LOGISTICS real estate operator and investor GLP, formerly known as Global Logistic Properties, has been developing green-certified buildings for nearly a decade. But it is only in the last year and a half that sustainability interest has really begun to pick up, said the company's global head of environmental, social and corporate governance (ESG) Meredith Balenske.

"It's such an exciting time to be working in the industry that I'm working in and be able to really be part of the generation that's transforming how businesses think about sustainability," Balenske said.

Among other things, she said new demands include increased transparency, the setting of public targets and goals, as well as benchmarking against peers in the industry.

"Climate change is quite real. For several decades, we've been making small incremental improvements as individuals. And today, I think you're seeing the largest contributors to climate change make substantial changes to their businesses to ensure that we meet the goals that are being set by governments to ensure that we have a future and future generations have a healthy planet to live on."

GLP was listed on the Singapore Exchange (SGX) in 2010, in what was the largest-ever real estate initial public offering (IPO) globally. It delisted from the Singapore bourse in 2018, and has today grown its footprint to cover 17 countries with US$120 billion in assets under management.

"As developers and operators of real assets - the largest part of our business - the main focus is to minimise carbon emissions in the construction process," Balenske said.

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This can be achieved through the use of materials that are less carbon-intensive, or by employing construction methods that require less earth movement. "By moving more earth, you're actually burning more fuel to even drive the machinery to move the ground off the land," she said.

GLP is also looking to minimise carbon emissions from fuel consumption by switching to solar power and minimising its reliance on the grid.

In 2020, GLP had solar capacity of 224 megawatts (MW) from 2.4 million sqm of solar panels installed at 120 of its properties globally. Its goal had been to double that by this year, with an additional 250MW across 75 properties. And the company is now aiming for a further doubling: "We should be at 1 gigawatt capacity by the end of 2023."

Balenske said GLP also makes investments in logistics supply chain technologies, such as automation, robotics and electric vehicles and trucks.

"We're even investors in a company that can help schedule trucking so that a truck never leaves completely empty," Balenske said. "Driving that efficiency can be supported through investments in technology; but it also has the benefit of reducing usage, minimising reliance on fuel and just driving down the carbon emissions."

Sustainable financing

GLP's ESG efforts have helped the company score sustainable financing.

The company has raised money in China, Japan, India and Singapore through sustainability-linked loans and bonds, which are based on hitting certain ESG goals and targets.

"We've been able to raise US$2.3 billion over the last few years, which indicates that we have a strong ESG policy within the business," she said.

For example, the company in May this year issued US$850 million of green subordinated perpetual non-call 5-year securities. This was followed by the issuance of US$300 million of green subordinated perpetual non-call 6-year securities in June. The proceeds were used to refinance green projects that are selected in accordance with its Green Finance Framework.

"Our collaboration with GLP is anchored on our common commitment to building a better future for generations to come," said Lim Lay Wah, UOB's head of the financial institutions group. UOB was the joint lead manager and bookrunner for the US$300 million green perps issuance.

As a customer-centric business, GLP has been successful in integrating ESG with its investment strategy," Lim added. "As sustainability is one of the key drivers to achieving long-term growth, UOB will work alongside GLP to forge a sustainable future together."

On top of expanding the company's access to capital, Balenske also sees the potential for sustainability financing to save the company money over time.

For instance, she said some sustainability-linked loans could be connected to a Sustainalytics score.

"If we meet certain thresholds and improve our score by a certain amount, we can actually decrease the interest rate," Balenske said. "It's definitely a large opportunity and supports driving our ESG programme forward, to capture the data required to set those goals and targets that are deemed appropriate by the lenders. So it's something I think you'll continue to see us work on.

"It's just part of the competitive DNA to make sure that we're future-proofing our business. We firmly believe that if we're not investing in sustainability to create a more efficient, more sustainable business, our assets won't retain the value in the future. So we have to make that investment now; to ensure that in the future, we have the most modern, efficient buildings."

As of end-2020, some 21 per cent of GLP's portfolio by gross floor area is green certified. The company aimed to increase the number of buildings with green certifications by 5 per cent this year.

"It can mean more development costs and more capex. But we think it's worth the investment, the upfront investment costs, to make sure that in the future, those buildings are still worth it," Balenske said.

Building communities

As a provider of a large number of jobs, especially with its large-scale logistics developments, GLP is also acutely aware of its social impact on local communities.

"It's important for us to make sure that the logistics development is part of the community," Balenske said. "We'll engage in philanthropic projects, we'll make donations, we'll hold community events at the logistics facility that help engage the community and help support them."

Balenske cites the example of Magna Park, which is the largest dedicated logistics and distribution park in Europe. Here, GLP provides more than 10,000 jobs and accounts for more than 20 per cent of all employment in the local community.

According to Balenske, GLP has added amenities such as gyms, daycare centres, canteens and outdoor seating areas at some projects as well as added more natural lighting to help make the environment more enjoyable to work in.

At a site in China, the company has also regenerated more than 50 mature peach and plum trees so they can be safely enjoyed by workers.

"Re-incorporating some of those aspects that can make a workplace a better, nicer place to be is incredibly important, especially given the large number of jobs and people that work in these facilities," Balenske said.

Globally, she adds, GLP is continuing to launch social initiatives at some of its large scale projects.

In 2014, the company launched the Spring Charity Foundation, which focuses on music and English language programmes for rural students. The aim is to build confidence and develop skills to help support future generations and local economies. "It sort of perpetuates the cycle and gives back to the local communities."

Such social development initiatives are also close to Balenske's heart. She previously worked at a social impact venture capital fund that focused on investing in startups in second- and third-tier cities in the hopes of driving job creation and helping support the local economy.

"It's more than just saving the world. I truly think that businesses are going to position, or are positioning themselves, with sustainability in mind (and) actually making investments in things that they weren't investing in previously, instead of just doing it because they had to because of the building code," she said. "So it's actually a huge benefit to your company if you're able to do that."

This is the 13th in a 20-part Green Business series, in collaboration with UOB, exploring sustainability trends across businesses and industries.