As the largest owner and operator of retail parks in the UK, British Land is leading the transition to net zero carbon. This includes accelerating LED rollouts, collaborating with our customers to deliver sustainable fitouts, upgrading EPCs and introducing huge solar PV arrays. Here’s what a net zero retail park looks like in practice.

Glasgow Fort is one of around 20 retail parks where we’ve rolled out 100% LEDs in all public areas.

Retail locations are the heart of many communities, providing vital goods and services – and fuelling 13% of UK jobs (retail is the UK’s biggest private sector employer)ⁱ. The evidence is there that the retail park format is successful and how people like to shop.  

As we transition our entire portfolio to net zero carbon by 2030, retail parks are an important part of our pathway. Priorities include collaborating to make all spaces energy efficient, including landlord areas and customer stores, and sourcing 100% renewable energy, generating as much as possible on site.  

Decarbonising retail parks is typically harder than offices because they mainly comprise occupier-controlled stores, with only small areas under landlord control. We’ve already cut landlord-controlled intensity (Scopes 1-2) across our retail parks by 35% since 2020. We’re now focusing on engaging with customers to cut emissions associated with energy use in retail units. Whilst these are our Scope 3 emissions, for our customers, they are their Scopes 1-2, so collaboration is mutually beneficial. 

Reducing occupier-controlled emissions is all about collaboration

Engaging with customers to make their stores more efficient is our biggest area of focus, going forward. It’s encouraging to see customers with their own sustainability strategies pushing the boundaries on what ‘good’ looks like. 

We find green leases helpful in laying the foundations for good collaboration, starting conversations about what we can achieve together before customers even move in. We’ve been engaging with customers on green leases since 2008, when we worked with the Better Buildings Partnership to develop sector guidance. In recent years, we’ve continued to strengthen our approach, agreeing clauses that are mutually beneficial in sharing energy data and improving efficiency. We’re also playing our part in updating the BBP toolkit, with the new version soon to be released. 

Embodied carbon is often not talked about in a retail context, but we’re including this in our guidance on sustainable fitouts, balancing the reuse of materials for a circular economy with creating a premium product that attracts shoppers and visitors. Opportunities to decarbonise stores include installing efficient LED lights with a control system to respond to lighting levels, building management systems to optimise heating and cooling, removing gas for all electric systems, using refrigerants with lower global warming potential, and upgrading store fronts. Some leading stores are adopting smart technologies similar to those we’re rolling out in our office portfolio, to optimise store performance for energy efficiency and customer experience. 

Energy Performance Certificates (EPCs) are a useful indicator of the likely efficiency of a store, although they don’t directly correlate with actual operational performance, which is where we focus most. 45% of our retail portfolio was rated A or B at HY23 – up from 22% in FY22. By March 2024, we’ll have modelled pathways to EPC B for all remaining units and will be engaging with customers on opportunities. Whilst the proposed Minimum Energy Efficiency Standards (MEES) update remains outstanding, investor sentiment and customer requirements continue to drive the need for EPC ratings at B or above. 

Everything we’re doing in this space is interlinked – customer engagement, green leases and sustainable fitouts lead to positive EPC outcomes; in turn, these mean customers have more efficient stores and often lower running costs, and units that are compliant with MEES. We’re encouraged by recent collaborations with customers and new stores being delivered. We welcome further dialogue. 

Rolling out renewables 

I’m particularly excited about our plans to roll out solar PVs across our retail parks. We already have a strong track record of installing solar arrays on our shopping centres and are now looking to expand this good practice, leading our sector.

Many retail park landlords have been put off solar PV because roof space is typically in occupier control, through lease agreements. However, the feasibilities at our two pilot sites – Orbital in Swindon and Nugent in Orpington – have shown that there is a strong business case, for us and for customers.

Customers will benefit from reliable, good value, 100% renewable electricity generated on site – which is the highest quality of renewable energy – while we will generate income from supplying this energy. So, we’ll not only be supporting customers’ climate action, improving store EPC ratings and decarbonising our portfolio, but also adding a new income stream and improving asset value.

Grid applications for our two pilot sites are already approved and we have submitted planning applications. We’re now in discussion with our customers on power purchase agreements and taking the roof space back under landlord control, where needed.

Based on initial feasibility studies, as much as 50% of electricity used on retail parks could come from solar PVs. As customers shift to all-electric stores, this new electricity source will take us all a significant step closer to net zero.

If our pilot is successful, it could help unlock the huge potential of PVs on retail parks – across our portfolio and beyond. Our retail parks have rooftop capacity for approximately 200,000 sqm of solar PV – an area as big as 28 football pitches. If we can unlock this, it would add 38MWp of renewable capacity to our portfolio and generate more than 30 million kWh of clean energy for our customers every year. To give an idea of scale, this is enough electricity to power more than 11,000 UK homes for a year.

Doing everything we can in landlord areas

We audit our parks to create net zero pathways and then choose the most appropriate points to implement interventions. This is often at end of life, to reduce whole life carbon impact. We’re supported in doing this by the automated meter reading systems we been rolling out across our retail portfolio since 2014. 

Lighting typically offers the biggest opportunity to cut landlord-controlled emissions on retail parks. More than half of our retail parks are now 100% LED in public spaces and management offices, reducing landlord-controlled electricity use by up to 73%, cutting costs for customers and improving lighting quality for visitors. Even where we’ve installed LEDs, we still look for new opportunities – there’s a big difference between the latest LEDs, with their advanced control systems, and early LEDs. 

Greener Spaces

Through the Greener Spaces pillar of our sustainability strategy, we’ve also made good progress on waste management (diverting 99.9% of waste from landfill across our retail portfolio last year and recycling 58%) and water efficiency (reducing intensity by 54% on our retail parks). We’re now increasing attention on biodiversity and climate resilience. There’s always more to do – the opportunities are huge. 

We welcome conversations with customers who are keen to achieve their own climate goals. Together, we can accelerate progress: [email protected] 

ⁱ Knight Frank, ‘A Retail Renaissance – The Price of Change 2.0’ (2023)