Case study by M&G Investments

In the spirit of showcasing leadership and raising standards of responsible investment among all our signatories, we are pleased to publish case studies of all the winning and shortlisted entries for the PRI Awards 2020.

Give a brief overview of your project, its objectives, and why you decided to undertake it. 

M&G Real Estate aims to reduce the energy intensity of its global real-estate portfolio by 25% by 2025, compared to 2013, and to be net zero carbon by 2050. 

Real estate is responsible for producing around 40% of global carbon emissions, which makes it a key target for government carbon reduction and energy efficiency policies. As such, and to meet the ambitions agreed at COP21, all new buildings must operate at net zero carbon from 2030, and 100% of buildings must operate at net zero by 2050. 

Driving environmental improvements at the firm’s assets not only benefits the planet, by reducing carbon emissions and the use of natural resources, it also drives lower occupancy costs through operational efficiency. This is particularly important given the challenging market conditions for some of M&G’s occupier base.  

By the end of 2019, M&G had achieved a 26% reduction in energy intensity for landlord-purchased utilities based on an indexed trend compared to 2012/13. Over the same period, it reduced absolute carbon emissions by 23%. 

Please describe the scale of the project, financially and in impact terms 

M&G’s green energy procurement saved 200,000 tonnes of carbon compared to buying brown energy. This is enough to power 31,000 homes for a year. The firm also produced 2 GWh of renewable energy on-site during 2019, with significant scaling up planned over the next two years. 

Describe the process of delivering the project, including any challenges and how these were overcome. 

M&G took a multi-pronged to integrating ESG considerations into its investment process:  

  • New acquisitions must now meet in-house requirements on ESG. 
  • Post investment, the firm’s global data management and reporting system identifies actions to improve energy efficiency.  
  • On development and major refurbishment projects, M&G seeks green building certification. 

Examples of initiatives M&G has implemented to drive reductions include: 

  • Targeting low and ‘no costs’ energy reduction measures at assets, such as ensuring on-site teams focus on efficient energy management and rolling out LED lighting wherever feasible. 
  • Introducing real-time monitoring of high-energy users through smart building technology, such as at the Manchester Arndale shopping centre in the UK, where a 36% reduction in total energy used has been achieved. 
  • Realising energy efficiency measures through retrofit, for example at Compass One, Singapore, where a refurbishment of the shopping centre saved over 1 million kWh. 
  • Benefiting from the sale of some older, less efficient buildings and buying newer, more efficient assets. 
  • Installation of renewable technologies. 

Key challenges: 

It took a lot of work to gather information from M&G’s property assets all over the world, and once gathered, it required extensive training with property managers to ensure the information was understood. It remains a challenge to gather data from occupiers and set targets that extend to scope three emissions. However, M&G is addressing this through greater engagement with occupiers on the importance of the data, and trial use of smart building monitoring in its occupier spaces to provide data and help occupiers to reduce consumption. 

How successful has the project been and how have you measured this? What have you learned from this project that can be applied more broadly? 

The success of the project is backed up by results (as outlined above) and, in addition, green building certification provides an independent verification of performance. 

M&G has trialled various initiatives that have achieved their intended outcomes. For example, LED lighting, photovoltaic panels, smart building monitoring. This has shown that these programmes and achievements can be delivered globally when rolled out using a framework and training. The work M&G has done puts its in a good position to build upon its net zero carbon ambitions. It is also currently undertaking work to develop net zero pathways for its funds.