In the fifth episode of Series Three, Helen Drury, Head of Sustainability at Tritax Group, discusses how sustainability in the industrial property sphere is more than just installing solar panels on the roof.
Helen highlights the problem of grid grab and balancing energy demands and also highlights some of the ways that the sector can provide social value to their local community.
Tritax is a logistics real estate fund manager focused on delivering sustainable, long-term income and capital growth through investments aligned with structural change.
Holly: Hello and welcome back to the Take 10 with Collier's podcast. I'm your host, Holly Brown, Head of Client Strategy here at Colliers. On series 3 of the podcast, we are talking net zero carbon and all things ESG. Today's guest is going to be busting some myths around the environmental contribution of industrial and logistics and telling us how big boxes really can make a big impact. Today's guest is Helen Drury Sustainability Lead at Tritax.
Helen's passion for sustainability started right from her university days at Manchester where she read environmental management. Her career has seen her take on roles in sustainability and CSR across the retail space including Revo, Intu and Virgin. And Helen is now the sustainability leader at Tritax where she's responsible for all things ESG and sustainability across Tritax's £5 billion portfolio. Helen, welcome to the podcast.
Helen: Hi, how do you do? Thanks for having me.
Holly: So Helen, I just wanted to start straight up by busting one of the big myths about industrial. Is it just as simple as putting solar panels on the roof?
Helen: Well, that is a large part of it, but it's definitely not the only part of it. When we're thinking about decarbonizing and producing on-site renewable energy, obviously, solara really big part of it. Logistics tend to have really large flat roofs which are absolutely primed for solar PV. There's lots of other things that go into decarbonizing the energy on site.
The first step's always going to be reducing the energy demand as much as possible, so that when you're then producing the renewable energy, you're hopefully using less so that it's more efficient . We've got some issues with that though, you know the warehouses are becoming more and more sophisticated: there's more automation, much more technology going into it, which means that ultimately in some circumstances that energy demand is going up, so therefore the energy efficiency becomes even more important.
But linked to that, there's some issues then, people call it Grid Grab, and the grid can't cope with this increased energy demand across the UK which we're seeing across all sectors, whether that's EV charging, everything's moving towards electrification. So actually, that's an issue for all sectors, thinking about if we need more electricity, how is that going to be supplied? So there's some issues where you find something called Grid Grab, where you can't necessarily get the energy that you need in those locations, so therefore on-site renewables does become even more important. So your solar PV, but also other types of on-site renewables, whether that's wind, bio gas, and ground source heat pumps, all of those mix of energy that then means that you can be more resilient against climate change, but also the energy demand in the UK.
But then link to that as well, there's also other environmental issues, so resource efficiency, biodiversity but then also some of the social impacts as well, as more and more people are employed in logistics, those social issues become even more important.
Holly: So interesting. So it's not only that you're having to provide for the energy needs of today, but you're also having to anticipate future needs of that asset and how those needs are going to change as that industry develops and progresses.
Helen: Yes, exactly that. So yeah, it's big jigsaw puzzles but you have to think about what you need today, what you need tomorrow, how that is against the context of climate change and increased energy demand. So it's quite a complex picture for someone to try and work out. But like I say the more efficient you can be and the more self-sufficient you can be, that means you're more resilient against these outside changes.
Holly: So a lot more complex than just solar panels on the roof then, even though they are an integral part. So thank you for busting that myth. You touched on it there briefly and that sort of social element, but there's always been this sort of theory that offices and retail have a greater capacity to positively impact social value, because obviously more than often they sit within that local community and industry and logistics assets can be somewhat more isolated. Is that true, and if not can you tell us how Tritax is contributing to social value?
Helen: Yeah, definitely. I think there's a huge amount of social value created by logistics. I think that that's flown under the radar for quite a long time. But over the last year with the pandemic, I think we've seen just how important logistics have been. I mean, if you could imagine if this pandemic could happen five or 10 years ago, how much more isolating and difficult it would have been. Would you be able to get your 24-hour deliveries, your Amazon within same day or next day prime? And not just all of the things we needed to keep ourselves from boredom, but also the important supply of PPE, and medicines being able to reach vulnerable people who wouldn't be able to go to the supermarket.
You know, even outside of that, I think we touched on before, we didn't have Netflix, any of these types of things, the world's very different and moving very quickly. And we've seen that the pandemic has really accelerated some of those changes. So there's more and more people employed in logistics, so therefore some of those social issues do become more and more important.
Logistics creates a lot of value, it creates a lot of employment, it pays a lot of taxes, it creates a lot of ripple effects in terms of economic value that it creates in that area. So if you think you have logistics facilities, all the services that supply into that, even, you know, a local cleaning company and those types of things that create a lot of economic value.
So within that as well, you're thinking about that community engagement like you said that used to be more traditionally seen in retail or in offices. But as I said, if there's more and more people employed, then there's more need for those types of activities, because importantly these people are working and living in the same location.
So as one of the largest landlords of logistics in the UK, we've got a number of initiatives to support our local communities. We've got a three-year partnership with the charity called School Readers, so they're very focused on supporting childhood literacy. We fund them to run in all the vacations near our sort of 60-oddassets. And again, they become more important during the pandemic: with the school closures, that support for children who don't get that literacy support is even more important. So we're really proud to support them over our three years.
But also linked to that is the skills in employment. As I mentioned before, warehouses are becoming more sophisticated, so those jobs are becoming more sophisticated. It's not just about having automation and robots that are going to take people's jobs, you actually see more sophisticated job role that's being created. So where we can step in and support skills and employment, which means that people have more, for example, engineering skills which means that you're upskilling people. But also importantly we're making sure our tenants have the right supply of labour, which means then they can enjoy longer staff retention and better productivity from their staff. So that's all really important.
And you know, with our development partner, Tritax Symmetry, they work with a number of university technology colleges which provide some of those technical skills in construction and logistics, which means that we're kind of providing that supply chain of labour for the next generation essentially.
Holly: And I think you'll have surprised a lot of listeners with that answer and with this sort of relentless demand for industrial logistics, and that's been continuing for a while. I really hope that any investors in this space who are listening will take note of really how much actually can be done and sort of support and nurture that local community and workforce. So thanks for sharing that.
Another area that I wanted to briefly touch on was the voice of your occupiers, and we know obviously you do a huge amount with all of your occupiers in that space. But you've got some really highly sought after global occupiers within your portfolio. What are you hearing from them in relation to ESG and how are you delivering on those needs?
Helen: Yeah. So we talk to our tenants on pretty much near daily basis. But we also do some research kind of annually to understand how we're meeting those needs. So outside of just chatting to them and understanding what's happening, again, during the pandemic that was a really great example of being able to talk to them, understanding what they needed in terms of health and safety that meant that they could keep their workers safe and continue to operate their very critical services. So we were able to share a number of best practice examples between our tenants so that everyone could understand that, because it was something completely unprecedented. I hate saying that word now, but I've been using the buzzword the last year. So actually, being able to share that knowledge was really important and I'm really gratefully received by our tenants. But we're always looking at what are those future trends, we do supply chain analysis to understand what are the things that our tenants need today and in the future, and then how can we make sure the space remains fit for purpose.
But then also, we conduct sustainability surveys to understand what are their sustainability requirements, how can we be working with them to deliver on those projects. Solar PV tends to be one of the larger one of those, but then we're seeing other kind of demands around health and well-being particularly, a bit more around that social side of things. So a number of ways always just kind of keeping our ear to the ground and working with those tenants, and like I say that kind of the labour and social side is something that's really coming up into the fore that we're seeing that they're kind of asking us about. But it's definitely different from the last few years, our tenants are actively coming to us to ask for ways to collaborate around ESG.
Holly: That's brilliant and I think that's the way that you and other major investors and landlords will retain, that really top quality occupiers by listening to them and giving them, supporting them in their goals in this space as well. So Helen, we've come towards the end of the show which means it's time for the quick fire question round. Hope you're ready? Okay. So would you rather plant a forest or regrow a coral reef?
Helen: Regrow coral reef.
Holly: Brilliant. Would you rather build a wind farm or solar farm in your back garden?
Helen: I think probably a solar farm, just because it's probably easier to do and living in London probably got more space to put solar PV on.
Holly: Yeah, that's very true. If you could save one part of the world from global warming, where would it be?
Helen: So it's quite a large part, but I’d go for the oceans, just because they have such a critical part to play in regulating our climates. They basically create our weather. So if we're not looking after the oceans, it exacerbates climate change so much more.
Holly: That is a very, very good answer. Okay, final one. If you could take either the tiger or the Asian elephant off the endangered species list, which would it be?
Helen: Oh, elephants. I've got a real soft spot for elephants, but it'd always be them.
Holly: Brilliant. Helen, thank you so much for joining us today, and for busting all of our myths. We really appreciate you being on the show.
Helen: Well, thank you for having me.
Holly: And everyone else listening, thank you very much for joining us. You can listen to more episodes of the podcast in all of the usual places: Apple podcasts, Google podcasts, Spotify, and YouTube. And to find out who we have on next, please follow us on all of our social channels: LinkedIn, Twitter, and Instagram. Thank you very much for listening you.