Science Based Targets

The climate targets were submitted to SBTi at the end of the year for review. The review and hopefully also approval of the targets are scheduled for June 2023. During the review SBTi will verify that the targets are science-­based and in line with the Paris Agreement. This process has helped Pandox to improve its knowledge of the GHG emissions that occur in the value chain and that the Company is directly or indirectly responsible for. It has also further improved the database. Pandox’s science-based targets constitute a robust framework for work on topics relating to energy and materials at the Group level. The emissions calculations are based on measured data, standard data where no data has been reported, life cycle analysis and spend analysis.

Road map for reduced climate emissions

Pandox has already started developing its road map of actions to reduce climate emissions to reach the climate targets. For the 20 properties operated within Operator Activities these steps will focus on reducing Scope 1 and 2 emissions where Pandox has a direct impact. Pandox will reduce the use of natural gas, which accounts for 32 percent of total energy use, and replace it with heat pump solutions. In 2022 a study was carried out on four hotels in Germany, England and Belgium to explore the possibility of converting away from gas dependence. An additional 10 studies will be carried out in 2023. Phasing out natural gas will be combined with energy efficiency improvements. This will include improved control systems and expanding opportunities to use renewable energy.

Meeting targets through behavioural change at hotels operated by Pandox

In addition to the measures above, it is important to promote commitment, knowledge and behavioural change to reach the climate targets at Pandox-operated hotels. As of 2023 the General Managers at the hotels will be responsible for reaching their climate targets. The targets will be broken down by property into the subcategories of water and energy. These will be incorporated into the General Managers’ productivity system in which they monitor revenue and staffing daily. The purpose of integrating the new sustainability module into the operating system is to ensure there is also a daily focus on reaching the sustainability targets, and to create awareness of how each property is contributing to these. Supplementary targets in the subcategories of waste, linen/towels and chemicals, which are also relevant in the Operator Activities business segment, will also be introduced, even if these are not part of the climate targets. The targets will be compiled into a sustainability index based on level of materiality and will form the basis for green incentives for the general managers. The general managers will need to involve their employees in order to reach the targets. There will be a department head responsible for each subcategory. This person will have overall responsibility for driving progress and involving most of the employees across departments to reach the targets. They will receive training and support from the system. The targets for each subcategory will be broken down into the activities that make the most difference. The managers will be given a clear mandate and time to priorise. The main focus is on reducing gas consumption and increasing energy efficiency. Activities to reduce emissions within Operator Activities (Scope 1+2) tise the activities, as well as financial incentives to meet the targets. Communication of targets and the green transformation will also be aimed at the hotel guests.

Training in materials sourcing and cooperation with tenants

In the 137 properties leased to external tenants in Property Management the measures are mainly intended to contribute to reducing Scope 3 emissions in the categories that account for more than 67 percent of emissions. These categories are materials sourcing in connection with renovation and retrofit, and tenants’ energy consumption. In 2023 the Swedish Environmental Research Institute (IVL) will work with Pandox to increase knowledge on the effect of materials sourcing on emissions and which alternatives exist in the market. Training in circularity will also be carried out internally, focusing on recycled building materials and using materials made from renewable or recycled inputs. The aim is to implement tools to assist in the sourcing process. Pandox also needs to focus on energy efficiency improvements in the properties it leases out. In 2022 the Company started taking stock of and evaluating the properties in Property Management from an energy perspective. Evaluations are carried out first for the buildings in the lowest energy category. The evaluation covers, for example, the building envelope, installations and operating routines on site, and aims to find potential energy-­saving measures that would benefit both the tenant and Pandox. Other factors that are of interest in an overall analysis include future regulatory requirements, geographical location, heating systems and contract length. Energy simulations of the buildings are then carried out so that different alternative can be tested in order to produce a proposed package of measures for achieving different energy classes. Energy efficiency improvement measures will be part of the annual investment process from the beginning of 2023 and will form a basis for dialogue regarding green leases with tenants within Property Management.

Activities to reduce emissions within Operator Activites (Scope 1+2)

The main focus is on reducing gas consumption and increasing energy efficiency.

Activities to reduce emissions within Property Management (Scope 3)

Reduce emissions from use of materials in renovations and extensions, and reduce energy use by guests.