicated in Figure 2.

Embodied carbon (total emissions generated in creating a building or asset) constituted 16% of the baseline footprint, resulting from three major developments: 196-222 King’s Road mixed-use scheme, 1 Sloane Gardens hotel, 115-116 Sloane Street hotel, as well as commercial white-boxing and over 24 property refurbishments.

Occupier operations also have a substantial impact, with 58% of the baseline footprint coming from commercial and residential portfolios. Energy use in these spaces is outside direct control, so working in partnership with occupiers and stakeholders across the Estate to facilitate decarbonisation is key.

35,664

88% of baseline emissions fall into scope 3

16% of baseline emissions come from developments

1 Cadogan Estates Annual Report and Accounts 2022

2 Excluding non-managed long leasehold properties, where leases typically last over 100 years

3 For further detail see Appendix B

4 Scope 3 emissions are indirect emissions from an organisation’s value chain

58% of baseline emissions come from occupier activity

2019 carbon footprint in tCO2e:

Pathway Best Practice

This pathway to net zero has been developed with best practice guidance from the UK Green Building Council (UKGBC) and the Better Buildings Partnership (BBP), as signatories5 to the BBP Climate Change Commitment.

Chelsea’s historic nature, conservation area requirements and development pipeline have been taken into consideration, with both bottom-up calculations of building decarbonization potential, and topdown assumptions on industry-wide transformation. Our greatest focus is on the areas with maximum impact potential: supply chain, embodied carbon in developments, and occupier operations.

Together the pathway is intended to deliver a 2030 footprint reduction of 53% compared with 2019, in line with science-based goals and the Paris Agreement, and offset the remainder according to parameters set out in Pathway Action 4.

In line with common practice, much of the Scope 3 baseline has been estimated. Estimation methodologies have been updated since Version 1 of this document, according to best practice information available at the time of calculation. Current emissions methodologies are set out in Appendix C. Given the importance of scope 3 emissions, improvements in data access, quality and analysis will play an essential role in the pathway to 2030.

It is expected that this pathway will continue to evolve over the coming decade, as the industry better understands the intricacies of net zero accounting, technology develops, and processes adapt to a low-carbon economy.

The pathway is intended to deliver a 2030 footprint reduction of

Total CO2e (in tonnes)

Embodied carbon: developments

Embodied carbon: supply chain

Landlord carbon

Total CO2e (in tonnes)

Embodied carbon: developments

Occupier operations

Embodied carbon: supply chain

Remainder

Landlord carbon

Occupier operations

Remainder

5 As a Climate Commitment signatory, we align with the BBP’s definition of climate resilience. The BBP define that a climate-resilient business has a strategy in place to: (1) mitigate the worst impacts of climate change by becoming ‘net zero’ carbon before 2050

(2) adapt to operating in a world in which climate-driven disruption is more frequent and severe, and (3) disclose climate-related information to investors, regulators and other stakeholders in a useful and timely way.)

FIGURE 3: REDUCTION PATHWAY

Pathway Action 1

TACKLING EMBODIED CARBON

Embodied carbon comes from the design and construction of a building, from extraction of materials, through manufacturing, processing, transportation and assembly of every element before operation. Embodied carbon from the construction and refurbishment of buildings makes up about 20% of built environment emissions6

As operational emissions from buildings continues to decrease, the UKGBC estimates that embodied carbon will form over 50% of built environment emissions by 2035.

The 2030 net zero pathway sets clear embodied carbon targets, with a downward trajectory as seen in Figure 4, for stages A1-A5 (“cradle to post-completion”) of all development projects. This allows for supply chain development and adaptation, ensuring shared learning and ability to maximise benefits across the value chain. This also applies to capital goods suppliers and other purchased goods and services, since 5.5% of the 2019 baseline footprint came from these sectors.

MOVING TO NET ZERO

Design Standards: sustainable design standards for all development projects addresses climate risk and covers embodied carbon targets, operational energy use and water intensity targets, as well as innovative opportunities arising from circular economy models. These standards will continue to evolve and be improved towards 2030.

Supply Chain Engagement: proactive engagement with partners, suppliers and the wider industry regarding sustainability expectations and environmental performance continues, alongside sharing best practice and supporting suppliers in the development and implementation of their own emissions reduction strategies. As part of this, we will continue to engage through Better Buildings Partnership to understand and implement the Net Zero Carbon Buildings Standard when it launches.

Improved Data and Reporting: tracking whole life carbon for every development project above £1.5m spend, alongside our internal carbon benchmarks for minor projects, is improving the quality of footprint data. Supply chain tracking and reporting will also continue to increase, as transparent and comparable data reporting helps drive improvement across the board.

6 UKGBC (2023) Climate Change: www.ukgbc.org/climate-change-2

4: EMBODIED CARBON TARGETS kg CO 2 e / m 2 (WHOLE BUILDING GIA)

FIGURE

CASE STUDY

30-33 Sloane Street

From inception, Cadogan’s mixed-use development at 30-33 Sloane Street was planned to be net zero carbon.

Initial scheme scoping between cut-andcarve or façade retention options determined that operational carbon emissions of the latter would be 5% approximately per annum lower, with increased upfront embodied carbon emissions offset within 18 years through significantly lower operational emissions. The proposed scheme prioritised the circular economy with increased flexibility, adaptability and accessibility provided by the better floorplates and ceiling heights.

The scheme’s embodied carbon is currently measuring at 550kgCO2e/m2 (for stages A1-A5), which meets RIBA’s current best-practice rating of <600kgCO2e/m2 for office buildings and is progressing towards the RIBA stretch target of <475 kgCO2e/ m2. Savings have already been achieved through reduction in concrete thickness, specification of low-carbon concrete and retention of the existing façade. We will continue to target reductions through material re-use, such as sourcing re-used steel sections and remanufactured raised access floors.

The scheme is aiming for BREEAM Outstanding, NABERS 5 stars and WELL Gold, and is scheduled for completion in 2027.

SUPPORTING CHELSEA 2030 TARGETS

SUPPLIER CONSOLIDATION

ZERO-EMISSION VEHICLES:

Minimizing transport trips and reducing the number of vehicles on the roads will not only improve air quality, but also reduce embodied carbon.

Ensuring that remaining transport is undertaken on zero-emission vehicles will reduce embodied carbon of materials.

BEYOND 2030

Cadogan will continue to work in partnership with stakeholders to reduce its embodied carbon, using our influence to support improvements materials, technology, processes, and knowledge sharing.

Pathway Action 2

REDUCING OPERATIONAL IMPACTS

Cadogan’s operational carbon emissions come from landlord managed electricity and gas. While this only accounts for 12% of the baseline footprint, it is within direct control so will be reduced as far as possible.

Operational emissions from commercial and residential occupier spaces constitute 58% of the overall footprint, requiring a collaborative approach to reducing emissions. Legislation is rapidly changing in this area, ranging from a push for gas-free homes to tightening MEES requirements, and this is expected to continue.

Chelsea is a challenging environment with historic properties, conservation areas and Listed buildings, but clear energy intensity targets for all new and existing buildings are phased into the pathway to 2030.