Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Community Engagement
• Employee Well-being

Environmental Achievements

• 55% recycling rate of managed waste across our like-for-like portfolio
• 4.4% reduction in water usage across our whole managed portfolio
• Zero operational waste from managed properties sent to landfill

Social Achievements

• £250,000 Fitzrovia community investment fund created
• £2,950,695 community contributions via planning
• c£50,000 invested in formal staff training
• 8.6% employee turnover rate compared with national average of 12.7%

Governance Achievements

• Third-party assurance of sustainability figures
• Continued compliance with the UK Corporate Governance Code (with exceptions noted in the report)
• Board refreshment process continued

Climate Goals & Targets

Environmental Challenges

• Marginal increase in whole managed portfolio carbon footprint (1.8%) due to increased occupancy
• Increased energy intensity (1.3%) in like-for-like portfolio due to increased occupancy
• Difficulty meeting energy/carbon reduction targets

Mitigation Strategies

• New space designs (e.g., White Collar Factory) aiming to drive down carbon footprint
• Increased interaction with tenants to influence operational behavior
• Full review of management approach and implementation of measures to improve energy performance in 2013

Supply Chain Management

Responsible Procurement

• 24 days average invoice payment period

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: EPRA, Greenhouse Gas (GHG) Protocol, Carbon Reduction Commitment (CRC)

Sustainable Products & Innovation

• White Collar Factory concept

Awards & Recognition

• Silver award in EPRA Sustainability Reporting Awards
• Sector leader in GRESB 2012
• Developer of the year in New Energy & Cleantech Awards

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Designing and delivering buildings responsibly
• Managing our assets responsibly
• Creating value in the community
• Engaging and developing our employees

Environmental Achievements

• 6% carbon reduction in like-for-like portfolio
• 6% energy reduction in total managed portfolio
• 5% increase in waste recycling rate (from 68% to 73%)
• 98% diversion rate of construction and demolition waste from landfill

Social Achievements

• Over £110,000 invested in community fund in 2016
• 234 volunteering hours by staff
• Created a third youth employment opportunity
• £65,000 spent on staff training

Governance Achievements

• Launched Sustainability Supply Chain Standard for development and operational supply base

Climate Goals & Targets

Environmental Challenges

• Maintaining pace with international developments and evolving climate change risks and opportunities
• Expanding the boundary of embodied carbon assessments on all assets towards a cradle-to-grave assessment
• Developing an even more comprehensive picture of the entire carbon footprint, including Scope 3 emissions from the supply chain

Mitigation Strategies

• Developed a comprehensive management strategy underpinned by a challenging science-based target
• Commissioned Arup to assess the impact of COP21 agreement and create an appropriate target
• Set a target of a reduction in carbon emissions intensity of 36% by 2022 and 55% by 2027
• Set an energy intensity reduction target of 10% by 2022 and 16% by 2027
• Introduced tougher energy requirements for new developments
• Reviewed/updated all Building Sustainability Plans

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainability Supply Chain Standard
• Responsible sourcing of materials (e.g., FSC or PEFC certified timber)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 core requirements, EPRA Best Practices Recommendations on Sustainability Reporting

Certifications: BREEAM, LEED

Third-party Assurance: Deloitte LLP

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• GRESB 5-star rating
• EPRA Gold award for sustainability reporting
• 12th place in Corporate Knights' Global 100 most sustainable companies

Environmental Metrics

ESG Focus Areas

• Designing and delivering buildings responsibly
• Managing our assets responsibly
• Creating value in the community and for our wider stakeholders
• Setting the highest standards of health and safety
• Engaging and developing our employees
• Protecting human rights
• Setting the highest standards of corporate governance

Environmental Achievements

• 4% reduction in our like-for-like portfolio energy consumption
• 9% reduction in like-for-like carbon emissions (tCO2e/m2)
• 76% waste recycling rate in our like-for-like portfolio
• 44% reduction in like-for-like carbon emissions compared to 2013 baseline

Social Achievements

• £115k invested across 19 projects through our Community Fund
• Over £280k in corporate and charitable giving
• 94% response rate for our third employee survey, with 96% of respondents saying they are ‘proud to work for Derwent London’
• 87% employee retention rate

Governance Achievements

• First UK REIT to launch revolving credit facility with £300m ‘green’ tranche
• Joined the Better Buildings Partnership signing up to their Climate Change Commitment

Climate Goals & Targets

Environmental Challenges

• Reducing energy consumption outside our direct control
• Addressing the energy performance gap of our buildings
• Reducing the embodied carbon of new developments
• Procuring all electricity and gas from renewable sources
• Managing residual emissions that cannot be eliminated

Mitigation Strategies

• Engaging with occupiers to reduce energy consumption
• Replacing gas boilers with all-electric alternatives
• Supporting the BBP’s Design for Performance initiative
• Setting embodied carbon reduction targets
• Specifying electric heating and cooling systems
• Procuring 100% renewable energy (electricity and gas)
• Investing in self-generation of renewable energy
• Using verified carbon offsets

Supply Chain Management

Supplier Audits: Over 90% of respondents operating detailed policies to address issues such as anti-bribery and corruption

Responsible Procurement

• Supply Chain Sustainability Standard

Climate-Related Risks & Opportunities

Physical Risks

• Increasing temperatures
• Physical stresses on buildings

Transition Risks

• Regulatory changes
• Occupier demand for more efficient buildings

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards, EPRA Best Practices Recommendations on Sustainability Reporting, TCFD, UN Sustainable Development Goals

Certifications: BREEAM, LEED

Third-party Assurance: Deloitte LLP

UN Sustainable Development Goals

• Goal 4: Quality education
• Goal 5: Gender equality
• Goal 7: Affordable and clean energy
• Goal 11: Sustainable cities and communities
• Goal 12: Responsible consumption and production
• Goal 13: Climate action

Alignment with UN SDGs through community investment, gender equality initiatives, renewable energy targets, sustainable building practices, and climate action plans.

Awards & Recognition

• GRESB Greenstar status
• CDP Management B rating
• EPRA Sustainability Reporting Awards – Gold Award

Environmental Metrics

ESG Focus Areas

• Resource efficiency
• Health and safety
• Employees
• Community
• Materials
• Supplier engagement
• Customer engagement
• Human rights
• Business conduct

Environmental Achievements

• 32% reduction in total managed portfolio carbon emissions
• 23% reduction in total managed portfolio energy consumption
• Delivered our first all-electric and net zero carbon development – 80 Charlotte Street
• Completed the development of our early-stage embodied carbon tool

Social Achievements

• Increased community and sponsorship donations by 179% to £1.1m
• Expanded the remit of our Community Fund to allow groups to apply for critical core financial assistance during the pandemic
• Launched a diversity and inclusion working group

Governance Achievements

• Published a pathway to becoming a net zero carbon business by 2030
• Further reduced average payment days to 20 days in 2020
• HMRC reaffirmed our ‘low-risk’ tax status until 2022

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic impact on energy consumption and carbon emissions
• Supply chain disruptions
• Climate change related risks (transition and physical)

Mitigation Strategies

• Introduced different operating procedures for ventilation and air conditioning
• Collaborated with occupiers to deploy localised strategies using BMS systems
• Developed Net Zero Carbon Pathway
• Engaged Willis Towers Watson to investigate climate-related risks
• Implemented Covid-19 site operating procedures across construction sites

Supply Chain Management

Responsible Procurement

• Supply Chain Sustainability Standard

Climate-Related Risks & Opportunities

Physical Risks

• Storms
• Heat stress
• Subsidence
• Flooding

Transition Risks

• Stricter carbon legislation
• Access to capital
• Change in customer demands
• Pricing of GHG emissions
• Cost of raw materials
• Emissions offsets

Opportunities

• Demand for lower carbon assets
• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards, EPRA Best Practices Recommendations on Sustainability Reporting, TCFD

Certifications: BREEAM, LEED, NABERS UK

Third-party Assurance: Deloitte LLP

UN Sustainable Development Goals

• Goal 4
• Goal 5
• Goal 7
• Goal 11
• Goal 12
• Goal 13

Sustainable Products & Innovation

• All-electric heating and cooling systems
• Low embodied carbon materials

Awards & Recognition

• GRESB Greenstar status with a score of 80
• CDP Management B rating
• EPRA Sustainability Reporting Awards 2020 – Gold Award
• FTSE4Good
• ISS Oekom prime

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Value
• Diversity & Inclusion
• Health & Safety
• Human Rights
• Corporate Governance
• Stakeholder Engagement

Environmental Achievements

• Energy intensity of the managed portfolio reduced 4% to 123 kWh/sqm (2021: 128 kWh/sqm). This is ahead of our 1.5°C aligned target for the fourth year in a row, which for 2022 was 139 kWh/sqm.
• Three major net zero carbon projects completed: Soho Place W1, The Featherstone Building EC1 and Francis House SW1. Achieved embodied carbon target of ≤600 kgCO2e/sqm.
• Resolution to grant planning consent received for a c.100 acre, 18.4MW solar park on part of our Scottish land. Expected to generate electricity equivalent to more than 40% of the needs of our managed London portfolio.

Social Achievements

• Annual community fund distributions increased 20% to £120,000.
• 91% of respondents to our 2022 internal ‘pulse survey’ agreed they are ‘proud to work for Derwent London’.
• One-off cost of living payment to eligible employees.

Governance Achievements

• Refreshed Vision, Purpose and Values.
• Developed a social value framework (to be completed and implemented in 2023).
• Continued mandatory compliance training programme for all employees (including Directors).

Climate Goals & Targets

Environmental Challenges

• Global events in 2022 caused a marked increase in uncertainty and higher inflation.
• Higher cost of capital leading to a fall in capital values.
• Supply chain disruptions due to the war in Ukraine and global events.
• Rising energy costs impacting tenants and the company's ability to manage energy tariffs.
• Increased cost of raw materials used in construction.
• Stringent planning requirements for demolition versus refurbishment.
• Occupier demand for amenity-rich, sustainable space.

Mitigation Strategies

• Disciplined capital recycling through strategic disposals (£206m in 2022).
• Focus on designing and curating amenity-rich, ‘long-life, low carbon, intelligent’ offices.
• Active asset management to retain and maximise income.
• Securing pre-lets on development projects.
• Investing in energy efficiency measures across the managed portfolio.
• Exploring lower carbon materials and methods of construction.
• Engaging with occupiers to support their sustainability aspirations.
• Developing a social value framework.
• Implementing a phased programme of works to upgrade EPC ratings.

Supply Chain Management

Responsible Procurement

• Supply Chain Responsibility Standard
• Prompt Payment Code
• Modern Slavery Act compliance

Climate-Related Risks & Opportunities

Physical Risks

• Windstorm
• Flooding
• Drought
• Subsidence

Transition Risks

• EPC rating requirements
• Emission offsets
• Planning requirements
• Cost of raw materials

Opportunities

• Improving buildings to meet stringent EPC requirements
• Extending carbon removal projects on Scottish portfolio
• Developing a tradable asset base from carbon offsets

Reporting Standards

Frameworks Used: TCFD, GRI, EPRA BPR, UN SDGs, SBTi

Certifications: BREEAM, LEED, EPC, ISO 14001

Third-party Assurance: Deloitte LLP

UN Sustainable Development Goals

• Goal 4
• Goal 5
• Goal 7
• Goal 11
• Goal 12
• Goal 13

See page 68 for details on how initiatives contribute to these goals.

Sustainable Products & Innovation

• 'Furnished + Flexible' workspace

Awards & Recognition

• EPRA Sustainability Reporting Award 2022 – Gold award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Energy intensity down 10% since 2019 on our journey to net zero carbon
• 99% of energy on renewable tariffs in 2023
• Received full planning consent for a c.100 acre, 18.4 MW solar park at Lochfaulds
• Scope 3, Category 2 (Capital Goods) footprint reduced to 799 tCO2e from 32,869 tCO2e in 2022
• Recycling rate across the portfolio improved to 71% in 2023 from 68% in 2022

Social Achievements

• Published our Social Value Strategic Framework
• Funded refurbishment of a staff room at UCLH
• £464k Community fund & sponsorship donations committed in 2023
• Won three employer awards
• Achieved a 94% response rate to our 2023 employee survey, demonstrating our open culture. The results indicate a high satisfaction rate: 88% Overall employee satisfaction

Governance Achievements

• Publication of climate-related financial disclosures consistent with the TCFD Recommendations
• Revised the long-term remuneration targets under the Performance Share Plans to include embodied carbon and energy intensity reduction
• HMRC reaffirmed the Group’s low-risk status across all tax regimes following the Business Risk Review+
• Published our latest Modern Slavery Statement
• Continued mandatory compliance training for all employees (including the Board)

Climate Goals & Targets

Environmental Challenges

• Water consumption was 29% higher in 2023 compared to 2022
• Managed portfolio energy intensity increased 5% in 2023
• ‘Operational’ carbon footprint up 27% year-on-year (location-based; excludes embodied carbon)
• Increase in RIDDOR accident frequency rate (AFR) on our developments

Mitigation Strategies

• Energy saving opportunities identified and implemented across the portfolio
• Significant occupier engagement to reduce energy usage
• EPC upgrade works are factored into all refurbishment projects
• Ongoing occupier engagement to further reduce energy consumption
• The H&S team continue to work closely with the Development team to improve visibility and identification of design elements which could have H&S risk implications

Supply Chain Management

Supplier Audits: All suppliers with whom we spend more than £20,000 per annum are required to provide evidence of how they are complying with our Supply Chain Responsibility Standard

Responsible Procurement

• Supply Chain Responsibility Standard

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, TCFD, SECR, UN SDGs

Certifications: Null

Third-party Assurance: Deloitte LLP

UN Sustainable Development Goals

• 4.4
• 4.a
• 5.1
• 5.5
• 7.2
• 7.3
• 11.7
• 12.5
• 12.6
• 13.2

See page 59 of the report for details on how initiatives contribute to these goals.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Sunday Times – Best Places to Work 2023
• EG Awards – Employer of the Year
• Westminster Business Council Awards – Employer of the Year