Green Shopping Malls in Poland: Implementing ESG in the Retail Industry

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According to a CBRE report, already every third investor pays attention to whether future assets are in line with sustainable development policies. More than half of the biggest players are willing to pay up to 20% more for assets that incorporate Environmental, Social, and Governance (ESG) solutions[1]. Customers also appreciate an environmentally friendly approach. In Poland, as many as 59% of shoppers would consider changing their shopping center if the competition began to implement sustainable development policies and care for the environment[2]. ESG policy in the retail industry has moved beyond being merely a legislative obligation and has become a serious competitive advantage. What does ESG implementation look like in the Polish market?
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With the adoption of the European Green Deal strategy in 2019, the European Union is implementing regulations aimed at full climate neutrality. The next step on this path is the Corporate Sustainability Reporting Directive (CSRD), published in December 2022. It imposes systemic management solutions in the field of ESG on member states and businesses. Currently, EU legislation on sustainable development covers 150 companies in Poland, but from 2024 this number will grow to over 3500 enterprises[3], including entities from the retail industry.

– Mature implementation of ESG requirements and applicable EU regulations in commercial facilities will be one of the significant challenges shaping the retail industry in the coming years. A green gallery is not just an energy-efficient, low-emission, and eco-friendly space. Above all, it is a facility that implements environmental, social, and governance principles at a strategic level, as an element of its long-term infrastructural, organizational, logistical, and marketing policy. It also involves ensuring that the shopping center is a good neighbor, fitting into the needs and expectations of the local community, creating new opportunities and chances for nearby residents and the entire region – emphasizes Anna Malcharek, Managing Director of Gemini Holding and Vice President of PRCH.

In the case of commercial properties, implementing sustainable development encompasses the entire value chain. The change mainly involves renovation and modernization of buildings to reduce CO2 emissions and introduce alternative energy sources. In the case of a shopping mall, it is also important to ensure rational waste management, including effective segregation. Another key aspect is the responsible supply chain for goods to individual stores and service points.

– To effectively implement ESG principles, we need to act within the so-called golden triangle, inviting both tenants and shopping center customers to partner for sustainable development. It is, of course, the duty of the manager to take care of all necessary certifications and modernizations. However, true synergy of potentials comes from jointly developing everyday space and process management standards with business partners, as well as the openness of our visitors to ecological campaigns and changes in habits, such as reducing plastic use or disposing of waste according to bin labels – adds Anna Malcharek.

Reports show that tenants and customers support the evolution of galleries towards eco-friendly facilities. According to a PRCH report, 57% of owners and managers of commercial properties confirm that tenants in their shopping centers are more or less interested in ESG issues. As many as 85% of surveyed customers agree that galleries should take action for sustainable development, and about 60% of them are willing to pay an extra złoty for each purchase to use only paper bags. Moreover, 63% would pay an additional złoty for a meal purchased at the center to cover the costs of waste segregation and recycling[4].

With the next phase of ESG implementations, Polish shopping centers are facing far-reaching changes. According to the Polish Council of Shopping Centers, there are currently about 560 shopping centers and retail parks in Poland with an area of over 5000 sq m. Most of them are approaching or will soon exceed 20 years of operation. Therefore, many property owners are facing significant decisions regarding necessary modernizations, reconstructions, or expansions to extend their functions and adapt the facilities to prevailing trends and expectations.

An example of a successful transformation in the ESG area is Gemini Park Tarnów, which is completing its 13th year. The managers of the facility have been focusing on modern technical solutions for years. Although these are the least noticeable infrastructure elements for customers, Gemini Park Tarnów began a comprehensive exchange of light sources to energy-efficient LEDs eight years ago, which ultimately ended in 2020. Thanks to this process, the managers obtained so-called white certificates for achieving energy efficiency. Additionally, from the beginning of the facility’s operation and as part of the modernization of various building areas, the Krakow investor periodically introduces changes in the algorithms controlling the HVAC system to increase customer thermal comfort and optimize energy consumption.

– The development of ESG strategies, as well as compliance with EU directives regarding the reduction of carbon dioxide emissions, are eco-priorities for Gemini Holding for the coming years, as evidenced by ongoing changes, employee training, and obtaining or annually renewing certifications. The dynamics of recent years mean that these decisions often have to be made quickly and not always in favorable market conditions. A shopping mall today is a very complex ecosystem combining a variety of functions and interests. Competitive advantage will be gained by those entities that skillfully respond to changing circumstances – concludes the Managing Director of Gemini Holding.

[1] CBRE Research January 2023, European Investor Intentions Survey 2023.

[2] PRCH Report, ESG in Commercial Real Estate.

[3] CSRD Directive – What Changes Does It Introduce in ESG Reporting? | PwC Poland

[4] PRCH Report, ESG in Commercial Real Estate.

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