07/10/2022 | by
Fashion District Philadelphia, Philadelphia, PA. Photo courtesy of Macerich.

This case study was published in the 2022 REIT Industry ESG Report, which details the REIT and publicly traded real estate industry's environmental, social, and governance (ESG) performance and features 32 case studies showcasing REIT leadership and ESG innovation from a variety of sectors. The report serves as a practical tool for shareholders and stakeholders to assess the scale and impact of the REIT industry's ESG commitments and initiatives. Applicable footnotes and/or citations for this case study are available in the full report.

Prioritizing Business Continuity Plans with Data-Driven Goals and Comprehensive Scenario Analysis

Macerich is building a strategic pathway to meet its 2030 carbon neutrality goal and address climate change by developing strong reporting and disclosure processes and conducting climate change scenario analyses.

“Macerich’s commitment to extensive environmental data collection, as well as transparency in reporting and disclosure over many years, has positioned us as an industry leader in ESG. More importantly, this commitment positions us to make sound longer-term business, financial and environmental decisions to protect the resiliency of our portfolio in the face of continuing climate change.”
-Jeff Bedell, Vice President, Sustainability, Macerich

Macerich is looking toward the future of its business by focusing on important long-term goals and staying ahead of reporting and disclosure requirements. In 2020, Macerich set science-based emissions reduction targets aligned with the Science Based Targets initiative (SBTi), made possible by the company’s well-defined data collection structure. Macerich also aligned its reporting with the Task Force on Climate-related Financial Disclosures (TCFD) and CDP, achieving a spot on the CDP “A” list for six consecutive years. The company is prepared to meet regulatory changes to ESG reporting and disclosure, such as greenhouse gas emissions reporting obligations, which Macerich analyzes as part of its scenario analyses.

As a normal course of business, Macerich identifies and assesses business risks and opportunities that could impact the value, reputation, and business continuity of the company across its portfolio. To do this, the company regularly reviews climate-related risks and opportunities, distinguished by short term (zero to two years), medium term (three to seven years), and long term (eight to 20 years) transitional risks; physical risks; and opportunities. Identified focus areas include, but are not limited to:

Scottsdale Fashion Square, Scottsdale, AZ. Photo courtesy of Macerich.
  • Short-Term Transitional Risks: Shifting costs of raw materials and energy, enhanced emissions reporting obligations, and demand for sustainable tenant space
  • Medium-Term Transitional Risks: Aging and obsolete utility infrastructure and risks from not being prepared for emerging regulation
  • Long-Term Transitional Risks: Regulations by carbon legislation, and a rising appetite for climate-related litigation
  • Physical Risks: Increased severity of extreme weather events, grid connection interruptions, and changes in recurring physical risks
  • Opportunities: Investment in energy efficiency projects, incentives and benefits for sustainable investments, and changing consumer preferences

Macerich’s transparency in reporting and disclosure, as well as its strategic scenario analyses, have prepared the company for the uncertainty of future challenges. By setting goals and identifying risks and opportunities, Macerich has been able to develop a risk management framework that allows the company to properly evaluate and prioritize material risks, ensuring that Macerich’s strategy is focused on the long-term success of the business.

Macerich is one of the country’s leading owners, operators, and developers of major retail real estate. Its unparalleled portfolio comprises trophy properties in the most desirable, densely populated, and highest-barrier-to-entry U.S. markets.

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