Sustainable Entrepreneur

The Warehouseman's Tale

John Duggan runs Gazeley. They build vast warehouses for Wal-Mart. Can this be the cutting edge of sustainability? Terry Slavin finds out.

The 58-year old chairman of Gazeley is not one to shirk a challenge. His company, based in Milton Keynes, is a wholly owned Wal-Mart subsidiary, and one of the largest warehouse developers in Europe. The retail warehousing business, he freely admits, is unsustainable. “Over 80% of goods that go into the retail machine end up in the bin in four years’ time; 40% of truck journeys are empty.”

But there are many villains in the piece. “The whole economic system is unsustainable in terms of how we do it at the moment,” he says. So Duggan has been working from within - to clean up his own corner of the system.

What he has done at Gazeley, together with US eco-architect Bill McDonough and UK photovoltaics specialists Solarcentury, is to develop an ‘eco-template’ for environmentally friendly warehousing [see ‘Greening the warehouse’, GF51].

Occupiers pay no more than what they would for an unadorned tin roof and four walls, but get 11 energy- and water-saving features fitted as standard. These include solar thermal heating, storm water collection, energy-efficient lighting, recyclable floor coverings, water-saving toilets and timber from sustainable sources. All developments also feature some other renewable technology, such as ground source heat pumps, photovoltaics and wind turbines.

The company says its tenants enjoy average energy savings of 8%, and 50% cuts in water usage on a standard warehouse. Where Gazeley also fits out the interior of the warehouses, with low-energy heating and lighting systems, the environmental impact is much more dramatic.

A 3.4-million-square-foot development planned for Milton Keynes will cut CO2 emissions by a projected 67% over its 25-year life. 

“In the Gazeley warehouse eco-template, ‘eco’ stands for economical as well as ecological.”

Asked how Gazeley can afford to do this and remain competitive, Duggan makes clear that the ‘eco’ in the eco-template stands for ‘economical’ as well as ‘ecological’.

“It adds a small percentage to the build cost,” he admits, but the eco-template design helps smooth progress through the planning system, and also attracts five-star customers such as John Lewis, Woolworths and B&Q at an early stage in development. “Letting them out earlier more than makes up for any extra build costs,” Duggan says. “There’s a strong business basis for this.”

Competitors are scrambling to recruit their own environmental consultants, but Duggan is not worried. “By the time the rest catch up we’ll be down the road and on to the next stage,” he says breezily.

The ‘next stage’ is zero carbon and zero waste; an industrial system which mimics nature in that all waste becomes ‘technical nutrients’. In this he echoes McDonough, who helped him see the light four years ago when he addressed a group of Gazeley executives.

“Until recently, I took the view that environmentalists were irresponsible,” says Duggan. “They didn’t care about the economic and social side. But Bill McDonough had such a positive take: let’s rethink the way we make things so it has a positive rather than negative impact. I felt his approach was unassailable intellectually, as well as good business sense. We all share the same planet.”

Without claiming that Gazeley’s eco-template project was the tail that wagged the Wal-Mart dog, Duggan points out that it started in 2003, a full two years before the retail giant’s company-wide drive for the environmental high ground [see GF56 ]. “We’d been feeding this in [to Wal-Mart] for a long time,” he says, “and they’d been positive and supportive.” In the UK, Gazeley has found common cause with the Renewable Energy Association and David Cameron’s Conservatives, who chose Gazeley’s first UK eco-template warehouse in Bedford as the venue for a press conference calling for renewables in all new major property developments. But Duggan denies that he’s party-political. As he says, “the Tories approached us. I’m happy to talk with any politician prepared to take a long-term view to the biggest issue facing mankind.”

Duggan himself is in for the long haul. “It’s a 20-25 year project at least to tackle these issues,” he says. “Who knows if we have that time? We’re trying to do what we can in our own sphere of influence - one building at a time.”

Terry Slavin is a regular writer for the Observer, specialising in environmental issues.

12 January 2007

Terry Slavin