Dept of Real Estate & Construction Management Master of Thesis no.

506
Div of Building & Real Estate Economics

GREEN SHOPPING CENTERS

A Survey of Stockholm’s Shopping Center Market and
its Environmental Commitment

Author: Supervisor:
Faranas Maneekum Hans Lind

Stockholm 2010

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MASTER OF SCIENCE THESIS

Title Green Shopping Centers:

A Survey of Stockholm’s Shopping Center Market and its
Environmental Commitment
Author Faranas Maneekum
Department Department of Real Estate and Construction Management
Division of Building and Real Estate Economics
Master of Thesis Number 506
Supervisor Hans Lind
Keywords Green buildings, shopping centers, corporate social respon-
sibility, environmental commitment

ABSTRACT
The debate concerning buildings’ negative impact on the environment has undoubtedly intensi-
fied gradually during the last years. Accordingly, the notion of green buildings has emerged and a
vast variety of environmental assessment methods and certification tools have been introduced.
Moreover, numerous studies and researches have been conducted, aiming at presenting the bene-
fits of committing to environmental concerns as a means of greening the industry.
However, few of the studies and the debate have discussed the subject in connection to re-
tail properties such as shopping centers. Nonetheless, shopping centers generate wastes in abun-
dance and the complex energy flow within such a building is undoubtedly worth discussing.
Therefore, the purpose of the thesis is to investigate the current state of environmental responsi-
bility or commitment existing within the retail sector. Subsequently, a comprehensive overview of
the attitude towards environmental concerns within a shopping center context will hopefully
serve as a starting point for further discussing the issue.
The thesis reveals that the majority of the shopping center owners do undertake green in-
itiatives such as reducing energy consumption, although at a varying degree. This can partly be
explained by the ownership type of the owner and their underlying investment objective. In other
words, the extent of their environmental commitment depends on whether or not the owner has
a long-term or short-term interest in the building. Moreover, organizational factors such as the
resource capacity and available capital are believed to influence the initiatives. Also, the shopping
center as an asset implies comparatively complex management due to for instance the number of
tenants and most often the big size and volume of the building. Consequently, these issues need
to be addressed in order to gain insight and knowledge on how to green the shopping centers as
well.

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ACKNOWLEDGEMENT
This Master’s thesis was conducted during spring of 2010 at the division of Building and Real
Estate Economics, a division of the Real Estate and Construction Management department at the
Royal Institute of Technology in Stockholm.
First and foremost, I would like to thank everybody at the department who has helped me
both before and during the thesis writing process. In particular, I would like to thank my thesis
advisor, Hans Lind, for sharing his valuable time and knowledge and for helping me throughout
the whole process of writing this Master’s Thesis.
Furthermore, I would like to thank every company who participated in the interview ses-
sions. Your opinion and knowledge have undoubtedly provided me with necessary information
for completing my thesis. I would especially like to thank Gunnar Mässing and Nils Cnattingius
at Kista Galleria for sharing their valuable time and knowledge in connection to the case study
and for providing me with data and information in order to complete it successfully.

Stockholm, April 2010

Faranas Maneekum

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TABLE OF CONTENTS
1 INTRODUCTION ............................................................................................................................................. 5

1.1 BACKGROUND ............................................................................................................................................ 5

1.2 JUSTIFICATION OF THE THESIS ......................................................................................................................... 5
1.3 AIM AND OBJECTIVES ................................................................................................................................... 6
1.4 METHODOLOGY .......................................................................................................................................... 7
1.5 DELIMITATIONS ........................................................................................................................................... 7
1.6 DISPOSITION OF THE THESIS ........................................................................................................................... 8

2 GREEN BUILDINGS ....................................................................................................................................... 10

2.1 THE LINK BETWEEN BUILDINGS AND ENVIRONMENTAL CONCERNS .......................................................................... 10
2.2 WHAT IS A “GREEN” BUILDING?.................................................................................................................... 11
2.2.1 LEED – Leadership in Energy and Environmental Design.................................................................. 12
2.2.2 BREEAM – Building Research Establishment’s Environmental Assessment Method .......................... 15
2.2.3 Environmental Classification of Buildings – Miljöklassad Byggnad................................................... 17
2.2.4 GreenBuilding – Improved Energy Efficiency for Non-Residential Buildings ...................................... 18
2.3 CURRENT STATE OF GREEN IN SWEDEN – WHAT’S HAPPENING? ........................................................................... 20

3 THE BENEFITS OF GOING GREEN .................................................................................................................. 21

3.1 THE BUSINESS CASE FOR GREEN BUILDINGS ..................................................................................................... 21
3.1.1 Direct Economic Impact.................................................................................................................. 21
3.1.2 Indirect Economic Impact ............................................................................................................... 23
3.2 CHALLENGES FACING THE IMPLEMENTATION OF GREEN INITIATIVES ........................................................................ 23

4 COMPANIES’ ENVIRONMENTAL COMMITMENT .......................................................................................... 26

4.1 CORPORATE SOCIAL RESPONSIBILITY ............................................................................................................... 26

4.2 CORPORATE ENVIRONMENTAL RESPONSIBILITY .................................................................................................. 28
4.3 DRIVERS OF CORPORATE ENVIRONMENTAL RESPONSIBILITY .................................................................................. 28
4.4 THREE THOROUGH MODELS OF CORPORATE ECOLOGICAL RESPONSIVENESS ............................................................. 30
4.3 DIFFERENT TYPES OF CORPORATIONS .............................................................................................................. 35
4.3.1 Demonstrating Environmental Commitment................................................................................... 36
4.3.2 Disclosure on the World Wide Web ................................................................................................ 38

5 ENVIRONMENTAL DISCLOSURE ON THE INTERNET ...................................................................................... 39

5.1 ATRIUM LJUNGBERG ................................................................................................................................... 39
5.2 KF FASTIGHETER ........................................................................................................................................ 43
5.3 STEEN & STRÖM........................................................................................................................................ 44
5.4 DILIGENTIA ............................................................................................................................................... 47
5.5 CITYCON OYJ ............................................................................................................................................ 49
5.6 SUMMARY – ENVIRONMENTAL DISCLOSURE ON THE INTERNET .............................................................................. 52

6 RESULTS FROM THE INTERVIEWS SESSIONS ................................................................................................ 53

6.1 SUSTAINABILITY IN A SHOPPING CENTER CONTEXT.............................................................................................. 54
6.2 ENVIRONMENTAL POLICIES AND CORPORATE DOCUMENTS ................................................................................... 56
6.3 GREEN INITIATIVES AND INVESTMENTS ............................................................................................................ 57
6.4 FUTURE PROSPECTS .................................................................................................................................... 62
6.5 SUMMARY – RESULTS FROM THE INTERVIEW SESSIONS........................................................................................ 64

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7 CASE STUDY – SHOPPING CENTERS’ ENERGY-FLOW..................................................................................... 67

7.1 KISTA GALLERIA ......................................................................................................................................... 68

7.2 ENERGY CONSUMPTION .............................................................................................................................. 69
7.2.1 Electricity ....................................................................................................................................... 69
7.2.2 Heating .......................................................................................................................................... 72
7.2.3 Cooling .......................................................................................................................................... 72
7.3 ENERGY EFFICIENCY AT KISTA GALLERIA ........................................................................................................... 73
7.3.1 The Energy Plan ............................................................................................................................. 73
7.3.2 Actions and Measures in Reducing Energy Consumption ................................................................. 74
7.4 COMMENTS FROM THE MEETING ................................................................................................................... 75

8 CONCLUDING COMMENTS AND INFERENCE ................................................................................................ 77

8.1 A SHOPPING CENTER – MORE THAN JUST A BUILDING ........................................................................................ 77

8.2 OWNERSHIP AND ORGANIZATIONAL MATTERS OF SIGNIFICANT IMPORTANCE............................................................ 78
8.3 ENVIRONMENTAL COMMITMENT – JUST AN IMAGE BOOSTER? ............................................................................. 79

LIST OF REFERENCES
APPENDIX A

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1 INTRODUCTION
The very first chapter aims at introducing the reader to the subject by providing brief background
information to the research problem. The purpose of the thesis and the justification of the re-
search problem are presented together with the methodology behind the research. Lastly, a dis-
position of the thesis is elaborated.

1.1 Background
Issues concerning the environment, in terms of climate change and global warming, have gained
significant attention and mainstream acceptance during the past years. The awareness and know-
ledge of its consequences on businesses have subsequently increased. Essentially, the environ-
mental degradation is certainly affecting businesses irrespective of industry.
Moreover, the construction and real estate sector have been recognized as one of the most
important participants in fighting further deterioration of the environment (Eichholtz et al, 2009,
p.3). Additionally, buildings are seen as main contributors to for instance heavy energy consump-
tion and carbon emissions both during construction phase and during their existence (Nelson,
2008, p.2). More specifically, buildings in the European countries account for 25% of CO2 emis-
sions and roughly 40% of energy consumption of the continent (Hagart & Knoepfel, 2008, p.2).
Subsequently, the notion of corporate social responsibility has steadily gained foothold
among companies within the construction and real estate sector as the industry has acknowledged
the implications of sustainability. Simultaneously, the concept of “green buildings” has naturally
emerged and numerous researches, in particular related to commercial properties and offices,
have been conducted indentifying potential financial benefits in connection to the implementa-
tion of sustainable practices. Furthermore, several rating tools and certificates have been estab-
lished for both new and existing buildings as an attempt to attain a more environmental sound
industry (Bonde et al, 2009, p.4).

1.2 Justification of the Thesis

As previously stated, substantial efforts have been undertaken in order to “green” the construc-
tion and real estate sector and raise awareness concerning sustainability. Currently, there is a vast
amount of green rating tools available for operators to adopt and the emergence of green leases
have started to get recognized across the industry. Furthermore, there seems to be a widespread
consensus within the industry that a green and more sustainable built environment is what every
market participant should strive for. Nevertheless, real estate owners and investors still imple-
ment sustainable practices to a noticeably varying degree.

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 Accordingly, the subject matter concerning environmental commitment and “green” in-
vestments among real estate owners is fundamental in understanding the reason why some own-
ers implement sustainable practices to a greater extent than others. By clarifying the details be-
hind the issue, the thesis will subsequently facilitate in distinguishing possible obstacles and hence
identify necessary incentives needed in order to attain a greener real estate industry where “green”
initiatives are embraced and implemented more extensively.
Shopping centers represent one of the most socially and environmentally influential forms
of real estate as of today. For instance, shopping centers are increasingly seen as a natural meeting
place for people, comprising a variety of public and private services besides shops. Moreover,
shopping centers play an inevitably important role in a broader urban economic context since
they create numerous job opportunities and can create benefits and added value for the citizens.
In addition, the Nordic Council of Shopping Centers (2009) states that shopping centers contri-
bute to almost one quarter of retail sales in the Nordic countries.
As a result, the lack of previous studies concerning sustainability in relation to shopping
centers explicitly implies a necessity of instituting a discussion in order to encourage further im-
plementation of sustainable practices in the construction and real estate sector.

1.3 Aim and Objectives

The main purpose of the thesis is to conduct a qualitative investigation of the current state of
environmental accountability prevailing among shopping center owners, developers and opera-
tors in connection to the implementation of sustainability practices.
Accordingly, the objective is to provide a comprehensive overview on present attitude to-
wards environmental commitment on the Swedish shopping center market by answering the fol-
lowing research questions, which have been identified as essential in successfully completing the
thesis and fulfilling the underlying intention.

 What factors constitute a green shopping center?

 Do shopping center owners disclose their environmental commitment in the cor-
porate website and to which extent?
 How do shopping center owners and operators perceive environmental concerns
related to their business
 How do shopping center owners and operators reason regarding investments in
green initiatives?

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1.4 Methodology
As initially stated, the underlying purpose of the thesis is to provide a comprehensive overview of
the green building trend in connection to shopping centers. In order to achieve the goal, several
stages were undertaken as to gather relevant information.
Firstly, a thorough literature study on the subject matter was conducted. Information con-
cerning green buildings; in terms of the definition, associated benefits and certification systems,
and corporate social responsibility have primarily been obtained from international research pa-
pers and from different websites.
The second step was to choose five shopping center owners in order to survey and assem-
ble publicly available information regarding their commitment to sustainable issues within their
organization which can be found on the internet. The purpose is to evaluate corporate environ-
mental reporting such as environmental policies etc. The main idea is to get a broad picture of
the ambition towards green initiatives as publicly displayed by the owners of shopping centers.
Due to the qualitative approach of the thesis and the highly specific area within commercial
real estate, the information gathering process was also based on face-to-face interviews with sev-
en shopping center owners. More specifically, the main research method applied in obtaining
information was a semi-structured qualitative interview. Additionally, the thesis adopted a qualita-
tive interview technique in order to be open and flexible towards the potential variation concern-
ing the respondent’s answers since the subject is relatively still unexplored. Furthermore, a semi-
structured interview was believed to allow the respondents to express their thoughts unreservedly
although there are a small number of questions guiding the interview.
In addition, a case study based on the outcome of the interviews was conducted. More spe-
cifically, the environmental concern distinguished as most relevant and crucial for a shopping
center complex by all seven interviewees serves as a foundation for the case study. Accordingly, a
case study concerning the energy consumption of Kista Galleria in Stockholm serves as a final
element of the thesis before the concluding comments and inference. Subsequently, the purpose
of the case study is to elucidate how energy consumption pattern looks like in reality and how
shopping center management teams in practice work in order to reduce the consumption of
energy. In addition, the case study provides an idea or insight regarding the complexity of energy
flows in such building.

1.5 Delimitations
In order to be able to complete a quality thesis in a realistic manner, a number of delimitations
were made so as to remain concise and finish in time. First and foremost, it is highly significant
to underline that the real estate companies included in the thesis are explored in a Swedish con-

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text. In other words, the real estate companies operate on the Swedish retail real estate market
and are subject to Swedish law and regulations. Consequently, divergence may exist due to na-
tional dissimilarities regarding existing prerequisites for undertaking sustainable measures such as
national regulations.
Moreover, the thesis merely discusses the topic in connection to existing shopping centers.
This is because new buildings entering the market are comparatively high in standard due to the
emergence of the different means such as industry standards and rating tools. The real challenge
is believed to be how to effectively implement green initiatives on existing shopping centers. Fur-
thermore, most building activities in terms of refurbishment and maintenance are carried out in
connection to existing shopping centers.

1.6 Disposition of the Thesis

Chapter 2 aims at clarifying the relationship between environmental concerns and buildings, and
illuminating the different definitions of a green building as proposed by organizations and the
certification systems.

Chapter 3 begins by presenting the business case for green buildings. In other words, previous
studies concerning the alleged financial benefits of going green are elucidated. Moreover, the
challenges potentially hindering sustainable development are presented.

Chapter 4 seeks to clarify the connection between terms such as corporate social responsibility,
corporate environmental responsibility and where the concept of green buildings falls in the inte-
raction between those. Furthermore, the potential drivers of ecological responsiveness and three
models explaining it are presented. The chapter finishes off by elaborating on the theory of envi-
ronmental disclosure.

Chapter 5 presents the findings from the environmental disclosure survey of the five randomly
chosen shopping center owners’ corporate websites. Possible contents on the websites have been
grouped into five parameters, namely; environmental assessment, environmental policy, follow-
up, human resource and other.

Chapter 6 presents what was being said during the seven interviews. The answers have been
grouped into four specific areas in accordance to the nature of the interview questions. The chap-
ter finishes with a section of concluding comments concerning the outcome of the interviews.

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Chapter 7 presents the case study conducted on Kista Galleria. Statistics over the energy con-
sumption, operational measures undertaken by the management team and the resulting outcome
from the measures are elaborated upon.

Chapter 8 gives a detailed account of concluding comments and inference made by the author.

Appendix A lists the interview questions used in connection to the interview sessions.

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2 GREEN BUILDINGS
The concept of “green” buildings has gained significant attention as the built environment and its
negative impact on the natural environment has been acknowledged. Firstly, the link between the
construction and real estate sector and the environment is elucidated. Additionally, this chapter
aims at introducing the reader to the subject by presenting the many definitions of what actually
constitutes a “green” building and also the premises for implementing green initiatives. Literature
concerning green buildings in relation to shopping centers in particular is briefly presented.

2.1 The Link between Buildings and Environmental Concerns

The construction and real estate sector plays a crucial part in sustainable development as the
connection between our built environment and the global climate change has been acknowl-
edged. Buildings are allegedly consuming approximately 32% of the world’s natural resources
(Bonde et al, 2009, p.3). Specifically, roughly 50% of all the hazardous carbon dioxide emissions
come from buildings located in the world’s developed countries (Reed & Wilkinson, 2005, p.341).
In combination with the increasing awareness of the consequences related to the deterioration of
the environment and the growing consensus regarding social responsibility, the concept of sus-
tainability has gradually gained foothold within the construction and real estate sector (Eichholtz
et al, 2009a, p. 2).
As a result, numerous rating tools, certification systems, buildings codes and standards
have been introduced during the past years as an attempt to facilitate the “greening” of the indus-
try (Eichholtz et al, 2009a, p.3). The tools have been distinguished and accustomed due to pre-
vailing differences between various property asset types and also due to diverse market partici-
pants (de Francesco & Levy, 2008, p.81). For instance, certification systems such as LEED and
BREEAM have gained international recognition and are increasingly demanded by investors op-
erating on the international market (Bonde et al, 2009, p.28).
Nevertheless, new buildings entering the market are comparatively high in standard due to
the emergence of the different means such as industry standards and rating tools. The real issue
concerns how to fully extend the concept of sustainability and a green way of thinking to the
existing building stock where most building activities take place in terms of refurbishment and
maintenance. It is acknowledged that equal priority ought to be given to both new buildings and
the existing building stock since both distinctions have the potential to reduce the negative im-
pact on the environment (Reed & Wilkinson, 2005, p.344). This view is shared by Pivo &
McNamara (2005), who also state that it is highly possible for the existing building stock to more
than match the improved quality of new buildings just by undertaking minor improvement meas-
ures. Moreover, it is considerably easier and less expensive to implement the new standards on

10
new building projects (Kats, 2003, p.3). In other words, the general focus has been on how to
reduce the negative impact on natural and social environment due to new developments entering
the market (Pivo & McNamara, 2005, p.133). As a matter of fact, sustainable practices such as
increased energy efficiency and reduction of greenhouse gas emissions are easier and cheaper to
adopt within the construction and real estate industry (Nelson, 2008, p.2).

2.2 What is a “Green” Building?

A definite and universal definition of a green building, also recognized as sustainable or high-
performance building, is relatively difficult to delineate largely due to national discrepancies re-
garding which rating system is being adopted. Nevertheless, attempts to provide a general de-
scription consisting of frequently recurring fundamentals have been made by a few numbers of
scholars and institutions.
Kats (2003, p.2) gives a highly simplified definition of a green building as utilizing resources
such as water, energy, raw materials and land more efficiently than conventional buildings whe-
reas The National Institute of Building Science (NIBS) provides a broader definition. More spe-
cifically, NIBS presents a description of a green building composed of six fundamental principles
(2006):

 Optimize site or existing building potential

Reducing the impact of buildings on the local ecosystem, transportation methods
and energy usage by thoroughly considering aspects such as location, orientation
and landscaping.
 Optimize energy use
To increase energy efficiency and consider renewable alternatives as to reduce
energy dependencies.
 Protect and conserve water
Efficient use of water by reducing, controlling and/or treating site run-off and
reuse water on-site if possible.
 Use environmentally preferable products
Using materials which have reduced environmental impact in comparison to con-
ventional alternatives.
 Enhance indoor environmental quality
Maximize daylight, incorporate appropriate ventilation and moisture control in or-
der to promote occupant health, comfort and productivity.

11
  Optimize operational and maintenance practices
Basically to try to consider a building’s operational and maintenance issues at an
early stage in order to optimize for instance work environments or reduce opera-
tion and maintenance costs etc.

As previously mentioned, there exist numerous definitions of green buildings as a result of

the many rating tools and certificates which have emerged. Also, it is common that an interna-
tional certification system is further adjusted for instance in accordance to existing national regu-
lations or to better suit country- specific conditions. The following section of this chapter
presents a selection of four certification systems, namely; U.S. developed LEED, British
BREEAM, the Swedish rating system called Miljöklassad Byggnad and EU Commission’s
GreenBuilding. More specifically, these rating systems “definition” of a green building is elabo-
rated upon.

2.2.1 LEED – Leadership in Energy and Environmental Design

LEED is a green building rating system developed by the U.S. Green Building Council (USGBC).
The rating system serves as a framework for professionals when identifying, implementing and
measuring high-performing green buildings’ and neighborhoods’ design, construction, operation
and maintenance. Accordingly, the underlying ambition behind the rating system is to optimize
the use of natural resources, promote both regenerative and restorative strategies and also pro-
vide high-quality indoor environment for occupants. Subsequently, maximizing the positive and
minimizing the negative impacts that buildings have on the environment and human health
(USGBC, 2009a). LEED is a highly internationally recognized green building rating system and is
adopted in countries throughout the world (Bonde et al, 2009, p.4).
Presently, there exist nine distinct LEED-rating systems applicable on different buildings
types and throughout the life-cycle of the building (design, construction and operation). These
are:
 New Construction
 Commercial Interiors
 Core & Shell
 Schools
 Healthcare
 Homes
 Retail
 Neighborhood Developments
 Existing Buildings: Operation & Maintenance

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 Moreover, these certification programs promote a whole-building approach to sustainabili-
ty by recognizing building performance in the following areas (USGBC, 2009b):

 Sustainable Sites
 Water Efficiency
 Energy & Atmosphere
 Materials & Resources
 Indoor Environmental Quality
 Location & Linkages
 Awareness & Education
 Innovation in Design
 Regional Priority

Nevertheless, minor discrepancies may exist due to the fact that some areas may not be
elevant for a specific rating system. As the intention of the thesis is to investigate environmental
concerns in relation to shopping centers, and existing ones in particular, the remainder of this
section concerning LEED will only discuss the rating systems relevant for retail buildings.

LEED Rating Systems Applicable for Retail

The USGBC is at present developing two new rating systems particularly for retail buildings,
which are currently in ballot. These are LEED for Retail: New Construction and LEED for Retail:
Commercial Interiors. Accordingly, LEED for Retail: New Construction is intended for the certifica-
tion of new retail buildings while LEED for Retail: Commercial Interiors is primarily for tenants
when they seek to certify their build-out.
The prerequisites and credits necessary for an approved LEED for Retail certification ad-
dress seven key areas, namely;

 Sustainable Sites
 Water Efficiency
 Energy & Atmosphere
 Materials & Resources
 Indoor Environmental Quality
 Innovation and Design Process
 Regional Priority

As previously mentioned, the focus of the thesis is to look at existing buildings. Subse-
quently, more attention will be given to exploring the LEED for Existing Buildings: Operations and
Maintenance rating system as the following section is a more exhaustive depiction of the LEED for
Existing Building rating system only.

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LEED for Existing Buildings: Operation & Maintenance
The LEED for Existing Building rating system is applicable for both existing buildings without
prior LEED certification and buildings which have previously been certified under other LEED
rating systems. The goal with employing the LEED for Existing Building rating system is to max-
imize operational efficiency and simultaneously minimize the building’s impact on the environ-
ment. More specifically, the ambition is to promote high-performance, healthful, durable, afford-
able, and environmentally sound practices in existing buildings, which range from commercial or
institutional to residential buildings (USGBC, 2009c).
The LEED for Existing Building rating system encompasses seven of the underlying key
areas as identified by USGBC and the constituents of these areas are presented in this section.

 Sustainable Sites
 LEED certified design & construction
 Building exterior & hardscape management plan
 Integrated pest management, erosion control & landscape management
plan
 Alternative commuting transportation
 Site development – protect or restore natural habitat
 Stormwater quantity control
 Heat Island Reduction – nonroof & roof
 Light pollution reduction

 Water Efficiency
 Minimum indoor plumbing fixture and fitting efficiency required
 Water performance measurement
 Additional indoor plumbing fixture and fitting efficiency
 Water efficient landscaping
 Cooling tower water management

 Energy & Atmosphere

 Energy efficiency best management practices
 Minimum energy efficiency performance required
 Fundamental refrigerant management
 Optimize energy efficiency performance
 Existing building commissioning (investigation & analysis, implementa-
tion, ongoing commissioning)
 Performance measurement (building automation system, system-level
measuring)
 On-site and off-site renewable energy
 Enhanced refrigerant management
 Emissions reduction reporting

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  Materials & Resources
 Sustainable purchasing policy
 Solid waste management policy
 Solid waste management (waste stream audit, ongoing consumables, dura-
ble goods, facility alteration and additions)
 Sustainable purchasing (ongoing consumables, durable goods, facility alte-
ration and additions, reduced mercury in lamps, food)

 Indoor Environmental Quality

 Minimum indoor air quality performance required
 Environmental tobacco smoke control
 Green cleaning policy
 Indoor air quality management program
 Outdoor air delivery monitoring
 Increased ventilation
 Reduce particulates in air distribution
 Indoor air quality management for facility alteration and additions
 Occupant comfort (occupant survey, thermal comfort monitoring)
 Controllability of systems – lighting
 Daylight & views
 Green cleaning (high-performance cleaning program, custodial effective-
ness assessment, purchase of sustainable cleaning products and materials
sustainable cleaning equipments, indoor chemical and pollutant source
control, indoor integrated pest management)

 Innovation in operations
 Innovation in operations
 LEED accredited professional
 Documenting sustainable building cost impact

 Regional priority
 Regional priority

2.2.2 BREEAM – Building Research Establishment’s Environmental Assess-

ment Method
BREEAM was developed by the British Building Research Establishment and is one of the world’s
most well-known and widely used certification tools for environmental assessments in the con-
struction and real estate sector. Subsequently, the main idea behind BREEAM is to mitigate
buildings’ negative impact on the environment by providing a credible and environmental label
for buildings (BRE Global, 2008, p.8).
In order to achieve the goals, several objectives of BREEAM have been established. First
and foremost, to ascertain market recognition for buildings with low environmental impact and
to raise awareness among market participants regarding the associated benefits of green buildings.
Moreover, to allow organizations to demonstrate their corporate environmental progress and
ensure that environmental best practices are employed. Accordingly, BREEAM sets criteria and

15
standards which exceeds existing regulations and also challenges the market to provide new and
innovative solutions which are environmentally beneficial (BRE Global, 2008, p.8).

BREEAM Schemes and Key Categories of Sustainability

Currently, there exist a number of different schemes of BREEAM customized for various build-
ing types:

BREEAM Courts BREEAM Prisons BREEAM Communities

BREEAM Education BREEAM Healthcare BREEAM International
BREEAM Offices BREEAM Ecohomes BREEAM Other Buildings
BREEAM Industrial BREEAM Multi-residential
BREEAM Retail BREEAM Domestic

Furthermore, the BREEAM environmental assessment method encompasses ten areas re-
lated to sustainability (BRE Global, 2008, p.14):

Management Waste
Best practice commissioning Construction waste
Policies implemented at top level management Recycled aggregates
Effective, used and maintained operating manuals Recycling facilities
Operational environmental management systems
Land use & Ecology Health & Wellbeing
Site selection Heating
Protection of ecological features Lighting
Mitigation/enhancement of ecological value Air quality
Noise
Energy Water
CO2 emissions Water efficient appliances
Low energy lights Water metering
Metering Leak detection systems
“A”-rated white goods Water-butts
Energy management

Transport Pollution
Location of development Refrigerant use and leakage
Parking and cycling facilities Flood risk
Access to public transportation and local amenities NOx emissions
Implementation of travel plans Watercourse pollutions
External light and noise pollution

Innovation Materials
Exemplary performance levels Embodied life cycle impact of
Use of BREEAM Accredited Professionals materials
New technologies and buildings process Materials re-use
Responsible sourcing
Robustness
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Pan-European BREEAM for Shopping Centers
Worth mentioning is that the International Council of Shopping Center’s (ICSC) European
working group for sustainability matters has evaluated various certification standards existing
today with the ambition of choosing one of those to develop it into a pan-European standard.
Accordingly, the working group has acknowledged BREEAM as the most appropriate standard
for use in connection to environmental assessments of new and existing shopping centers
throughout Europe. Therefore, the sustainability working group has adapted BREEAM for use
across Europe and initiated a one-year long pilot program in 2008 which was launched in autumn
2009.
An essential argument for choosing BREEAM instead of other international certification
standards is because of its European roots and as a result its adaptability to local European mar-
kets.

2.2.3 Environmental Classification of Buildings – Miljöklassad Byggnad

Miljöklassad Byggnad is a Swedish environmental classification program for buildings initiated in
2005 by Bygga-Bo-Dialogen, which is an organization consisting of representatives from both
public and private construction and real estate sector. The objective is that the wellbeing of
people living and working in a certified building should be enhanced at the same time as build-
ings’ negative impact on the climate and environment is reduced (Bygga-Bo-Dialogen, 2008).
The certification system can be implemented on both existing buildings and new develop-
ments. Nevertheless, it was initially intended for assessment of the existing building stock only
due to the interest of a building’s function in terms of the technical systems (Bygga-Bo-
Dialogen).

The Foundations of Miljöklassad Byggnad

Four main areas, which are the basis for the classification of a building, constitute the Swedish
environmental assessment tool. These are energy, indoor environment, chemical substances and special
environmental requirements. However, the special environmental requirements category is only appli-
cable on buildings with their own water supply and sewage systems. Below is an amplification of
the four classification categories (Bygga-Bo-Dialogen, 2008).

 Energy
The first area concerns the energy need and consumption of a particular building.
Subsequently, three aspects have been identified as significant within this category.
The first aspect is the energy consumption in relation to purchased energy. The
second aspect concerns the energy need as a result of the physical characteristics of
the building and heat recovery. Lastly, the type of energy being used is considered.

17
  Indoor Environment
The second category primarily concerns the identification of problem areas related
to the indoor environment which could potentially lead to health problems. Five
aspects regarding indoor environment are assessed. These include noise, air quality,
thermal climate and daylight, moisture level and the risk for Legionella in water.
 Chemical Substances
This particular category considers the occurrence of chemical substances in a build-
ing, for instance in the building materials. The nature of this category is more a
question of activities needed in order to detect and mitigate the substances. Activi-
ties include inventory, documentation of building products and chemical sub-
stances and ultimately a phase-out of chemical substances particularly harmful.
 Special Environment Requirements
As previously mentioned, the fourth category is only applicable for assessment of
buildings with their own water supply and sewage system. Two aspects identified as
of relevant significance for such buildings are that a good quality of the drinking
water is maintained and that small sewage systems have a high level of eutrophied
substance reduction.

2.2.4 GreenBuilding – Improved Energy Efficiency for Non-Residential

Buildings
The GreenBuilding Program was initiated in 2004 by the European Commission, as a part of the
Intelligent Energy Europe Program, and has increasingly gained foothold in the industry the past
years. As of today, thirteen European countries are involved in the project and have introduced it
to the local market. These countries include Sweden, Germany, France, Spain and Finland
amongst others.
Several goals serve as the foundation of the GreenBuilding Program. First and foremost,
the main objective is to trigger investments in the field of energy efficiency and renewable energy
technologies for non-residential buildings, investments which are profitable and based on proven
technologies. The program encourages measures which exceeds existing regulations and are eco-
nomically viable. As a result, it contributes to the advancement of present technologies. The pro-
gram is intended to open up markets by increasing awareness, know-how and technical capabili-
ties, access to finance and energy services. Hence, to achieve investments with high benefits and
shorter pay-back period. Lastly, the GreenBuilding Program seeks to provide information and
support as well as acknowledging companies which are committed to improving energy efficiency
beyond legal requirements.

18
Becoming GreenBuilding Partner
There are basically two possible ways for a company to become a GreenBuilding Partner (Euro-
pean Commission, 2009, p.4). The first alternative is being a partner on corporate level. Commit-
ting to the program on a corporate level implies that at least 30% of the company’s existing build-
ings and 75% of the new buildings have met the requirements. The second alternative becoming
a partner is by implementing the program on one specific building or a few numbers of buildings
within their building stock.
Subsequently, the process of acquiring GreenBuilding status consists of four steps:

 Establishment of an energy audit of the building(s) which the company has cho-
sen to participate in the program. The energy audit should contain information re-
garding energy use and the current state of the building(s) in terms of hours of op-
eration, climatic data etc. The audit should also identify major energy efficiency or
saving opportunities, priorities these with regards to their cost-effectiveness and al-
so specify interactions between possible measures undertaken in different parts of
the building.
 Formulation of an action plan where the scope and nature of the company’s level
of commitment is thoroughly delineated. In other words, energy saving measures
which correspond to the company’s criteria for economically viable investments.
The plan should give detail information concerning the building itself, the total
energy consumption and identify the types of end-use equipment, systems and/or
services the company chooses to upgrade. These so called technical modules in-
clude for instance the building envelope, lighting, office equipments and ventila-
tion.
 Approval of the action plan by the National Contact Point of immediate interest
and the EU Commission.
 Execution of the actual action plan and report to the National Contact Point
and EU Commission.

Additionally, guiding principles are given in connection to the granting process. In the case
of new buildings, the guiding principle is that the building should consume 25% less total primary
energy, if economically viable, than the standard at time or of a conventional building presently
constructed. In the case of existing buildings, the guiding principle is that the building should
consume 25% less total primary energy, if economically viable, after refurbishment in comparison
to before.

19
2.3 Current State of Green in Sweden – What’s Happening?
Although Sweden is often viewed as one of the forerunners in terms of environmental commit-
ment and sustainability, the Sweden Green Building Council (GBC) was founded as late as in
June 2009 by 13 different companies and organizations. Accordingly, the Swedish GBC operates
in accordance to the directives and intentions as stated by the World GBC. The objective is to
become “Emerging Member” in 2010 in order to gain full membership in 2011 (SGBC, 2010a).
The purpose of the initiative is to provide a common ground for companies and organiza-
tions on the Swedish construction and real estate sector in order to further facilitate sustainable
development. As a result, the Swedish GBC has assessed several green building certification tools
currently available on the market and concluded by recommending LEED, BREEAM, Green-
Building and Miljöklassad Byggnad as most applicable for buildings in Sweden (SGBC, 2010b).
Moreover, Liljeholmstorget, which is owned by Citycon, is Europe’s first shopping center
achieving the LEED Platinum certification. The shopping center is located in Stockholm and was
opened in October 2009. Environmental aspects which resulted in the highest certification level
include low energy consumption, recycled construction materials and great transportation possi-
bilities (FSVE, 2010a).
In addition, the shopping center Gyllen in Linköping, which is owned by Diligentia, has
been certified with GreenBuilding certification in connection to the rebuilding during 2009. More
specifically, the reconstruction of Gyllen resulted in roughly 50% reduction of the total energy
consumption due to more efficient ventilations systems and more modern control systems
(FSVE, 2010b).
Furthermore, one of the biggest and most talked about projects on Stockholm City area is
Arena City with a shopping center in its conjunction, namely Mall of Scandinavia. Unibail-
Rodamco is the major company behind the project, which is a new regional shopping center
comprised of roughly 130’000 m2 retail area planned for 2012. The objective as stated by Unibail-
Rodamco is to attain a BREEAM certification for the building (Unibail-Rodamco, 2010).
Lastly, the international consultancy firm WSP is currently working with KF Fastigheter
on a project which aims at investigating the possibilities of adapting the Swedish environmental
assessment tool Miljöklassad Byggnad to be more applicable for assessing shopping centers
(Öhrling, 2010).

20
3 THE BENEFITS OF GOING GREEN
In connection to the promotion of green buildings, different benefits have been acknowledged
and endorsed. These drivers of the green building movement range from downright ecological
remunerations to financial benefits. Moreover, prior studies concerning the benefits associated
with green buildings have distinguished what is described as direct and indirect benefits and risk
related gains (Lorenz & Lützkendorf, 2008, p.489).
Naturally, the initial reason behind the green building revolution concerns the environmen-
tal or ecological issues which have been recognized the past decades. As a result, environmental
benefits such as enhanced and protected ecosystems and biodiversity, improved air and water
quality, reduced waste and the conservation of natural resources function as fundamentals for
going green (USGBC, 2009d).
Nevertheless, in particular the financial benefits associated with green buildings have in-
creasingly gained attention and been extensively researched and documented. In the following,
the financial benefits of green buildings will be elucidated.

3.1 The Business Case for Green Buildings

Undertaking sustainable practices is no longer considered as purely environmental and social re-
sponsibility. Nevertheless, incorporating sustainability is increasingly gaining reputation as a fi-
nancially sound and responsible business strategy as well (von Paumgartten, 2003, p.28). Hence,
obvious drivers of sustainable practices comprise of tenant and investor demand, societal de-
mands and government regulations, rising energy prices and unsurprisingly the notion of global
climate change (Nelson, 2008, p.22).

3.1.1 Direct Economic Impact

At present, investment activities taking place within the commercial property sector encompass a
great variety of investors with diverging demands and objectives. The market consists of not only
local participants but also of a growing number of international participants due to cross-border
investments (Nelson, 2008, p.9). Nonetheless, irrespective of whether it is a property owner or
investor, the objective is to maximize the return from investments (Reed & Wilkinson, 2005,
p.345).
Sustainable investments can increase property value and improve the rate of return in dif-
ferent ways. For instance, sustainable investment entails opportunities to increase operational
efficiency and hence enhance competitiveness (Pivo & McNamara, 2005, p.136). Additionally,
there is an agreement among academics and researchers regarding the financial benefits that can
be achieved due to sustainable practices. A paper assembled by Bowman and Willis (2008, p.15)
identified reduction in operation costs by 8%-9%, increase in occupancy ratio by 3,5%, rent in-
21
crease by 3%, increase in property value by 7,5% and more importantly that return on investment
(ROI) increased by 6,6%. Eichholtz et al (2009a, p.27) discovered improved values following
similar pattern. More significantly, the study distinguished a 16% increase in selling price.
The notable benefits to investment returns are highly correlated to the matter of energy ef-
ficiency (Pivo & McNamara, 2005, p.136). In addition, valuation methods have been identified as
highly relevant in determining the financial benefits. Reed and Wilkinson (2005, p.345) highlights
the capitalization of value approach and the discounted cash-flow (DCF) approach as an attempt
to examine the economic variables that influence the market value and the rate of return. Key
variables related to the capitalization approach are the net operating income (NOI) and the capi-
talization rate (Bowman & Willis, 2008, p.12). As property owners undertake practices that in-
crease energy efficiency, the NOI ought to increase due to reduced operational costs and energy
consumption.
The capitalization rate, which reflects the market’s perception of the future risk associated
with the property, has a significant influence on the property value. In addition, the perceived risk
is highly related to obsoslescence and depreciation. For instance, the capitalization rate will be
lower if a property ages slower due to less obsolescence (Reed & Wilkinson, 2005, p.345). Re-
garding the DCF approach, incorporating sustainable practices such as energy conservation will
intuitively influence the cash-flow and the discount rate (de Francesco & Levy, 2008, p.78). The
DCF method rigorously analyses income and expenses. Hence, the method also monitors the
impact exerted by obsolescence and depreciation on the property (Reed & Wilkinson, 2005,
p.345).
Additionally, in a property investment context, the notion of sustainability has lead to the
emergence of responsible property investing (RPI). Pivo and McNamara (2005) defines responsi-
ble property investing as; “maximizing the positive effects and minimizing the negative effects of
property ownership, management and development on society and the natural environment in a
way that is consistent with investor goals and fiduciary responsibilities.”
An article published in the Journal of European Real Estate Research extends the conception of
RPI and investigates the potential impact of sustainability from a property investment perspec-
tive. More specifically, the authors refer to sustainability as providing an opportunity to incorpo-
rate external costs such as social or environmental into the market price mechanism (de Frances-
co & Levy, 2008, p.74). Furthermore, by being able to incorporate aspects directly related to sus-
tainability, a more socially optimal outcome can be obtained due to a more efficient market pric-
ing. In addition, the higher market price ought to provide the means to embark on research and
development and commence investment in new technologies (de Francesco & Levy, 2008, p.75).

22
3.1.2 Indirect Economic Impact
As previously mentioned, green buildings also yield benefits described as indirect or intangible.
These indirect benefits are often linked to the enhanced indoor environmental quality due to
green features. For instance, the improved air; thermal; lighting and acoustic environments as
identified by the USGBC (2009d) imply increased occupant productivity and satisfaction. This in
turn might result in a willingness to pay higher rent by the tenant (Eichholtz et al, 2009a, p.6).
Although the link between indirect benefits such as improved productivity and occupier
comfort is relatively hard to assess in comparison to for instance energy savings, there ought to
be a positive correlation due the alleged negative relation between poor indoor environmental
quality and for instance higher absenteeism and health related issues such as respiratory ailments
(Kats, 2003, p.5).
Furthermore, a number of studies have identified the possibilities for corporate tenants to
attract and retain highly qualified employees by occupying a building with green features. The
underlying argument being that companies are concerned with their reputation among current
and prospective employees and that a green workplace will promote the health and satisfaction of
those (see for instance, Kats, 2003; Nelson, 2008; Eichholtz et al, 2009b).
In connection to employee attraction and retention, Eichholtz et al (2009a, p.7) also men-
tions the likelihood of tenants being willing to pay higher rents as they believe that locating in a
green and sustainable building will have a positive effect on corporate image.

3.2 Challenges Facing the Implementation of Green Initiatives

Although the concept of sustainability has rapidly spread across the industry and investors are
gradually realizing the importance of embracing the idea of socially responsible property invest-
ing, skepticism still exist due to uncertainties and ambiguities concerning some of the fundamen-
tal factors needed to ascertain the prospective of a green real estate industry. First and foremost,
the limited supply of properties considered as green is recognized as considerably hampering the
progression of green buildings as an investment class (Nelson, 2008, p.14). The lack of compara-
ble properties and sufficient property transactions simply implies that the alleged benefits due to
for instance increased energy efficiency cannot be adequately related to the property values etc
(Lorenz & Lützkendorf, 2008, p.494). The need for quantifiable remuneration is even more es-
sential for commercial properties whose green investments are not financed or supported by
public funds, meaning that the owners and investors must then take the initiatives by themselves
and more importantly within their economic limitation (Milian, 2006).
Furthermore, Eichholtz et al (2009a, p.3) emphasize that the economic grounds for imple-
menting green investments are greatly supported by subjective postulations, leading to uncertain-

23
ty among developers and investors regarding the actual investment performance. In addition,
Ellison and Sayce (2007, p.287) highlights the notion of the so called “circle of blame”. More
specifically, that the market participants accuse one another for the limited response or “slug-
gishness” of the commercial property sector to the green agenda (Bonde et al, 2009, p.3).
The situation is even worse in connection to the existing buildings stock. Because of the
significant variety in terms of age, condition and quality, the cost and benefits of refurbishing
existing buildings to more environmental sound standards are even less accurate and quantifiable
(Nelson, 2008, p.14).
The main drivers of investments in refurbishing are often financial. In other words, the
reasons for property owners to conduct refurbishment are generally as a means of reducing va-
cancy, obtaining higher rental levels and to diminish obsolescence (Reed & Wilkinson, 2005,
p.342). However, property owners have to be assured that they will be rewarded financially if they
for instance increase energy efficiency or implement more efficient waste management. Other-
wise, the feasibility of such investments will most certainly be questioned until a significant level
of financial stability can be maintained (Reed & Wilkinson, 2005, p.347).
Another factor perceived as an obstacle for further expansion of the green trend is the
lease structure. A majority of previous studies highlights the impact the leases have on the exis-
tence of the sustainable agenda. The standard lease structure, whether it is a gross lease or a net
lease, is considered as an impediment for tenants and landlords to engage in sustainable practices
(Hinnells et al, 2008, p.544). For instance, a gross lease simply implies that there are economic
incentives for the landlord or property owner to undertake energy efficiency measures, whilst the
tenant ought to be more interested in a building with increased energy efficiency if there was a
net lease (Reed & Wilkinson, 2005, p.347).
The third aspect hindering the development of sustainable practices within the industry
concerns the rating tools and certification systems that presently exist within the sector. More
specifically, the vast variety of type and arrangement of rating tools and environmental certifica-
tion systems is creating frustration and confusion among market participants (de Francesco &
Levy, 2008, p.81). Currently, there exist several types of certification systems which in turn can
vary due to property type, regional condition and country. Moreover, certification systems only
focusing on certain aspects of sustainability such as energy efficiency or indoor environment
quality have emerged (Bonde et al, 2009, p.4). For instance, the European Greenbuilding certifi-
cation focuses solely on energy efficiency.
Finally, one ought to consider the possible impact of the ongoing global financial crisis on
the change towards a greener construction and real estate sector. Naturally, the vagueness regard-

24
ing the financial premiums such as higher return on investment is even more uncertain these days
(Nelson, 2008, p.13). However, the global recession is believed to only slow the green change in
the market (Nelson, 2009, p.1).

25
4 COMPANIES’ ENVIRONMENTAL COMMITMENT
Although the notion of corporate social responsibility is currently gaining considerable amount of
attention, the modern era of social responsibility actually began in 1950’s as a result of Howard
Bowen’s book “Social Responsibility of Businessmen” which marked the beginning of literature
on the subject (Carroll, 1999, p.269). This chapter of the thesis introduces the reader to the broad
concept of corporate social responsibility and continues by elucidating and focusing on the eco-
logical perspective, namely; corporate environmental responsibility. Additionally, further details
regarding the motivations and drivers of companies’ ecological responsiveness is given and the
emergence of corporate environmental reporting is elucidated.

4.1 Corporate Social Responsibility

The integration of social, ethical, economical and environmental concerns within the business
community have contributed to the emergence of corporate social responsibility. In “Concepts
and Definitions of CSR and Corporate Sustainability” (2003), van Marrewijk illuminates three
different perspectives of whom an organization has a responsibility. A classical view of CSR is
the shareholder approach, where the social responsibility of a company is to contribute to the
actual purpose of the company, which is to create long-term value for the owners, namely the
shareholders. In other words, businesses are only concerned with CSR to the extent that it in-
creases its profits. The second perspective is the stakeholder approach, which view companies’
accountability as including the balancing of multiple stakeholders’ interests which can directly
affect or are affected by a company’s pursuit of corporate objectives (van Marremijk, 2003, p.96).
A broader view of CSR is the societal approach, which sees a company as an integral part of the
society of which it is responsible for as a whole. This latter perspective is perceived as being a
response to ever-changing circumstances and new corporate challenges, taking on a philanthropic
approach (van Marrewijk, 2003, p.97).
As with other concepts, CSR does not necessarily mean the same thing to everybody. The
intense debate involving different parties such as academics, corporate executives and consultants
has resulted in numerous definitions of basically the same notion, which is a more humane, more
ethical and more transparent way of conducting business. For instance, one definition of CSR is
given by the World Business Council for Sustainable Development (WBCSD):

“CSR is the continuing commitment by business to behave ethically and

contribute to economic development while improving the quality of life
of the workforce and their families as well as of the local community and
society at large.”

26
 A broad definition, however perceived as rather vague by some, refers corporate social re-
sponsibility to company practices. These activities are voluntary by definition and demonstrate
the integration of social and environmental concerns into the actual business operations and also
in interaction with stakeholders (van Marrewijk, 2003, p.102).
Furthermore, some scholars distinguish between corporate sustainability and corporate re-
sponsibility, referring sustainability to its fundamental definition as proposed by the Brundtland
Commission in 1987 and placing corporate sustainability as the ultimate aspiration. On the other
hand, corporate (social) responsibility is seen as an intermediate stage in attaining corporate sus-
tainability as businesses balance the “Triple Bottom Line” (profit, planet, people) in their opera-
tions (Wempe & Kaptein, 2002, p.228). This view of CSR is relatively suggestive of the one pre-
sented by de Francesco and Levy (2008, p.73), where CSR can be described as combining the
three key dimensions of sustainability, namely; ecological, economical and social sustainability,
together with corporate governance or corporate practices. Below is an illustration of the rela-
tionship between sustainability and CSR as proposed by de Francesco and Levy.

Corporate Social Responsibility

Ecological
Green
Buildings

Economical Social

Corporate
Govern-
SUSTAINABI-
ance
LITY

Fig.1
Source: de Francesco & Levy (2008) &
author.

In a classic paper aiming at exploring the definitional evolution of corporate social respon-
sibility, Carroll (1999, p.277) depicts three fundamental constituents or stages in connection to
the implementation of corporate social responsibility initiatives within organizations. The first
stage involved is to set objectives. The second stage is to decide whether or not to pursue the
objectives that have been set. The third and final stage is simply to finance the objectives.
The same author explains that the act of social responsibility begins where the law ends.
More specifically, merely complying with the minimum requirements as stated by law or regula-
tions does not automatically imply that an organization is being socially responsible.

27
4.2 Corporate Environmental Responsibility
Referring back to the previous section, a basic definition of CSR is the voluntary commitment of
a company to contribute to current social and environmental goals. Accordingly, corporate envi-
ronmental responsibility (CER) can be seen as an implied part of CSR (Lynes & Andrachuk,
2008, p.378).
More specifically, the ecological aspect of CSR entails an accountability to consider the en-
vironmental implications of the company’s operations, products and facilities which might nega-
tively affect the future generations’ gratification of the natural environment. In other words, a
company shall address environmental and ecological issues affected by its decision-making (Des-
Jardins, 1998, p.825). Therefore, a company shall strive for eliminating waste and emissions, max-
imize efficiency and productivity, and naturally manage practices which might contribute to the
environmental and ecological deterioration.
In his paper concerning CER, DesJardins (1998, p.833) proposes three general normative
principles for companies and different industries.

1. Renewable resources should not be utilized at a rate which exceeds the ecosystem’s
ability to replenish itself.
2. Non-renewable resources can only be used at the rate at which alternatives are de-
veloped or loss of opportunities compensated.
3. Wastes and emissions should not be generated at rates which exceed the capacity of
the ecosystem to assimilate them.

The same author also emphasizes the importance of relating ecological principles to a
company’s long-term self-interest in order for environmental concerns to influence corporate
policies. Moreover, a more holistic and “ecocentric” perspective ought to be included (1998,
p.832).

4.3 Drivers of Corporate Environmental Responsibility

Numerous researches and studies have been conducted aiming at investigating the underlying
motivations or drivers of CSR and accordingly CER. Although vocabulary divergences might
exist, the essential elements constituting the motives are relatively the same. Nevertheless, Bansal
and Roth (2000, p.717) highlight the importance of understanding the motivations and the differ-
ent factors which results in these motives. For instance, understanding what drives the companies
in CSR related issues could assist academics in predicting ecologically based behaviors. Moreover,
exploring the fundamentals as regards why companies respond to these issues would distinguish

28
the mechanisms which foster responsible organizations. Hence, allowing the determination of
appropriate and efficient measures by for instance policy makers, managers and institutions.
Mazurkiewicz (2010) describes the drivers of CSR as a mixture of incentives and risks
aimed at companies to improve its standards. In other words, these drivers emerge in connection
to the anticipation or respond to a risk associated with for instance social or environmental im-
pact of a company’s business practice. Accordingly, Mazurkiewicz (2010) distinguishes three driv-
ers of CSR, namely; economic, social and political drivers. The economic drivers include better
image and reputation of the company, improved risk management, competitive advantage and
pressure from investors and customers. The social drivers include for instance pressure from
local communities and political drivers encompass regulations and license to operate.
Other academics explain the motivations as internal, sector-specific and external influences
which operate separately or in concurrence (see for instance Dummett 2006; Lynes & Andrachuk
2008). Dummett (2006, p.376) distinguishes key influences such as international agreements, na-
tional governmental policies and market forces which can be further broken down to several ac-
tual drivers of CSR such as government legislation, cost savings, risk avoidance and what is re-
ferred to as a “champion” within an organization driving it to sustainability. This champion is
often a high-profiled person with personal environmental and social agenda.
Furthermore, Valentine (2009) summarizes the catalysts for corporate environmentalism,
referring to risks and incentives as threats and opportunities instead.

Threats Corporation Opportunities

- Business Risk Management - Competitive Advantage

- Stakeholder Pressure - Cost Reduction
- Reputation,PR - Increased Access to Finance
- Legislation - Increased Employee Motivation, Reten-
- International Standards tion & Recruitment
- Green Marketing or Consumerism

Fig.2
Source: Valentine (2009) & author

29
4.4 Three Thorough Models of Corporate Ecological Responsiveness
As mentioned in connection to the preceding part of the thesis, there exists a vast amount of
researches examining why and how companies respond to CSR and the ecological aspect in par-
ticular. However, the majority of these studies solely concentrate on the motivational factors,
leaving out the underlying factors or contexts which lead to these motives or drivers. Therefore,
the findings from three different studies concerning the subject will be elaborated upon in con-
junction in the following. These studies include the ones conducted by Lynes and Andrachuk
(2008), Bansal and Roth (2000) and Valentine (2009).
Common to all three studies is the inclusion of factors influencing or leading to certain
drivers to CSR among firms. In particular, the two former studies explain the motives behind
companies’ commitment to dynamic layers of different influential elements.

Model Developed by Lynes and Andrachuk (2008)

Nevertheless, the conceptual model provided by Lynes and Andrachuk (2008) is slightly more
exhaustive in terms of illustration. The model illustrates how a company first processes and in-
terprets motivations from sector-specific and external influences and then decides to what extent
it will commit to social and environmental issues.
The first part of the model depicts the grouping of external and sector-specific influences
into four different systems and how these influence the way the companies are operated:

 The market system – cost-benefit analysis of the potential advantages to the

company within the market place.
 The political/institutional system – influence by political culture and system of
government where the company operates.
 The scientific system – influences due to scientific knowledge of cause and con-
sequences.
 The social system – influences from the sharing of knowledge about market, po-
litical and scientific systems.

The second part of the model depicts how the four systems determine a company’s moti-
vations. These motives encompass financial benefits, competitive advantage, image enhancement,
stakeholder pressure and risk avoidance. The third part of the model illustrates catalysts which
may act as an intermediate step in encouraging or discouraging a company’s social and environ-
mental commitment. Catalysts such as the financial position of the company, internal leadership
and the culture in which the company operates have been identified in connection to the devel-
opment of this particular model. The fourth and final part of the model depicts how previous

30
parts result in the level of commitment, which can be displayed as corporate policies, external
validation mechanism and employment of a person overseeing social and environmental perfor-
mance of the company. Below is a figure of the model developed by Lynes and Andrachuk.

Market
System

Sector-specific Influences
External Influences

Scientific Social
Company
System System

Political
System

Motivations

Financial Benefits
Competitive Advantage
Image Enhancement
Stakeholder Pressure
Risk Avoidance

Catalysts

Culture
Financial Position
Internal Leadership

Level of company commitment

Fig. 3
Source: Lynes & Andrachuk (2008) & author
31
Model Developed by Bansal and Roth (2000)
Another model emphasizing the significance of understanding the underlying factors which result
in varying motivations explaining corporate ecological responsiveness is the one constructed by
Bansal and Roth (2000). The model defines corporate ecological responsiveness as initiatives
aimed at mitigating a firm’s negative impact on the natural environment. Additionally, three main
motivations have been identified as crucial in influencing these initiatives.
The first motivation for adopting ecological initiatives as categorized by Bansal and Roth is
competitiveness, which basically refers to the possible enhancement of long-term profitability
due to ecological commitment. In order to attain profitability, firms which are motivated by
competitiveness commonly engage in activities yielding in competitive advantage. These activities
are relatively simple measures which improve operational efficiency and usually visible as to im-
prove corporate reputation. In addition, the decision-making process is primarily focused on
cost-benefit analysis of different initiatives in order to distinguish alternatives which will yield the
highest return possible, independent of ecological consequences. In other words, ecological initia-
tives are only implemented if they influence the financial performance positively.
The second motivation is legitimacy, which mainly refers to improvement of the appro-
priateness of a firm’s action within an established set of regulations, values and belief s in the
society. Hence, firms are reactive rather than proactive to external forces in order to avoid sanc-
tions. In other words, firms initiate environmental policies just to comply and keep up with exist-
ing environmental regulations in order to survive. The decision-making process is largely focused
on finding a way to mitigate the costs and risks as a result of not complying with existing regula-
tions.
The third motivation is social or ecological responsibility, which describes motivations
as initiated by a firm’s concern for its social values and obligations, ethically rather than pragmati-
cally in comparison to the other motivations. More specifically, companies undertake ecological
initiatives due to sense of philanthropy, accountability and obligation rather than self-interest. In
addition, the originators of this model refer to one single individual with much power within the
organization who has championed the environmental initiatives. Accordingly, the decisions taken
regarding ecological responsibilities are highly influenced by this person’s values in order to ideal-
ize rather than rationalize the best course of action.
Similar to the model constructed by Lynes and Andrachuk described earlier, this model al-
so proposes three contextual dimensions which are believed to influence the three motivations.
These contextual factors are referred to as issue salience, field cohesion and individual concern.
Issue salience is the extent to which a specific ecological issue is significant or relevant for a
company. Moreover, an issue’s salience is determined by three factors. The first factor considers

32
certainty, or degree to which the impact of the issue can be measured. The second factor is trans-
parency, which refers to how easily attributable an issue is to a particular company. The third
factor is how emotive an issue is.
Field cohesion refers to the proximity and interconnectedness of the participants in an or-
ganizational field, which are for instance suppliers, regulatory agencies and competitors.
Individual concern is the degree to which members of the organization value the environ-
ment and the discretion they possess to act upon these values. The relationships between the
motivations and the contextual dimensions are illustrated below.

Contexts Firm Motivations Ecological Initiatives

Issue Salience Process intensification

Certainty Green marketing
Competitiveness
Transparency Green products
Emotivity

Field Cohesion Regulatory compliance

Proximity Impression management
Interconnectedness Legitimacy
Networking with environ-
mental interest groups

Individual Concern Process intensification

Ecological values Green marketing
Discretion Environmental Responsibility
Green products

Fig. 4
Source: Bansal and Roth (2000) & author

Furthermore, Bansal and Roth suggests three propositions in accordance to the key moti-
vations and their contexts. The first proposition is that issue salience is positively related to legi-
timacy and competitiveness. The second proposition is that field cohesion is positively related to
legitimacy and negatively related to competitiveness and ecological responsibility. The third
proposition is that individual concern is positively associated with legitimacy and environmental
responsibility.

Model Developed by Valentine (2009)

In comparison to the two conceptual models described above, the “green onion” developed by
Valentine (2009) is simpler in its construction. The model consists of five key layers of forces
which are perceived as possible influences of a company’s approach to environmental manage-

33
ment initiatives. Although Valentine’s model merely describes influencing forces, the underlying
proposal is highly consistent with the two other models presented in the thesis.
The dominant forces as proposed by Valentine are:

 Macro Layer: the outermost layer of the “onion” portrays the broadest force
which influences how a company’s environmental governance. These forces are re-
ferred to as PEST-forces (Political, Economic, Social, Technological). Political fac-
tors refer to for instance international environmental treaties and national environ-
mental legislation and regulations. The economical aspect considers the economic
position of the country. For instance, that economically disadvantaged countries
ought to lack the resources to embark on rigorous environmental regulation. The
social aspect simply refers to how socio-cultural differences influence the degree of
environmental initiatives and reporting taken in a country. The technical factors re-
fer to the level of technological advancement in a country and how it has a signifi-
cant effect on the ability of companies to for instance undertake environmentally
friendly production initiatives.
 Secondary Stakeholder Layer: this layer is based on the classical stakeholder
theory, which implies that a company ought to balance its strategic objectives to
make certain that stakeholders’ expectations are satisfactorily. Valentine has identi-
fied creditors, government regulation, interest group pressure, the general public,
educators and pressure from the union as six key secondary stakeholder groups.
 Industry Layer: naturally, the third layer refers to industry-specific forces which
influences the way a company approaches environmental concerns. Six industry-
specific forces have been identified. These are industry type, the risk associated
with specific industry tasks, media exposure, customer pressure, supplier incentives
and competitive practices.
 Firm Layer: due to the unique structure of a given company, certain influences on
corporate environmental governance may arise. These five firm-specific constraints
on environmental management encompass ownership characteristics, size of the
company, financial health, age of assets and environmental reputation.

34
  Functional Layer: forces within the functional layer reflect a company’s economic
rationality. In other words, environmental management practices are only underta-
ken if it enhances the company’s financial health. A company can turn enhanced
environmental management practices into improved financial performance through
five strategic areas. These include green positioning strategies, financial strategies,
brand protection strategies, quality strategies and cost-control strategies.

Macro Layer

Secondary
Stakeholder Layer

Industry Layer

Firm Layer

Functional
Layer

Fig. 5
Source: Valentine (2009) & author

4.3 Different Types of Corporations

In connection to the many studies in the field of corporate social responsibility, and environmen-
tal responsiveness in particular, some academics have taken a step further in examining compa-
nies’ ecological commitment by identifying different types or profiles of companies in terms of
their level of dedication (see for instance Bansal & Roth,2000; van Marrewijk & Werre, 2003; van
Marrewijk,2003).
In the paper “Multiple Levels of Corporate Sustainability” (2003), van Marrewijk and
Werre present a matrix depicting multiple ambition levels and demonstrations of corporate
sustainability. Hence, distinguishing six different ideal types of organizations.

 Pre-CS: Principally, there is no ambition for adopting CS. However, when

“forced” by for instance legislation or buyers strike, CS initiatives might be
instigated.

35
  Compliance driven CS: CS is perceived as an obligation or duty. Consequently,
CS initiatives are only undertaken in accordance to existining regulations.
 Profit driven CS: Companies integrate social, environmental and ethical concerns
into business operations and decision-making under the condition that it
contributes to the company’s financial triple bottom line. CS is perceived as a
business case.
 Caring CS: Companies implement CS initiatives beyond legal compliance and
profit motives. Economic, environmental and social issues are thoroughly balanced.
 Synergistic CS: Companies take CS one step further by trying to achieve well-
balanced and functional solutions for all three aspects in a win-together approach
with all relevant stakeholders.
 Holistic CS: Companies fully integrate and embed CS in every aspect of the
organization. Each person and organization is recognised as having universal
responsibility towards each other since all being and phenomena are mutually
interdependent.

4.3.1 Demonstrating Environmental Commitment

As public awareness regarding sustainability issues increase and corporations gradually take into
account their impact on the environment, the communication of their environmental perfor-
mance both internal and external also become significant. In other words, companies are disclos-
ing themselves more broadly regarding social and environmental issues due to the increase in
public interests.
Accordingly, an organization can engage in various activities as to display their environ-
mental commitment. For instance, a natural first step is to conduct an environmental audit in
order to gain understanding of the company’s ecological impact (i.e. type and amount of re-
sources used, types of waste and emission generated). Moreover, companies could provide educa-
tional programs for their employees regarding environmental issues. In addition, companies can
also buy environmental products, materials or services from suppliers in what is called green pro-
curement (Mazurkiewicz, 2009).
Nevertheless, perhaps the most common way of demonstrating environmental commit-
ment ought to be through different corporate reports and policies. Since mid 1990’s, organiza-
tions started to include aspects concerning ethics and the environment more broadly (Daub,
2007, p.76). Nowadays, documents such as environmental policies and sustainability reports are
gaining more attention as financial objectives are no longer the only variable relevant for stake-
holders.

36
 Sustainability reports can be seen as a more holistic presentation of a company’s commit-
ment. A report ought to include both qualitative and quantitative information regarding how
much a company has managed to improve its effectiveness as regards the three pillars of sustai-
nability (Daub, 2007, p.76). A rather similar definition of sustainability report is given by the
WBCSD:

“…//…public reports by companies to provide internal and external

stakeholders with a picture of the corporate position and activities on
economic, environmental and social dimensions.”

Naturally, many academics within the field of business ethics and corporate management
have conducted researches concerning the factors potentially describing corporate environmental
disclosure. For instance, Wilmshurst and Frost (2000, p.11) investigated if legitimacy theory could
be used as an explanatory factor for management motivation to disclose environmental informa-
tion in the annual report. The underlying assumption being that the annual report could be seen
as a tool to reinforce community’s perception of the company’s responsiveness to specific envi-
ronmental concerns as the legitimacy theory implies that a company will take measures in order
to make certain that their activities and level of performance are accepted by the community.
Other scholars (see for instance Haddock-Fraser and Fraser, 2008; Tagesson et al, 2009;
González-Benito and González-Benito, 2006) refer the extent of environmental disclosure to
factors such as corporate size, industry type, media, culture and stakeholders. A number of stu-
dies have found a correlation between the size of a company and environmental reporting, ex-
plaining it as a result of greater resource availability and greater vulnerability to media visibility in
combination with the necessity of managing external stakeholder perceptions.
A distinction has been made regarding different types of stakeholders and their influence
on corporate environmental activities. More specifically, organizational stakeholders such as such
as customers, suppliers, employees and shareholders and community stakeholders such as non-
governmental organizations have been found to influence proactive environmental behavior. On
the other hand, regulatory stakeholders and the media have been found to bringing forth envi-
ronmental reactivity.
Furthermore, studies have also found a tendency of greater extent of environmental report-
ing among companies within sectors which are referred to as having high environmental pres-
sure.
In addition, Kolk (1999, p.226) highlights interesting viewpoints regarding information dis-
closure. For instance, a company which has started to publish a report revealing its environmen-

37
tal commitment ought to persist doing so since discontinuation might lead to negative publicity.
The same paper written by Kolk mentions the possibility of rising expectations resulting in what
is referred to as the “paradox of information”. Basically, the occurrence implies that the more
information a company discloses, the higher the demand for new information by stakeholders.
Accordingly, the likelihood of stakeholders asking companies to live up to their promises and
guarantee the accuracy and reliability of the information disclosed.

4.3.2 Disclosure on the World Wide Web

Naturally, the internet plays an important part in the emergence of disclosing environmental
commitment. In today’s global economy, companies are more frequently judged on the basis of
the environmental commitment as the internet and other media scrutinize business practices.
Simultaneously, studies have recognized that companies are more frequently and increasingly
using the internet as an information dissemination channel (see for instance Mazurkiewicz, 2010;
Tagesson et al, 2009).
Obviously, there are logical explanations to the expansion of the World Wide Web as a dis-
tributional tool for companies. In comparison to the internet’s paper-based equivalents, Tagesson
et al (2009, p.353) mention several advantages in connection to the usage of the web. These in-
clude speed, global reach, flexibility, versatility, timeliness and unlimited capacity. These characte-
ristics make internet-based information disclosure more cost-efficient due to the increasing global
spreading of investors and other relevant stakeholders for a company.
However, some studies (see for instance Ramus & Montiel, 2005) question the underlying
intentions of companies when using the internet to demonstrate their environmental commit-
ment. More specifically, the notion of “green-washing” has emerged, which refer to the spreading
of disinformation by an organization so as to exhibit an environmentally responsible image. Basi-
cally, the studies bring to lights the fact that having an environmental policy does not necessarily
translate into green initiatives or implementation of the policy, that the policy is disclosed merely
so as to positively influence the public’s perception of the company and its environmental com-
mitment.

38
5 ENVIRONMENTAL DISCLOSURE ON THE INTERNET
Five Shopping Center Owners through the Looking-Glass
As a natural continuation from the last chapter, this chapter aims at providing an overview re-
garding current environmental disclosure among some of the biggest real estate companies own-
ing shopping centers on the Swedish real estate market. Particularly, environmental disclosure on
respective corporate websites is elucidated in order to gain an insight of the content and extent of
information concerning environmental commitment by five of the shopping center owners.
Accordingly, possible content is grouped into five parameters which are looked for on the
corporate websites.

Environmental Environmental Human

Follow-Up Other
Assessment Policy Resource

The first parameter aims at identifying whether or not the company discloses its environ-
mental impact, environmental matters of high concern for the business, resource usage etc. The
second parameter aims at identifying if the company has developed an environmental policy and
if so, what does it include. The third parameter is related to follow-up procedures of the compa-
ny’s commitments. In other words, how the company follows up targets which might have been
set, outcomes, what is to be done and priorities. The fourth parameter aims at ascertaining if
there is a particular position on the company which is solely committed to environmental con-
cerns. Lastly, the fifth parameter captures other disclosure worth mentioning.

5.1 Atrium Ljungberg

The real estate company Atrium Ljungberg was founded in late 2006 as a result of the merger
between the two Swedish real estate companies LjungbergGruppen and Atrium Fastigheter. Pre-
sently, property types owned by the company include retail, office and housing. Nevertheless, the
business focus is on retail properties and more than 50% of the company’s rental income (2009-
12-31) comes from this particular property type.
More specifically, the company owns four regional shopping centers with a total of 328 500
m2 leasable space. Furthermore, retail premises include eleven inner-city shopping malls with a
total of 163 200 m2 leasable space. Remaining retail properties are mainly situated along larger
traffic routes in Stockholm area as so called retail areas with Coop Forum as the biggest anchor
tenant. Below is a full list of the company’s retail properties.

39
 Regional Shopping
Shopping Malls Retail Areas
Centers
•Sickla Köpkvarter, •PUB, Stockholm •Botkyrka
Stockholm •Orminge Centrum, •Haninge
•Farsta Centrum, Stockholm •Rotebro
Stockholm •Telgehuset, Södertälje •Södertälje
•Gränby Centrum, •Forumgallerian, Uppsala •Västberga
Uppsala •Cityhuset, Eskilstuna •Halmstad
•Mobilia, Malmö •Linnégallerian, Växjö
•Kvasten, Kalmar
•Arosian, Västerås
•Gallerian, Motala
•Storknallen, Borås
•Mittpunkten, Östersund

In accordance to the corporate website, the company refers their environmental commit-
ment to the broader view of corporate responsibility. In other words, environmental commit-
ment is a part of a more holistic approach to sustainability. The strategy is allegedly to direct the
business towards a more defendable manners from an economical, social and environmental
viewpoint. Moreover, anticipated benefits by doing so include increased client and public welfare,
increased employee satisfaction, controlled environmental impact, resource thrift and enhanced
property values.

Environmental Assessment
The company’s latest (2008) annual report, which is publicly available on the corporate website,
offers a relatively good and overall insight regarding their environmental commitment. Efforts in
reducing and successively eliminating sources to costs related to energy are prioritized, likewise
the significance of having dialogs with stakeholders during the different phases of a project in
order to ascertain that sustainable aspects are thoroughly considered.
More importantly, information and statistics regarding for instance the company’s con-
sumption of energy, water, heating and cooling can only be found in the annual report.

 District heating: All properties owned by Atrium Ljungberg expect for one, which
is supplied with oil, use district heating. The consumption has decreased by approx-
imately 3% during 2008, primarily due to sales of retail properties and measures en-
hancing efficiency such as new ventilation systems and roof insulation. Heating
consumption for all retail properties during 2008 sums up to roughly 49 000MWh,
where the four regional shopping centers are the main contributors.

40
  District cooling: Merely some of the properties use district cooling and the con-
sumption increased by 22% during 2008 due to a new connection to Sickla area.
The regional shopping centers consumed about 4 000MWh during 2008.
 Electricity: Due to increased letting of retail and office premises, the electricity
consumption has increased by roughly 4%. However, settlement of cooling plants
in Sickla and overall efficiency enhancement has resulted in a lower increase in
comparison to previous years. The shopping centers consumed roughly
65 000MWh during 2008, while the inner-city shopping malls and retail areas con-
sumed approximately 40 000MWh during the same period.
 Water: The water used is provided by the local municipalities. Consumption during
2008 decreased by roughly 7%, primarily due to adjustments to the cooling plants.
 CO2 generation: The main sources to CO2 generation have been identified as
cooling and heating activities and also transports due to the nature of the business.
The company reduced its CO2 generation by 7% mainly due to decreased heating.
Alterations to the company’s policy for employees’ mode of transportation, in-
creased usage of public transportation and the introduction of video conference
equipments are believed to further decrease the CO2 generation by employees,
which are estimated at roughly 100ton during 2008. CO2 emission as a result of visi-
tors’ trips to and from the commercial centers is estimated at slightly more than
50 000ton a year.

A document concerning the company’s Carbone Disclosure Project is also available on the
corporate website. The Carbone Disclosure Project reports detailed information regarding direct
and indirect sources of energy, the amount bought and consumed.

Environmental Policy
The company’s environmental policy is included in the annual report as well as readily available
on the website for downloading. Following points constitute Atrium Ljungberg’s environmental
policy:
 Activities undertaken by Atrium Ljungberg shall be conducted in such ways which
enable least negative impact on the environment in order to contribute to a sustain-
able society.
 Our environmental accountability shall be an integrated part of the business activi-
ties. It shall rest on current business idea and corporate values, and contribute to
long-term profitability and an enhanced trademark.

41
  We shall continuously develop routines and methods which enable us to measure,
follow-up and report the results of our environmental commitment in a clear way.
 Environmental commitment shall be based on a continuous development of our
competences and constant improvement.
 Our ambition is to support and cooperate with our clients and partners in their en-
vironmental commitment.

Follow-Up
Once again, the annual report serves as the only source of information, this time regarding meas-
ures undertaken, outcome, what are supposed to be done in the nearest future and priorities. The
company’s environmental policy, priorities and action plan have been revised during 2008 due to
an evaluation of the environmental concerns relevant for the business operation. The action plan
now extends approximately two years and encompasses several overall efforts needed in develop-
ing the company’s business process and ascertaining competence, regulations and transparency.
The annual report also mentions the change of a software program for assessment of for
instance energy efficiency measures as strengthening the internal operation within the field.
Moreover, energy declarations and PCB inventories have been conducted during 2008.
Priorities for 2008-2012 as described in the annual report include:

 Ascertain that all business activities within the company conform to existing
environmental regulations.
 Reduce the need of energy and transports using fossil-fuel.
 Increase accessibility to the company’s commercial places for pedestrians,
cyclist and people arriving by public transportation.
 Improve the properties environmental qualities.
 Replace operation processes with negative environmental affect with more
long-term viable solutions.
 Carry through new developments and rebuilding projects which are more op-
timal from a sustainability perspective.

Human Resource
An internal project manager with the assignment of coordinating and supporting the implementa-
tion and development of the environmental action plan was assigned in 2008.

Other
Other information can be found on the corporate website as well. For instance, that the compa-
ny’s corporate responsibility engagement includes selected components from international stan-

42
dards such as ISO 14001 (environmental management systems), ISO 26000 (guidance on social
responsibility) and UN’s Global Compact. Moreover, the sustainability commitment is presented
in accordance with GRI (Global Reporting Initiatives) directives.

5.2 KF Fastigheter
KF Fastigheter is a Swedish real estate company with focus on retail properties. Their portfolio
includes 50 shopping centers and retail centers totaling over 500 000m2 leasable space, mainly in
conjunction to Coop. Accordingly, the company’s business is divided into two divisions. One
division is to actively manage the property portfolio while the other is to provide tailor-made
property related services to cooperative companies operating in the retail trade.

Environmental Assessment
No specific information regarding the company’s environmental impact, resource consumption
or issues of particular interest for the business exist on the corporate website.

Environmental Policy
In comparison to the first company, company B focuses solely on environmental aspects and not
on CSR. Although not available as a document for downloading, the company’s environmental
policy is described on the website.
The environmental policy begins by stating that the company’s environmental commitment
aims at conforming to current regulations which are applicable in order to produce sustainable
solutions. The company strives to mitigate its impact on the environment together with clients by
committing to a number of objectives. These objectives include:

 Identifying and communicating environmental concerns in connection to assign-

ments in order to prevent future negative environmental impact.
 Render more efficient energy consumption in connection to new developments and
management of existing buildings.
 Plan and conduct more efficient transports.
 Reduce consumption of non-renewable recourses and products.
 Reduce usage of ecologically harmful products.
 Provide conditions which enables efficient management of waste.

Furthermore, the environmental policy states that both employees and management shall
continuously develop their competency regarding environmental concerns and act environmental
consciously.

43
Follow-Up
No specific information regarding the company’s follow-up of activities, objectives which have
been set and what have been done etc exist on the corporate website. However, information con-
cerning a few project cases is available on the website.

Human Resource
In 2009, one person was appointed manager for environmental and energy concerns and was
included in the team of executives. Nevertheless, this person has been responsible for environ-
mental issues for many years on the company.

Other
There is no annual report available on the corporate website. Hence, possible disclosure of envi-
ronmental commitment in the annual report remains unknown. Nevertheless, there is an infor-
mation brochure about the company and its operations available on the website, which includes a
section concerning the environment.

5.3 Steen & Ström

Steen & Ström was originally a Norwegian real estate company which expanded its business
throughout Scandinavia. However, the company was bought by the Dutch pension fund ABP
and the French commercial real estate company Klépierre in 2008.
Presently, the company owns 56 shopping centers in Norway, Denmark and Sweden. Nine
of the shopping centers are situated in Sweden and have a total of 264 000m2 leasable space.
Moreover, Steen & Ström is currently engaged in four development projects of 52 000m2 and
four new construction projects comprised of 192 000m2 leasable space. A full list of shopping
centers is given below.

Existing Shopping Development New Construction

Centers Projects Projects
•Allum, Partille •Hageby Centrum, •Arenastaden, Växjö
•Etage, Trollhättan Norrköping •Emporia, Malmö
•Familia, Åstrop •Marieberg Centrum, •Mölndal Centrum,
•Hageby Centrum, Örebro Mölndal
Norrköping •Sollentuna Centrum, •Wäfveriet, Borås
•Kupolen, Borlänge Sollentuna
•Marieberg Centrum, •Torp Köpcentrum,
Örebro Uddevalla
•MittiCity, Karlstad
•Sollentuna Centrum,
Sollentuna
•Torp Köpcentrum,
Uddevalla

44
 Furthermore, information on the website implies a more holistic approach towards sustai-
nability which implies focus on ecological, social en economical concerns.

Environmental Assessment
In 2007, the company decided to implement a CR program. As a matter of fact, the only docu-
ment available on the corporate website is the CR brochure. The brochure states the ambition
and goal of the commitment which will result in a continuous improvement of the business per-
formance.
The environmental aspects perceived as important for the company are energy consump-
tion, CO2 emissions, waste, transports, purchase and aesthetics. In connection to the environ-
mental aspects given, more area specific directives are given regarding how to mitigate the com-
pany’s impact on the environment. On the other hand, the policy for CR states guidelines in a
more general sense which serve as the foundation for actions and priorities.

Environmental Policy
As mentioned above, the CR brochure includes a section concerning the environmental aspects
of the company’s CR commitment. These can be seen as a policy for environmental concerns.

Energy consumption:
 The company shall have a good overview over its own energy usage and work sys-

tematically to maintain lowest level possible.

 The total energy consumption within the organization shall be reduced by 20%, in
comparison to the consumption level in 2006, by the end of 2010.
 The energy consumption within the organization shall be 20% lower than other
corporations within the sector by the end of 2010.

Energy and CO2 emission:

 The company shall have a good overview over the CO2 emission level due to its
own energy consumption.
 The company shall work systematically in maintaining lowest level possible of its
own generation of CO2 emission.
 The company shall strive at becoming a more climate neutral business operation.

Waste:
 The company shall have a good overview over its own waste generation and work

to mitigate environmental impacts due to the waste.

 A minimum of 75% of the waste generated by the organization shall be sorted.

45
 Transportation:
 The company shall have a good overview over the transportation to and from its

shopping centers and associated environmental impact. The company shall work
systematically in maintaining a low level of environmental consequences.

Purchase:
 The company shall inquire environmental friendly products and services, collabo-

rate with companies who are committed to environmental concerns and demand
documentation of fulfilled environmental requirements.

Aesthetics:
 The company shall improve the aesthetical standard of both existing shopping cen-
ters and new projects.

Follow-Up
No specific information regarding the company’s follow-up of its environmental initiatives can
be found on the corporate website. However, the CR brochure does conclude by presenting mi-
lestones regarding the company’s CR commitment. Below are the milestones which are specifical-
ly related to ecological concerns.

 Every shopping center in Denmark and Sweden shall be environmental certified

before 2010.
 The company participates in an ICSC work group with the task of developing a
pan-European standard of BREEAM.
 The company shall implement an operating system for follow-up of indicators,
based on ISO 14001 and report in accordance to GRI.
 The Swedish shopping centers use Bra Miljöval-certified electricity.
 The company establishes local CR teams at every shopping center, led by the center
manager, during 2008.

Human Resource
The CR brochure refers to a person in Sweden titled environmental coordinator. Nevertheless,
no such position or contact person can be found elsewhere on the corporate website.

Other
As previously mentioned, the only information concerning the company’s environmental com-
mitment can be found in the CR brochure. Consequently, information regarding for instance the

46
progress of the efforts remains unknown. Moreover, only one paragraph concerning the envi-
ronment is included in the annual report (2008).

5.4 Diligentia
Diligentia is a subsidiary completely owned by Skandia Fastighetsinvesteringar AB, which in turn
is owned by the insurance company Skandia. Properties in Sweden owned and managed by the
company range from housing units to shopping centers.
More specifically, the company manages 12 shopping centers strategically located in four
main areas; Stockholm, west of Sweden, Skåne and Östergötland. The 12 shopping centers to-
gether constitute almost 170 000m2 leasable shop space. Below is a list of the retail premises
owned and managed by the company.

Regional Shopping Other Retail

Shopping Malls
Centers Premises

•Frölunda Torg, •Gyllen, Linköping •Mörby Centrum,

Göteborg •Magnus Stenbock, Danderyd
•Väla Centrum, Helsingborg •Solkatten, Lerum
Helsingborg •Valen, Trelleborg •Amhult Centrum,
•City Aveny, Göteborg Göteborg
•Knallerian, Borås
•Valdemar Atterdag,
Halmstad
•Meeths, Göteborg

Environmental Assessment
Information regarding the company’s environmental commitment can mainly be found in the
annual report. The company identifies its activities which have the biggest negative impact on the
environment as consumption of energy and materials, waste generation, air-bound emission and
water pollution.
Efforts, in accordance to the latest annual report available on the website, undertaken by
the company have primarily been establishing energy declarations for the properties as required
by law. Furthermore, efforts in establishing inventories, decontamination and measuring of PCB
and radon have continued during 2008, likewise the conversion to district heating.

Environmental Policy
The environmental policy can be found both directly on the corporate website and in the annual
report. Moreover, the policy is developed in accordance to the requirements stated by ISO 14001.

47
Following statements constitute the company’s environmental policy which aims at mitigating
and preventing the company’s negative influence:

 Minimize energy consumption in our properties.

 Minimize the usage of substances harmful to the environment and non-renewable
materials.
 Minimize usage of chemicals, and if necessarily, chose the alternative with least
possible environmental impact.
 Actively collaborate with tenants so they too can minimize their environmental im-
pact.
 Facilitate conditions for sorting and recycling of waste as much as possible.
 Design buildings so as to minimize the usage of non-renewable resources in con-
nection to new, extension, and rebuilding projects.
 Inform suppliers of the company’s environmental policy and actively act together in
obtaining environmentally adjusted solutions.
 Laws and environmental regulations are least requirements and shall be fulfilled.
 Facilitate engagement, participation and responsibility regarding environmental
concerns among our employees through education and information.
 Continuous follow-up with the goal of constantly improving our efforts.

Follow-Up
Overall targets or goals for efforts undertaken are set on an annual basis and the work coincides
with other business plans. The objectives are allegedly included in the company’s general business
plan and are broken down to business unit level. Accordingly, follow-up of the environmental
targets occur in connection to the regular follow-up of other business plans.

Human Resource
The corporate website refers to a person in the company for further information regarding their
environmental commitment. Nevertheless, the title of this person is Business Development.

Other
Another thing elucidated on the website is the Environmental Handbook, which is a document in-
tended for usage internally among employees. The handbook provides an overview regarding
demands and tools which facilitates a systematic way of working with environmental issues in
accordance to the environmental policy. The structure of the handbook is developed in accor-
dance to SS EN ISO 14001 and SS 62 77 50, and describes ways of working with matters such as
regulations, routines in connection to purchases and sales, leasing, reports etc.

48
 The company highlights their active collaboration with different national organizations
working with environmental concerns in the construction and real estate sector. These organiza-
tions include: Belok, Byggherreforum, Fastighetsägarna, Miljöstatus för byggnader and Rådet för byggkvalitet.

5.5 Citycon Oyj

Citycon is a Finnish real estate company which primarily owns and develops shopping centers.
Nevertheless, the portfolio also includes retail properties such as retail centers, supermarkets and
other larger retail units. More specifically, by the end of 2009, the company owned 33 shopping
centers and 51 other retail premises.
Eight of the shopping centers owned by the company are located in Sweden, totaling
238 400m2 gross leasable area. Below is a complete list of shopping centers in Sweden.

Greater Stockholm Greater Gotheburg

Area Area Other

•Fruängen Centrum, •Stenugns Torg, •Strömpilen, Umeå

Stockholm Stenugnsund
•Jakobsbergs Centrum,
Järfälla
•Liljeholmstorget,
Stockholm
•Åkersberga Centrum,
Österåker
•Åkermyntan Centrum,
Hässelby
•Tumba Centrum,
Botkyrka

For 2009, Citycon decided to introduce their first combined annual report and CSR report
with the aim of providing a comprehensive description of the economic, social and environmen-
tal aspects of responsibility and to increase reporting transparency for the stakeholders. The re-
port has been prepared in accordance to recommendations given by GRI and is available for
downloading on the corporate website. Subsequently, most information concerning the compa-
ny’s environmental initiatives can be found in the report.

Environmental Assessment
As a result of the global climate change, and particularly associated consequences such as ex-
pected legislation and growing energy prices, the company has made a strategic choice to pursue
sustainable development. Accordingly, the company has identified impact areas where the com-

49
pany can initiate environmental management. These areas include climate change, energy, water,
waste, and land use and sustainable construction.
In general, the new and combined document of annual report and CSR report contains
highly comprehensive and illustrative information regarding the company’s efforts in mitigating
its negative impact on the environment. For instance, the report contains illuminating statistics
and figures showing primary energy sources, energy consumption pattern, Greenhouse Gas Pro-
tocol, emission sources, water consumption and types of waste generated in the shopping centers
etc. The impact areas identified as of significant importance for the business are elaborated upon
in the report.

Environmental Policy
No specific document referred to as environmental policy can be found on the company’s web-
site. However, the report combining annual statements and CSR initiatives does present what are
referred to as strategic objectives related to the company’s environmental responsibility. Fur-
thermore, these objectives are broken down into each respective impact area.

Climate change:
 Reduction of green house gas emissions by 20% by year 2020 from 2009’s level.

Energy:
 Reduction of energy consumption (electricity and heat) by 9% by 2016 from 2009’s
level.
 Improvements in energy efficiency.
 Finding renewable energy solutions.

Water:
 Lowering water consumption to an average level of less than 3,5l/visitor.

Waste:
 Shopping center waste recycling rate to be raised to at least 50% by 2015.
 Reduction of landfill waste to a maximum of 30% of total waste volume by 2015.

Land use and sustainable construction:

 All development projects to be implemented in accordance with environmental
classification principles.
 Development projects are located in built-up environments, within reach of good

public transportation connections.

50
Follow-Up
Follow-up activities within the organization include a range of initiatives. For instance, annual
energy performance certificates, which show the total energy consumption in each property, are
prepared for every shopping center in Finland and Sweden.
The company started to report its carbon footprint in 2009, using the Greenhouse Gas
Protocol developed by World Resources Institute and World Business Council for Sustainable
Development.

Human Resource
There is one position within the company titled as manager for sustainability issues in accordance
to the website’s contact information.

Other
Information on the corporate website also mentions the initiation of what is called the Green
Shopping Center Management Program, which aims at facilitating sustainable development in all
shopping center owned by the company. The program serves as a tool for planning and improv-
ing management and operations in practice. Accordingly, the program allows for assessment of
shopping center management in several areas:

 Energy consumption and energy efficiency

 Water consumption
 Waste management and recycling
 Refrigerants
 Procurement and co-operation agreements
 Transport
 Marketing and external communications
 Training and internal communications
 Follow-up and reporting

Other information which can be found on the website concerns the company’s participa-
tion in various campaigns such as Earth Hour and that the company has decided to seek for
LEED certification for three of the shopping centers. One of which is situated in Stockholm,
Liljeholmstorget.

51
5.6 Summary – Environmental Disclosure on the Internet
Obviously, environmental disclosure on corporate websites is relatively common among Swedish
real estate companies owning retail premises. Although the thesis surveys only five shopping cen-
ter owners, the pattern can be found among the rest of the market participants.
Nevertheless, the difference between the companies lies in the varying extent of informa-
tion disclosed. For instance, some companies only publish their environmental policy while oth-
ers disclose additional information regarding what has been done and what is scheduled to be
done.
Moreover, after examining the corporate websites, variances regarding the degree of infor-
mation detail provided on the internet. As a concluding comment, Citycon Oyj is believed to
disclose their environmental commitment in a more comprehensive way in comparison to the
other companies due to the new combined report of annual report and CSR report.
Below is a table summarizing the findings for this part of the thesis. The five shopping cen-
ter owners have been compared as regards the content and extent of environmental disclosure on
their corporate websites.
KF Fastighe-

Citycon Oyj
Ljungberg

Diligentia
Steen &
Atrium

Ström
ter

Environmental Assess-
ment

Environmental Policy

Follow-Up

Human Resource

Other

Disclosure exists and is comparatively thorough.

Disclosure exists although comparatively lacking some information.

Disclosure almost non-existent.

Disclosure is missing.

52
6 RESULTS FROM THE INTERVIEWS SESSIONS
As initially stated, the underlying purpose of the thesis is to provide a comprehensive overview of
the green building trend in connection to shopping centers in Sweden. Accordingly, a highly rele-
vant and interesting matter is to investigate the extent of environmental commitment among
shopping center owners and how they perceive the green building movement. In other words,
this chapter is a continuation of the preceding chapter with the intention of examining whether
or not there is a correlation between the extents of environmental disclosure on corporate web-
sites and what companies actually engage in. However, one ought to keep in mind that the res-
pondents in chapter 6 are not based on the companies in chapter 5.
As a result, interviews with seven market participants within the Swedish retail property
sector have been conducted. These particular respondents have been chosen as to provide a wide
range of market participants with diverging business objectives. Furthermore, the interview ques-
tions have been constructed and divided into four main categories or areas considered as funda-
mental in understanding environmental concerns among shopping centers, namely;

 Sustainability in a shopping center context

 Environmental policies and corporate documents
 Green initiatives and investments
 Future prospects

This chapter presents the results from the seven interviews. More specifically, the outcome
from each interview is presented in conjunction to one another in connection to the four catego-
ries mentioned above. The seven companies will remain anonymous and is referred to with let-
ters A-G. For a complete list of the interview questions, please see appendix A.

Respondent A A Swedish real estate company owning and develop-

ing shopping centers located in Sweden.
Respondent B An international real estate company owning shop-
ping centers throughout Europe.
Respondent C An international real estate company specialized in
property management, including shopping center
management.
Respondent D A Swedish real estate company owning and develop-
ing shopping centers located in Sweden.
Respondent E A Swedish real estate company managing commercial
properties in Stockholm and Gothenburg.
Respondent F A management company managing one of Stock-
holm’s biggest shopping centers.
Respondent G An international company offering various property
services, including shopping center management.

53
6.1 Sustainability in a Shopping Center Context
The seven interviews conducted during spring 2010 all began by asking the respondents ques-
tions concerning their own definition of sustainability and what they perceive as important envi-
ronmental matters in connection to a shopping center.
Interestingly, the respondents’ definitions of the term sustainability were quite diverging,
ranging from a more holistic and all-encompassing point of view to more straightforward view-
point of concrete factors constituting a green and sustainable shopping center. Respondents
adopting a more comprehensive view of sustainability include respondents A, B and D.
Respondent A defined sustainability as a long-term and comprehensive perspective. Never-
theless, the same respondent emphasizes that such sustainable initiatives are restricted by the fact
that it has to be economically viable. An illustration on the respondent’s standpoint regarding
sustainability was given during the interview and is shown below.

Direction of sustainability
Stakeholders

Company
Environment

Fig.6
Source: Author

More specifically, respondent A refers to sustainability as having two different perspectives.

One perspective of sustainability concerns the stakeholders and increasing their well-being while
the company benefits from it. The other perspective is pure ecological, that is improving their
environmental impact. Accordingly, sustainability is attained when all three constituents can ben-
efit from the initiatives (see the shaded area). In other words, the respondent is primarily interest-
ed in taking sustainable measures which lie in the above figure’s shaded area. Furthermore, res-
pondent A mentions that as a result of factors such as technological development and prevailing
market conditions, the relationship between the three parts will eventually move in a further di-
rection.
The respondent gives an example of electrical cars. Since the number of electrical cars in
Sweden today is still relatively scarce, having parking spaces with charging possibilities is not nec-
essarily value or image enhancing for the shopping center owner. However, when the number of

54
electrical cars increases, installing sockets for parking spaces becomes more significant and the
three circles move towards a more sustainable relationship in the arrows direction.
The respondent perceives transportation as a highly important concern for shopping cen-
ters, both from an environmental point of view but also for the survival of the shopping center.
Naturally, a shopping center causes great amount of transportation. First of all, there is all the
transportation as a result of people working at the shopping center but also all the visitors. More-
over, transportation includes the logistical matter of transporting all the products. For existing
buildings, the respondent says that ways to reduce the need for transportation could for instance
be having a dialogue with representatives in order to increase accessibility by public transporta-
tion. Regarding energy matters, respondent A refers to it as not a critical concern but a highly
significant issue when it comes to all the costs associated with a shopping center. Furthermore,
the respondent identifies waste and water management not as crucial since water is not a signifi-
cant issue in Sweden and waste management is explained as highly dependent of the municipality.
For instance, the respondent explains that the municipality’s action plan for waste disposal does
vary depending on the possibilities of taking care of the waste in the municipality. Hence, shop-
ping center owners and their waste management programs are considerably depending on the
municipality.
As with previous respondent, respondent B also perceives sustainability in a more compre-
hensive way. More specifically, respondent B defines sustainability as an integrated approach
which reflects the needs of the different stakeholders and is simultaneously economically sound.
The respondent recognizes the consumption of energy due to heating and cooling, lightning,
generation of waste and water usage as important matters for a shopping center.
Furthermore, respondent D defines sustainability more in accordance to the literature
where sustainability is described as composed of ecological, economical and social aspects. The
respondent perceives sustainability as an act of balancing the three constituents in agreement to
the nature of the business in question. Respondent D recognizes transportation, materials and
energy as critical concerns for an existing shopping center.
A more economical perception of sustainability is given by respondent C, which perceives
sustainability as pro-active maintenance in which the life-cycle of the property is maximized and
economically sustainable. Basically, sustainability means ensuring a long-term approach in con-
nection to capital investments. Relatively similar to respondent B’s answer, the environmental
concerns undoubtedly most significant for a shopping center as perceived by the respondent are
connected to energy, heating, cooling and water usage. Furthermore, the respondent acknowl-
edges waste management as secondary in terms of importance.

55
 Respondents E and F give a more concrete and straightforward definition of sustainability
and comparatively focused on ecological concerns. More specifically, when asked what sustaina-
bility implies in a shopping center context, respondent E only mentions heating issues as main
concern while respondent F refers to energy consumption as significant. Furthermore, respon-
dent E mentions wastes as another crucial matter for a shopping center while respondent F in-
sists that well-functioning systems for controlling units such as lightning, fans etc are crucial in
efficient utilization of resources.
On the other hand, respondent G perceives sustainability and green shopping centers as
not too diverging from green buildings in general, such as green office properties. Although,
when discussing shopping centers, perhaps there is more urge or need to focus on clients since
the number of tenants is naturally higher than office properties and all the people visiting the
shopping center every day.

6.2 Environmental Policies and Corporate Documents

The second set of interview questions concerned the presence of different corporate documents,
action plans and environmental policies. More specifically, the objective of asking these particular
questions is to gain an insight regarding how various documents are used as tools by the compa-
nies in exhibiting their environmental commitment, both internally and externally.
When asked if there is an overall environmental policy within the organization, all intervie-
wees except one said that an environmental policy does exist. The interviewee who is unaware of
any such document within the organization was respondent C. Strangely enough, a company en-
vironmental policy does exist on their corporate website and the interviewee, who is the compa-
ny’s area facility manager, ought to be aware of the existence of such document. Otherwise, the
remaining respondents have documents within the organization serving as guidelines, although
varying as regards of the level of detail given.
In addition to the general environmental policy, respondent A reportedly has other corpo-
rate document concerning environmental issues compiled by the board of directors. Moreover,
various subordinate documents can be found at different departments of the company. Never-
theless, the respondent expressed a wish for more integrated documents, including all aspects
such as ecological concerns, working environment and health and safety. Additionally, the com-
pany has compiled an illustrative information tool for describing how sustainability concerns are
integrated in the different stages of a project.
Seemingly, respondent B is the company which discloses most information. More specifi-
cally, a corporate sustainability report is published annually, which aims at providing their stake-
holders with an objective assessment of the company’s environmental and social performance

56
and also explains thoroughly the visions and objectives for the future. For instance, exhaustive
information concerning strategies, energy consumption, and internal environmental programs for
employees etc is included. The report comprehensively explains the areas distinguished as signifi-
cantly relevant for the company. These are; CO2 emissions and energy efficiency, transport, waste
and water management. The report elucidates the environmental commitment in terms of both
existing buildings and new developments, and also measures taken in connection to tenants, cus-
tomers, suppliers/contractors, shareholders/investors and communities/local authorities.
Respondent D has what is referred to as a policy document combining environmental and
energy matters, which describes environmental impacts identified as highly significant for the
company. The document is allegedly more detailed in comparison to a common policy. For in-
stance, the interviewee mentions that the word “minimize” is used to express their commitment
and not just “reduce”. A version of the environmental policy is included in the company’s annual
report.
In comparison to other companies, respondent E only has environmental policies and cor-
porate documents for internal use. These documents mainly state how to carry through projects,
management and how to work with tenants.
Respondent F mentions a document, not necessarily an environmental policy, which states
procedures in connection to investments in order to ensure that more environmentally sound
alternatives are considered during decision-making process.
Like the other interviewees, respondent G also has a rather broad and general document
concerning environmental issues. The document provides general guidelines in connection to for
instance purchasing matters. Moreover, the interviewee acknowledges that a particular document
which discusses environmental concerns in connection to projects does not exist within the or-
ganization. In other words, there is nothing which says that the company shall always consider
environmental concerns in connection to their projects.

6.3 Green Initiatives and Investments

As a natural extension of the second set of interview questions, the interviewees were asked
about their green initiatives and the underlying principle in connection to green investments.
These particular questions are highly significant for the thesis as regards its intention of providing
an insight on how the green movement and environmental concerns are perceived by shopping
center operators and how widespread the issues have gone within the retail sector. Moreover,
interviewees’ answers and reflections on these questions will help us identify possible impedi-
ments hindering the greening process and understand what is needed in order to go further.

57
 The results indicate a rather varying outcome concerning how the interviewees perceive
green initiatives and approach environmental matters. Interestingly, the perception regarding the
significance of “greenness” existing out in the “real world” does not necessarily correspond to
the view expressed by academics. In the following, the answers from respective interviewee are
presented.
In terms of energy matters, respondent A mentions inventory of energy consumption as a
natural part of the total calculation for a specific project. However, the same respondent also
concedes that investments in energy efficiency do not occur in the management of shopping cen-
ters, explaining that the measures taken thorough out the life of the property are pure operational
and maintenance specific. More specifically, the measures are solely taken to ensuring that the
function of the building is maintained. Nevertheless, measures taken aimed at enhancing energy
efficiency are more likely to be considered in connection to projects such as new developments
or more extensive renovations.
Furthermore, the respondent answers to one of the questions that their work and efforts in
environmental concerns are not related to for instance the company’s turnover. In other words,
the extent of environmental commitment is not dependent of the company’s financial condition
and engagement in environmental matters is not used as a positioning strategy. In addition, the
respondent states that the company basically undertakes measures which are believed to benefit
the function of the building.
Accordingly, one guiding principle or criterion as expressed by the respondent is that
things which they know are supposed to last in the building over a long period of time shall be
robust, durable and sustainable. Consequently, objects which the company knows will most likely
be removed in near future as a result of for instance tenant adaptation or be worn down alterna-
tives which are the cheapest will fulfilling the functional demands are most often chosen. This
guiding principle might also be of interest depending on the duration of the leases. For instance,
certain long-term solutions might be considered in connection to leases which extend over a long
period of time.
After all the interviews have been conducted, respondent B is seemingly the shopping cen-
ter owner who is most committed to environmental concerns. In connection to the interview
session, the respondent did actually describe their environmental commitment as an important
part of their corporate business idea. Hence, stating that it is core business for the company since
they aim at being number one in terms of environmental commitment. This is reflected in their
annual corporate sustainability report, which contains thorough information concerning their

58
environmental commitment in terms of targets being set, follow-up procedures, key performance
indicators etc.
The respondent says that, as a shopping center owner, they have been working with energy
and waste issues for many years. Nevertheless, during the past two-three years, their efforts have
been referred to as a more all-encompassing dedication to sustainability. Presently, the company
engages extensively in matters concerning energy consumption, heating and cooling, waste and
water generation by so called key performance indicators. For instance, the company aims at re-
ducing green house gas emissions by 25% until 2016. Especially, CO2 and NOX emissions are
perceived as very important.
Moreover, travel plans have been initiated as an attempt to encourage both the company’s
own employees and the tenants’ to choose public transportation when travelling to and from the
shopping centers.
Furthermore, the respondent said during the interview that the organization’s Nordic
shopping centers, the majority situated in Sweden, together sort 98% of the waste generated. This
can partly be explained by the fact that the costs associated with waste disposal are transferred to
the tenants. Currently, a pilot is being tested at of the biggest shopping center owned by the
company, where the tenants pay for the cost which depends on how much and what type of
waste it is and more importantly, on how well the tenant sorts the waste. In other words, at the
different waste disposal units at the shopping center, the tenants weigh their wastes, choose what
type of waste it is and which tenant it is. The tenants then receive a bill on a monthly basis speci-
fying the waste generated by the tenant. Basically, they pay for what they throw away. The better
the tenant is at sorting their wastes, the cheaper it gets.
Being an international shopping center owner, the respondent highlights the significance of
having the opportunity to share best-practice. For instance, since the shopping centers in the
Nordic countries are really successful and have come a long way in terms of waste management,
they can share their experiences and knowledge with the rest of the company and also learn from
others too. As a matter of fact, so called sustainability-meetings are held twice a year within the
organization where for instance best-practices are being shared.
A part of the company’s environmental commitment is also to compile an environmental
action plan for each shopping center, which extends over a five-year period and is followed-up
quarterly. These environmental action plans considers environmental concerns in conjunction
with prospects regarding revenues and costs. Moreover, respondent B mentioned about their
energy-log, which is used as a tool to trace energy consumption, heating and cooling. Also, all the

59
company’s shopping centers in Sweden have undergone energy declarations, which are believed
to have a significant positive influence on the property values.
The respondent also mentioned about the importance of having a continuous dialogue
with stakeholders, and the tenants in particular. Simply because what shopping center operators
need to cool highly depends on the nature of the tenants’ business and their store concept. Be-
sides beginning to have annual meeting with tenants with environmental matters on the agenda,
the company has decided to only sign green leases with new tenants and also in connection to
new leases with existing tenants. These green leases will for instance contain statements of com-
mon targets, sharing of best-practice and directives for the tenants regarding rebuilding etc.
Moreover, board of directors has agreed on implementing BREEAM on every new building
project.
Rather reminding of the previous interviewees, respondent C explains their environmental
commitment as mainly an operational matter. In other words, they primarily work with non-cost
measures such as ensuring that fans and lightings are not switched on when unnecessary, control-
ling the temperature so that heating and cooling do not counteract each other etc. Nevertheless,
some investments have been made for instance in systems which allow heath to be extracted
from cold and movement detection lighting in garages and stairwells.
Although highly interesting in connection to new construction projects, bigger investments
are rather expensive and complicated to undertake when it comes to existing buildings. For green
alternatives, the payback period is the main factor determining whether or not to choose them.
Hence, investments which yield a positive present value or have a rather short payback period are
prioritized. For instance, the company has installed slow-running devices on all escalators based
on this principle.
Respondent C concluded by stating that the financial benefits of undertaking green invest-
ments can surely be attained to a certain level. When this level has been exceeded, it tends to cost
too much for such small additional gain.
Respondent D’s efforts in reducing their energy consumption mainly concerns “fine-
tuning” of operating systems so as to be as efficient as possible. Another big concern is naturally
all the waste being generated. Nevertheless, waste management and their recycling plant and
waste disposal unit are sub-contracted to an external company specialized in environment and
recycling.
In terms of the financial benefit of increased property market value, the respondent replies
that as long measures undertaken affect the net operating income, the market value will naturally

60
be positively influenced. Hence, the respondent is uncertain regarding other benefits as a result of
environmental measures as proposed by academics.
Matters concerning energy, heating and cooling are most important for respondent E, who
has initiated an energy management system for their biggest retail premise. The whole shopping
center uses eco-labeled energy, including energy provided for the tenants. The energy manage-
ment system consists of a five-year action plan for the consumption together with reduction tar-
gets. The consumption statistic is then followed-up on a monthly basis.
In comparison to energy consumption, the respondent says that it is more difficult to work
with matters such as waste management, that you cannot fully control. For instance, sometimes
you are locked by external contractors and there is also what is referred to as “monopoly-waste”,
which is organic waste and garbage from restaurants and cafés. Currently, waste management is
sub-contracted to an external company specialized in environment and recycling.
The respondent mentions that environmental due-diligence is always a constituent to all in-
vestment decision-making. Moreover, the respondent says that at certain level, break-even exists.
But if pay-back period is relatively long, investments in green measures become more indecisive.
Comparatively, respondent F describes their environmental efforts as either property-
related or tenant-related. More specifically, property-related measures mainly concerns changing
systems and techniques to more efficient ones, for instance operating systems and movement
detection lightings. Targets are set and the consumption of energy, heating and cooling is fol-
lowed-up monthly.
On the other hand, tenant-related efforts refer to how much the tenants encumber the fa-
cility. As an example, the respondent mentions one of the tenants, who has a rather comprehen-
sive corporate environmental policy themselves, takes care of all the packing at their own ware-
house so all deliveries to the shopping center come without additional wrapping. As a result, this
particular tenant barely encumbers the shopping center at all in comparison to other retailers.
Accordingly, the respondent believes that in the future, the leases will contain a clause aimed at
“rewarding” tenants who act commendably as their costs will lower. For instance, the lease could
contain information such as environmental load coefficient depending on how much the tenants
encumbers the facility so tenants who actually are extensively committed to environmental con-
cerns will have lower costs, hence lower rent in comparison to others.
Respondent G admits that their prime focus is to generate good returns for their clients.
Consequently, environmental concerns are not prioritized. In connection to investments or pur-
chasing, alternatives which fulfill its function to a reasonable price are most often chosen.

61
6.4 Future Prospects
The last part of the interviews concerns the prospect of environmental commitment among
shopping center owners and operators. More specifically, what the interviewees perceive as con-
straints to a more widespread dedication to the subject. Furthermore, the interviewees expressed
what they believe is needed in order to urge on the development.
Respondent A believes that a company with a strong and clear environmental profile can
increase its competitiveness against other market participants. However, as regards shopping cen-
ter properties, the respondent is uncertain regarding their ability to engage in environmental con-
cern to a greater extent due to shopping centers complex nature. Specifically, the respondent
explains that, in connection to shopping centers, the number one priority at present is the loca-
tion. In other words, if the net operating income increases due to for instance investments in
energy efficiency, then it is a “plus”. What a shopping center owner or developer and retailers are
primarily interested in is factors such as target groups, market area and market capture, demand
and supply.
The respondent recognizes ownership type as a highly significant factor in determining the
extent of environmental commitment. First and foremost the difference between public and pri-
vate companies but also between companies with long-term ownership versus companies with
short-term ownership.
The fact that companies varies in terms of ownership structure in combination with the
complex nature of environmental concerns result in different companies having their own inter-
pretation and solutions to issues. The respondent believes that this is very important aspect slow-
ing down sustainable development within the sector. The respondent provides another explana-
tion to the situation and that is the mixture of unsustainable business ideas (long-term versus
short-term), reluctance and incompetence due to the intricacy of environmental concerns which
slows down the progress.
Consequently, the only way to approach this problem and make things happen is to legis-
late or provide economical incentives. The respondent mentions incentives such as better finan-
cial conditions provided by lenders, governmental incentives such as tax relief and other regula-
tions.
Respondent B believes that the lack of knowledge in environmental matters among shop-
ping center owners and operators is the main explanation why some companies are not prioritiz-
ing ecological concerns. The respondent explains that there is a tendency of believing that some-
thing you are not really familiar with ought to be expensive and costly. Hence, people tend to
avoid it. Moreover, the respondent underlines the relevance of lease type and the possible con-

62
flict of interests. For instance, a tenant governed by a gross lease would not necessarily have the
financial incentive of reducing their energy consumption since the property owners or landlords
pay for the expenses. On the contrary, a tenant governed by a net lease would have an incentive
to reduce energy consumption as the tenant is fully accountable for the associated costs. Never-
theless, the respondent highlights that, if it is a net lease, the landlord could still have the incen-
tive and possibility of benefiting from engaging in environmental concerns such as energy sav-
ings. The main argument being the probability of increasing the tenant’s capacity to pay, this in
turn means that the shopping center owner can set higher rents.
In comparison, respondent C experiences no actual obstacles of undertaking green initia-
tives from an operational or management perspective. Operating in a more efficient way is a pre-
requisite in managing a property. However, the respondent explains that, what is referred to as
the 80/20-rule is highly present in connection decision-making. The rule or guideline implies that
the first 80% of such investments is viable, when approach the last 20%, it becomes too expen-
sive to conduct.
Respondent D emphasizes the importance of having a better dialogue with the tenants.
The costs should be partly transferred to the tenants, and the situation will be totally different.
Nevertheless, the demands ought to be realistic. Basically, the respondent calls for a more ba-
lanced responsibility allocation between shopping center operators and retailers which occupy the
property. However, the respondent also stresses that when it comes to retail premises such as
shopping centers, there is still a long way to go. As with respondent A, respondent D agrees that
the main priority is the location of the shopping center. Other factors are secondary.
Respondent D points out ownership type as significantly influential on a company’s envi-
ronmental commitment, just like respondent A mentioned. This particular viewpoint was a fre-
quently recurring input during the interviews and is also shared by respondent E and F. Respon-
dent E, which is a real estate company managing properties owned by a pension company, men-
tions that managing people’s retirement funds implies a different way of thinking in connection
to investments. Respondent F agrees that the decision for a company to engage in certain matters
depend on the owners directives to the management team. And as long as a greener alternative is
not smarter, better and cheaper, the less sustainable alternative will be chosen. The respondent
finishes off by saying that they are lucky enough to have financially strong owners with a long-
term ownership ambition, which has allowed the management team to engage in environmental
concerns to such extent.
Similarly, respondent G has not experiences demands from their clients, who own the
shopping centers they operate, in terms of environmental considerations.

63
6.5 Summary – Results from the Interview Sessions
The outcome of the interview sessions clearly indicates divergence in terms of the definition and
perception of sustainability. The descriptions of sustainability in the context of retail properties
such as shopping centers range from a more holistic and all-encompassing viewpoint to concrete
and specific operational measures.
Frequently recurring terms among respondents acknowledging sustainability as holistic are
long-term and integrated approach of the three main constituents of sustainability as proposed by
the literature, namely; economical, ecological and social sustainability. Nevertheless, although the
respondents may use different expressions, the underlying opinion is that green initiatives shall
also be taken with consideration to the nature of the business. More importantly, initiatives or
measures aiming at mitigating the company’s environmental impact need to be economically via-
ble and hopefully profitable too.
In terms of which environmental concern is of most significant importance for an existing
shopping center, the respondents more or less unanimously referred to the energy consumption
as a result of heating, cooling and electricity. This can be explained by the often significantly big-
ger size of the building in comparison to other property types and hence the associated volumes
in need of energy consuming activities such as heating and cooling. Furthermore, energy flows
within a shopping center are rather complex due to the fact that there are numerous tenants with
diverging climate demands for their premises within one and the same building. This makes ener-
gy consumption a priority for shopping center owners and operators.
In addition to the energy consumption, waste management is also perceived as highly sig-
nificant. However, the wastes generated within a shopping center are perceived as somewhat not
as controllable as energy consumption by the shopping center owners. This can partly be ex-
plained by the number of tenants with varying procedures regarding for instance packing and
wrapping. Also, the amount of organic waste generated by restaurants and cafés is described as
relatively hard to control by the property owner.
Every interviewee admitted to having at least some kind of corporate document, usually an
environmental policy, which functions as guidance for their environmental commitment. These
environmental policies are often described as containing generic information stating corporate
environmental ambitions such as reducing green house gas emissions and energy consumption,
and increasing recycling rate etc. One of the international respondents has embraced the inclina-
tion of publishing an annual sustainability report, which usually describes the company’s envi-
ronmental commitment and measures undertaken during the year thoroughly. Moreover, these

64
reports are usually used as a tool in communicating corporate environmental activities to stake-
holders such as the investors.
Logically, the environmental concern recognized as most significant for a shopping center
is also the area which the respondents are putting a lot of effort in. More specifically, every res-
pondent says that the consumption of energy is highly prioritized and measures undertaken aim-
ing at achieving a more efficient usage of energy constitutes a natural part of the shopping cen-
ter’s daily operation. Actively reducing energy consumption is not done merely for the sake of
protecting the natural environment. For shopping center owners, reducing energy consumption
could also, depending on the lease type, imply an increase in the net operating income or possibil-
ity of increasing the rent since the tenants’ costs have been reduced. Therefore, resulting in the
tenants’ enhanced capacity to pay.
As a means of increasing energy efficiency, the respondents refer to optimization of the
operating systems as highly critical. In other words, continuously ensuring that for instance the
lightings and fans are in use only when needed. Nevertheless, management teams often deal with
measures which are considered as non-cost day-to-day management practices. When considering
bigger investments, the decision whether or not to undertake it is still highly influenced by the
economical viability of the investment. For instance, one respondent described their guiding
principle or criterion for investment decision, which applies to greener initiatives too. Things
which they know are supposed to last in the building over a long period of time shall be robust,
durable and sustainable. Consequently, objects which the company knows will most likely be
removed in near future as a result of for instance tenant adaptation or be worn down alternatives
which are the cheapest will fulfilling the functional demands are most often chosen. This guiding
principle might also be of interest depending on the duration of the leases. For instance, certain
long-term solutions might be considered in connection to leases which extend over a long period
of time. Some of the respondents also mentioned about the necessity of proper costs allocation
stipulated in the lease as a way to enhance the collaboration between tenants and property owners
in terms of reducing the shopping center’s overall environmental impact.
Two of the international respondents recognize the opportunity of sharing best-practices
due to their international organization as considerably favorable in applying green initiatives.
More specifically, it allowed best-practices to be shared within the organization and simultaneous-
ly increase knowledge locally. As a result, environmental commitment tends to be more embed-
ded in such organization.
The most frequently recurring answer to the question why environmental concerns are tak-
en into consideration to varying extent, the respondents refer to the ownership type as unques-

65
tionably the most important factor. In other words, the extent of environmental commitment
highly depends on whether or not the company has long-term or short-term interest in the prop-
erties. For instance, shopping center owners with a long-term approach is naturally more likely to
undertake green initiatives which imply an investment with a relatively longer payback-period
than a company with short-term interest.
Moreover, the interview sessions revealed that the number one priority for a shopping cen-
ter owner and also the tenants is still the location of the shopping center complex. Factors such
as demography, target groups, market area, capture rate, and demand and supply are given more
attention and lower operational costs as a result of environmental commitment and efforts in
improving energy efficiency by the landlord is simply just a “plus”.
Furthermore, the importance of having a continuous and beneficial dialogue with tenants is
believed to be highly imperative in jointly reducing the shopping center’s environmental impact.

66
7 CASE STUDY – SHOPPING CENTERS’ ENERGY-FLOW
Logically, retail properties such as shopping centers are perceived by some as comparatively
riskier than other property types as a result of the complex and dynamic nature of the industry.
This is particularly due to the highly competitive nature of retailing and the dependence on the
satisfaction of two different types of demands. In other words, shopping center owners or opera-
tors need to satisfy primary demand from the tenants and simultaneously ascertain demand from
consumers who visit the shopping center and buy the products (DeLisle, 2005, p.26).
Moreover, a shopping center needs to constantly follow the trends and the market in order
to differentiate itself from other and remain competitive. For instance, it has become more
common to have entertainment centers in conjunction to shopping centers to offer visitors more
than a nice and pleasant shopping experience (DeLisle, 2005, p.27). Accordingly, shopping cen-
ters with a specific theme or concept are increasingly gaining foothold.
The figure below is developed by Howard (1997, p.266), and it shows the complex nature
of a shopping center. More specifically, the figure illustrates post-development elements of shop-
ping centers which are manageable, and the main environmental forces or contexts within which
they are managed.

Retail Innovation Competitors &

Competition

Access & Range &

Accessability Specialization

SHOPPING CENTER

Internal
Environment &
Consumers & Changing Service Economy & Economic
Tastes Change

Fig. 6
Source: Howard (1997) & Author

Subsequently, commercial and architectural aspects have continuously been prioritized in

connection to the development of shopping centers. However, matters concerning energy ought
to be given equal attention. When numerous shops are located in one and the same building,
complexity also arises in connection to energy consumption or the energy flow within the shop-
ping center (Stensson, 2008, p.66).

67
 Accordingly, this particular chapter of the thesis presents a case study of Kista Galleria,
which is one of the biggest and most popular shopping centers in Stockholm. More specifically,
the purpose behind the case study is to provide the reader examples of the complexity as pre-
viously mentioned regarding the flow and consumption of energy within a shopping center com-
plex.
Firstly, a brief presentation of the shopping center is provided as an introduction. After-
wards, statistics for the actual energy consumption is presented in order to give an idea of the
amount of energy consumed in such shopping center. Measures undertaken by the management
team as a means of optimizing the operation of the shopping center, and the energy consumption
in particular, are presented in order to demonstrate the difficulties a management team could
potentially face.
The information has been provided by the management team of the shopping center and
obtained from the website. However, the data concerning the energy consumption, in particular
as regards of heating and cooling, has not been adjusted for prevailing outside temperature.

7.1 Kista Galleria

Kista Galleria is one of the biggest shopping centers in Stockholm area,
jointly owned by a Swedish insurance company and a Norwegian insur-
ance company. On 25th November 2009, what is sometimes referred to
as the “New Kista Galleria” was finally inaugurated after the comple-
tion of a major rebuilding and extension project, where an additional
12 000m2 provided new retail space.
As of today, the shopping center contains approximately 180 dif-
ferent retailers, restaurants and cafés. Other facilities include a big Food Court with roughly 6 000
visitors daily, Kids Court developed especially for families with young children, a major cinema
complex with 11 movie theaters and 2 500 parking spaces. Moreover, the shopping center offers
other amenities such as dental health service, care center, children’s clinic and police. Further-
more, a hotel with 166 rooms and 406 student accommodations are located in conjunction with
the shopping center complex. The shopping center, with a focus on fashion and design, and the
only place with opening hour’s 10-21 everyday, attracted approximately 16.5 million visitors dur-
ing 2009.

68
Leasable space:,total 84 700m2
Retail 52 800m2
Cinema 4 700m2
Office 8 700m2
Student accommodation 10 000m2
Hotel 8 100m2
Other 400m2

Anchor tenants (m2): Åhléns, Filmstaden Kista, New Yorker, OnOff, H&M, The Casbah, Espirit, ICA
Supermarket, Coop Konsum, Clas Ohlson, Systembolaget

7.2 Energy Consumption

The energy consumption at Kista Galleria is mainly engendered by electricity, and heating and
cooling demands. Nevertheless, retail tenants have their own individual electricity subscription. In
other words, the data presented only concerns electricity, heating and cooling demand derived
from all other tenants, common areas and non-leasable spaces such as stair wells.

7.2.1 Electricity
The energy source for electricity consumed at the shopping center is constituted by wind and
water power, provided by the energy firm Fortum. Furthermore, the shopping center has five
electricity distribution plants (A-E) which cover specific areas of the building, level 0-5.
The diagrams presented below illustrate the variation of electricity consumption at each
cover area during 15th February 2010, which is a randomly chosen date.

Electricity Consumption - Distribution Plant A

170

160

150

140

130
kWh

120
Electricity
110 Consumption -
100 100215

90

80
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Time

Areas covered by distribution plant A include four stair wells, parts of the main passages
Kistagången and Modeboulevarden, lavatories and unit rooms for air treatment systems etc on
level 5-6. Moreover, the coverage area includes four escalators and four elevators. Examples of

69
tenants located within the coverage area of distribution plant A are Max Hamburger-restaurang,
Akademibokhandeln, Twilfit, Aoptek Hjärtat and ICA.

Electricity Consumption - Distribution Plant B

90
85
80
75
70
kWh

65
60
Electricity
55 Consumption -
100215
50
45
40
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Time

Spaces covered by distribution plant B include two stair wells, parts of Kistagången and al-
so office premises etc on level 5-7. Moreover, the coverage area includes two escalators and one
elevator. Examples of tenants located within the coverage area of distribution plant B are Indiska,
The Casbah, Monki, Benetton and Adidas.

Electricity Consumption - Distribution Plant C

310
290
270
250
230
kWh

210
190
170 Electricity
150 Consumption -
100215
130
110
90
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Time

Spaces covered by distribution plant C are mainly constituted by the common areas of the
Food Court and lavatories in its conjunction.

70
 160
Electricity Consumption - Distribution Plant D
140

120

100
kWh

80
Electricity
60
Consumption -
40 100215

20

0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Time

The spaces covered by distribution plant D include two a small part of the passage Mod-
eboulevarden and unit room for air treatment systems on level 6. Moreover, the coverage area
includes one escalator and one elevator. Examples of major tenants located within the coverage
area of distribution plant D are H&M, Lindex, JC, Gina Tricot and Kappahl.

300
Electricity Consumption - Distribution Plant E
280

260

240

220
kWh

200
Electricity
180
Consumption -
160 100215

140

120
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Time

Spaces covered by distribution plant E include major parts of Modeboulevarden and Bran-
desgången, but also the big cinema complex and some apartments. Moreover, the coverage area
includes one escalator and one elevator. Examples of tenants located within the coverage area of
distribution plant E are Filmstaden Kista, Clas Ohlson, OnOff, McDonalds and Expert.
As illustrated by the graphs, the highest levels of electricity consumption can all be found
between approximately 10.00 – 21.00, which is the opening hour for the shopping center and its
retailers. Naturally, the consumption remains rather even throughout this period of the day. Nev-
ertheless, the amount of electricity consumed varies depending on the distribution plant and its
coverage area. More specifically, distribution plants C and E show the highest rates of around

71
280-290 kWh. This could possibly be explained by the fact that these particular distribution
plants cover areas which include the big food court, the cinema complex with 11 movie theatres
and some of the apartments.
The graph below illustrates the total consumption of electricity for 2007-2009 on a
monthly basis.

7.2.2 Heating
As previously mentioned, the second factor contributing to the total energy consumption of the
shopping center is heating demand. The main source for the heating is so called district heating
provided by Fortum. Worth mentioning is that the landlord provides heat for all tenants of the
shopping center. A graph presenting the heat consumption on a monthly basis for 2007-2009 is
shown below. Naturally, the demand for heating the shopping center complex is lower during
summer months in comparison to colder periods of the year.

Heating 2007-2009
1800

1500

1200
MWh

900
2007

600 2008

2009
300

7.2.3 Cooling
The third factor contributing to the total consumption of energy is the demand for cooling. The
source for cooling down the shopping center is district cooling and as with the other sources,
district cooling is provided by Fortum. Moreover, cooling is provided by the landlord for usage in
the entire building. A graph presenting the cooling consumption on a monthly basis for 2007-
2009 is shown below.

72
 Cooling 2007-2009
1200

1000

800
MWh

600
2007

400 2008

200 2009

7.3 Energy Efficiency at Kista Galleria

As previously stated, the primary sources to energy consumption at Kista Galleria are electricity,
heating and cooling. Consequently, measures in energy savings or efficiency are focused on these
particular areas. As a means of successfully achieving goals in energy efficiency, an energy plan is
composed by the management team.

7.3.1 The Energy Plan

The energy plan basically consists of four main stages. The first stage is to develop a comprehen-
sive vision. The second stage involves establishing goals which enables the vision to be realized.
The third stage entails establishing of intermediate goals, key performance indicators, activities
and measures necessary for fulfilling the main goals which have been established in the previous
stage. The last stage constituting the energy plan involves follow-up activities. Below is an illustra-
tion of the energy plan and its function.

Vision

Goal Goal Goal Goal Goal

Intermediate Goal

Measures
Activities
KPI

Fig.7
Source: Kista Galleria KB & author
73
 Basically, the suggestion is to proceed from the initial vision and realize it with the help of
the goals established. Subsequently, the goals are fulfilled with the help of intermediate goals, key
performance indicators (KPI), different activities and measures. Lastly, action plans and KPI
reports can for instance serve as tools in following-up the energy plan.
The current vision for Kista Galleria, which aims for 2012, exhibits the ambition of being a
sustainable shopping center with a pronounced customer focus which entails high-quality indoor
climate and simultaneously causing as little negative impact as possible on the environment. In
order to realize the vision, four goals and associated intermediate goals have been established.

1. To establish environmental certifications for Kista Galleria (2010)

2. Institute incentives for efficient energy consumption (2011)
3. Maximum energy consumption 140 kWh/m2 (2012)
4. To only use in-house generated and renewable electricity (2012)

These goals and the KPI’s established by the management team are followed-up on a
monthly basis.

7.3.2 Actions and Measures in Reducing Energy Consumption

At present, several measures in reducing energy consumption have already been undertaken by
the shopping center’s management team. In the following, actions which have already been un-
dertaken as well as those presently under consideration are presented.

Electricity
Measures undertaken in mitigating electricity usage mainly concerns control of lighting. Areas
such as garages, corridors, stair wells and other areas where there are less people have movement
detection device or time- controlled lighting. Simply as a means to only keep the lights on when
necessary in these areas. The management team has installed such lighting devices in two of the
bigger passages, namely Brandesgången and Kistagången since these passages are public and need
to be accessible day and night. For instance, Kistagången is a passage through the shopping cen-
ter which leads to the subway-station Kista Centrum. As a result, this passage is accessible until
01.00 and reopens when the subway starts again around 04.00-05.00.
The biggest passage, which is Modeboulevarden, is equipped with light-sensors. These
lighting devices can sense the natural light passing through the skylight and adapt indoor lighting
accordingly. In addition, all electric fittings in for instance cargo areas are equipped with LED-
lights.

74
 Interestingly, the management team is currently testing so called sound-sensors, which
could be suitable for stair wells etc. If it works, they would not need as many devices as move-
ment detectors since the sound-sensors will react to sound which has wider range.

Heating and Cooling

Measures undertaken in connection to heating and cooling are often related. Currently, the man-
agement team is working on a project which aims at utilizing excess heat from ICA’s refrigerants
and uses it to heat tap-water and ventilation systems for the tenant. Similar solution has been
carried out for COOP Forum. Moreover, excess heat from refrigerants and cold-storage for te-
nants at the Food Court will also be utilized and used to heat tap-water for the area.
The management team is currently investigating the possibility of utilizing excess heat
among retailers as a result of their lighting fixtures, and used it to heat the ventilation systems.
A new solution for the cinema complex was introduced last year where the fans started as
the staff turned on the cine-projector, which reduced the time of the fans running in excess.
Moreover, the ventilation system was rearranged so it automatically adjusts to the number of
people in the movie theatre.

7.4 Comments from the Meeting

In connection to the case study, an interview with a member from the management team of Kista
Galleria was conducted. The following is an outline of the comments made by the respondent
concerning their energy efficiency measures.
The most essential activity, as expressed by the respondent during the interview, in reduc-
ing energy consumption is simply to measure, measure and measure. In other words, assessing
and determining where and how much energy is consumed. In addition, it is highly crucial to
thoroughly follow-up on energy saving measures. Basically, it is highly fundamental to know the
energy flow or energy consumption pattern of the building in order to know where and how to
reduce energy consumption efficiently. Accordingly, this is how energy saving activities are con-
ducted at Kista Galleria, by measuring the consumption and firstly undertake non-cost measures
or less expensive investments.
Subsequently, a great amount of effort is put in to optimizing operational matters. For in-
stance, the operational team makes sure that lights are turned off when not required, that fans are
not running in excess etc. Furthermore, the work also involves utilizing excess heat in order to
ascertain that everything is consumed as efficiently as possible.
However, the daily routine of optimizing the operation of the shopping center does not
come without problems. As mentioned previously, managing a shopping center is highly complex
due to for instance the vast number of tenants, the competitive nature of retail and the necessity

75
of high efforts in marketing etc. In particular, the number and varying types of tenants compli-
cates the efforts of optimizing the operation of such facility. Accordingly, the management team
is constantly faced by the need of balancing between being environmentally conscious and satis-
fying their tenants and the customers or visitors of the shopping center.
For instance, every tenant does not necessarily have the same environmental policies. Nev-
ertheless, they all want the same climate and temperature for their shop. Since some of them have
lighting with low energy consumption while others do not, it implies that the need for the opera-
tional team to adjust the climate control increases and the system gets more complex. Hence, the
team needs to come up with solutions which will reduce the buildings overall operational costs
without compromising the tenants demands.
Moreover, the need for cooling can be complex. First of all, everybody has their own view
of when it is cold. For instance, customers visiting the shopping center during winter time might
experience the temperature as quite hot while the employees working at the stores might think
the other way around. What temperature should you then, as staff of the operational team, adjust
to? If you simply supply a store with cold air as a means of cooling it down, you might have
problems with draught which would possibly have a negative impact on people’s health, causing
for instance neck and shoulder-pain.
Another consideration they have had at Kista Galleria is whether or not to use revolving
doors. Presently, there is one entrance/exit which has a revolving door. The other entrances are
predominantly equipped with regular swinging doors, basically due to its higher capacity. For
instance, a revolving door would not be suitable to have in connection to the entrance of Kis-
tagången since large flows of people enters it every day, particularly during the morning and af-
ternoon since people have to pass it to go to the subway-station. So, should we choose revolving
doors due to its better energy-savings qualities or should we choose swinging doors which are
worse from an energy point of view but more efficient in accommodating the amount of people?

76
8 CONCLUDING COMMENTS AND INFERENCE
No one could possibly have gone unnoticed of the profound attention environmental concerns
have been given during recent years. Issues concerning global climate change, the green house
effect and natural disasters as a result of it, have raised awareness regarding our planet’s environ-
mental condition at every level of the society, from regular citizens to leading policy-makers.
Indisputably, environmental concerns and the increased awareness have affected every line
of business trade, nonetheless the construction and real estate industry since links between the
built environment and ecological matters have been identified. For instance, buildings are alleged-
ly consuming approximately 32% of the world’s natural resources. Moreover, buildings in devel-
oped countries alone are accountable for roughly 50% of all the hazardous carbon dioxide emis-
sions. Subsequently, the industry has experienced the emergence of new conceptions such as
green buildings and responsible property investing, and also the introduction of green leases and
numerous environmental certification tools.
Furthermore, academics have identified both direct and indirect benefits as a result of
committing to the new green movement, ranging from pure ecological benefits to financial re-
munerations. As mentioned at the outset of the thesis, economical benefits include for instance
increased NOI, higher rent levels, enhanced property value and increased ROI.
Accordingly, and perhaps ideally, every property owner should reasonably engage in activi-
ties which reduce their negative impact on the environment since both the environment and they
themselves will be better off. However, is it really that easy to save the planet by greening the real
estate industry, in particular the retail property sector and associated shopping centers? Obviously
not, since property owners, including shopping center owners, are as of today still seemingly en-
gaged in environmental concerns to a varying degree. Consequently, this is a highly significant
question which firstly needs to be addressed.

8.1 A Shopping Center – More Than Just a Building

First and foremost, a shopping center complex is more than just a building in comparison to oth-
er property types as a result of the shopping center owner’s concurrent dependence on the con-
tentment of two different demands.
More specifically, an owner needs to satisfy the demand from the numerous tenants and
simultaneously ascertain demand from consumers who visit the shopping center and buy the
products. In addition, the tenants can range from retailers to restaurants and cafés, all of them
conducting businesses in highly competitive sectors. This somewhat three-dimensional relation-
ship between the shopping center owner, the tenants and the costumers inevitably makes the
management of a shopping center diverging from the rest.

77
 Furthermore, from an owner’s point of view, managing a shopping center implies a lot of
efforts in constantly renewing and adapting in order to continuously adjust to prevailing market
conditions. Additionally, the management team of a particular shopping center needs to persis-
tently follow the trends and the market in order to differentiate the shopping center from other
and remain competitive.
As a result, today’s shopping centers have undoubtedly developed and become a place of-
fering visitors more than a nice and pleasant shopping experience. Shopping centers today have
evolved into a complete meeting place for people to not just shopping but also eat, hang around,
run errands and perhaps also watch a movie at the cinema. As a means of distinguishing oneself
from other, it has become more common to assign a specific theme or concept to the shopping
center and have an entertainment center in conjunction to it.
Consequently, commercial and architectural aspects have commonly been prioritized in
connection to the development of shopping centers while matters concerning the shopping cen-
ters’ negative impact on the environment have not necessarily been given equal attention. This
notion is supported by the comments from the interview sessions, where the respondents admit-
ted to the fact that the location of the shopping center is still the number one priority for both
the owner and the tenants. More specifically, the respondents refer to aspects such as demogra-
phy, target group, capture rate and market area as most significant and that environmental con-
cerns are of subordinate importance.

8.2 Ownership and Organizational Matters of Significant Importance

Another considerable aspect when discussing the extent of environmental commitment among
shopping center owners concerns a number of organizational factors. Firstly, there is seemingly a
difference in environmental commitment as a result of the owners’ investment and ownership
objectives. More specifically, depending on whether the investor or owner of a shopping center
has a long-term growth objective or short-term income objective, there is a divergence in the
extent of green initiatives undertaken at a shopping center. For instance, an owner with a rather
short-term interest in the shopping center as an asset might merely focus on customary operation
and maintenance matters while an owner with relatively long-term interest might “go the extra
mile” as a means of reducing the buildings environmental impact. In other words, a short-term
owner might just engage in non-cost measures such as making sure that all lights are turned off
while an owner with long time horizon might invest in solar cells on the roof.
There are certain organizational factors reasonably influencing the “greenness” of a shop-
ping center. First of all, there is the size of the company owning the shopping center, both in
terms of its capital “muscle” and the number of employees etc. As regards the amount of money

78
the company has, the capital constraint might plausibly influence the extent of investments in
more sustainable alternatives in a negative way. For instance, if the owner experiences capital
constraints, they might have to choose a more conventional and less green initiative simply be-
cause it is cheaper than the more environmental friendly choice. Moreover, a shopping center
owner might not engage in environmental matters at a greater extent simply because of con-
straints in terms of resources or employees.
Accordingly, depending on whether or not the owner is a large international organization
or a local company, it ought to have an impact on their environmental commitment. More specif-
ically, a large and international shopping center owner ought to have an advantage in terms of
resources and capital. Perhaps more importantly, their advantageous position of such shopping
center owner ought to be knowledge transfer or the opportunity of sharing best-practices con-
cerning sustainable measures and implement it more efficiently.

8.3 Environmental Commitment – Just an Image Booster?

At the end of the day, matters concerning for instance energy consumption and waste manage-
ment have always existed. To actively reduce operation and maintenance costs as a result of ener-
gy consumption and waste generation, and subsequently increase the NOI has always been an
obvious element of good and proper property management. From a real estate economical point
of view, and depending on the lease terms, reduced costs imply an opportunity for the owner to
increase the rent levels and/or improve the property value.
Subsequently, my personal belief, besides the factors potentially influencing the extent of
shopping centers owners’ commitment to environmental matters described above, another con-
siderable aspect is that some of the companies have simply adhered to the green movement.
More specifically, these companies have differentiated themselves from others by acknowledging
the increased public environmental awareness and subsequently marketing and disclosing for
instance their energy efficiency initiatives as corporate environmental responsibility. In other
words, just because some companies do not disclose environmental commitment or if they dis-
close to no inconsiderable extent, do not necessary suggest that they do not engage in fighting the
ongoing environmental deterioration. Plausibly, explanations could be found in for instance re-
source constraints or simply because these companies experience such initiatives as “hygiene fac-
tors”. Consequently, they do not disclose their efforts in reducing energy consumption and cor-
porate environmental responsibility to a greater extent because they do not consider it as relevant.
Whether or not the underlying purpose of present environmental commitment disclosure is
to enhance a company’s image, sooner or later, every real estate company within the retail sector,
owning or developing shopping centers, will gradually increase their environmental disclosure

79
and commit to it as the pressure from influential stakeholders ought to increase. One needs to
keep in mind the competitive nature of retailing and the complex management of shopping cen-
ters, which might possibly be the underlying reason why environmental concerns have not yet
gained foothold within the sector in comparison to office and residential properties.
However, shopping center owners whom have already acknowledged the somehow new
era of property management which incorporates green and sustainable initiatives to a more all-
encompassing degree ought to cope with the coming transition in a smoother and more efficient
way. Accordingly, these owners will reasonably benefit from the potential advantages by commit-
ting to environmental concerns, as described at the outset of the thesis, at greater extent in com-
parison to other who has lagged behind.

80
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APPENDIX A
Questions for the Interview Sessions

Sustainability in a Shopping Center Context

1. How do you define “sustainability”?
a. What is a “green shopping center”?
2. Which environmental concerns are of most importance for a shopping center situated in
Sweden?

Environmental Policies and Corporate Documents

3. Is there an overall environmental policy within the organization?
4. Is the environmental policy a natural constituent of the company’s overall business idea,
strategies and vision?
5. How does the company communicate its environmental commitment, internally and ex-
ternally?
6. Do you think that a distinct environmental company profile can enhance the company’s
competitiveness on the market?
7. How do you perceive the prospects of positioning a shopping center as green or sustain-
able?

Green Initiatives and Investments

8. How do you work with :
a. Energy efficiency?
b. Waste and water management?
c. Transports?
d. (Eventually some other areas as identified in connection to question no 2)
9. Do follow-up activities exist and if so, how?
10. Are the investments and efforts in environmental matters connected to the company’s
turnover rate or profit?
a. Do you invest more of there is more money available?
b. Do you think that the alleged financial benefits due to environmental commit-
ment can be realized in practice?
11. Which factors determine whether or not to choose a more sustainable and green alterna-
tive in connection to investments?
a. What are the return and yield requirements?

Future Prospects
12. What are the biggest obstacles for undertaking green investments to a greater extent?
13. What are the necessary incentives?

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