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Capco takes a responsible and forward-looking approach to environmental issues and the principles of sustainability. Our ESC strategy is underpinned by four pillars as shown here. The first three pillars specifically address climate-related risk and opportunities, and include our commitment to Net Zero Carbon by 2030.

Tackle climate change

Capco recognises the urgent responsibility to tackle climate change and this is reflected in our 2030 Net Zero Carbon target. We have a strong track record of restoring and celebrating the heritage of the Covent Garden estate through considered refurbishments and developments.

Tackling climate change in an urban environment must also prioritise natural capital as well as greenhouse gas emissions. We will continue to prioritise both nature-based solutions and biodiversity following our first ecological surveys of the estate during 2021. Our next steps are principally set out in the Net Zero Pathway, which can be accessed here and in the 2022 commitments we have set in our 2021 Annual Report, which can be downloaded here. We will focus on:

  • communication and engagement with stakeholders, including suppliers and customers;
  • further integrating our Net Zero approach across all aspects of our business, including leasing, customer selection, development, property management, marketing, events and future consideration of sustainability-linked financing; and
  • developing our staff capability in this area through training and development programmes.

We continue to embed sustainable practices and make year-on-year improvements in all areas of our performance. We are proud of our passionate and talented people who will deliver on our net zero ambition through proactive engagement and mutual understanding to create and maintain a vibrant, thriving environment in which Covent Garden and all our stakeholders can flourish.

Task Force on Climate-Related Financial Disclosures (“TCFD”) 

Following our first response to the TCFD recommendations in 2020, Capco became a formal TCFD supporter and we continue to broaden and deepen our understanding of climate-related risks and opportunities for the business under the direction of the Company’s ESC Committees. Our TCFD response for the financial year ended 31 December 2021 can be downloaded below. This is also included in our 2021 Annual Report.

 

 

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Sustainability Indices

Our participation in external sustainability indices and benchmarks helps us monitor our performance and identify opportunities for improvement. We are proud to have achieved our forth consecutive Gold award, for our 2021 EPRA Sustainability Report, for reporting in line with the EPRA Sustainability Best Practice Recommendations for Reporting. Capco’s 2021 EPRA Sustainability Report, Gold award, can be downloaded below.

EPRA SUSTAINABILITY

REPORT 2021

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ERPA_2020

During 2022, we increased our score in the GRESB Standing Investments Assessments to 68 and Two Green Stars. Capco's development component in the portfolio achieved a GRESB score of 85 and Three Green Stars. We increased our CDP Rating to B and we are aiming to improve these scores through our actions this year. We continue to report under FTSE4GOOD and S&P Global. 

Carbon footprint and energy management

Our 2019 carbon footprint was published in our Net Zero Carbon Pathway. We have used the same GHG protocol methodology to calculate our 2021 footprint which is published on page 73 of our 2021 Annual Report. The landlord (Scope 1 & 2) emissions over which we have direct operational control have fallen by c.30 per cent compared to the 2019 baseline, driven by disposals and like-for-like Covent Garden GHG emissions falling by 12.8 per cent compared to 2019. While the like-for-like movement partly reflects the impact of COVID-19, the reductions are also a consequence of continued intervention with building efficiency measures. The overall reduction in the carbon footprint is driven by a significant fall in Scope 3 emissions, particularly in relation to capital goods, where the baseline year 2019 included the completion of the Lillie Square development. Given the nature of long-term capital investment in our assets, it is expected that this element of the footprint will vary with the volume of works completed in any given financial year, but with a long-term downward trend on an absolute and per m2 basis. We will continue to increase the amount of data we capture to reduce the proportion of estimation required, as well as enhancing transparency over time.

As set out in our Net Zero Carbon Pathway, our approach to offsetting includes collaborating on local projects, particularly those which aim to convert more carbon intensive energy such as gas to electricity. In this context, we have continued our long-term engagement with Westminster City Council to replace gas street lighting and upgrade electric lights to LED lighting. Approximately 60 per cent of street lighting is now LED across the estate. We continue to work with our stakeholders to convert the remaining gas powered lights on the estate to LED lighting consistent with the heritage nature of the area.

We are committed to transparent environmental reporting of the estate and the graph on page 75 of our 2021 Annual Report sets out the current EPC performance of our estate. The Minimum Energy Efficiency Standards (“MEES”) regulations set out minimum level certification required for all new lettings on an accelerating basis from 2023. Our objective is to improve EPC performance whenever we undertake any works to our assets, and we have set accelerated targets around this in our Net Zero Carbon Pathway. Our green lease structures also ensure that occupiers do not undertake works which will reduce the rating of the individual unit. A total of 319 demises are required to be assessed for EPC purposes. This excludes residential properties where the rental level is below the MEES threshold (primarily long leasehold) as well as other units including outdoor barrows, storage, electric substation and other ancillary units. Currently 94 per cent of units are assessed at level A-D, with a small number of the remaining units either at level E or in development. Our long-term management of EPC performance means we are well-placed to meet our targets ahead of statutory regulation timelines.

We continue to address these units as part of our ongoing capital investment programme in the estate. Approximately 90 per cent of landlord areas in Covent Garden now use LED lighting. We continue to roll out smart metering to best prioritise and target energy efficiency initiatives.

Greenhouse gas emissions including Streamlined Energy and Carbon Reporting (“SECR”) 

Capco engaged Carbon Footprint Limited to provide independent verification of the calculation of 2021 GHG emissions assertion, in accordance with the industry recognised standard ISO 14064-3.

A copy of our Greenhouse Gas Assertion and Verification Statement for 2021 can be found here.

We continue to reflect progress across all reported SECR measures, other than market-based Scope 2 emissions. These have risen where previously let space is returned to space with a higher emission factor tariff than our own renewable tariffs. Given the nature of tenant electricity procurement, some variability in market-based Scope 2 emissions is expected over time. Our verification process has additionally included a review of our Scope 3 emissions given the high proportion of our overall carbon footprint which these make up.

Further information on the methodology used to calculate GHG emissions can be found in our 2021 Annual Report, which is accessible here.

Waste and water management

We continue to work to raise awareness of recycling opportunities across the estate to support our aim of improving recycling rates across the Covent Garden portfolio, in addition to the two food waste recycling facilities on the estate. In partnership with our waste contractor, Veolia, and one of our occupiers in the Market Building, we have instigated a waste trial aimed at reducing overall waste volumes, increasing the proportion of waste recycled and reducing the amount sent to the “energy from waste” plant. We continue to divert 100 per cent of non-hazardous waste from the Covent Garden Market Building from landfill. Additionally, the upcoming launch of our Covent Garden Community Charter aims to further reduce food waste as well as addressing waste delivery consolidation across Covent Garden.

Within our own offices, we continue to raise awareness of recycling and all excess IT or furniture equipment continues to be diverted for refurbishment or re-use through our charitable partners. We continue to monitor water usage across the assets we control and have incorporated water-efficient appliances and fittings into our refurbishment and development projects. As with energy efficiency, COVID-19 has undoubtedly had an impact on water usage, nevertheless, water usage over the last two years has fallen on average by more than 25 per cent. We have now identified an opportunity for rainwater harvesting using existing flood mitigation measures and are using peatfree compost in our planting which significantly improves water retention and consequently reduces watering requirement. No fines or penalties related to non-compliant actions that harmed the environment were incurred by Capco during the most recent financial year.

Carbon offset

Capco’s Net Zero Carbon commitment is predicated on reducing emissions as far as possible, and then offsetting the residual emissions. For the first time this year, Capco will fully offset the Scope 1 & 2 emissions arising from real estate activities totalling 1,016 tCO2e. In addition, we will continue to offset our business travel. Our offsets will be nature-based, remove incremental atmospheric carbon and provide long-term carbon storage solutions. During 2022, we will publish our carbon offsetting policy which is a critical part of our activities to reach Net Zero Carbon by 2030.

Responsible development

Capco’s Sustainability Framework for our projects and developments can be downloaded below:

OUR SUSTAINABILITY

FRAMEWORK

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CAPCO_Sustainability_framework

In addition to the above Framework, our Net Zero Carbon Pathway sets clear short and medium-term embodied carbon targets to reach our Net Zero Carbon commitment by 2030. We will refresh our framework to align with these targets, and now target an EPC B rating on all developments where heritage buildings allow, as well as a minimum SKA level of ‘Silver’ on all major projects and refurbishments. We have set an internal carbon price, currently £95 per tonne to align with the 2021 London Plan and will continue to review building certification to increase the proportion and level of certification across the estate.

Given relatively limited capital activity across the estate, there were two completed projects in the period, an office refurbishment on King Street which achieved a SKA Silver certification and improved EPC from E to C, and a restaurant refurbishment on Maiden Lane which achieved a SKA Silver and EPC C rating. We continue to explore how we can drive EPC performance in heritage buildings.

Capco remains an active member of the UK Green Building Council.

Improve air quality

Capco continues to support air quality, prioritising cleaner air through reduced numbers of vehicle movements and use of cleaner vehicles. Capco has consistently sought to introduce additional pedestrian streets across the Covent Garden districts since 2006. Following the introduction of additional al fresco seating in 2021, Capco has continued to work actively with Westminster City Council to launch the recently implemented Covent Garden Neighbourhood Traffic Management Scheme. We support and manage the scheme through our operational teams. Extensive greening has also been undertaken to improve the pedestrianised environment. Plant species are chosen to maximise their potential to improve air quality. We are working with our neighbours and Westminster City Council to explore further ways to reduce service vehicle traffic through delivery and waste consolidation and both themes will feature on launch of our Covent Garden Community Charter.

We continue to explore ways to improve access to universal electric vehicle charging points to maximise their use, particularly by commercial vehicles. We are conducting a pilot of new indoor air quality sensors which in addition to the usual humidity, carbon dioxide and temperature also monitor particulates and volatile organic compounds (“VOCs”). The sensors may be introduced elsewhere across the estate should the pilot be successful.

Drive innovation and change

Creativity and innovation are at the heart of Capco’s business and we have used this in our approach to greening and on a number of our developments. During 2021, we secured planning consent to trial photovoltaic tiles within the conservation area on King Street. We also launched our first farm initiative which uses hydroponic towers made from recycled ocean plastic to grow herbs and salad within a retail unit. The growing process uses up to 95 per cent less water than traditional planting and growing food close to where it is consumed greatly reduces the “farm to fork” distance and associated carbon. The produce is primarily distributed to our community partners. We will continue to seek out opportunities to partner with third parties to trial sustainability technology for the built environment while recognising that our heritage buildings are long-term carbon stores that should be celebrated. We have a proud history of working with universities and academics, and are actively exploring an intern programme with local universities. Such partnerships will continue to be considered in order to champion change.

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People

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People are key to our success. We aim to develop careers by promoting talented individuals to positions of leadership.