RioCan Real Estate Investment Trust, one of the largest Canadian REITs, finished a high-level estimate of its greenhouse gas emissions and certified more of its portfolio under green standards in 2022 as part of its evolving ESG strategy.
The Toronto-based REIT owns, manages and operates a portfolio of retail-focused properties and is expanding its presence in the multiresidential sector.
Its portfolio was approximately 33.6 million square feet of net leasable area across 193 properties in Canada as of Dec. 31, 2022.
RioCan's 2023 ESG Report chronicles its achievements in two GRESB categories, recognition as a Gold Level 2022 Green Lease Leader and certifying almost two-thirds of its gross leasable area under BOMA BEST.
RioCan took steps to better understand its greenhouse gas emissions, advance its net-zero initiatives, integrate ESG into its culture, and sent its proposed climate targets to the Science Based Targets initiative (SBTi) for validation.
“We really took the opportunity (over the past year) to revise our ESG strategy and really evolve it so that it is forward-facing for the next several decades,” Jennifer Suess, RioCan’s senior vice-president, general counsel, ESG and corporate secretary, told SustainableBiz in an interview.
RioCan’s 2022 emissions profile
The portfolio emissions RioCan measured in 2022 were: 25,345 tonnes of carbon dioxide equivalent (tCO2e) of Scope 1 emissions, 7,122 tCO2e of Scope 2 emissions and 76,786 tCO2e of Scope 3 tenant emissions (includes the footprint for which data was available from tenants).
Emissions totalled 109,253 tCO2e in 2022, compared to 84,257 tCO2e in 2021, 98,113 tCO2e in 2020 and 112,857 tCO2e in 2019.
Suess said the increase in total emissions from 2021 to 2022 was because of the relaxing of COVID-19 pandemic-related restrictions on retailers, and the completion of several development projects which added to the size of RioCan's portfolio.
Emissions intensity measured at 3.39 kilograms of carbon dioxide equivalent per square foot (kgCO2e/sqft). It increased compared to 2021’s 2.78 kgCO2e/sqft (during the height of the COVID shutdowns), but was lower than the 2020 total of 4.27 kgCO2e/sqft and 4.92 kgCO2e/sqft in 2019.
RioCan performed a Scope 3 emissions scan in 2022 to “identify material emission sources up and downstream of our operations.” The analysis found approximately 90 per cent of its emissions footprint is Scope 3, with Scope 1 and 2 emissions making up 10 per cent.
Of the 90 per cent, RioCan estimates 51 per cent are from its tenants, 24 per cent are embodied emissions and 25 per cent are other emissions.
Ridhima Nayyar, RioCan’s assistant vice president of sustainability, said the emissions scan is used internally so the REIT is aware of its greenhouse gas emissions and emphasizes RioCan's need to act to reduce the indirect/Scope 3 emissions.
Suess said RioCan continues to work to improve its ability to measure and report all its related Scope 3 emissions.
Using its emissions profile, RioCan has set its near-term and net-zero targets. Its 2050 net-zero target is decarbonizing its full portfolio, which was sent to the SBTi for validation in early 2023.
How RioCan is reducing its emissions
RioCan’s broad emissions reduction strategy hinges around reducing its energy use, exploring green energy and working with its tenants.
At the end of 2022, the REIT had certified 65 per cent of its portfolio under BOMA BEST – a green building certification program addressing energy efficiency – a five per cent increase from 2021 and 10 per cent from 2020. Suess said RioCan aims to certify 70 per cent of its portfolio under BOMA BEST or LEED by the end of 2023, with incremental five per cent annual increases until it reaches 90 per cent by 2030.
RioCan invested in a national LED retrofit program and installed smart technologies like building automation technology to reduce energy use.
Suess highlighted RioCan’s application of innovative energy efficiency technology at The Well, an over three-million-square-foot mixed-use development in Toronto heated and cooled using deep lake water cooling from Enwave Energy Corp.
To address its tenant emissions, Suess said RioCan is collaborating on projects like enhanced solar energy usage, installing electric vehicle chargers, maximizing recycling capabilities and ensuring there are green lease clauses requiring its tenants “also be mindful of consumption” and collaborate on sustainability-oriented initiatives.
RioCan is communicating with major national tenants to understand their ESG objectives.
Sustainability is integrated into design, construction and procurement, Suess said, which encourages RioCan’s suppliers to improve their resource efficiency. A full-time sustainability professional in the development and planning team works with Suess’ team to ensure sustainability is emphasized.
Its efforts were recognized by GRESB by naming it a regional sector leader – listed for standing investments and a first-place ranking among its Canadian peers in the GRESB Public Disclosure Assessment.
Green Lease Leaders recognized RioCan as a gold-level property owner.
Climate resiliency, finance and governance
RioCan continues investing into climate-resilient assets as it transitions its portfolio to a lower-carbon economy and decarbonizes its operations.
On the finance side, it took up initiatives such as green bonds.
To incorporate ESG into its governance, ESG metrics are embedded into executive compensation and the scorecards of employees eligible for bonuses.
Suess said RioCan’s dedicated nominating and ESG committee at the board level cascades into management initiatives committees covering risk management, climate and ESG.