eflect who we were as people. We opened our first store in Surry Hills in September 2011, offering contemporary apparel from brands that are hard to find in Australian bricks-and-mortar stores. The idea initially was to be a local retailer serving the community, but that has now expanded. We have customers who come to Sydney once or twice a year on business and pop into our store because they are looking for something they won’t find in their local cities. We have since opened a second store at Lendlease’s Barangaroo South in Sydney and a third store in Fitzroy, Melbourne. Barangaroo South has strict sustainability requirements for its tenants. What steps have you taken to make your store more sustainable? OR: Our store is in a building called International House, which has a six-star energy rating. Apart from the ground floor, which features concrete, the upper levels are all built with cross-laminated timber, which is fully recyclable. All the tenants are required to use certified sustainable materials in their shopfits. For instance, we had to use formaldehyde-free MDF, which is a little more expensive but so much better for the environment, and low-energy light bulbs. Our storeroom is set up so the light goes on when you open the door and goes off when you close the door, so there’s no energy being wasted. And we have multiple bins for soft plastics, hard plastics and so forth, so we can recycle at the source really quickly. Did you have to make any trade-offs between looks and environmental impact in your store design? OR: To be honest, no. Our designer, Tim Magdalino, was very clever. Our shopfit is a reflection of the building itself, so we used cement board for our counters and display units, which replicates the cement pillars at the front of the building, and cross-laminated beams to mimic what is happening in the floors above us. We also used felt, which is very sustainable, and local Australian hardwoods. What do your customers think about the sustainable features in your store? OR: I think most people just appreciate the design aesthetic. But a lot of our customers at the moment work in the building, so I think their level of knowledge about energy-saving and recycling is quite high. I’m seeing a trend now where customers are quite happy to say, “I don’t need a bag”. Even though we only offer paper bags, I think people have become a lot more aware about the impact of single-use plastic bags, with the big supermarket retailers finally phasing them out. It wouldn’t be anywhere close to 50 per cent of customers doing this, but it’s just a trend I’m picking up on. Are you looking to introduce some of the same sustainability aspects into your two high street stores? OR: It’s quite a hard question to answer. The landlords for our two high street stores in Surry Hills and Fitzroy are relatively small investors themselves, and like with so many classic high street properties, the rent they can get for the store reflects how much the building is worth. They aren’t prepared to invest heavily into the buildings to make them greener or more environmentally friendly. When we renovated our shop in Fitzroy, we were looking to do things cost effectively, so rather than rip out the entire building and start afresh, we kept the lights and original pressed tin ceiling. It’s a nice blend of old and contemporary and works with the bones of the building. We’re a self-financed business, so if we can reuse something, we will. For us, less is more. I’ve seen restaurants come and go in both Surry Hills and Fitzroy, and the new guys come in and rip out a perfectly good shopfit, trash the lot and buy brand new stuff and put it back in again. You could buy a terrace house for the amount of money they spend on refitting a room, and 18 months later, they’ve done their dash for whatever reason. It’s a crazy economic situation I don’t quite understand, but I find it really sad. Ikea’s sustainability goals Tell us about the sustainability goals Ikea announced earlier this year. Kate Ringvall, sustainability manager, Ikea Australia: Our ambition is to become people and planet positive by 2030, while growing the business. It’s an exciting time for Ikea in Australia. Over the last five years we have doubled our footprint, and now have 10 stores and one distribution centre. We reach millions of Australians each year and are in a unique position to promote sustainable living as an affordable, accessible and attractive lifestyle. We want to inspire and enable Australians to live better lives, within he limits of the planet. Global commitments for IKEA by 2030 include: • Designing all products with new circular principles, with the goal to only use renewable and recycled materials. • Offering services that make it easier for people to bring home, care for and pass on products. • Increasing the proportion of plant-based choices in our food offer. • Becoming climate positive and reducing our total climate footprint by an average of 70 per cent per product. • Achieving zero emission home deliveries by 2025. • Expanding the offer of affordable home solar solutions to 29 markets by 2025. What steps is IKEA Australia taking to reduce its carbon footprint? KR: In Australia, we are looking at transport as an area where we can reduce our carbon footprint. According to the World Health Organisation, transport is the fastest growing  contributor to climate change, comprising 23 per cent of energy-related carbon dioxide emissions. This year, in partnership with one of our transport suppliers, we have rolled out two electric vehicles to deliver products from our Springvale store to customers’ homes. They have made 780 deliveries since October 2017. This represents 14 per cent of the store’s total deliveries and a saving of 8130 kilometres in emissions. Energy is also a focus area for IKEA. The lights in our Rhodes and Richmond stores are now 100 per cent LED. We also have almost 20,000 solar panels across our stores in Australia. The panels generate enough solar energy to power 967 homes for an entire year. What challenges does IKEA face in trying to make stores more sustainable? KR: Our ambition is to transform IKEA into a circular business by 2030. This is one of our biggest ambitions and challenges for the future. It will impact the business in all aspects: from how we develop products, source materials, develop the supply chain and set up logistics, to how and where we meet our customers. Working with circularity is crucial to finding new and innovative ways to work with renewable and recycled materials and ensuring nothing goes to waste. We continue to design our sites to be more innovative with their sustainability features, and are constantly looking for new ways to reduce our waste and energy consumption. For example, our recently opened distribution centre is a state-of-the-art facility. It has electric powered forklifts and is also home to green crane technology where the nine robotic crane arms convert breaking energy into electricity, which is fed back into the building to power the lights. Research suggests customers want businesses to be more environmentally friendly, but they don’t necessarily want to pay for it. Where does that leave retailers? KR: Research recently carried out by IKEA revealed that 61 per cent of Aussies consider themselves environmentally-conscious shoppers, yet only 24 per cent always consider sustainability when purchasing products. The research also found that price drives decision-making over design, environmental impact and convenience. The research was carried out to look specifically at Australian awareness and perception around home textiles and sustainability, linked to one of our most popular fabrics to use in the home, cotton. Over the last 13 years, IKEA has invested more than $6.6 million into supporting the development of a more sustainable cotton industry, from the farm and through the supply chain. Cotton from farmers that have implemented practices that use less water, fewer chemical fertilizers and pesticides reduce negative environmental impacts and increase yield and profit to improve the livelihood of farmers. Our vision has always been to make great design available to many people, and we do this through what we call Democratic Design. We have made a decision that you shouldn’t have to compromise on price, quality, design, function or sustainability when making a choice, and this philosophy influences every part of IKEA from product design through to our supply chain and into stores. We strongly believe that a healthy and sustainable life is for everyone, not a luxury for the few, which is why price is so important. This means that Australian shoppers can buy with confidence, knowing that our products are designed, made and distributed with sustainability in mind from the outset, but always at the lowest possible price. Mirvac’s ambitious targets In 2014, Mirvac set some ambitious targets to have zero waste-to-landfill and be carbon and water positive by 2030. How are you progressing? Sarah Clarke, Group general manager of sustainability, Mirvac: A lot has changed. In our retail portfolio specifically, we’ve already achieved a 32 per cent reduction in carbon emissions and we’re now diverting 73 per cent of waste from landfill, up from around 33 per cent five years ago. We’ve just reviewed our strategy and we’re doubling down on those environmental targets and expanding our efforts in other areas. We’ve had some really great recognition of our initiatives so far. Last year, Mirvac was ranked as the world’s most sustainable real estate company by the Dow Jones Sustainability Index. But I think our biggest achievement is the fact that we’ve really internalised sustainability in a short time. It’s in our DNA as a business. It’s in the questions we ask ourselves and the way we make choices. Tell us about some of the specific ways you’re making centres more environmentally friendly. SC: We’ve put a lot of focus on waste separation to work towards that zero waste-to-landfill target in recent years. We used to have around five to eight different waste streams in retail centres; now we’ve got 22 different waste streams, including general waste, which we’re trying to eliminate as much as possible, cardboard, soft plastics, cooking oils and landscape waste. We’re working with our retail tenants to help them separate at the source, and then taking it to the waste facilities in our centres, where we have those different waste streams. One of our shopping centres, Kawana Shoppingworld in Queensland, has a closed-loop process. So organics are being collected from the food waste being produced in the centre and being recycled into fertiliser, and that is provided to a local strawberry farmer, whose product is then returned back to the shopping centre and sold there locally. We’re also educating our tenants. Some of this stuff can be a little overwhelming, so having tangible examples of how they can make a difference is important. And we’re keeping ourselves honest by constantly reviewing and measuring our performance. We have a team doing night audits to make sure the infrastructure around the centres, including chillers and LED lighting, is all working in the best way it can. Meeting your targets will require a lot of buy-in from retailers. Is it difficult to get them on board? SC: I suppose the retailer’s primary purpose is to sell products, but we’re trying to demonstrate the benefits of our processes. Kawana is another good example of that. Our facility  manager there has taken retailers out to the dock areas, which they may not otherwise visit, to show them all the different waste streams and explain the benefits of the closed-loop process. With the cost of landfill and everything going up, that obviously impacts back on our fees. We typically get an offset on operating costs from sending less waste to landfill. It is slight, but there is a benefit and retailers do see that. There’s a lot of focus focus on new, green developments. Is it harder to make existing shopping centres sustainable? SC: When we’re designing a new asset, we have these great opportunities to include infrastructure that will make it easier for us and our customers to be more efficient around energy, water and waste. When we’re retrofitting, there is a different set of challenges, but we’re not alone in that by any means. There’s a huge amount of effort going on across our industry to transform existing assets. Another challenge is how those assets are being used. We’re seeing extended trading hours, so a key issue for us is how to keep generating those efficiencies in energy, water and waste, while our customers are trading for longer. Another is looking at the changing nature of society. We’re really attuned to this idea that our retail centres play a key part in bringing people together, as cities grow. We see our part in that as becoming more and more important over time. We’re thinking about how we can support communities more generally as a force for good, and not just being a place where people come to shop. Why is sustainability so important to Mirvac? SC: We would say it’s fundamental to the long-term success of any business. It’s not just about limiting our impact on the planet. It’s about being a force for good in society and having the holistic view of who we are as a business and what we can contribute. Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.