Real estate firm Morguard Corporation is using its latest ESG report to advance a comprehensive discussion about its practices and recognize existing gaps on its sustainability, diversity and governance.
Mississauga-based Morguard (MRC-T) owns, manages and invests in a $15.3 billion portfolio of assets across North America and has over 1,300 employees.
It released its 2021 ESG report in late September, highlighting a smart valve partnership to reduce water usage across three shopping centres, the training of its board of directors on ESG governance, and being recognized as one of Canada’s safest employers.
Christine Wickett, Morguard’s director of corporate sustainability and responsibility, said the report continues efforts to move away from the “bricks and mortar” of ESG reporting into investigating corporate sustainability and responsibility factors beyond energy and waste. The aim is to “expand and review on those long-term objectives through specific committees we’ve organized, engaging with our respective management groups including operations and asset management and dialogue . . . and the risk and national programs and executive teams.”
Morguard’s emissions in 2021
In 2021, Morguard recorded a 17.5 per cent decrease in greenhouse gas (GHG) emissions intensity for Scope 1, 2 and 3 for its Canadian office and retail portfolio. It also reduced energy use by 11.6 per cent and brought down water use by 15.5 per cent. All figures were measured against a 2019 baseline.
In 2021, its direct and indirect Canadian retail emissions were at 31,311 tonnes of carbon dioxide equivalent (tCO2e), a 23.3 per cent decrease from 2019.
For its direct and indirect Canadian office emissions, Morguard made a 13.4 per cent decrease from 2019 at 50,090 tCO2e versus 61,180 tCO2e.
Its Canadian residential emissions rose 4.3 per cent against a 2019 baseline from 35,817 tCO2e to 35,942 tCO2e.
The company says the COVID-19 pandemic affected its energy use and GHG emissions figures as fewer employees worked in offices, but said power consumption for its HVAC systems grew. Wickett said Morguard tried to account for the decrease in building occupancy during the pandemic and figure out how much of the decrease was due to energy efficiency or occupancy.
The company did not mention specific GHG reduction targets nor a net-zero goal in its 2021 ESG report, though it did establish a net-zero target by 2035 in previous ESG reports.
By the end of 2021, Morguard managed 12 buildings with Leadership in Energy and Environmental Design (LEED) certification, 52 buildings with BOMA BEST certification and eight buildings certified by ENERGY STAR.
It aims to certify its new developments from the Canada Green Building Council (CAGBC) or LEED as a minimum standard.
It made energy use reductions by upgrading electrical and mechanical equipment with LED lighting retrofits, boiler upgrades and installing energy-efficient appliances in residential units. Lighting and signage were upgraded to feature occupancy sensors, or a time clock system that automatically turns off after a certain time or when no people are recognized.
Morguard purchased 627.6 mW-h of green energy to offset 77.73 tonnes of carbon dioxide equivalent in 2021 across properties like 150 Elgin St. in Ottawa and 60 Bloor St. W. in Toronto.
Wickett distanced from property-level specifics, saying Morguard is attempting to create an all-encompassing view of its environmental management practices to “combine our efforts to create a story that is more holistic.”
Wickett said she's most proud of the company’s partnership and relationships between its stakeholders on environmental problems. Morguard led a partnership between Intercity Shopping Centre in Thunder Bay, New Sudbury Centre in Sudbury and Northgate Shopping Centre in North Bay that led to the installation of smart valves to accurately measure water use and reduce water use up to 25 per cent.
Morguard won the Healthcare of Ontario Pension Plan's (HOOPP) Leadership in Environmental Advancement Program (LEAP) Forward award for the initiative. The company was “really gunning to win” the award for years, according to Wickett, who also expressed that the firm was ”super excited” when it won.
The company has undergone a materiality assessment in 2022 to consider gaps in its sustainability data. The ESG report says the company is continuing to “improve our processes to collect verifiable data across our assets, including those where we don’t have direct control of energy use.”
An unnamed third-party reviewed Morguard’s building performance data, but the contents of the report were not formally assured.
Social and governance
Just as the pandemic altered the trajectory of the company’s environmental progress, it also impacted how it sought to advance the progress of its social programs.
“The global pandemic proved to be challenging,” Wicket said, because it required greater coordination among stakeholders.
Yet it was also an opportunity to design new management, with Morguard implementing online file sharing and enhanced dialogue around key issues like mental health awareness and flexible work environments.
Morguard increased training hours for its employees and saw over 95 per cent of its employees fill out an annual employee performance review. It was recognized as one of Canada’s Safest Employers in the Service Sector for the ninth year running by Canadian Occupational Safety’s Safest Employer Awards.
Morguard’s board of directors received training from a third-party in areas such as corporate policies, regulatory requirements and the value of ESG reporting. It also added more updates on sustainability issues like climate change into its risk management process.
What to expect from Morguard next
Wickett said Morguard completed its 2022 materiality assessment with “fantastic” feedback from stakeholders on ways to enhance its ESG investing approach and management throughout its portfolio.
It is designing a five-year roadmap using the materiality report, with feedback from industry and academic stakeholders, into its ESG strategy. Morguard plans to further refine its engagement policy and processes, data acquisition, data management and the visibility of management.
“Climate resiliency is obviously key,” Wickett said, as is expanding what it means to its stakeholders and responsible investing principles.
There are also plans to expand on a partnership with HOOPP, increase dialogue with other pension clients and peers, and improve its internal communication.
“I really think communication, engaging and dialogue has really grown over the past five years and I’m incredibly proud of that," Wickett said.
Morguard also plans to wrap up a major overhaul of its data management for ESG; create a visual system to help property staff understand their impact on community involvement, certifications and other key ESG areas; and optimize property performance while reducing the carbon footprint via renewable energy, efficient design and refining goals and targets.