Luxury retailer Chalhoub Group, luxury goods company LVMH, Emaar Malls Management, Majid Al Futtaim Properties and Abu Dhabi’s biggest listed developer Aldar Properties have partnered to accelerate sustainability targets in the UAE’s retail sector.
They have formed a joint taskforce, called Unity For Change, that aims to negotiate and execute an agreement by the end of 2024 on collaborative sustainability key performance indicators, according to a statement from the stakeholders on Saturday.
Key areas of co-operation include energy efficiency, clean energy, eco-design, water and waste management.
Objectives involve enhancing energy management, developing eco-design checklists, increasing clean energy adoption, improving water and air conditioning efficiency, researching greener alternatives for cement and recycling operational waste, the statement said.
“The aim of this partnership is collective action to reduce carbon footprint,” Patrick Chalhoub, group president of Chalhoub Group, said.
“We will focus on how to act on waste and water management, both in our own stores and in our retailers, use eco designs and green cement, how to reduce electricity needs and use renewable energy.
“We will fix certain KPIs to make it happen.”
In 2021, the UAE unveiled its Net Zero 2050 Strategic Initiative, a Dh600 billion ($163.4 billion) plan to invest in clean and renewable energy sources over the next three decades.
It was the first Gulf country to commit to net-zero emissions by 2050.
The strategic initiative aligns with the Paris Agreement, agreed in 2015 and signed by 195 countries including the UAE, which aims to limit the global temperature increase to 1.5°C above pre-industrial levels.
The Unity For Change announcement comes as the UAE hosts the Cop28 climate summit in Dubai.
Under the initiative, after the KPIs have been defined and agreed upon by the end of 2024, each party will designate a co-ordinator who will evaluate sustainability progress and report to the parties, the statement said.
The co-operation aims to enhance management of energy consumption across the entities’ properties, tenant stores, and landlords’ common areas, while developing an eco-design checklist, pooling resources for clean-energy purchases to optimise consumption, and co-operating on chilled water management and air conditioning to enhance efficiency.
Additionally, there will be concerted efforts to research green concrete usage to achieve recycling objectives, the statement outlined.
Challenges include the infrastructure, developing a regulatory framework and possible resistance from other retailers and suppliers, according to Mr Chalhoub.
“When a business is growing double digits, it’s easy to set sustainability targets, but when the ride gets bumpy because of macroeconomic or geopolitical turmoil, sustainability tends to be pushed to the back of the pile,” said Antoine Arnault, head of image and environment at LVMH.
“However, we don’t see things that way and want to do the right sustainable actions even when things are not going as planned.”
LVMH signed a similar partnership with developer Hang Lung in China in 2022 and is already building stores that are better designed, more sustainable and consume less energy, he added.
“As a developer, we provide for a resilient future for our communities through sustainable design, resource efficiency, a green finance framework and cross-sector collaboration,” said Faisal Falaknaz, chief financial and sustainability officer at Aldar.
“The UAE will take a leading role to make sure that regulations are adapted in a way that will allow the private sector to be responsible going forward.”
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Aldar Properties has introduced green clauses in all new leases requiring tenants to report their energy consumption and waste output. This encourages landlord-tenant collaboration and the developer helps by retrofitting retail units to make them more sustainable, he added.
Aldar spent Dh150 million last year on retrofitting properties that it owns or manages.
“The conclusion was that sustainability is actually good for business,” Mr Falaknaz said.
The developer also partnered with the Ministry of Climate Change and Environment in March to launch the Real Estate Climate Pledge, in which more than 60 companies will announce their decarbonisation plans by the end of this year.
In 2022, Mall of the Emirates became the biggest mall in the world to achieve the Leeds Platinum certification for operations and maintenance, said Ahmed El Shamy, chief executive of Majid Al Futtaim Properties.
“The mall has reduced water consumption by using low-flow fixtures, optimised irrigation systems, proper wastewater treatment and using grey water for our cooling systems,” he added.
“It used less energy in 2022 than in 2018 by nearly 20 megawatts, which is almost enough to power 2,000 homes for a whole year. We also use non-toxic materials to improve indoor air quality.”
The shopping mall is trying to reduce single-use plastic by more than 60 per cent and almost 75 per cent of mall workers use public transport, Mr El Shamy explained.
An Emaar Malls spokesperson said the company is focusing on the importance of energy efficiency, eco-responsible design and responsible use of resources.