We believe sustainability is in our Company’s best interest through every touchpoint. We look to address material environmental topics through our environmental commitments, supporting us in our achievement of key strategic objectives in our operations and development projects.
At Regency, we strive to integrate sustainable practices throughout our business and believe that sustainability is in the best interest of our stakeholders and the environment.
Our approach to environmental stewardship focuses on integrating management responsibilities across our operations and development projects to address material environmental risks and issues.
We accomplish this by focusing on eight strategic priorities:
Our formal climate strategy work began in 2008, and in 2014 we became the first U.S. REIT and the second U.S. Corporation to issue a Green Bond for financing environmentally sustainable projects. In 2017, we developed our own Green Building Standard that, to date, is applied to all ground-up development and major redevelopment projects, ensuring that all of our construction projects achieve a higher level of green building performance. In addition, we set initial 10-year environmental targets, which were achieved ahead of schedule, and in 2018 we re-set new goals. In 2019, we developed and implemented a Tenant Sustainability Guide. In 2020, we incorporated a sustainability metric into our amended and extended credit facility agreement as added incentive to reduce Scope 1 and 2 GHG emissions. In 2021 and 2022, we continued to achieve our goal of reducing Scope 1 and 2 GHG emissions, introduced property-level climate risk reports into our due diligence process for all new investments, and released a standalone climate change risk report aligned with TCFD. Furthermore, in 2022, we developed a net-zero Scope 1 and 2 GHG emissions goal and an interim Science-based goal endorsed by SBTi.
More than ever, we recognize that climate change is one of the most significant issues facing our society and future generations. As a long-term owner, operator, and developer of real estate, we acknowledge the potential for climate change to have a material impact on our properties, people, and long-term success. The frequency or intensity of extreme weather events, sea-level rise, and other climate changes may continue to increase. Regency wants to ensure that our properties can safely, sustainably, and responsibly withstand the test of time. In addition to understanding the impacts, we also aim to do our part to reduce the impacts of climate change.
Climate-related analyses and actions are a key focus of our Corporate Responsibility Program. Our Board regularly reviews our Corporate Responsibility Program, including our efforts to analyze the impact of, and respond to, climate change. Ultimate responsibility for assessing and mitigating climate-related risks and opportunities is with our President and CEO, with ongoing oversight by our Corporate Responsibility Committee.
We align and disclose climate risks under various reporting frameworks, including TCFD and CDP.
To understand our exposure to climate-related impacts, in 2018, we analyzed the sea-level rise risks to our properties in Florida. As a result, we identified that a small number of our assets would be at higher risk in the long term and, as such, factored the results into our insurance and property management strategies.
Beginning in 2020, we built on that work, expanding our analysis to our entire portfolio and business over the medium and long term (2030-2100). Our analysis looked at two scenarios: one assuming lower levels of GHG emissions that will limit average temperature increases to 1.5°C to 2°C degrees (a “sustainable growth” scenario), and another where GHG emissions continue to rise at a higher level of 6°C degrees (a “current trends” scenario). The work provided a better understanding of the risks and opportunities at both the portfolio and geographic market levels under the two different climate scenarios and over the medium and long term.
To help expand our understanding at the property level, in 2021, we partnered with an experienced consultant to perform climate-risk analyses on any properties we are considering for new investment, and in 2022, on all properties in our portfolio progressively over the next four years. These reports identify the risk level of the site within five specific perils: storm (including hurricanes and strong winds), heat, drought, fire, and flood (pluvial and fluvial).
For each hazard, our consultant analyzes the modeled frequency and severity of extreme events in the past and future to create a 1-100 rating relative to the data coverage area. The screening and reports include property-level climate risk data projecting 50 years into the future under multiple scenarios, including RCP4.5 and RCP8.5.
(1) Ratings reflect hazard risk at a property relative to the rest of the contiguous United States. Ratings are based on projected 2050 risk and the change from historical risk. A rating of 1 represents the lowest risk; 100 is the highest.
Risk management is embedded into everything we do, and our risk management practices are set out in our Corporate Responsibility Policies and Practices. Our risk management practices stem from a philosophy of pursuing sustainable growth and creating economic value while managing appropriate risks and opportunities.
Our 2018 sea level rise analysis informed how we manage risks to our Florida properties. The results from our 2020 work, described in the graphic below, updated that analysis and now informs climate risk management across our entire portfolio. It is also integrated into strategic planning, acquisition decisions, property management, and capital allocation project planning, and guides our ongoing property-level analyses.
We took the following steps to evaluate the impacts of climate change and its potential effect on our properties:
All of these actions to identify and manage climate risk at the property and portfolio level are monitored and coordinated by our Real Estate and Management Committees, with oversight from our Board. This ensures that a holistic strategy guides the approaches in our business lines.
Regency is focused on maintaining resilience at our properties and our business. We strive to implement leading construction and operational practices as well as robust planning for a swift recovery from any incident. According to the UN Intergovernmental Panel on Climate Change (IPCC AR5), the physical risks of climate change are varied and widespread. Regency’s operations may be subject to disruption from natural or human causes beyond its control, including physical risks from hurricanes, severe storms, floods, heat waves, other forms of severe weather, wildfires, and sea level rise;
as well as transitional risks, such as policy and legal, market, and reputational.
A more detailed discussion of the risks that could impact our business and financial condition are discussed in our SEC filings, including our most recently filed Annual Report on Form 10-K.
At this time, outside of our 2020 TCFD analysis accessible through our 2021 TCFD Report, we have not identified a material climate-related risk to our business. In addition, the geographic diversification of the properties in Regency’s portfolio means individual natural events such as a severe storm, which potentially impact one or a small number of properties, should not have a significant financial impact on the business in the aggregate. However, we continue to monitor the impacts of climate risk on our business and aim to use the ongoing property-level analyses and projections developed by our consultant to assess our business’ climate vulnerabilities and perform resiliency planning. Furthermore, we intend to leverage the data and models to determine the relevance of disclosure related to the quantifiable financial impacts on our Company, if any.
In 2022, we revisited our climate-related goals and disclosures and, in line with best practice, developed a net-zero Scope 1 and 2 GHG emissions goal and an interim Science-based GHG emissions reduction goal, together with a strategy to achieve both.
We have for many years disclosed our energy use, water consumption, waste diversion, and GHG emissions in our annual Corporate Responsibility Report. Details related to our strategy and progress against our targets are provided throughout our 2022 Corporate Responsibility Report.
Greenhouse Gas Emissions
We are committed to measuring, reducing, and reporting our GHG emissions. Regency's Scope 1 and 2 GHG emissions consist primarily of electricity consumed in common areas and vacant tenant spaces within our operational boundary/control. Scope 3, on the other hand, represents the most significant portion of our reported emissions and comes from sources such as tenant activities, business travel, and employee commuting.
Early 2022 marked Regency’s transition to targets for reducing Scope 1 and 2 GHG emissions on an absolute basis. Aligned with the Paris Agreement, we’re committed to reducing our absolute Scope 1 and 2 GHG emissions by 28% by 2030 — a target endorsed by the SBTi — and to achieve net-zero Scope 1 and 2 GHG emissions across all operations by 2050. Through this pledge, we continue to reduce our Scope 1 and 2 GHG emissions and measure, report, and collaborate with our tenants to reduce their operational emissions.
Our overall Scope 1 and 2 GHG emissions reduction of 12% compared to our 2019 baseline is driven by several factors, including the improvement of common area energy efficiency, the deployment of renewable energy solutions, and the purchase of renewable energy.
To help reduce the environmental impact at our centers and meet our 2030 goal, we have identified the following two primary reduction strategies:
- Energy efficiency focused on LED conversion and lighting controls in our common areas, and
- Renewable energy through the growth of on-site solar generation projects at our centers
(1) Regency calculates GHG emissions reduction progress in absolute terms in accordance with the SBTi and GHG Protocol, and measures both location-based and market-based Scope 2 emissions. Figures presented above correspond to market-based Scope 2 emissions. See About Our Report and Appendix for Regency’s full GHG emissions inventory, methodology, and additional notes.
We have developed an interim GHG emissions reduction strategy aligned with limiting global warming to well below 2°C compared to the pre-industrial level, positioning Regency to contribute as the world transitions to a net-zero future. Through this process, we aim to focus on LED conversion and lighting controls, and growing our renewable energy footprint. As of year-end 2022, we had nine properties that generated on-site renewable energy and, in total, have an installed capacity of 2.5 MW-DC. The on-site production of clean energy generated was 3,479 MWh.
For our reporting in 2022, Regency will take credit for reducing its Scope 2 GHG market-based emissions by incorporating renewable energy certificates (RECs). These RECs total approximately 3,478 MWh, equivalent to our on-site renewable energy generated in 2022, and when applied to our Scope 2 market-based GHG emissions, is equivalent to the reduction of 1,083 MtCO2e.
We continue to expand and explore additional renewable energy and efficiency projects, and plan to introduce more initiatives at our properties to benefit the environment. We will continue to share near- and long-term progress regarding our de-carbonization strategy.
Improving energy efficiency across our operational control is critical to achieving our Science-based targets. Exterior common area lighting represents Regency’s total energy consumption and is our largest source of GHG emissions, while stationary combustion follows, accounting for approximately 12%. In 2012, we started to replace our existing lighting systems with energy-efficient LED lighting. Over the years, we have continued to make progress on this strategic priority and, to date, have converted more than 275 of our shopping centers to highly efficient DarkSky™ compliant LED fixtures. In 2022 alone, we converted more than 20 shopping centers, which produced savings of 591,687 kWh = $106,119.
Additionally, throughout 2022, we continued to take advantage of opportunities to use cool-roofing technology, improve glazing and insulation at our properties, and maintain and replace HVAC units.
We’re proud of the progress made over the years; however, we recognize that the opportunity to reduce our total energy consumption remains as we position Regency to meet our 2030 GHG emissions and energy efficiency goals.
(1) Regency calculates in accordance with the GHG Protocol. See About Our Report and Appendix for Like-for-Like (LFL) definition, methodology, and additional energy performance figures.
Regency continues to focus on expanding the use of renewable energy technologies at our shopping centers and sharing the benefits of affordable, clean power with our tenants and local communities. This initiative has been incorporated into our business strategy since 2011. While we continue to deploy opportunities to provide our tenants with affordable and clean renewable energy, in the future, we plan to procure strategically in order to reduce Regency’s own GHG emissions footprint. Given our vast geographic distribution, solar is currently the most effective and readily available renewable option, but we continue to review other potential renewable options for future deployment.
(1) Regency calculates in accordance with the GHG Protocol. See About Our Report and Appendix for methodology and additional notes.
Regency’s most significant use of water within our operational control is landscape irrigation, which is primarily impacted by weather patterns and water restrictions. We recognize the need to conserve this natural resource to keep it available for future generations while also preserving the environment and minimizing effects such as drought and water shortages. At Regency, we strive to implement best practices in water management at our properties by focusing on strategies that balance the use more efficiently, while also providing shade and pedestrian-oriented landscape areas for the community to enjoy.
We do this through high-efficiency irrigation systems, including “smart” controllers that adjust schedules based on local weather conditions to optimize irrigation run times. We also, where possible, use reclaimed water from our local utility providers and plant native, drought-tolerant plants. Other measures like stormwater management systems that protect stream channels from excessive erosion, permeable paving systems, and rainwater retention cisterns are just a few other measures to conserve water usage on our properties.
The water we use is sourced from municipal, public, and private water utility providers, and we comply with public policy and local requirements for water use and monitor consumption regularly. We strive to reduce our water use without compromising the environments at our centers and encourage our tenants and other stakeholders to undertake water conservation measures, including through our Tenant Sustainability Guide, which provides guidance on tools and practices our tenants can use to reduce water use.
In partnership with our tenants and network of local recyclers, composters, and waste haulers, we work to promote responsible waste management practices across our shopping center portfolio. While recycling programs vary significantly based on local recycling infrastructure, we continuously strive to provide our tenants and center visitors with the means to recycle and compost their waste. Collaboration with our tenants to reduce waste management is key to our success. While it presents a challenge, we advise our tenants on how recycling can be maximized and its benefits to the environment and their businesses through our Tenant Sustainability Guide.
Not only do we focus on waste diversion and resource conservation at our properties, but we also seek effective waste management programs at our corporate and regional offices. Together with tenant engagement, waste management remains a strategic priority.
(1) Regency calculates in accordance with the GHG Protocol. See our 2022 Corporate Responsibility Report for definition, methodology, and additional notes.
Electric Vehicle Charging Stations
Regency was an early adopter nearly ten years ago and has since been a leader in supporting the development of a national network of electric vehicle (EV) charging stations. EV stations positively impact our communities and provide visitors to our centers with a modern amenity that enables them to reduce their carbon footprint directly.
In 2022, we continued to advance our electric vehicle program by installing 107 stations across our properties. This was a 2% increase from 2021 when we had 690 active stations across 405 Regency properties.
(1) See our 2022 Corporate Responsibility Report for definition and additional notes
Biodiversity and Habitat Protection Practices
We respect and strive to protect biodiversity and natural habitats at, and around, our neighborhood shopping centers, and during development projects.
Evaluating and mitigating potential environmental impacts during new development begins during the site planning phase, which includes an environmental assessment tailored to local regulations and engagement with local communities.
For example, based on the planning phase, modifications are made to the
site construction plans as necessary, which could include relocating
protected or endangered species. Additionally, we seek to minimize the impact on the local environment
from our ongoing operations at or around our neighborhood shopping
We require our vendors and contractors to assist us in our efforts. To minimize any potential impact on biodiversity and habitats, we implement the following measures where appropriate:
Supply Chain Visibility
Scope 3 GHG emissions represent the most significant portion of our reported emissions, although measuring emissions in the supply chain is currently challenging and not as accurate as we would like due to the need for more available and reliable data. We recognize that our engagement efforts related to the accessibility of data are key to our long-term success. Furthermore, accurate data enables us to better understand the environmental impacts and risks across our supply chain.
In 2022, we enhanced our data collection process to ensure more frequent engagement with our suppliers and better controls in our data collection process. This process change not only fosters collaboration with our tenants and supply chain vendors, but also allows for greater visibility in our Scope 1 and 2 GHG emissions data to help effectively drive change within our operational control. We believe the regular cadence of our reporting combined with granular data results in more effective conversations about driving progress. Furthermore, our Leasing and Legal teams continue to support the Company in advocating for more robust green lease provisions with our tenants. While this change demonstrates our commitment to measuring, reporting, and collaborating with our tenants and supply chain vendors, there is still much more room for us to adapt, refine, and raise the bar.
(1) Regency calculates in accordance with the GHG Protocol. Scope 3 GHG emission figures are based on actuals provided by supply chain vendors and input into ENERGY STAR® Portfolio Manager® (ESPM). FY22 Scope 3 data coverage was 31%. See our 2022 Corporate Responsibility Report for methodology and additional notes.