1. Consumer and Investor Expectations:

   Modern consumers and investors are increasingly environmentally conscious and prefer to support sustainable brands and spaces. Mall developers face pressure to meet these expectations, often leading them to make broad claims about “sustainability” or “eco-friendliness” without providing transparent data.

2. Complex Supply Chains and Tenant Accountability:

   Mall developers can control certain aspects of their sustainability practices, such as energy-efficient building designs, but much of the environmental impact comes from tenants. If tenants are not committed to sustainable practices, it undermines the overall green efforts of the mall, making it difficult to report accurate and impactful ESG metrics.

3. Inconsistent and Selective Reporting:

   Without standardized reporting frameworks, some developers may selectively report metrics that show favourable outcomes, downplaying areas where their impact is negative or where they have yet to make improvements. This selective reporting can lead to accusations of greenwashing, particularly as regulatory scrutiny over misleading claims intensifies.

1. European Union’s Green Claims Directive:

   The European Union has proposed the Green Claims Directive to crack down on vague or misleading environmental claims. This regulation mandates that companies substantiate their green claims with scientific evidence, ensuring that any environmental assertions are transparent and verifiable. For mall developers, this means that terms like “carbon-neutral” or “sustainable” must be supported with clear data, and they must be ready to disclose their methods of achieving such claims.

2. UK’s Greenwashing Regulations:

   The UK has introduced its own regulations aimed at reducing greenwashing across industries, with the Competition and Markets Authority (CMA) enforcing guidelines that hold companies accountable for misleading claims. In retail real estate, this may impact mall developers who promote their properties as “green” without backing up these statements. The CMA has already investigated several cases in the real estate sector, highlighting the scrutiny that mall developers can face if they make unverified claims.

3. US SEC’s Focus on Greenwashing in ESG Funds:

   In the United States, the Securities and Exchange Commission (SEC) is focused on increasing transparency in ESG claims, particularly for funds that invest in companies claiming sustainability. Mall developers who rely on investment from ESG funds must ensure their practices align with their green claims, as discrepancies could result in regulatory scrutiny and potential legal action.

4. International Standards for ESG Disclosure:

   The International Financial Reporting Standards (IFRS) Foundation and the International Sustainability Standards Board (ISSB) are developing globally recognized standards for ESG reporting. These standards aim to unify the way companies report their environmental impact, offering consistent metrics that investors and consumers can rely on. As these standards are adopted, mall developers will need to adhere to them to remain competitive and credible in the global market.

1. Embrace Transparent Reporting and Established Frameworks:

   By adopting recognized reporting frameworks such as the Global Reporting Initiative (GRI) or the Task Force on Climate-related Financial Disclosures (TCFD), mall developers can ensure comprehensive and standardized disclosures. This also includes publishing both positive and negative environmental data to build trust with stakeholders.

2. Collaborate with Tenants on Sustainability Initiatives:

   Given that tenants contribute significantly to a mall’s environmental impact, mall developers should actively engage tenants in sustainability efforts. Providing incentives for energy efficiency, waste reduction, and sustainable retail practices can drive meaningful change across the entire property.

   Invest in Verifiable Green Infrastructure:

   Developers should focus on tangible, verifiable upgrades that reduce their environmental impact, such as renewable energy installations, water saving systems, and waste reduction technologies. For example, installing solar panels, upgrading to energy-efficient HVAC systems, and implementing comprehensive waste management programs can demonstrate a clear commitment to sustainability.

3. Use Clear, Measurable Language in Marketing Claims:

   Instead of vague terms like “eco-friendly” or “green,” mall developers should provide concrete details about their environmental achievements. For example, instead of saying “sustainable shopping,” a developer might state, “We have reduced water consumption by 30% over the past year through water-efficient installations and recycling programs.”

4. Pursue Third-Party Certifications and Independent Audits:

   Achieving reputable certifications like LEED, BREEAM, or ISO 14001 can validate a mall developer’s environmental claims. Annual third party audits also add an extra layer of credibility, verifying that the sustainability initiatives are not only implemented but are delivering measurable results.

About the Author

Kinneri is an Economics Major graduate, with minors in Liberal Arts and Business Study from NY University (NYU). She joined Dickenson full-time in May 2016 as an Associate Consultant within the f irm’s Investor Relations practice, and as an Editor for the Corporate Reporting practice. Since then, she has successfully developed strong skills in developing investor presentations, in Bloomberg/ Factset data mining, News Release preparation, IR Analytics, Investor Targeting reports and curating the content’s team work for the Corporate Reporting and Financial PR practices of Dickenson. In February 2017, she took up the responsibility of seeding the company’s UK presence and based herself permanently in London. As a Director of the company’s UK arm, she is currently responsible for developing the firm’s business in the North Atlantic markets.