Natural capital: environmental impact

Highlights

  • 78% of waste recycled
  • Cost savings of R24 million
  • Third submission to CDP on carbon emissions
  • Third participation in GRESB

As a landlord, our business has a low environmental impact, but we aim to further reduce this in daily operations. The execution, reporting and review of our environmental policy are monitored regularly by management and annually by the social and ethics committee.

After identifying the most relevant environmental impacts of our operations — specifically water, energy and waste – the group introduced an environmental strategy in 2014 (see below). This strategy explains how our approach is informed by best practice, proven methods, ease of implementation, and the benefit and cost of retrofitting green design principles to existing buildings. Identified opportunities include lower operating costs, reduced liability and risk of higher utility costs.

Our environmental strategy illustrates how Hyprop mitigates related impacts where possible and proactively manages natural resources.

Targets

International benchmarking

For the third year, Hyprop voluntarily participated in two global benchmarking programmes, illustrating our commitment to ensuring best practice is embedded throughout our group for the benefit of all stakeholders:

  • CDP is acknowledged as the worldwide standard for environmental carbon reporting. This is an international non-profit organisation providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information in building sustainable economies
  • GRESB is an industry-driven organisation that assesses the sustainability performance of global real estate portfolios (public, private and direct). It is used by institutional investors to improve the sustainability performance of their portfolios, and the global property sector.

Fines

Hyprop incurred no fines for non-compliance with environmental laws and regulations during the year.

Key environmental projects completed in 2016

We completed four projects costing R8,9 million, focused on energy-efficient lighting to reduce both electricity consumption and maintenance costs.

Phase 2 of our solar photovoltaic (PV) plant was installed on Clearwater Mall’s parking roof (completed in August 2015). The total size of the plant (phase 1 and 2) is 1 500kWh at peak, with generating capacity of 2,5GWh per annum.

Energy-efficiency initiatives

A large portion of Hyprop’s total operational spend in any period is on electricity (mostly consumed by tenants), making energy efficiency a financial imperative. We are implementing a range of energy-efficient solutions to better manage costs for the group and our tenants, improve our environmental performance and reach our targets.

Total electrical consumption 2016   2015  
Direct non-renewable energy consumption (GJ*), i.e. from diesel burnt 4 704   5 609  
Direct renewable energy consumption (GJ) from solar PV 5 297   1 839  
Indirect energy consumption (GJ), i.e. from electricity consumed 82 139   85 538  
Indirect energy sold (GJ), i.e. electricity recovered from tenants 680 653   713 627  
Electricity consumption (MWh) 274 605 343   287 066 328  
Energy consumption (GJ) — calculated 762 793   797 406  

* Gigajoules

To better monitor the effectiveness of these initiatives and year-on-year consumption patterns, we began calculating our energy use intensity in 2013.


  2016   2015   2014  
Energy use intensity (GJ/m2) 1,07   1,27   1,31  

Kilowatt hours per occupied space (m2) 2016   2015   % change  
Retail 353   357   (1,13)  
Office 268   250   26,4  

Determining our carbon footprint

To establish an accurate baseline, we determined the group’s scope 1 and 2 carbon footprint using the UK Department for Environment, Food and Rural Affairs (Defra) voluntary reporting guidelines and the revised corporate accounting and reporting standard of the Greenhouse Gas Protocol, the most widely used international tool for government and business leaders to understand, quantify and manage greenhouse gas (GHG) emissions.

Hyprop participated in the CDP for the third time, submitting our carbon footprint for the 12 months to June 2016. KPMG independently audited our 2016 submission, Hyprop achieved an A-score (based on the new scoring chart which has more emphasis on actions to mitigate climate change than just reporting on carbon footprint). This is considered above average.

Hyprop’s carbon disclosure

Total carbon emissions (tonnes of carbon dioxide equivalents, CO2e) — calculated 2016   2015  
Total carbon emissions include the following mix: 289 939   296 770  
Scope 1** 7 096   3 260  
Scope 2** 30 457   31 925  
Scope 3** 252 386   261 585  
Average volume of carbon emissions (scope 1 and 2) per hour worked (tonnes CO2e/HW) 0,085   0,085  
** Scope 1: all direct GHG emissions
  Scope 2: indirect GHG emissions from consuming purchased electricity, heat or steam (scope 3 covers other indirect emissions, which for Hyprop are calculated as kWh purchased from the supply authority and resold to tenants)
  Scope 3: includes the increase in scope 3 emissions that is tenant driven. All our sites have bulk meters that measure total kWh consumed. Each tenant has a sub-meter that registers direct electrical consumption. Where tenants have dedicated AC units, 100% of electrical consumption is recovered. Where they share an AC system, they pay a pro-rata share of the total area served by th

Carbon tax

This proposed tax is based on carbon emissions, with organisations taxed on their emissions as measured in carbon dioxide (CO2). The tax is expected to be phased in from 2017 to help South Africa reduce its carbon footprint. The mooted figure is R120/tonne of CO2, with a 40% scale for the first year. This is currently envisaged as an additional surcharge on each kWh consumed and equates to 12 cents per kWh.

Based on current advice from KPMG services (climate change and sustainability division), Hyprop is not liable for any direct carbon tax at this stage.

Water

We are investigating all feasible opportunities to reduce water consumption while improving our measurement and monitoring standards. This includes installing water-efficient equipment.

At existing properties, we rely on close co-operation with tenants and customers to reduce water consumption. At new developments and in the case of renovations and upgrades, efficiency is a criteria in choosing technical equipment, for example (toilets, taps, and cooling systems).

Bulk water consumption is monitored daily at centres to identify unusual consumption patterns that might indicate leaks.

Water measures
2016   2015   % change  
Total water consumption (kilolitres (kℓ)) 1 037 011   1 123 687   (7,7)  
Average volume of water consumed per hour worked (ℓ/HW) 2 349   2 664   (10,3)  
Target for water consumption, or reduction, against a specific denominator (ℓ/HW) 2 398   2 618   (10,0)  
Retail: kℓ per occupied space (m2) 1,15   1,7   (32,3)  
Office: kℓ per occupied space (m2) 0,97   0,32   203,1  
Total: kℓ per occupied space (m2) 1,31   1,6   (18,1)  

Water intensity
2016   2015   2014  
Water use intensity (kℓ per occupied space (m2)) 1,3   1,6   1,4  

Waste

Our waste management approach is designed to maximise recycling, minimise disposal to landfill and comply with legislation. Tenants are regularly informed about on-site waste management systems, and Canal Walk and Clearwater Mall have public recycling stations. Suitable waste segregation facilities are in place at all centres.

For development projects, we adhere to all applicable regulations and consider best practice in optimising the environmental quality of our construction sites. Waste generated by construction is disposed of in line with responsible management plans.

In 2016, Hyprop recycled 78% of total waste, up from 75% in 2015. While higher in percentage terms, lower group volumes reflect greater individual recycling efforts from our tenants.

Waste 2016   2015*   2014*  
Total mass of non-hazardous waste disposed (tonnes (t)) 5 646   6 165   6 362  
Total mass of hazardous waste disposed (t) 43   34   35  
Total mass of waste sent for recycling (t) 2 998   2 757   3 154  
Waste sent for recycling (%) 34,5   30,8   33,0  

* Numbers updated for comparison with 2016

Recycling 2016   2015*   2014*  
Number of loads ordered 7 293   6 790   6 469  
Quantity of units collected (t) 68 166   64 240   83 619  
Recycled (volume) (%) 78   75   67  
Recycled (m3) 64 861   60 033   64 655  

* Numbers updated for comparison with 2016

Environmental sensitivity

Canal Walk and Willowbridge are in biodiversity-rich areas:

  • Canal Walk is part of the greater Century City precinct, which is in a national wetland conservation area, Intaka Island. Intaka is an award-winning 16-hectare conservation area, rich in birdlife and indigenous plants. The precinct has an environmental management plan to which Canal Walk adheres. In terms of the plan, no sewerage, fertilisers, herbicides or chemicals are discharged into canals that run through the precinct. Only biodegradable cleaning products are used for parking decks, walkways and walls to minimise water pollution. In addition, Hyprop contributes financially to the environmental management plan
  • Willowbridge is next to the Elsiekraal River and adheres to the environmental management plan set by the council to guard against water pollution.

Climate change

We have formally assessed the risks and opportunities presented by climate change as part of our annual submission to CDP and group risk management process. The key direct risks lie in:

  • Change in temperature extremes — higher temperatures mean air-conditioning equipment will not cope in peak summer
  • Sea-level rise — danger of flooding coastal centres, notably Canal Walk
  • Change in rainfall extremes — extreme rainfall can lead to increased leaks with damage to tenant and Hyprop property.

Current energy and carbon emission savings initiatives

INITIATIVE   OBJECTIVE   PROGRESS/CURRENT ACTIVITIES

At Clearwater Mall, phase 2 PV plant increased to 1 500kWh and commissioned August 2015

 

Reduce carbon emissions and reliance on the grid

 

Total energy produced by phase 1 and 2 from 1 July 2015 to end April 2016 is 1,9GWh

Capital replacement programme

 

Ensures capital equipment at the end of its lifecycle is replaced with energy-efficient equipment against the following criteria: non-ozone-depleting refrigerant gas; reverse cycle heating instead of electrical element heating; and performance co-efficient 3,5 or better

 

All capital replacements are approved by the national technical manager

At Somerset Mall, three package units were replaced in the review period using non-ozone-depleting R410 refrigerant and with unit performance co-efficients of 3,6. At Canal Walk, only one-third of planned units (32 units) were replaced with R410 refrigerant and energy-efficient inverter units. The balance was rolled over to FY17.

Modify thermostat set points and supply temperature for chiller water

 

Lower energy costs in winter and summer

 

Building management systems upgraded at CapeGate and Somerset Mall

Variable speed drives (VSDs) for heating, ventilation and AC systems

 

Match speed to required output to reduce consumption

 

Two faulty VSD drives replaced at CapeGate. VSD drives installed where practical

LED lighting and occupancy sensors

 

Improve lamp life and reduce required power factor correction

 

LED outside parking lighting installed at Woodlands Boulevard and Atterbury Value Mart

Implement preventive maintenance programmes on AC equipment

 

Ensure optimal operation of equipment

 

National service level agreement signed with third party for seven sites. Regional agreements signed for Pretoria sites. Remaining sites have signed agreements with local contractor or agent. All sites now covered by service level agreements

Peak energy demand reduction

 

Reduce power consumption in peak periods (premium tariff) and avoid expensive peaks, reducing the cost of consumption

 

Solar PV at Clearwater has reduced peak demand from 8 200kVA to under 7 000kVA. All power factor units serviced under contract, reducing kVA


Water efficiency initiatives

The table below highlights ongoing opportunities to manage water more efficiently.

INITIATIVE   OBJECTIVE   CURRENT ACTIVITIES   PROGRESS

Smart metering

 

Improve measuring and monitoring of water consumption and identify leaks from unusual flow patterns

 

Anomalies immediately flagged, limiting risk and consequential loss Accurately tracking consumption patterns optimises financial benefits of time-of-use tariff
Balancing sub-meters back to bulk meter at all times to flag any bypassing

 

Bulk check meters installed at certain sites

Fire system water consump

 

Identify leaks and illegal use of water

 

Save water and avoid abuse of infrastructure

 

All buildings monitored