Our owners will receive their expected returns, though never at the expense of the environment and people. To accomplish our assignment, we must create value in the business. This is achieved through good property management, property development and gainful transactions, when we buy and sell.
We report our financial position in an open, transparent and relevant manner. We know that sustainability pays. For example, our goal-oriented work with energy savings have favourably impacted financial performance.
We have continued to increase the percentage of green financing, which now accounts for 20% of our borrowings. Our leading position in terms of sustainability and our high percentage of environmentally-certified properties, 85%, makes it possible to double this.
A prominent seal of quality is the fact the Nordic Investment Bank (NIB) and the European Investment Bank (EIB) have chosen to finance two of our largest development projects, Sergelhuset in Stockholm and Platinan in Gothenburg, via green loans. Both the NIB and EIB evaluate meticulously before they make a decision to lend money. For example, the NIB only accepts certification in accordance with the strictest environment-classification systems, LEED and BREEAM.
Interest for green bonds in the Swedish market has essentially exploded. Vasakronan was the first company in the capital market to issue green bonds in 2013, and welcomes the increase in demand that entails favourable terms for our financing.
Recently, we tightened the framework for green bonds. Among many things, this mean that the environmental ambitions for the project was raised and it also enables existing properties to be financed with green bonds. The new framework was well received by the market, and was awarded the highest shading, Dark Green, by the Center for International Climate Research, CICERO.
We perceive many challenges on the horizon. One is the challenge posed by a climate changed by the increase in GHGs. If we are to maintain and raise the value of our properties, we have to adapt them to storms, downpours and heavy snowfall, all of which can impact infrastructure and potentially our customers’ property.
While this is a future that may not impact investment decisions taken today, it will one day. Therefore, we have to review the locations where we own property. Are any of these locations vulnerable to flooding, for example? And what long-term approach should we adopt for new construction projects?
Properties impact the environment throughout their lifecycle, from planning, construction and management to renovation and demolition. We are focusing on the areas where we have the most influence and where the actions will have the greatest impact. These consist of energy consumption, use of materials, waste, transportation and travel. The efforts are ongoing at all levels, in our own operations, at our customers and with our suppliers.
We are also involved in many contexts to promote positive development, for example with the Sweden Green Building Council and Byggvarubedömningen. Vasakronan was one of the initiators when both these organisations were formed. We also subscribe to the UN’s climate initiative Caring for Climate, Klimatpakten i Stockholm and Uppsala klimatprotokoll as well as many different research and development collaborations.
Properties devour energy. They account for almost 40% of society’s total energy consumption. This must be reduced. We realised this many years ago and set a target of reducing our energy consumption to half the industry average. This seemed almost impossible at the time, but at 47% below the industry average, we are now within a whisker of the target.
At Vasakronan, we are continuously testing new energy solutions. The installation of solar cells continues and we now have systems generating approximately 3,670 kW. These account for almost 3.5% of total property electricity. Other solar photovoltaic technologies will soon be in use, such as roofing tiles that have integrated electricity and thin film on glass. We have also tested battery energy storage to store the surplus from solar cell production. The technology is still too expensive but is expected to become competitive within a couple of years.
Geothermal energy solutions are yet another way to make energy consumption more efficient. The properties Sergelhuset in Stockholm and Triangeln in Malmö use aquifers, underground reservoirs of water, to heat and cool the properties.
We work together with our tenants to help them reduce their energy consumption. In 2010, we were the first in the sector to offer green leases, which means that we ensured the implementation of a number of tangible measures together with tenants. For example to reduce energy consumption and sort waste. Moreover, the tenants commit to choosing green electricity. Today, all our leases are green and measures that promote the environment are natural components.
Rapid technological advances create completely new opportunities, not only in terms of energy efficiency. Smart control systems and sensors mean that we can discover irregularities — such as ventilation that is not functioning as it should — and take action long before they become an issue for our tenants. To fully utilise the advances offered by technology in our cutting edge properties, we need to have an organisation that can capitalise on and manage the new opportunities.
Considerable quantities of material are used in our new construction and redevelopments. Materials that impact the environment when they are produced and transported. This is a major challenge. Reducing the amount of material and, to a greater extent, using renewable raw materials and recycled or reused material will deliver major environmental gains. For these reasons, as the first in our industry, we have started to measure material use in all our large projects. We check the type of material and how it is used, the respective percentage that is non-renewable and renewable, whether the raw material is recycled or virgin, and whether it is environmentally certified.
We also need to be sure that the materials we use do not contain hazardous substances that endanger people’s health or our ecosystem. For these reasons, we use Byggvarubedömningen, a non-profit organisation that provides data on the components of a building product and how it was produced. The goal is to promote the development of a non-toxic and healthy built environment.
When constructing the Hubben property, we identified our environmental impact by, among other things, requiring the project contractors to report their use of materials. You can read the report here. Only available in Swedish.
Wherever possible, we try to prevent any waste arising.
We try to reuse any waste that arises, for example by selling or donating. One example is the new Sergelhuset building that we are constructing in central Stockholm. When the interior and parts of the building were demolished, we saved as much as possible to sell on. A total of more than 40 tons of material were reused, including inner doors, laminated glass panels and ceiling lamps.
Paper, corrugated board, glass and glass packaging are just a few examples of materials that can be recycled and transformed into new products.
Combustible waste is a resource that can be used to recover energy and become electricity or heat. Organic waste can become biogas..
Waste that cannot be reused, recycled or used for energy recovery is taken care of, disposed of, in an environmentally correct manner.
4. TRANSPORTATION AND ECOSYSTEM SERVICES
At Vasakronan, we aim to reduce our climate impact from transportation to and from our construction projects. For this reason, we set stringent requirements that vehicles transporting materials and waste must use fossil-free fuel. We also require our suppliers to reduce the number of consignments. This can be achieved through consolidation solutions that reduce the number of vehicles that drive all the way to the site. This also reduces noise and congestion.
Freight consignments to and from city centres must also be reduced. This was the reason behind the “Love Your City” initiative, a partnership between Vasakronan, Ragn-Sells, Bring and the City of Stockholm. The objective is to establish urban consolidation centres in central Stockholm, and one is already in place at Klara Zenit. In this way, distribution of goods to stores can be coordinated using electric vehicles, which can also collect returns and some waste. In June 2019, the initiative was established in Malmö as well.
Few things remain as steadfast as a well-built building. And our tenants’ travel to and from work results in many journeys. We want to reduce this by facilitating for those choosing sustainable alternatives. Our offering includes electric vehicle charging stations and car pools as well as “Cycle & Service”, which offers secure storage, lockers, bicycle parts and repairs, and shower facilities. We are transforming garage space for cars and cellars into bicycle parking.
We must choose climate-smart solutions for our own business travel. Examples of how we do this include video conferencing, using rail instead of air travel, and phasing out vehicles that use fossil-based energy. Travelling in an environmentally friendly manner is a crucial part of reducing our own carbon dioxide emissions to zero.
Promoting nature’s services
Our environmental initiatives also encompass what happens outside our buildings. One major issue is the threat to biodiversity. It is therefore important to promote ecosystem services – in other words the services nature constantly provides for humanity.
When the natural world functions as it should, among other services, plants regulate the climate, and clean air and water, insects pollinate our crops, worms and bacteria make the soil fertile – all in mutual interaction. From an ecosystem in balance, humanity can extract recreation and food as well as commercial products and services.
Vasakronan is one of around 55 participants in the ecosystem services network, which forms part of the Swedish Environmental Protection Agency’s initiative. Our contributions include installing living walls, for example on the corner of Drottninggatan/Mäster Samuelsgatan in Stockholm, on Påvel Snickares gränd in Uppsala and on Kyrkogatan in Gothenburg. Living walls help manage surface water, clean pollution from the air, give off oxygen, contribute to biodiversity, reduce noise, keep facades cool in the summer and insulate against cold in the winter.
We have also created roof gardens, such as the one on Karlavägen in Stockholm. The 800 square metre terrace has become a verdant outdoor area with plant beds and beehives. It is a soothing, beautiful place, but the ambitions reach higher than that. The idea is that people will be able to come here to learn more about biodiversity, urban gardening and how this can contribute to a sustainable city.
Our equal treatment policy means that no one should experience discrimination. We are an inclusive company that leverages different skills and opinions. Our operations are characterised by diversity and is free from xenophobia and harassment. We want to reflect the communities in which we operate by increasing diversity, having an even gender balance, and increase the proportion of employees who have foreign backgrounds.
A healthy social environment is largely about treating each other fairly. Our internal code of conduct (only in Swedish) sets out our requirements. It encompasses employees, tenants, suppliers and other people who are affected by our business.
We are one of the drivers behind the UUA project (universal design of workplaces). Our goal is to start the process for tomorrow’s offices, which will comprise inclusive workplaces that leverage people’s differences and skills. Read more about the project here (only in Swedish).
We always strive to ensure our buildings and their surroundings are accessible to all people, whatever their circumstances. No one should be excluded.
It is important for everyone to feel safe and secure. Our customers want to ensure that their employees have a safe workplace and a safe journey to and from work. We regularly implement measures with this aim in and around our properties. These could entail reviewing alarms and installing entry systems, improving lighting in darker areas and pruning trees and bushes to create better visibility.
An important part of this work to build a safe city is creating a more lively environment during the evenings. In 2017, Vasakronan joined forces with the Swedish Property Federation to certify three areas in Gothenburg in accordance with the Purple Flag standard. The Purple Flag standard is a quality mark that has the purpose to improve safety, raccess, diversity and the physical environment.
People spend a large part of the day indoors. And buildings have a major impact on people’s health and well-being. Therefore, we strive to create healthy and attractive indoor environments and surroundings. This includes aspects such as good acoustics, lighting and air quality, but equally, an environment designed for movement and well-being.
Vasakronan’s vision is to create “future-proof cities for everyone, where people and companies thrive.” This means we get involved in important community issues, even if they are not directly associated with Vasakronan’s business. A prerequisite for our involvement is that we can make a difference and that our employees perceive it as relevant. Löparakademin, a non-profit organisation that supports young people in socially disadvantaged areas, is one such example. In this case, we contribute expertise and resources in various areas and also make a financial donation every year.
Another example is Mitt liv, which promotes a more inclusive society and advocates the value of diversity to the labour market. This collaboration has entailed, among other measures, a diversity course for all our Gothenburg-based employees along with mentorship and internship programmes.