Net zero is old hat, says the mall owner that wants to go bigger

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• Majid Al Futtaim aims to be ‘net carbon positive’ by 2040
• Company owns and operates 29 malls across the region
• Retailer increased its clean energy production by 26 percent in 2021

Sustainability is high on the agenda of the region’s major retailers, and in early July, Majid Al Futtaim gave an insight into what it is doing to limit its environmental impact, with the release of its latest environmental, social and corporate governance (ESG) report.

The retailer, which owns and operates 29 shopping malls across the Middle East and Africa in addition to community, retail and leisure assets, has set a target of being ‘net carbon positive’ by 2040, meaning it aims to go beyond neutral and take more carbon out of the atmosphere than it emits.

The company was one of the first three signatories to the World Green Building Council’s net zero carbon buildings commitment.

It is aiming for its entire mall portfolio to be certified a minimum of LEED gold or equivalent by 2026. Some 45 of its assets have already been assessed for that standard, and a further 20 are under way.

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The business has committed to halving its greenhouse gas emissions by 2030 – reaching net zero by 2050 – and halving the volume of waste sent to landfill.

It aims to be net positive in terms of its water footprint by 2040, meaning it contributes more to water resources than it takes from them.

Ibrahim Al-Zubi, the firm’s chief sustainability officer, said in a statement accompanying the release of the report: “The rise of ESG on the corporate agenda has transitioned quickly from a niche interest to a mainstream requirement for companies seeking to lead across all industries today.

“With ethical buying and sustainability gaining importance for consumers, we want to create a positive impact in everything we do, from our local communities and the organisations we partner with, to the products we procure, and sell.”

Majid Al Futtaim already stands out as a regional pioneer in green finance as it begins adopting a risk-management approach to sustainability to satisfy investor requirements, linking ESG performance with the financing of its operational and capital expenditures.

In 2019, the firm listed the world’s first benchmark corporate green sukuk (Islamic bond), raising $600 million, quickly followed by a second sukuk of the same size.

Last year, it secured a $1.5 billion sustainability-linked loan – another first for the region – which is dependent on measurable improvements on specific yearly targets.

In a bid to cut its greenhouse gas emissions, the retailer has been investing in renewable energy capacity in partnership with Yellow Door Energy, increasing its clean energy production by 26 percent in 2021 to 21.4 million kWh.

The firm’s sustainable building policy requires all new projects to achieve a minimum on-site renewable energy generation capacity of 25 percent of total energy use. 

Other sustainable initiatives underway include efforts to phase out single-use plastics and an air-to-water pilot project, which uses hydro-panel technology and solar power to generate clean drinking water from air.