Great Portland Estates Plc (GPE) Earnings Call Transcript & Summary

Good afternoon, everybody, and a very warm welcome to this investor and analyst call entitled Sustainability, It's Imperative. My name is Toby Courtauld, and I have the privilege of being GPE's Chief Executive that is both fascinating and exciting time of change for our industry. In a minute, I'll take you through our agenda. And you'll see we have some important material to cover over the next 40-or-so minutes. But first of all, I want to take you back 12 months, back to February last year and our 2020 Capital Markets Day. Back then, we talked about our occupiers wanting more, more from their buildings, more from the owners of their buildings. And we described how we were evolving and innovating to meet their needs through our Flex product, through offering flexibility more generally and through the services that we provide, including using tech, such as our award-winning app, sesame. We thought the prospects for London were positive, allowing us to remain committed to this great capital and with a portfolio of balance sheet and a team that combined to ensure that we are well positioned. And we showed you how sustainability touched everything that we do. It has moved from being moderately important to being an economic and, therefore, strategic imperative and, if properly understood and executed, an opportunity for us as well. 12 months on and so much of what we said last year is even more relevant today as we navigate our way out of this pandemic. Those occupier trends are accelerating, so is our evolution and our innovation. Today, we're focusing on more choice, making sure our offices are magnetic places that our occupiers people want to be, more service and hospitality and flexibility in every sense, addressing health and well-being challenges and opportunities and with an approach to sustainability that is both pragmatic and progressive in addressing their needs. We still think the prospects for London are positive. And whilst the effects of the pandemic will linger for some time, it will bounce back. This great city will still be a global cultural and business capital. And we remain both committed to it and well positioned to benefit from its recovery. And today, it's even clearer that sustainability is an absolute imperative economically and strategically, generating leasing and value premium and increasingly guiding us as to what we buy, build, hold and sell. So let's explore this idea of it being an imperative a little more. We know occupiers are increasingly focused on the topic and will demand buildings of the highest sustainability credentials. And that's because their buildings play a crucial role in defining their brand. A sustainable building helps them to be an employer of choice in the battle for tomorrow's talent. We also know that the regulatory environment is changing. Just one example, an EPC B will be the minimum allowed energy rating by 2030. And this is a big issue. Today, some 80% to 90% of London commercial real estate is rated C or below. And we are seeing investors and capital markets applying increasing pressure to businesses generally to up their game. And on the right, you can see that they now expect sustainability to be the single most important trend influencing the real estate industry over the long term. So it's imperative. And what might some of the consequences be? We think the sustainability best will pull away from the rest whether that be assets or owners. And you'll see this difference in rents or where a building has a green rating. And we think the best will get stronger as they recognize the imperatives I'm talking about and look at what we have done recently. We've launched our sustainability statement of intent last February. We've launched our Roadmap to Net Zero and created our decarbonization fund in November. And we put sustainability at the heart of our decision-making through Monday's announcement of the promotion of our Sustainability and Social Impact Director, Janine Cole, to the group's Executive Committee. But perhaps the most interesting consequence is the opportunity the sustainability challenge presents us with, an opportunity to differentiate our product in the eyes of the occupier in order to generate higher relative returns and an opportunity to acquire effectively orphaned assets needing a sustainability solution and which are currently owned by those without either the means or the knowledge to find such a solution. So turning to the agenda for this session. And we're going to take you on a short journey as to how we are approaching this challenge and this opportunity. We'll start with Simon, who will expand on the occupiers perspective on sustainability before Janine looks at the 4 pillars of our statements of intent. Helen will then explore how they are implemented at our most recent completion of The Hickman. James will consider some of the tech we are using and will be using to strengthen our sustainability credentials still further. And Andy will bring these trends together at our most recently committed development, 50 Finsbury Square, before Nick wraps up. And after all of that, we'll have some time for you to ask me or any of the team any questions you'd like. So let's get started then with the views of our all informed occupiers and over to you, Simon.

Thanks, Toby. A good way to summarize the change in how occupiers view ESG and sustainability, in particular, is to look at the design and marketing of 2 of our projects 10 years apart. If I take you back in time to 240 Blackfriars, our marketing and sustainability initiative was limited to how we had reduced utility costs for the occupier. Despite innovative [indiscernible], we still didn't believe it rapid enough for the occupier to make a big statement about it. Fast forward to today at 2 Aldermanbury Square, where we have recently submitted a planning application. And the entire ESG equation is contained in our marketing story: design, procurement, technology, the health and well-being benefits as well as the commitments we are making as a business and how we intend to get there. We are seeing a similar shift in the mindset of occupiers. For most, sustainability credentials are seen as something to collect like swimming badges. Those occupiers typically want a competitive edge over their peers and are aware that their offices need to be future-proofed. But there are some for whom there is no compromise. It is integrated into the fabric of their business, their culture and it's an economic imperative. And more occupiers are moving from bucket 1 to bucket 2, which influences the way we are delivering for our occupiers. Providing buildings in a Cat A condition was going to become the exception, not the rule. I spoke this time last year that the majority of sub-10,000 square foot floors will have to be delivered fitted. Not only does the lack of hassle suit the occupier, it is beneficial for everyone if we design and build a sustainable fit-out that can be reused for the next occupier. But all sites of occupiers want to reduce the waste associated with strip-out and fit-out. During an occupier's 10,000 square foot fit-out, as much as 30% of the Cat A works that the landlord installed was scrapped. So look out for larger occupiers taking space in a shell and core or fully fitted condition to improve on these inefficiencies. We expect occupiers to be more involved in the design of our buildings. If I put you into a meeting last month on 2 Aldermanbury Square, you would have seen a major law firm's global health, safety and sustainability officer on a call with 8 members of the GPE team, including our Chief Executive. That meeting was not about just reducing utility costs. It was about establishing an understanding and setting mutual goals about how we both want the whole building to be designed, built and managed. And some of those changes cannot be retrofitted. That means over the next 5 years, you will continue to see early pre-letting discussions. And those, like us, with a track record for delivering in partnership with occupiers will be at an advantage. A couple of final thoughts. For some time, businesses have been using their building as an extension of the benefits they offer their employees. But since COVID, more than ever, the workplace must be somewhere that is worth traveling to. They must have a magnetism and an experience that is worth it. That means greater focus on amenity and providing something those staff can't get at home. In a while, Helen will explain what makes our development at The Hickman work it. But before then, health and well-being is front and center for occupiers. And right now, Janine is finding herself front and center in leasing discussions because education and collaboration on ESG is becoming an extension of the services we are offering customers. Over to you, Janine.

Thanks, Simon. For more than a decade, we have been focused on creating and managing sustainable buildings to meet our occupiers' expectations, delivering green, excellent developments, monitoring resource consumption and is performing well against numerous ESG benchmarking indices. We've also [Audio Gap] has now moved from being a moral obligation to an economic and strategic imperative. In May 2020, we launched our statement of intent. The time is now, which brings together the 4 inextricably linked pillars of our approach; to decarbonize our business by 2030, design climate change resilience and deductible spaces, create a lasting positive social impact in our communities and to put health and well-being front and center. Today, we will largely focus on the first of these 4 pillars: how we intend to decarbonize our business. In order to set out our Roadmap to Net Zero carbon, we first need to understand our carbon footprint. As you can see from the pie chart, only 15% of our carbon emissions, Scope 1 and 2, are within our direct control. Therefore, in order to address the remainder of the pie, extensive collaboration will be required with our occupiers who were generating 22% of our carbon emissions and with our supply chain where 41% of our emissions were directly attributable to our developments. Our road map sets out how we will transition to become net 0 carbon by 2030. As you can see from the diagram, if we do nothing, we are projecting that we would emit 37,000 tonnes of carbon in 2030. We have set out 4 steps to reduce this impact, reduce embodied carbon, reduce energy intensity and increase renewable energy supplies. These steps are anticipated to halve our footprint. But by implementing our internal carbon price and decarbonization fund, we hope to accelerate change. Any residual emissions will then be offset to net 0. This will be a significant challenge. We therefore need to innovate by using new materials and construction techniques and employ the principles of the circular economy. It is estimated that approximately 2/3 of the building area that exists today will still exist in 2050. And therefore, the need to retrofit existing buildings has never been greater. This presents a challenge to those businesses who lack the skill set to do this and an opportunity for businesses like us who have been doing this for years. Above all, data must improve to identify carbon reduction opportunities and measure progress because, generally, what gets measured, gets managed. So let's explore how we plan to implement our road map. Starting with the reduction of embodied carbon, the first step in our hierarchy. The majority of the buildings' embodied carbon is emitted during construction. That's the carbon involved in the manufacture and transportation of materials and the on-site construction. This made up just over 40% of our carbon footprint in 2019. It can take 40 years or more to emit the same quantity of emissions during operation. We therefore have a target to reduce our embodied carbon emissions by 40% by 2030. This slide shows the CGI of our proposed development, 2 Aldermanbury Square. Currently, it's early stage of the design process. We're having positive conversations with the planners in part because of the way in which we have integrated sustainability and our embodied carbon target from the start. We're designing for longevity and adaptability, increasing the lifetime of the building. We're challenging the status quo by reviewing outdated industry norms for building specifications, which will reduce the quantities of the materials required. Technology was supported using BIM and efficient construction techniques to just prefabrication. We will specify low carbon, requiring our supply chain to seek out materials that use less carbon during their manufacture and with minimum transportation emissions. We are designing with the circular economy in mind, looking to specify materials which can be reused or repurposed at the end of the building's life. The signs are good. And we hope to deliver 2 Aldermanbury Square as our first net 0 carbon development 5 years ahead of our 2030 schedule, significantly improving its occupier appeal. Moving to the next step in the road map, reducing energy intensity. Given operational energy emissions are 37% of our footprint, driving energy efficiency is critical. We already purchased 100% of our energy on green tariffs but that's not enough. We need to improve energy efficiency to reduce consumption. We also need to close the performance gap. Buildings should operate as efficiently when they are in use as they were designed to perform. Legislation in this space is evolving fast. By 2030, the minimum energy efficiency standard will be an EPC B. Below this, it will be illegal to lease the space. Therefore, improved energy efficiency will reduce both our footprint and the risk of our assets being environmentally stranded. We've set ourselves a stretching target to reduce our energy intensity by 40% by 2030, including the emissions of our occupiers. So how will we do it? Real-time information for us and our occupiers will support behavioral change. Collaboration will be key as occupiers increasingly look to work with us on their transition to net 0 carbon. We also need to utilize technology. New systems and energy monitoring will support us, and James will provide more on this later. Finally, we need to engage with our supply chain. And our occupier services team is already working to integrate our net 0 carbon goals into supplier contracts. So moving on to our third objective, renewable energy. Buildings will always need some form of heating and cooling. Once the efficiency of these systems has been maximized, we need to ensure that they are powered through renewable energy supplies whereas possible. This means that we need to radically increase our on-site renewable power supplies with a target to generate 600 megawatt-hours across our portfolio per annum by 2030. That's approximately the annual energy consumption of 160 homes. To reach our target, we will include renewable and low-carbon energy supplies in all new developments shown here in this image of 160 Old Street; review our existing roof spaces for opportunities to retrofit photovoltaic panels; use biodiversity to create natural solar shading, reducing the need for cooling; supplement on-site renewable energy with investments in new renewable energy schemes; and connect to local energy networks where possible. Our decarbonization fund will help support this, so turning to our setting. As you'll remember from our announcement in November, we just set an internal carbon price of GBP 95 per tonne, which will be used to form our decarbonization fund. This will be levered for the first time in April against the Scope 1 and 2 emissions from our portfolio. It will also be charged against the embodied carbon from our development activities. The fund raised will support the deep retrofitting required to accelerate our transition. It will also provide the efficient spaces our occupiers want and build further climate resilience into our existing portfolio, reducing the risk of stranded assets. We anticipate the fund will receive GBP 6 million in the first 5 years. The first development to be impacted by the internal carbon price will be 50 Finsbury Square, which is forecast to contribute around GBP 600,000 to the fund. We could use this fund to upgrade lighting, retrofit solar photovoltaic panels and install heat pumps at Wells & More, potentially saving 160 tonnes of carbon per year. We anticipate that the fund will accelerate our transition. However, it is inevitable that carbon offsets will be required. And from 2030 and beyond, we will offset all our residual emissions to net 0 as a last resort. Through our charity partners, we will look to offset in the community. For example, supporting those living in fuel poverty, investing in new local renewable energy projects and developing biodiverse spaces within London to increase carbon sequestration as well as supporting climate resilience. We aim to use our offset strategy to create a lasting positive social impact. So returning to the 4 pillars of our statement of intent. Whilst I have largely focused on the first pillar, decarbonizing our business, I have also, I hope, started to demonstrate how inextricably linked the pillars of our statement of intent are and how they touch upon all of our stakeholders. We are designing for climate change resilience, maximizing the longevity and adaptability of our spaces, transitioning away from fossil fuels, using biodiversity for natural solar shading, generating more renewable energy and using our decarbonization fund to undertake deep retrofitting, reducing the risk of stranded assets. We are committed to creating a lasting positive social impact in our communities. We will use our carbon offsetting strategy to contribute to our community program. The measures we are taking to decrease our carbon emissions, such as reducing materials and prefabrication, will minimize site deliveries, improving local air quality. This will be further supported by the installation of biodiversity measures. We intend to create GBP 10 million in social value by 2030. And the final pillar, putting health and well-being front and center. The real-time information on energy consumption, comfort and air quality supports our occupiers' well-being. Through the installation of biodiversity measures, such as living walls, we can reduce the indoor temperature by up to 5 degrees, reducing the need for cooling, further supporting occupier well-being. And don't forget, throughout the COVID pandemic, we've kept all our buildings open and COVID secure, including increasing airflow to meet new best practice guidelines. I'll now hand over to Helen Hare, our Director of Project Management, who will demonstrate how we are delivering on our sustainability ambitions and meeting ever-evolving occupier expectations.

Thank you, Janine. The Hickman marks a significant step for GPE. We acquired the site in 2017 with an embedded project team and set to work on-site almost immediately. Functionality of space for our occupiers and a sustainable approach, as always, remain at the forefront of our design. But at The Hickman, we wanted to take these and the development of our smart building approach to another level. Overall, we've added almost 40% to the net internal area of this asset and have managed to retain over 60% the original structure. By strengthening less than 10% of the existing foundations and only 6% of the existing columns, we were able to reuse the existing foundations and frame. As our first development completion following the launch of our statement of intent, we're delighted to note by retaining the existing structure, we were able to save 306 kilograms per square meter of CO2, which is approximately 49% less than that of an equivalent new development. Not only did we consider the carbon impact and the energy efficiency, we also considered the future adaptability of the asset and multiple potential uses, including retail, residential, hotel and, of course, offices, thereby increasing the potential longevity of the space. We've pushed the boundaries on our energy targets by achieving an EPC A rating and BREEAM excellent. Ordinarily, we would expect to achieve a very good rating for refurbishment. But we set the team a stretch target which we're delighted to say we achieved. I mentioned functionality for occupiers. Functionality and flexibility of spaces, together with choice, we believe is critical to the market positioning of this asset. We use this project as a springboard to ensure we delivered a building with a high user experience, including full fiber install 3 separate carriers, full WiFi to all common areas, preinstalled aerials and satellite, all alongside our sesame app. The Hickman delivers a world of outside spaces across 5 different floors, including courtyards and terraces, totaling nearly 12% of the total area of the building, all directly accessible for occupiers. We've also prioritized biodiversity, which will help cool the building and reduce the open heat island effect. This is our fourth development where we have delivered a collaborative café and a variety of meeting spaces at the entrance to the building, providing both privacy and areas for collaborative working and vibrancy as you choose. We've removed the physical barrier of a reception desk and provided full frictionless access to all occupiers via our sesame app and all the usual benefits of meeting and booking systems, transport updates, media links, local business promotions and events but, more interestingly, individual control, including light and control for users on the floor. We have recently installed air quality sensors, allowing us to measure the real-time environmental conditions and to share that information with our building users, again, through sesame. This is only one part of the technology that we have developed here. And we strongly believe that all these market-leading initiatives have helped generate occupier interest and appeal, which has contributed to the successful letting of the top floors to Four Comms late last year. And to explore our latest innovations a little more, I would now like to hand over to James.

Thanks, Helen. As you can see at The Hickman, we've continued to innovate, increasing our smart building capability, to improve sustainability performance of our buildings and to meet the ever-evolving occupier expectations. Let me show you how we've done this. Building information modeling, or BIM as it is known, is integrated at the start of a building's design. We've been market leaders in the use of BIM for more than a decade. BIM uses 3D modeling to better coordinate design and enhance project management. And through our open-minded approach to innovation, we've been able to combine our growing expertise in smart buildings to combine this with the BIM model and create a digital twin of the building. A digital twin is a virtual replicator building which models the specification of every single component and its performance. And for the first time, this provides real-time feedback about what's happening in the building. There are over 500,000 components in The Hickman building. And we can now access all of them in a matter of seconds, providing our engineers with a wealth of information to better maintain the building and improve operational efficiency. For example, as you can see on the video, we can easily access information from each individual fan cooling unit. It allows us to understand when equipment is being installed, tested and maintained, building up a digital record which helps us learn the frequency of visits and start to predict when we will need to repair ahead of time. More recently, we've installed environmental sensors to allow us to understand the flow of people around our buildings and understand how and when the building is being used. This allows us to build up a picture of energy usage based on occupancy. From this, we'll be able to start to predict energy usage and work with our occupiers to reduce whole building energy consumption. As you heard from Janine earlier, closing the performance gap between the energy of buildings designed to consume and actual usage is key to help us decarbonize our portfolio. We're taking the data and feedback from the digital twin at Hickman and other recently completed developments to help inform the design and operation of other properties in the portfolio. We can also take the information from the digital twin and put it in the hands of our occupiers through the use of sesame. After rolling out sesame across the portfolio, we've continued to evolve its functionality to help improve our occupiers' well-being and respond quickly to the challenges presented by the pandemic. We are giving our occupiers and their visitors hands-free access into our buildings. We've installed sensors to measure indoor air quality and allow occupiers to understand conditions in their office. We have further improved our lighting and environmental controls so they're even more responsive, enhancing occupier satisfaction in the workplace. We provide occupiers with real-time energy data to help us work together to reduce energy intensity. And finally, we've put real-time transport data into the app so you can understand how busy the chief platform is before you make your journey. We've improved this functionality not only at Hickman but all of the occupiers in the portfolio. As Janine mentioned earlier, what gets measured, gets managed. And with the creation of digital twins and improved feedback in sesame, we are creating more and more data. Looking forward, we'll continue to innovate, use the BIM model to measure embodied, use the data from tech components to embrace the circular economy with a base set for the entire life cycle of the building. We'll use aggregated and anonymized data from a digital twin and seek to deploy machine learning to help us continually improve our portfolio and meet our sustainability targets. Our Development Director, Andrew White, will now explain how we're going to apply these technologies and our sustainability thinking to our next project, 50 Finsbury Square.

Thanks, James. I'm delighted to introduce 50 Finsbury Square, our newest committed development, which is due to complete Q3 next year. It's the first time we started the scheme, meeting all our pillars of sustainability. So how have we done this? Starting with embodied carbon. Because the building has good bones, we felt we could adapt and reuse rather than knock down and replace. This alone gives an 80% structural embodied carbon saving over redevelopment. Where we've extended, we've been able to reuse existing foundations and limit column strengthening to reduce the carbon impact. We've embraced the circular economy. The stone in the existing facade needs to be replaced. But we'll be recycling much of it to create a stunning feature wall in the atrium, as you can see in the image. We're also reusing the existing glazing to further reduce the carbon impact. We estimate that we're already below our 2030 embodied carbon target. And by offsetting the remaining carbon for a GBP 600,000 contribution to our newly established decarbonization fund, 50 Finsbury Square will be our most sustainable building to date. As with The Hickman, we thought about the future adaptability of the building. As shown in the image, there's a wide range of potential future uses, including residential, hotel, retail and life sciences. And should planning ever permit it, the building can take additional floors without the need for significant new foundations or columns. This offers a far more sustainable future than simply demolishing and rebuilding. In terms of operational carbon, our new building services, which includes air source heat pumps, will be all electric on green tariffs rather than gas. This provides a 60% operational energy saving and reduces CO2 emissions by 40% compared to the existing building services. We've also started to challenge historic industry specifications. By raising our summer temperature set point by 1 degree, there's a 20% energy saving. Turning to wellness. We know the importance of providing a variety of workplaces within buildings to promote health and well-being. Continuing our trend of ensuring our buildings provide appropriate spaces for formal and informal working, we've included co-working space with integrated café as you enter the building, a town hall space at the base of the atrium and rooftop amenity with a variety of potential uses. 50 Finsbury Square will be well enabled to allow future occupiers to achieve wellness accreditations once their fit-outs are complete. There will also be high levels of greening with living walls and plants throughout. And in a post-COVID world, we've increased the volume and circulation of fresh air. One of our key pillars is creating lasting positive social impact. Through our development of 160 Old Street, we're already active in Islington. And with 50 Finsbury Square, we'll continue supporting Groundwork London to improve air quality in schools as well as working with partners to promote job placements and apprenticeship opportunities. Turning to technology. As you've heard from James, the level of tech investment into our schemes continues to increase to ensure we retain our market-leading position of delivering smart buildings. We're targeting a Platinum WiredScore, the highest level, to ensure we meet occupier's requirements. Building on the excellent work at Hickman, we'll be introducing further technology to continue closing the energy performance gap as well as starting to analyze how our occupiers use the building. This will make 50 Finsbury Square our smartest building to date. So to conclude, 50 Finsbury Square continues to build on the sustainability and innovation initiatives that we've been incorporating into our developments, most recently at The Hickman. We're addressing the circular economy and challenging historic industry norms. 50 Finsbury Square will be an exemplar, best-in-class modern office, having some of the strongest sustainability and innovation credentials in the market, exactly what occupiers want. And early interest in the space has been encouraging. I'll hand over to Nick to cover how sustainability is touching everything we do.

Thanks, Andy. Hopefully, given everything you've heard, you'll understand that sustainability now touches everything that we do at GPE and is driving real behavioral change. It's evident across our portfolio activities, the technology that we're embracing, the discussions that we're having with our occupiers and the priorities that we're setting our supply chain. It's also embedded in our culture and increasingly in our decision-making, too. And I'm pleased to say our team is rising to the challenge. And I know that we're all benefiting from our program of sustainability education as we're all learning together, with our expert guest speakers enhancing not only our understanding of climate change but also the corporate and individual positive contributions that we can make. And don't forget, we have clear incentives to deliver on our ambitions, including the targets in our innovative ESG-linked bank facility, which not only impacts our borrowing costs but also our remuneration. However, we can't do this on our own. So as well as collaborating with leading real estate sustainability bodies, such as the U.K. Green Building Council and the Better Buildings Partnership, we're also working closely with our peers and supply chain. Plus, we're continuing to measure our performance and adapt our reporting to the growing myriad of standards and sustainability indices, which we know are important to both investors and occupiers alike. We've been in the FTSE4Good for 15 years and have received EPRA gold for our sustainability reporting every year since 2014. Plus, we continue to perform well in GRESB, Carbon Disclosure Project and a multitude of other indices. And at the asset level, we've now delivered more than 2 million square feet of BREEAM rated development schemes since 2009. And more recently, we've been a pioneer, collaborating with other developers to introduce the U.K.'s first energy performance-in-use rating for commercial buildings, successfully launched as NABERS U.K. last October. Last but not least, we're also rolling out Fitwel and WELL ratings across our portfolio where appropriate. So lots going on and plenty of near-term actions to focus on as we seek to deliver our long-term ambitions and the 4 pillars of our statements of intent. As you heard earlier, our decarbonization fund will be going live from April, with deployment to follow shortly thereafter. You'll see enhanced TCFD disclosure in our upcoming annual report. And we'll also be setting out our climate change resilience strategy in the upcoming financial year as well as launching our social impact strategy as we seek to create lasting positive impact for our communities. And we'll continue to put health and well-being front and center, including across our Flex space and through our use of technology whilst also updating our well-being brief in the next 12 months. So with sustainability both in economic and strategic imperative to GPE and, increasingly, for our occupiers, investors and other stakeholders, too, busy times ahead with still lots to do. Now over to Toby and the chance to see Q&A.

Thank you, Nick, and thank you, team, for some really, really helpful insights into our activities. And I hope you on the call found that you learned something along the way as well. Now like good a conversation, we've got team lined up ready to answer any questions that you have. I wish to focus on them. And Steve, I'm going to hand over to you to -- all of those questions for us. And then we can distribute them around everybody as best as we can.

Sure. [Operator Instructions] But to start off, I've got a text question. It's from Rob James at Exane, who asks, what is the biggest obstacle to achieving your 2030 goals? Is it tenant engagement to cut Scope 3 emissions? Do lease contracts need to change to force tenants to change their behavior?

Thank you, Rob. Very important question. It feels like one for Janine. Do you want to have a go at that one?

Thanks, Toby, and thanks, Rob. So I think probably the first thing to say is that we are absolutely committed and we'll achieve our net 0 carbon goals for 2030. We're really focused on those, making sure that we reduce the level of offset that we will need to do at 2030. There are -- there will be obstacles along the way of that, I'm sure, but as we've already covered in the presentation, also opportunities. I think that's sort of really important to make that point. I will come back to occupiers in a second. I think the first thing to sort of point out really is that data is going to be key. James covered that within his part of the presentation, where we're really starting to understand the data from the operational carbon within our buildings. And that will undoubtedly help support our journey. I think with embodied carbon, there's more work to do. What we found when we set our own baseline for embodied carbon was that areas such as transportation of the materials has been widely underestimated by a number of the industry benchmarks. And I think the other thing that we found as well is that processes around estimating whole life carbon of buildings and Cat B fit outs, for example, is less well developed. What that means is that will set us a challenge whereby our carbon footprint may go up before it comes down, and that's something that we're going to need to deal with. I think sort of aligned to that then also is the piece around technology and innovation, again, something we touched upon earlier. We need to drive innovation throughout our portfolio, embracing new materials, and also the industry needs to do the same. And so I think the pace of change is going to be something that is going to be important on our journey. And then on to occupiers. I think what we're finding is that they are very much wanting to engage with us and not least because they have a number of similar challenges to us. They want to engage with us to understand how they can also get their net zero carbon goals. Green leases are certainly part of the discussion. And I think that, certainly, where obtaining occupier data, for example, is concerned, green leases are going to be really key to that discussion. But I think what we're finding is that generally, sustainability outcomes are being driven more through collaboration engagement and working together rather than through taking contractual relationships.

Thanks, Janine. Really comprehensive. I would just add that one of the things that we're certainly noticing is behavioral change is beginning to show itself. That's not just obviously the owner segment, people like us, but also through our occupier community as well. And that behavioral change is going to be absolutely essential for us to hit the targets with minimum offset that Janine is talking about. The stimulus is clearly there, and that stimulus is better rating equals better performance. And for us, probably will equal better returns in the medium term as well. So that stimulus will encourage us to help them along the way as well. Rob, thank you. Steve, back to you.

Okay. So the next question comes from Paul May, who I will now allow to speak. Paul, are you there?

Do you hear me okay?

Yes, got you.

Great stuff. Got the 3 questions. Best to ask all of them or should do one at a time?

Why don't we start one at a time?

Cool. Just on the first one, super interesting as always, and I think you are at the forefront of this particular movement. Just wondered, does the approach to the net zero carbon change your underwriting of investments at all? Obviously, embodied carbon and knockdown and rebuild, which you've sort of done in the past are major developments you've done, obviously, successfully in the past. There's been quite a core part of your business. Just wondered, does this change how you view assets and the assets that are particularly attractive for acquiring?

Paul, if I may, just at the risk of getting the wrath of Mr. Burrows, do you mind asking the other 2 as well because then I can -- we can distribute it around and give time for people to think about answers.

Sure, not a problem. Second one is on the impact of the sort of current situation, work from home. You touched on it on one of the developments, talking about the adaptability of the workplace. But I just wonder if there's anything else that you feel sort of more broadly across your portfolio that you'll need to incorporate moving forward. And then on the final one, just wondered if you've seen any impact on rent levels at all from more sustainable buildings? Or is it still a case at the moment where better and more sustainable buildings just have a broader appeal to the tenant base as tenants become a bit more selective about the types of space that they would want to occupy, but as yet, pricing isn't necessarily being affected? Just wondered if you'd give an update on that.

Okay. Great questions. Thanks, Paul. I'll have a go at the first one. Andy, if you might expand a little bit on the work-from-home thinking that you touched on earlier. And then maybe, Simon, you can talk about the experience we're having around discussions and perhaps the rental impacts. In relation to underwriting, Paul, the answer is yes. I mean we are, without question, now feeding into our both development appraisals, the consequences of decarbonization be that through the fund itself, so we're now allowing in our appraisals numbers associated with the fund at the GBP 95 per tonne. But I think more relevantly, Helen and Andy, through our developments in particular, are spending an enormous amount of time thinking through how we can reduce the cost, both the carbon cost and the actual cost of the buildings that we are thinking about building. And that clearly finds its way into underwriting. I'll go to the other end of the spectrum as well and say, as I said, right at the top of the show, we will definitely make decisions on hold versus sell based on our prospective view on a building's carbon performance. And that's something I wouldn't have said 10 years ago. I mean Janine was right. We've been on this for 10 years, but it wasn't -- it's obviously measurable, firstly, or relevant perhaps even 10 years ago. Today, there's no question that will feed into the underwriting. And you will see that's our point about the strategic imperative. You will see us making decisions on which to hold and buy and build, et cetera, based around the performance, the sustainability performance of the asset. It's obviously much more than that, but that's become very important. Andy, touch on the work from home, please.

Yes. Well, the -- also, just, Toby, pick up on your last point, going forward, we're also starting to -- when we're doing design work, it's actually looking at the carbon impact as we go through the process. And when we make design decisions, not only are we looking to custom program, but we're also saying what's the carbon impact of this. I think, Paul, you had 2 questions in relation to the working-from-home piece. As you've seen from both what we're doing at 50 Finsbury but what we've done on a lot of our other developments is this variety of workplace piece. So the office really becomes a pull factor through the wider provision of services that we're now providing through both the flex piece but also the integration of cafés into reception, et cetera, really trying to make a strong pull factor on that. I think you had also a question around sort of COVID and that sort of thing. We are obviously making sure that all of our portfolio, I'd say, to date is COVID secure. But as I said, in relation to 50, we're also looking at how we can boost the provision of fresh air but recognizing that when you do that, that potentially does have an energy impact. So there'd be balances we need to think about it. We're hopeful, over time, as air quality in London improves, though, that we can introduce openable windows and that sort of thing. So I think you will see some of the changes coming through from COVID into how we change some of the buildings going forward.

Thanks, Andy. Simon.

Yes. I think just following on from what Andy said, if you think about amenity and well-being adaptability, what makes a good ESG building makes a good building. And Jones Lang has recently issued a report, which suggests that a premium for a good ESG building may be somewhere between 8% to 11%. But the truth is that the best buildings let quickest. On a whole, the best buildings are the ones being delivered by those who are paying dues [indiscernible] [ pre COVID ]. And we bumped into Toby. And the first question that, that occupier asked Toby was about sustainability. And if you can't adequately answer that question, you're at a disadvantage. And you're unlikely to capture all the interest or the demand that is out -- and that has to have a value impact. I just don't think you can explicitly [indiscernible], but it's moving up the agenda and definitely to stability.

And just -- thank you, Simon. Just completing the question, Paul, in relation to work from home. The one thing that is going to get -- not one thing, a, an important thing that it's going to get people back into office buildings aside from all the obvious discussions we've all shared around wanting to be collaborative and with our colleagues creating ideas and generating ideas, et cetera, The one [Audio Gap] space we create is space in which they really want to be because it's fun because it's a great place to spend your day. And that's a key part of, I think, the work-from-home debate as well. Okay. Steve, back to you.

Okay. So back to the live questions. We got a question from [ Oliver Carruthers ]. Oliver, can you hear us?

I can hear you. Can you hear me?

Yes, we can. Go ahead.

You mentioned earlier on that 80% to 90% of the London stock is below the EPC B minimum 2030 requirements. Could you expand a little bit more on what you see as the market level implications of this? Refurbishment rates accelerate. How could this potentially affect supply/demand dynamics in the occupier market? And then I guess, follow-up, where is the capital going to come from to meet these requirements, again, at a market level?

Thanks. Thanks, Oliver. Why don't I have a go at the first one? And then, Nick, do you want to pick up on the broader capital question and investor piece of that? So the 80% to 90% is a current estimate. Clearly, by the time we get to 2030, it's going to all change, I would imagine. Janine referenced a number in her section around 50% to 60-odd percent of stock today would still be there come that sort of time frame. So something has to happen. And our judgment is that you will see a series of relationships form where knowledgeable specialist players like us provide a really important service to those who own assets but don't have the knowledge or potentially the capital. Now we've never wanted to be a development [indiscernible] whether the [ pricing ratio is ] much higher than it is related to fees. Why would we want to be? And we don't propose to change that. But it is going to be a really interesting opportunity for us to partner with those who don't have those skills potentially or if they are in some way concerned about the prospective performance of a -- what I describe as an orphaned asset. Maybe they're a seller, and at the right number, we're a buyer. But we have to use that knowledge and those skills, I think, that will allow us to generate the opportunity that I was referring to. And I think we'll be able to do that. I think it's going to be a very interesting time for people like us, and we're clearly not the only firm with these skills, but for people like us who have those skills, to use them to full advantage for shareholders and, indeed, of course, for London. Nick, do you want to take the second part of that question?

So I think [ put into the star ] building is funded by sustainable finance. I mean we've seen over the course of the last 12 to 18 months rapid [indiscernible] backed finance market. When we put in place our ESG-linked RCF this time last year, it was the first in the U.K. REIT sector. Subsequent to them, we've seen a number of our peers follow the same route. And perhaps more significantly in the bond market, you've seen a lot more issuance on the -- particularly on the green side, and you start to see that come through in pricing. And at the same time, there's no doubt, on the equity investor side, we've had a sustainability, Janine touched on, for 10 years. We've probably only been -- had questions from -- on the sustainability side from investors for 18 to 24 months. That is changing rapidly. I think the fact that 150 people on this call today tells you that things are moving rapidly. And so whilst there are going to be costs associated with delivering sustainable buildings, I think there's an argument of also the company's cost of capital are going to start moving around dependent on their sustainability credentials and their ability to deliver sustainable buildings. So I think sustainable buildings and sustainable finance go hand in hand.

Thanks, Nick. Thanks, Oliver. I hope that answered your question. Steve?

Okay. So no hands raised. [Operator Instructions] In lieu of that, I'm going to go to a question raised by Steve Bramley-Jackson. He says with regard to the need for retrofitting existing space, have you already had conversations with any of your tenants? And how do you foresee the cost of apportionment of this type of activity between landlord and tenants?

Okay. Thanks, Steve. Thanks, both Steves. Okay. Simon, do you want to just perhaps expand a little bit on the conversations we're having with occupiers more broadly, not just in new pre-lets?

Sure. Yes. Obviously, where there are existing occupiers in buildings which carry leases, we're going to be governed by the leases in place. But clearly, where there are mutually aligned benefits, those discussions are happening. I think proactive conversations with our occupiers is a day-to-day function of the entire portfolio management team. This may well lead to sustainability-led changes to existing spaces, but another example on the flex side of the business is where we've opened up a discussion this side of Christmas with an occupier who has seen what we are doing at Dufour's Place where we've just launched a fully managed product. And they are saying, well, actually, this really fits with what we want, and can we have a discussion around taking some space back and converting that building into a fully managed building for them, too. So it's just part and parcel of being an active owner of real estate in London. And I don't know if Janine has any other examples of where we are working with an occupier to change, plants and things like that. But certainly, from my perspective, I think it's part and parcel of what we do.

Yes. I mean we are working with a number of occupiers, particularly those actually where the energy intensity for their buildings is particularly high, so working with them on potential changes that we can make to the services within the building, how we can help them monitor where the energy consumption is getting consumed within the building so that we can start to support that as well. I think the other thing to say as well in terms of where the -- how we will deal with the CapEx for that's concerned, don't forget, we've got the decarbonization fund as well. And so we will be using the decarbonization fund to bring forward projects to help support retrofitting of the buildings as we work through. And I think James is also wanting to comment on that as well.

Yes. Just to [indiscernible] the other thing exciting to see is occupiers move back [ here ] and we want to understand how their space is being used. So we wanted to understand their utilization and use of centers and really trying to get to grips with maintaining their satisfaction and well-being, which goes hand in hand with energy consumption as well. And I think this whole picture is going to be a really interesting discussion over the next months and years as we get to know more about each other and commitment to each other's requirements.

Thanks. Thanks, guys. And just picking up on that point from James. I think one of the really interesting consequences of the lockdown has been the levels of communication between owner and occupier have probably gone up because we've been staring down the barrel of the crisis needing to help out in every direction our occupier community as we have been. And in those conversations, we've learned a huge amount, more actually often about their needs and demands and to James' point, about the sorts of things that we can help them collect from a data standpoint or the sorts of flex opportunity that might exist as Simon touched on. And those conversations have got really rich, and there's no question that they will broaden, I think. And that's probably a real positive that's come out of -- one of the few that's come out of lockdown. Okay. Steve, back to you.

Okay. The next question is from [ Emily Chadwick ], who asks, do you see reaching net zero carbon as a necessary cost to keep up with market expectations and legislation or rather as an opportunity to create value.

Janine, that's winging its way to you.

It's a bit of both. So there's no doubt that legislation is growing in this space, and we can see it happening from national government, the EPC B rating being an obvious example. You can see it happening from local government, the GLA, the London plan was adopted last month. And that has some significant sustainability aspirations in it. It's then transferring into borough councils with all of them declaring climate emergencies. And so I think there's no doubt that it's a necessity, but if you actually deal with sustainability in a pragmatic and progressive way, as Toby said at the start of the session, then it's an opportunity. And I think that -- and we will be able to drive value through it. And I think, again, that EPC piece around the minimum energy efficiency standards that would be, there will be some property owners, as Toby has already touched upon, that just aren't able to deal with that. And so I think that there is undoubtedly an opportunity for us in doing this.

And I think it's worth just reiterating at this point about brand, not our brand but the brand of our occupiers. The importance to them of being in a building, which is supportive of their brand, should not be underestimated. We're seeing that -- we're hearing that in the sort of conversation Simon's already touched on. We're seeing it more and more. And unless we are able to give them buildings that support their brand, we're not going to succeed. And I think we will end up with a 2-tier market, those who do and those who don't provide buildings that support occupiers' brands. Those that do will win. Those that don't will really not with, quite the opposite. So yes, absolutely an opportunity to create value as well as a legislative requirement. Steve?

Okay. We've got one more live question. Paul May's back and would like to ask a follow-up. So Paul, go ahead.

Sorry, just a quick one. I think it's exactly the very point that you've made about creating those great places for people to occupy. I think you've been sort of stellar at doing that in the past. However, part of that strategy has been quite extensive redevelopment of assets, which I think, as you're highlighting, is quite a carbon-intensive requirement or impact. I just wondered of the buildings that are below EPC -- or C or below on the EPC scale, how many of those can be retrofit or is a knockdown, a rebuild required? And moving forward to sort of linked to the underwriting, would you avoid a scheme in order to hit your ESG targets even if that, that scheme was a particularly great economic opportunity so you can still create a great ESG building but the embodied carbon to knock down and rebuild it, for example, would be extensive? I mean you may not hit your ESG targets to kind of get the trade-off that I was just asking or trying to get to. And then just second question, apologies if you did mention this. What proportion of the GPE portfolio is currently C or below, out of interest?

Okay. Good. Paul, there's 3 more great questions. Janine will come to you on the last one. On the -- so that's the EPC C I believe. In relation to redevelopment versus retrofit, Helen, maybe you'd just like to reflect on some of the challenges of retrofitting versus redevelopment, and particularly how the work's expanding on the work we're doing on new materials to help rebalance between redevelopment and retrofit because, clearly, Paul's picking up on an important point about social economy, the cost of redevelopment. So why don't we come to you on that, Helen?

Thank you, Toby. So if I pick up on the first piece, redevelopment versus retrofit, I think our example at The Hickman was really telling in that that's notably a retrofit, and we've demonstrated there how, even during this transition, through applying all of our ESG initiatives, we've achieved so much. Similarly, with the example at 50 Finsbury, reuse of existing foundations, et cetera. So 2 really early examples there already. Just touching on materials. Materials, we've been doing a huge amount of work researching in the last year or so. I mentioned last year, someone introducing Sempre concrete. What we found is that there are even more coming to the market over that time. The supply chain is responding really, really well, really strong, looking to actually make their own investments to encourage us to adopt these materials at a much earlier stage, and they are listening. They're listening to us when we're saying transportation is a huge contributing factor to all of these things, such that there's one particular supplier I've spoken to in the last month, who are looking to electrify their whole fleet of vehicles in the next year. And if we look beyond there, what we're also looking to do is to eliminate [ deals ] on-site as far as possible by using alternate material or alternative fuel. The other aspect that's worth touching on with materials is also the method of manufacture. So if I look at one of the greatest contributors to carbon, if I look at steel, there are lots of organizations already investigating greater use of electric air furnaces, for example, instead of oxygen-based furnaces. And this, in turn, over time, will produce what we call net 0 steel. So huge development in these areas, all of which will contribute to helping us to achieve more net zero carbon buildings. Just lastly from me if I may, I think one of the other key factors is that whilst we've achieved huge amounts at The Hickman and at Finsbury Square, what we are finding is that, as we make a consideration to embodied carbon, a key part of our design process in the outset, we are finding that we're able to influence so much more in those very, very early stages. So we're really -- we're a lot more than hopeful as to what the future holds for us.

Thanks, Helen. Paul, just before we come to Janine, the other question you asked was around underwrite and whether we would find ourselves committing to a scheme that may get in the way of our targets initially at least if the economics were very strong. And I think that's a very interesting question, and it's one that I think is quite a dynamic question. I think you'll see a lot of change on this point over the next few years. And to Simon's point of earlier, a good environmental, good sustainable building is a good building, full stop. And so it follows ultimately that good buildings will let better than bad buildings, and they'll tend to be the environmentally supportable buildings. And I think that, in time, will be the case. For now, however, it may take a while for that to happen. For now, if we came across a really interesting development that hit our sustainability targets, it's not quite as straightforward as that because, of course, we are going to put into that scheme a fair amount of capital by way of our decarbonization funds. So we'll allow for that in the underwriting which, in turn, will then get fed back into retrofitting elsewhere in our portfolio, so that the net benefit coming from our contribution through the fund. And of course, whilst we don't really want to be using the offset, we still have some capacity there to invest in our local communities and in some of the schemes that we're keen on pursuing through the offset measure. So it is quite possible. Looked at in isolation, we will underwrite schemes where they of themselves might not help our target numbers. But when taken in the round with the various other measures that I just touched on, I can see that we might well choose to do that. And longer term, I don't think this is going to be an issue because I think, longer term, we get to the same place, great buildings equal sustainable buildings. Janine, anything you want to touch on -- to add to that?

So I mean on the EPC B rate sort of question, so 22% of our rated portfolio is B or above, which is aligned with the estimations on London office buildings and also nationally as well. As Toby has already touched upon, the decarbonization fund, we -- one of the key reasons we've put the decarbonization fund in place was to support that deep retrofitting, which will help support derisk our portfolio from forthcoming legislative changes around the minimum energy, which is the target. So it's not just about -- so it's retrofitting as -- and our buildings will move at that EPC trajectory as we go. So I think that will address the energy efficiency point.

Great. Thanks, Janine. Steve, [ Simon Robson Brown ] has a linked question. Should we go to that next?

Yes. Yes. So Simon asks, for the decarbonization fund, how did you get to GBP 95? Is that a truly meaningful amount to make a difference? And is it sourced from the normal reserves of the company?

Janine, I think that's back with you.

So the GBP 95 per tonne, as you would expect, there was a great deal of research and work that went into that. So we looked at the market and what others were doing, both in the U.K. and in Europe. We also looked at what was happening in other industries as well. What we also [ vendored ] is the pricing put into our development appraisals so that we could see what difference the number would make. The key for the internal carbon price and then the decarbonization funds is to create behavioral change. And when it's much lower than GBP 95 per tonne, it becomes more difficult to create behavioral change because the price isn't high enough to make a real difference to development appraisal. The other thing as well, to bear in mind as well is that we need to give the development team some certainty on the internal carbon price. If you think about the average lifetime of the development, it can take sort of 3 to 5 years, sometimes depending on the development. And so it's important that they know what the internal carbon price is going to stay relatively stable throughout that development so that what they've worked into the development appraisal is what we charge at the end. And so I think that -- so that's where we came to. And I think the important point with it is that it needs to drive different decisions. It needs to not be cheaper to pay the internal carbon price rather than make changes to the building.

Thanks, Janine. Steve, we've got a couple from Steve Bramley-Jackson relating to the RCF and rent. Should we go there?

Sure. So Steve asks, GPOR issued a GBP 450 million ESG-linked unsecured RCF with an adjustable margin subject to performance measures based on ESG-linked KPIs. Is it too early to have driven any change in the margin? Or have you done so already?

Nick, please.

I'll take that one. Steve, give us 3 more months, and we'll let you know. It gets measured in May, and I'm hoping we're positioned to include it in the annual reporting [ and really know ] does it impact the margin on the RCF [ or it does feed ] into executive remuneration. And I think there's a broader question there. I think more companies will go down the route of including it within both their nonfinancial KPIs and also their remuneration. And I think, in the same way that we're going to see it become more material -- have a more material impact on financing rates, I could imagine that, over time, it may well become more relevant in rem, right? The first step is to get it into rem structure, which we put in this time last year.

Good stuff. And you've also, I think, answered Steve's other question about whether the rem component might get more important over time in relation to sustainability, which I think we all think it should. Okay. Steve, back with you.

So I think we've got one -- probably one final question, which is how does the company develop its digital twins for buildings? Is this company developed software or third-party sourced? How'd you do it?

By having a man called James Pellatt in the team. JP?

Yes. I didn't do that myself. And we always source this externally. We don't do it internally. For the digital twin, we scoured the planet literally. We found 2 enterprises in the U.K., 1 in Australia and 1 in the U.S.. And we just wish -- we try our best to make sure we get the best-in-class opportunities. So we're trying both opportunities, U.K. opportunities, one at Hickman and another at 160 Old Street. And we're working hard with those teams now daily trying to work out how we can get more information out of it. And I think the crucial thing is, actually, there's a whole ecosystem at different companies. So the air quality sensors come from a Finnish company and [ certainly ] is another software company. And that's why we invested in [ pilots ] last year and continually checking this evolution and innovation that they're all very excited about trends we saw around sustainability involving issues. And there's more and more opportunities coming daily almost that we keep looking at.

Thanks, JP. Steve, back with you. Do we have any more?

Well, I've got one more and then we'll wrap up. So the last question comes from [ Maria ] at Green Street. She says, as part of the development cost of underwriting, you were able to measure a cost premium today for a highly sustainable building versus a more classic, arguably less sustainable development.

Andy, any thoughts or Helen, either of you?

I think we can answer it kind of jointly in a way. If I start off, to a certain extent, we're approaching it holistically. And as Helen has said, the more we're designing it in from the very beginning, to the extent there is any cost premium, it's being minimized. I think as the market moves on and matures, it's only going to -- to the extent there is any cost premium, it's only going to come down. And actually, I should have commented on a point earlier in terms of the decarbonization fund. If you think about 50 Finsbury Square, for example, success should be that we end up paying less than the GBP 600,000 that we're targeting, and that's certainly where the team are coming from that they're hoping that by still carrying on and looking at things, we should be below the GBP 600,000 contribution on that. Helen, do you want to give a bit of a deeper dive on just some of the cost side of things?

Well, it's very much just to add that I mentioned earlier integrating, I think, as an embedded part of our [ design on the outfit is key ]. But I think also to convert the science into reality, what we're also finding is that through adopting the supply chain into the design process much earlier, it is producing rewards, too, in terms of pricing. I touched earlier that concrete pricing, more entrants into the market. People are looking to carbonize their fleet, price changing, estimates within the 12-month period. This is moving very, very quickly. So we said last year, much closer engagement with our supply chain and everybody is onboard, which is really encouraging to see.

Great. Thanks, Andy. Thanks, Helen. Steve, I think we -- are we wrapping up then?

We've got one more hand raised if you'd like to go for one more question. So we have a question from [ Rodney ]. So [ Rodney ], if you would like to ask your question.

Did I hear Janine correctly that only 22% of your estate is an A or B on EPC?

You did hear me correctly. Yes.

And -- Okay. And sorry to follow up on that. I'm sure you guys have done it. Obviously, I appreciate you guys are developments. But if -- have you done the exercise? And could you share in sort of pounds million what it would cost without changing the scope of your portfolio to bring the whole portfolio up to a B?

The straight answer, and this is why I think it's strategic, is that it isn't all probably without -- within the boundaries of economic sense, it isn't probably possible to get the whole portfolio up to an A or a B. And that's in essence why I think you're going to see quite a lot of sorting portfolios out between now and 2030. I mean it's interesting. That regulatory change was actually more adventurous than we thought it was going to be. Isn't that fair, Janine? We thought it was probably going to end up in a C. And to put it at B is -- I mean that's pretty fundamental, and it is going to -- it's going to force a lot of behavioral change, which is its intention. And that's actually -- that's why we're here today, why we're we talking about this topic. It's why we're getting so much interest in this topic. It's why you're going to hear us talk about this a lot more from here. And it's why we're going to be making stronger linkage between these topics and the economics of our game, so to speak, much more readily because it's fundamental. So yes, it's a big, big -- good question, [ Rodney ], big issue. Janine, anything more you want to add?

The other thing to say, [ Rodney ], it's what we do. So we take buildings that need to be improved. And you can see ratings no -- is no different. So if you think about the way in which we -- historically, we've brought buildings in. We've refurbished them and repositioned them, and then often, we will dispose of them. So what we tended to be doing is disposing if the buildings are EPC A rated. And I think that, that's why the proportion of our portfolio is 22% B or above. And I think, over time, clearly, you're going to see that change because it will need to because of legislative change. But where I started, it's what we do, and so therefore, we're -- that's why we're here and want to put the decarbonization funds in place.

It is, in essence, opportunity we're interested in. Sorry, [ Rodney ], were you asking...

I just want to say thank you. Good answer even if it wasn't quite the number I've asked. I'll probably chew your ear off on some future ratios, but understood.

Of that, we have 0 doubt, [ Rodney ], 0 doubt. We'll come prepared. Don't worry. Okay, that feels like an appropriate point for us to wrap it up. We've taken almost 1.5 hours of your time. We're hugely grateful to all of you for giving us your time. I'm also immensely grateful for the team at GPE, the home team for helping put the presentation together, thinking through all the issues that do amazingly well and answering the questions that they do amazingly well. And I hope you, on the call, got a very strong sense of how on top of this issue the GPE team is and how we are going to put ourselves or keep ourselves at the front of the train, so to speak, making sure that we're doing all of the right things by our community of occupiers and by the communities where we operate. So plenty more from us on this and watch us address some of these issues and the economic imperatives and the strategic imperatives that come from it. Watch how behaviors change. I think that's going to be fascinating for us to catalog for you and to illustrate how we're enabling that to happen. And we've got a couple of events coming up, which will be the next opportunities for us to talk to you about some of these topics. We've got a quarterly update in early April probably. We'll give you an update then, of course, on our rent collection statistics. And then our results in May will be a great opportunity for us to expand further on some of these ideas. And by then, hopefully, some of us would have had found a chance to get a haircut. Anyway, we'll leave it at that. Thank you very much, everybody, for joining us. Thanks again to the home team, and have a great rest of the day. See you soon. Buh-bye.