Susan Freeman
Hi, I’m Susan Freeman. Welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum, where I get to interview some of the key influencers in the world of real estate and the built environment. Today, I am delighted to welcome Dan Labbad. Dan was appointed Chief Executive of The Crown Estate in December 2019 and is an Executive Member of the Board. The Crown Estate’s portfolio includes extensive property interests in London and across the UK, a substantial rural holding and Windsor Great Park. It also manages the seabed across England, Wales and Northern Ireland and plays a major role in the UK’s world-leading offshore wind sector. Established by an Act of Parliament, it has generated over £3 billion in profits to HM Treasury over the last ten years. Prior to The Crown Estate, Dan held a number of senior positions at the global and property and infrastructure group Lendlease, including Group Chief Operating Officer and the dual roles of Chief Executive, International Operations and Chief Executive, Europe to oversee the expansion of Lendlease’s businesses in Europe, the Americas and Asia. Dan has actively championed sustainability throughout his professional life, having previously served as a director of the Green Building Council of Australia and more recently as Chairman of the UK Green Building Council. In addition to his role at The Crown Estate, Dan is currently a Trustee of the Raspberry Pi Foundation, a Trustee of Ark Schools and a Director of The Hornery Institute.
So now we’re going to hear from Dan Labbad on his role as Chief Executive of The Crown Estate and how he is shaping its strategy to adapt to changing times. Dan, good morning.
Dan Labbad
Good morning, Susan.
Susan Freeman
This interview has actually been quite a long time coming, so I am delighted that we’re sitting here together today. Let’s start with a little bit about your background because I detect an Australian accent. I mean, tell us first a little bit about how you were attracted to real estate initially and how, how and where your career started.
Dan Labbad
So, I was attracted to real estate by chance. I grew in Australia, as you said, in Sydney, born and bred. My father and mother weren’t from Australia though and my father was from Egypt, my mother from Italy, so they were first generation Australians. They raised myself and my two brothers. I didn’t really know what I wanted to do when I was at school and decided upon leaving school that I wanted to be a civil engineer and went and started doing that and started working at the same time and I found myself I guess doing a few things, travelling to Canada and doing an exchange year at University on, in Ontario when I was 19/20 and then coming back to Australia and starting to do some part-time work while I was studying in the construction industry and then it sort of went from there and I started, whilst I was still at University, working for a company called John Holland – famous Australian construction company – our client was a company called Lendlease and whilst I was at University, I thought gee, I’d really like to work for that organisation, I really connected with its values, I didn’t really know why but I connected with its values, it was a very purposeful business, ahead of its time because of the philosophy of its founder and so I applied over several years trying to get into Lendlease and still have a couple of the rejection letters and eventually, in the lead up to the Olympics in Sydney with so much work on, got the opportunity to work for Lendlease and that’s how I got into the industry, that’s how sort of it happened, it was really, really by nothing more than chance.
Susan Freeman
Just listening to you talk about your background with the Egyptian father, Italian mother, working in London, Australia, I think you must have a lot of problems when we’re watching international football as to who you’re supporting.
Dan Labbad
Yeah. Yes, yes whenever there is a world cup on or an international event, I’m like that, it does get quite, quite complicated. In fact, I’ve got a young daughter, she four and a half, and we had to draw her background and my wife was born and bred in Sydney but both her parents are Croatian, they were also first generation Australian, so you get this sort of my daughter having these six or seven international links to who she is, which is, which is quite funny, which is good.
Susan Freeman
Oh that’s, that’s brilliant. And so, eventually, you did work for Lendlease and I think you worked for Lendlease in different roles over a period of 22 years and I think it’s fair to say you’ve worked all over the world which must stand you in really good stead in dealing with different, different cultures but when did you first work in London?
Dan Labbad
I first, like I did the backpacking thing to London back in the day and then started coming over, I guess just taking a step back, I sort of made my way into Lendlease, was really connected to its values, had a great time working on Olympic infrastructure and in fact had my first role as Project Director at the back end of getting Sydney Airport ready for the 2000 Olympics and after that I was you know really discovering myself as a, I guess a young man, trying to sort of make my way in the world and was struggling to see what I do next, something was missing, something wasn’t fulfilling me and I didn’t know what it was but one day at a Lendlease event, there was a presentation by part of the group that was talking about retirement of the then Chairman, a gentleman by the name of Stuart Hornery, who I’d met briefly a couple of times opening the doors for senior management, who are walking him around the projects that I worked on but I’d never, ever sat down and had, or ever had a conversation with him, I literally was the person who opened the doors for others and – on site tours – and he on his retirement was being given really an endowment by Lendlease to start up a non-profit that looked at, in today’s language, social sustainability. This was in 2000/2001 and something triggered in me, something connected with me. I, I you know remember to this day standing in the audience and thinking, I’d really like to be part of this, not knowing why and so I sort of made some enquiries and about three weeks later I found myself at Lendlease’s headquarters in Australia, in Sydney, meeting with the Chairman of Lendlease and these were in the days were Bluewater shopping centre had just opened, he was the key principal who oversaw that development and anyway, to cut a long story short, I ended up running his non-profit on his retirement for three to four years, The Hornery Institute, a small non-profit in Australia and as part of that we did quite a bit of work in researching global best practice and that’s what brought me to London for business for the first time in 2001. Fast forward, I returned to Lendlease in 2004 and in 2005 we were expanding our operations over here, we were working with two gentlemen who were well-known in the industry, Nigel Hugill and Robin Butler, who came to Lendlease and I was working with them when they joined the organisation from Australia, supporting them in setting up their business over here. So that’s really what brought me to the UK for business for the first time, first with The Hornery Institute and then back with Lendlease as part of working with Robin and Nigel.
Susan Freeman
And, I mean 2001, you must have been very much ahead of your, your time in looking at issues such as you know, social sustainability and environment. Was this unusual in real estate at the time?
Dan Labbad
It was and I mean I’ve, I’ve always felt like an outsider, I’ve always felt like an imposter, to this day, you know I remember talking to people about the subject back in 2000/2001 and trying to get, you know senior executives at the time, to see the logic in why this was an important thing to do, whether you were talking about social sustainability or environmental sustainability but looking at progressive issues and the need to bring those issues into business and I remember the hundreds of conversations that I had where eyes would glaze over and people were looking at me thinking you know, who is this kid who doesn’t have a clue and in fact, you know I remember one senior executive at one point sort of threw a business plan across, back across the table at me that I was trying to sort of convince them to follow in the area of sustainability and you know, saying to me, ‘you know what your problem is Dan, you’ve never been around the block, you’ve never, you’ve never run a real business’. So, yeah, I think to answer your question, I was, it was unique and I definitely felt like an imposter talking about these issues at the time. You know, I found out years later, discovered years later, as I got older, why and what drove my passion for these areas and that was really to do with my upbringing and, and, and being in a household that was very non-hierarchal, there was no hierarchy in our household, you know we had friends from all walks of life, I was very fortunate that my parents invited everybody into the house and you know the household that I grew up in was really a little bit of a, you know, a community hub in a lot of ways, which you know as great but then in that, I saw my father in particular because my mother moved from Italy to Australia when she was very young so, she has an Australian accent, my father however moved when he was twenty, speaks English with an accent, with an Arabic accent, and you know I saw the discrimination that he faced growing up and in fact I was angry with him for many years because, because I felt he didn’t stand up for himself and I think a lot of the resilience that I have today and my brothers also have, I should say not just me, where you know we’ve always had this fight in us and it’s probably because of those, you know that sort of that upbringing and what we saw and I think it drove in me a realisation, without knowing at the time, that I was really passionate about social justice that everyone had a right to realise their potential, everyone had, everyone deserved the chance to realise their potential and that’s what led me to work for The Hornery Institute and start my journey in this area and then through the experience I had with you know, eyes glazing over and the imposter syndrome, really wanting to demonstrate that actually I could actually be at the centre of business and I could actually operate with purpose and we could focus on progressive issues and I was very fortunate at Lendlease because the organisation had a history of giving young people a chance to sink or swim and it did that with me and I was able to operate with relative autonomy when it came to really nailing the values of the organisation down and demonstrating that through the work that we did.
Susan Freeman
That’s really fascinating because you could have chosen not to go back into a business environment and sort of continue with something like The Hornery Institute. So you were able to go back into Lendlease and actually promote the values that you thought were important.
Dan Labbad
Yeah I had a frustration working sort of the consulting side because I could see you know, I was talking but somebody else would be doing the doing and that frustrated me from a very early age in my career and I realised I needed to be client side in whatever I did, I needed to be client side and I think I found the challenge of winning people over and influencing a real, something that really, really caught my interest so, on one hand I’ve always had this imposter syndrome but on the other, it’s driven this thing in me to want to change things, it hasn’t led me to just want to shrivel up and go away, it’s driven me on in some ways, so I that sort of sounds a bit weird in saying it but that’s who I am, that’s how it works.
Susan Freeman
Yeah, I mean that is so interesting because it could have gone a sort of different way, it could have actually held you back from wanting to try to change things so, I was going to ask you what attracted you to The Crown Estate Chief Executive role in 2019 but actually, just building on what you’ve been saying, it makes an awful, awful lot of sense because at first sight, you know, Lendlease to Crown Estate, it’s not such an obvious progression but in view of what you’ve said about you know your values and what drives you, it makes a lot of sense.
Dan Labbad
Yes I think, you know and a few things also happened along the way, you know, you have children and that only reinforces what I’ve talked about, makes you want to fight even further and I think that’s where, you know as you get older, it sort of led me to start to reflect on you know where I want it to end up and coming back to that conversation about needing to go, you know need to go round the block a few times, I’ve been around the block a few times now and I think if you had the conversation with me in my twenties, I’d be talking to you or you know, you would have me this idealistic young man who wanted to change the world, now I think you know, I’m somebody that wants to make sure that I nudge the world in the right direction, you know and my daughter, having children, it just drives that even further and I think a few years ago I was reflecting on, you know where, what I wanted to do in the next decade and with my wife and we were sort of talking about you know, what we wanted for our daughter and you know I sort of started to reflect on the fact that at the end of my career, I want to make sure that it’s not in some ways what I’ve achieved, it’s feeling that I gave it everything and what you achieve will be what you achieve but feeling that I gave everything and I did it in the right way and that there’s nothing left in the tank and I felt that you know a lot of people expected me to just stay on at Lendlease and eventually run Lendlease and you know there’s huge, hugely exciting that proposition on so many levels, you know and I’ll always be thankful because I think it’s an incredible organisation with very special people who have had the opportunity not just working there now but have had the opportunity in the past to work there but I felt that one, I wanted to challenge myself to do something different, take a risk, and as part of that see if I could work somewhere where I could have a different type of impact and The Crown Estate coincidentally came along, I’d known The Crown at a superficial level, I knew Alison for example for many years, we’re friends and but I knew a couple of the Board members but didn’t really know it, know it in depth and as it sort of emerged as an opportunity, it went from being I guess an interesting concept to, again with the imposter syndrome, thinking there is absolutely no way in the world that The Crown Estate would have me, given the way I speak and you know just given my background but it got to a point relatively quickly that I would rather have not gotten the job than not knowing, meaning that I wanted to give it a go, see if I could pull it off in terms of successfully getting it and you know I feel incredibly fortunate to be sitting in a seat that I’m sitting in today talking to you, on so many levels. Thirty years of you know my career, it sort of has all been about fortune in a big way, the fact that to begin with, I don’t suffer from bias in terms of, you know I haven’t been discriminated against because I’m a white, I’m a white male, the fact that I’ve had the opportunity to put my values to work over the years, I’ve been given those chances by Lendlease and others and the fact that you know, the Board of The Crown Estate you know have, gave me the opportunity that I’ve got and to be sitting here working for this organisation is you know, I feel incredibly fortunate about it.
Susan Freeman
And of course, you were appointed in 2019 just before Covid lockdown and you know there have obviously been a succession of events that were unforeseen so you’ve had to cope with all that as well and I mean just looking at The Crown Estate, it’s a very diverse portfolio, to say the least, including some elements which must have been quite different from what you were used to and I just wondered, I mean perhaps we’ll talk a little bit about the, you know what the portfolio consists of but what part has been most challenging to get your head round or has it all been challenging, given in mind the fact that we’ve had sort of lockdown and sort of various crises and since you took up the role.
Dan Labbad
I think that modern leadership is challenging, that’s part of the deal, and I think that if you’re not pushing yourself to feel that challenge, you know you shouldn’t be doing it, you shouldn’t be, these roles are responsibilities, they’re not entitlements or rights, you know, I feel a huge amount of responsibility which means pushing myself to the threshold and I think that’s important because we live in a world that is incredibly volatile and we have issues coming at us within business that quite often are difficult to predict and therefore an agility is required and I do believe the agility requirement of leadership today is different and more challenging than it has been in the last twenty or thirty years and therefore you don’t come into these roles and think you know, I’m signing up to these railroad tracks and if I don’t happen to find that I’m on these railroad tracks, I’m going to complain about it, you know you deal with what comes, that’s the deal and that’s why I find these roles exciting because you know you have to really think differently in the way that you take on challenges, the people that you put around you, who you seek advice from, really challenging yourself to make sure that you’re not believing your own, your own homework, you’re not marking your own homework and that’s tough stuff you know, it's really, really, really, really hard and you know, you think about all the strategic challenges businesses face, you look at the sociodemographic challenges that we face off the back of obviously the pandemic as well as quite rightfully, the growth in awareness and challenge around diversity, equity and inclusion, sustainability, the digital revolution, I mean all of these things and then you look at the macroeconomics that we’re facing as a country and the fact that you know we’re in a period of particular hardship for communities and families and again, the responsibility you know that we face as leaders to bear all that in mind and in heart when we go about our day to day jobs, you know, that’s in my mind, that’s part of the deal.
Susan Freeman
And you produced a new strategy for The Crown Estate which centres on an ambition not just to extract revenue and grow the capital base but to create lasting and shared prosperity for the country and I just wondered, I mean in your mind, what is the main point of difference from the strategy that went before?
Dan Labbad
I think it’s an evolution of the strategy that went before. I feel in the work that Alison did and those that came before them, you know I’m standing on the shoulders of John Irons right, I mean what The Crown Estate has done over 260 years and what it’s done specifically since The Crown Estate Act came into being in 1961 has been incredible. The stewardship and you know it doesn’t sing from the rafters about it, it doesn’t go out there and promote itself but that doesn’t mean that it’s not doing great and magnificent work and so when I came to the organisation, one of the fundamental things I was attracted to was this very core proposition that sits in the 1961 Act, which is this, responsibility of its commissioners, its directors, to enhance the portfolio on behalf of the country into perpetuity and we had to do that bearing commercial interests in mind and we had to do that demonstrating good management, so in that, those very few words you have this notion of balancing the short-term but not at the expense of the long-term and doing to in a way that is thinking about future generations and to me, those ingredients are a wonderful foundation to demonstrate what purposeful business should be, so when we talk about our purpose to create lasting and shared prosperity for the nation, prosperity in the broadest sense of the word, these aren’t words done by a marketing team and retrofitted to justify what an organisation does, these are words drawn from the core of The Crown Estate’s constitution. So when we say, ‘new strategy’ I don’t think it is that new, I think what I’ve done is used the opportunity to take the great work that’s been done before my arrival and now allow the organisation, in a world that is ready for it, to really put itself out there and say we’re not better than anybody else but we have a unique set of attributes because of who we are and how we’re constituted to actually be a company for the country and do the things that are going to help the country move forward but we will do those things with a discipline that you require in order to ensure that we’re remaining objective and that we’re doing things commercially and in the right way and so that’s, that’s sort of where it comes about and you know a lot of people have said to me, certainly when I joined, they say it a little bit less these days but when I joined, oh it’s such a traditional business and it’s old fashioned in its ways, nothing could be further from the truth, noting could be further from the truth when I arrived, nothing could be further from the truth today, now you know we’ve, we, one of our key stakeholders is Treasury, the other key stakeholder is the Royal Household and you know Treasury are, you know we’re independent, the Board is independent and so like any company, the Board operates like a corporate board would operate with board meetings and various committees and one of the things that we have to do is we deliver our revenues to Treasury and they put healthy targets on our performance and that’s been incredibly helpful because it’s enabled the organisation over the years to stay incredibly commercially fit. I think if I’d arrived and I was trying to create that commerciality from scratch, it would have been enormously difficult so my role is now to work through the strategic challenges that we face, around the things that we’ve talked about, whether it’s sustainability or diversity, equity, inclusion, biodiversity as well as the climate challenge, looking at the properties we own around the country and working out how do we enable our portfolio on behalf of those issues and how do we do it in a way that balances the short-term but not at the expense of the long-term and you know, dare I say it, I’m probably not articulating anything different to what every business faces today. The advantage that I guess I have is that the constitution that I operate under, calls for it in black and white, in very simply, very clinically.
Susan Freeman
It’s interesting what you say about people thinking of The Crown Estate as being traditional and you know maybe because of the sheer diversity of the portfolio because you have, you know have everything from housing, offices, shopping centres and then you’ve got farms and forests and minerals and golf courses and we’re going to come to the coastline and the seabed in a moment but I suppose for people living in London, they see the you know Regent Street and St James’s Estate and that’s what they think of you know as The Crown Estate but what I think I’d like to turn to now is what is an increasingly important part of the portfolio, the marine estate, which again is possibly not something that people are that aware of in the fact that The Crown owns the seabed and a lot of the coastline around England, Wales and Northern Ireland and just before we talk about that, I just wanted to go back to the fact that you’ve been aware of the problems of climate change you know since you know pretty early on, I think before a lot of people were thinking about it and I think you became a Director of the Australia Green Building Council back in 2004 and then were a Founding Member and Chair of the UK Green Building Council so, you know, it’s something you’ve been aware for longer than most of us and now what I find absolutely fascinating is the opportunity that the seabed provides for offshore wind farms and I was just looking at this little calculator you can look at to see how much of the UK’s electricity is supplied by the offshore wind, and it’s 12.2% as we speak, which is an amazing amount so, can you tell us a little bit about you know what’s going on and all the innovation and what you can do with these offshore wind farms?
Dan Labbad
Yeah, it’s probably worth me just taking a step back and sort of building the picture of what The Crown Estate is and then sort of coming quite quickly to the marine business and answering your question. I think, you know coming back to this, the purpose to create lasting and shared prosperity for the nation, you know our strategy is focussed in sort of four key areas and ultimately, our role is to empower the land that we own on behalf of the country and doing it in a way that has a lasting impact and the four areas of the business, quite broadly are, the London portfolio, we have a very large contiguous landowning in central London and given the challenges of climate change to digitisation and the pandemic and the structural shifts the pandemic has caused, you know we’ve got some big challenges to work through in London, both in our portfolio but also our role in supporting London generally, to ensure that it can remain as a globally leading urban centre and be a place for everybody, you know, incredible, now we’ve taken that for granted for so many years because London has just been great but I think the need for not just The Crown Estate but other landowners in London, Government, to really, really work on protecting London’s future, there is a stewardship role in London itself moving forward that I think we’re all leaning into, so very, very important role there. We’re a strategic landowner around the country, we have retail parks, shopping centres, a lot of strategic land, so again our role in enabling economic growth, regeneration, and just supporting the communities where we have holdings and as I said, our holdings are quite vast. We’re the sixth largest rural landowner in the UK with just under 200,000 acres. We are focussed very heavily on agriculture, food production, looking at biodiversity, how we support environmental issues, large portion of our holding is things like forestry and then land with environmental opportunity and we’re also looking at how we integrate food production and environmental issues together, a big part people often think of us as being focussed on climate change, we are focussed both historically and today, as much on the natural world and looking at biodiversity and protection as we are on climate change and we, as core to our strategy, is working through how we bring those two things together, which leads me to the marine environment and yes, over the last 25 years and I think this is a magnificent British success story, we’ve delivered 33 gigawatts of leasing, of which today about 11 gigawatts are in production but we’re moving towards 33 gigawatts, that translates to pulling out your figure between 10 and 12% of energy production depending on whether the wind’s blowing and what we’re using energy for but it averages out at about that and that’s growing and obviously, this is fundamentally important given not just the climate crisis but the energy security challenges that we face. We’ve built up over the years a wonderful capability in being able to enable the leasing of offshore wind and that’s not just about writing contracts, there is a lot of research and a lot of engineering that goes into enabling land for leasing. We also have to balance that with other seabed users and whilst we look at sea, it looks like a pretty empty place, it’s an incredibly busy place with things like navigation, defence, as I said biodiversity you know considerations, as well as communities like fishing and other industries that use the seabed, cables and wires and a whole host of other things. So, spatial planning on the seabed is a key part of what we do and just as important, if not more important, than the way that that is done you know on land, moving forward and we’re second to China in terms of offshore wind deployment, which again is fantastic and moving forward, we’re in the middle of a major leasing programme now, about another 8 gigawatts of leading and we’ve just announced earlier this year up to 24 gigawatts of additional leasing potential in the Celtic Sea so, in another part of the country which I think both will support not only energy generation but also the onshoring of jobs and industrial development, which is important. Now we’re not directly responsible for the latter but we see that we have a key role to play to support Government and the industry in developing those solutions. So, you know we have a big role to play in moving forward in all of our business areas but obviously, something that’s quite topical for good reason at the moment, is the, you know our role in enabling the renewable energy marine future of this country and what’s interesting, it’s not just about offshore wind, it’s also about new types of wind technology, so what I just mentioned with regards the Celtic Sea, that’s in deeper waters than has traditionally been used for offshore wind, so you’ve got to move to a new technology which is floating wind, not fixed wind, so there’s innovations that are going to be required to ensure that that can work and we’re trying to do really what we did with fixed wind over the last 25 years, in the next 10 and on top of that, we’ve carbon capture and storage, which is essential, as we know, in order to meet the country’s net zero and the world’s net zero targets and then obviously we’ve got hydrogen coming as well and so all of those considerations play themselves into the way that we think about both how we strategically position ourselves and also, how we bring ourselves to market to support industry and Government in enabling that opportunity, given the essential nature of it, for both the country and the world.
Susan Freeman
It’s so exciting and in a recent lecture, you described this offshore wind story as the sustainability equivalent of creating a vaccine and I’m not sure that, I think the story should have a lot more airtime because it sounds like an opportunity for the UK really to be world leading and just hearing what you’re talking about in terms of innovation, it sounds pretty amazing.
Dan Labbad
I think deep down in me that idealistic young man still exists, you know I don’t show it every day because you know I need to get stuff done but it’s there and what I talk about and why I’m so passionate about not only The Crown Estate today but also setting The Crown Estate up for the future, is because I feel that it has got such an important role to play for the country moving forward and this organisation has so much potential, most of which is ahead of it and I see a key part of my role is in the short time that I have in being able to lead the organisation, is setting it up so that, you know, if I can just, as Alison did and others did before me, if I can just increase its gradient and give it a projection that is steeper than when I arrived and so that others coming after me can move forward with a, in a bigger and better ways, on behalf of the Nation, that would be a wonderful thing to achieve. So yes, it’s about what we’re achieving today but it’s, in my mind, more important almost the options that I’m giving those that take the organisation forward down the track. The reason why I think it’s so important is that we know, coming back to your point about my discovery of my passion for sustainability earlier, early in my life and my career, you know that came about because I am passionate about ensuring that everyone has the right to realise their potential and that same root passion of mine plays into why I care about diversity, equity, inclusion, it plays into why I care about health and safety through my many years running businesses with health and safety at the fore, just like at The Crown Estate, health and safety is at the fore, and it plays into both the natural world crisis and sustainability because this is about you know us being the custodians of ensuring that future generations have the ability to realise their potential and the problem with sustainability and the natural world now, is that care about them is driven by you know global events, they, you know, they’ve seen, I mean interestingly, I would argue and many might disagree with me but I would argue, until the energy crisis landed in the last eighteen months, net zero and the climate crisis was seen as a chronic issue, now it’s seen as acute issue, it’s seen as an acute issue because its, because of energy securing, even though a beneficiary will be net zero. The natural world unfortunately, is very much in a chronic, it’s in a passive chronic state I would argue, and you know one of our roles is to ensure that we’re bringing to light the fact that actually, we have an acute natural world crisis alongside the climate crisis, alongside the energy crisis and whilst I would love to sit here and say oh, what, you know I wish we weren’t dealing with so many crises, so many issues, the world’s not going to wait for us and you know we have to rise to these challenges and that’s the idealism coming out that at the same time, you know we have to fight for these things because of the reasons that I’ve talked about, to give the future a chance.
Susan Freeman
And with all the work that you’re doing on the seabed with the offshore wind and all the innovation, I mean how can you do that without damaging marine life and biodiversity?
Dan Labbad
Well firstly, one of the biggest challenges, there’s not a lot of research and data, well certainly nowhere near the extent of research and data available to support decisions and we are investing heavily in understanding the impact of different things on the natural world. We have something called The Offshore Wind Evidence and Change Programme what we’re sponsoring and we currently have £50 million invested in it, we have about two hundred organisations around the country involved and you know the key, the first thing is to make sure that we’re making decisions on real data and then secondly, ensuring that we, we’re understanding the impact of different things on, in this case the natural world, making sure that we engage with a diverse set of stakeholders in working through options of deployment, if we’re talking about renewables, because everyone has a different view of what good looks like and so what we’ve got to do is make sure that The Crown Estate are not making decisions in isolation but we’re drawing people in and ensuring that there’s balance and ultimately, we are not the decision-maker on what gets put where, we’re you know, that is not for us, that is for Government, there is a planning system and the planning system determines you know what, what should be deployed where but we want to make sure that as we feed into that system, we are producing you know all the data and all the evidence to ensure that what we’re doing in the area of renewables is not impacting the marine natural environment and where it is impacting that we have the ability to compensate and what I mean by compensation, isn’t financial compensation, although there will be a cost involved, there is a cost involved because compensation measures are happening today but we’re effectively accounting for any disruption or displacement if and when it occurs and so, you know, I’m not going for one moment sit here and say it’s a perfect world, there will be trade-offs but I think at the moment, there’s not enough focus on gathering the data so that we can actually ensure that we’re thinking about these things in an informed way and that’s what we’re absolutely committed to doing.
Susan Freeman
And before we move away from renewables and the seabed, just to put things in context, what is the potential, I mean how many homes can the offshore wind power in due course?
Dan Labbad
Well, it depends. I guess there’s a few things. Firstly, at the moment, the last leasing round of what we’re calling Round Four, 8 gigawatts will do up to seven million homes and so, you know, you can extrapolate that out but that’s, what that factors in is that you know there’s a latency with regards to offshore wind because one, the energy needs to be blowing and then the energy needs to be used. We can’t change whether the wind’s blowing but what we can do over time is, through things like hydrogen, ensure that we don’t have the volatility that comes from, on the storage side and so you know industry around this country, doing a lot of work on that at the moment, we’re still years away from solving it but it is within, it is within our sights and so that will improve again but the reality is that you know, with a focus and an acceleration, which is occurring at the moment, everyone is leaning into this, I’m proud to say, you know, we can, we can really accelerate and take, you know the 33 gigawatts that has been developed in 25 years and we’re doing, do a lot more in an accelerated way and moving forward and not only, not only just focus on new deployment if existing technology but actually also focus on new deployment of new technology, which effectively is what’s fundamental to ensure that we can reach the targets that have been set by Government.
Susan Freeman
Okay, brilliant. So, just turning to the sort of onshore portfolio and I know you’re planning to achieve net zero by 2030 and we focus a lot of on new build but The Crown Estate has a lot of heritage assets, how are you, how are you planning to retrofit them to achieve the net zero target?
Dan Labbad
I think it’s important to say first of all, really in everything that I’ve said in this conversation, Susan, that you know we’re far from perfect, you know, and again, coming back to what I said earlier even about myself, it’s not about being perfect, it’s about leaning in and giving it your all and I think in the whole area of net zero, us and others are leaning into it and giving it our all and that’s what we’re doing and we don’t have all the answers yet but I feel unless we come out and nail our colours to the mast and say this is what we’re going for, we won’t galvanise the attention around the innovations required in order to get to all the answers. But there’s a few things, one is that we’re looking at you know across our portfolio, where demolition occurs versus when new builds occur, you know we focus often on the performing, energy performance as opposed to embedded energy and we’re looking at both, like a lot of organisations are, we’re looking very soon to price carbon in our internal investment decisions, we sort of do that by proxy now but we want to do that properly, moving forward so that we start to bring the real price of carbon into investment decisions and one of the advantages of having a contiguous ownership is that we have more infrastructure to play with in terms of the provision of energy, as opposed to only having the scale to look at building efficiency in isolation and in addition to looking at building efficiency like the whole industry is, we are also looking at seriously about energy provision, you know, in an and around what we do nationally. So for example, in central London, we have heritage issues to your point, we have old stock. Now, one of the easy things we could do is say, okay well let’s make The Crown Estate green so let’s sell out of all our brown stock and just buy and invest in new green stock. A lot of organisations are doing that but someone buys that brown stock and often, those that buy it, don’t focus on greening it and that’s why a number of people that prominent in the environmental world talk about greenwashing because there is a lot of it and you know, what we’re committed to is one, admitting the fact that some of our building stock is hard because it is brown and decarbonising it is challenging but secondly, looking then at for every pound that we’re going to invest in decarbonising property, how much are going to building efficiency and how much should be going into the, to district energy and to providing green energy in the first place and you know we are working through how we get that balance right and eventually, where we want to get to, is making buildings as efficient as possible and also, making sure that we are provisioning green energy, doing both and so, and you can imagine, given the nature of our business, one of the wonderful things about the diversity of The Crown Estate, whilst a lot of our learning is going to come from outside The Crown Estate, it is, it is great to have a business where we have offshore and renewable experts and we also have biodiversity experts. You know, we are the custodians of the Windsor Great Park and you know we’ve been doing that for the last 260 years and we have a lot of learnings around everything from environmental leadership, preservation, forestry, you know we’ve got, we’ve got oak trees out at Windsor, a few of which are over a thousand years old, you know we have experts in those areas and whilst these things might seem like they’re mutually exclusive to property, you’d be surprised at how integrated they in fact are and so, you know, again we’re throwing everything into that and we’re going to make some mistakes but those mistakes will be made on the way to getting it right and they’re the areas we’re focussed on.
Susan Freeman
And you were talking you know earlier about you know being idealistic in your twenties and realising you know, what were the important things for you. What are you seeing now, is it the younger generation are more concerned climate change and decarbonisation or are you now seeing your contemporaries equally concerned about it?
Dan Labbad
I think both, both. I think there is a lot of concern in and amongst my contemporaries. There’s not a chief executive that I speak to today that isn’t up on the subject and really focussed on it and I think that’s fantastic. You know, I’m very humble about this, I don’t feel that given the fact that I’ve been involved in it for many years, it doesn’t make me better than anybody else but this is hard stuff and we’re all trying to solve it together, so I’m just relieved, I do think that I do have a lot of time and compassion for young people who are angry about this area, I don’t, you know, I really do feel for them and the reason is this, and that is that in my career, I had the opportunity to discover sustainability even not knowing early on why I was interested in it, skilling myself up by being involved in things like the Green Building Council movement, making my way through my career and building more and more relative influence and being in a position today where I can oversee an organisation that can have an impact within its bounce but an impact none the less. Now, we know because of the climate science that what we do in the next ten to fifteen years is the bridge into history and you can imagine that those that are sitting there in their twenties, in their teens and their twenties, are sitting there, haven’t yet had the opportunity to build their influence in the world as individuals, yet have only got the next ten to fifteen years to deal with something that the generations before them created. So, you know, if I were them, I’d be angry too and so, you know, and I feel, coming back to this point of custodianship and stewardship and the role of leadership today, I feel that we have a responsibility to turn their anger into action.
Susan Freeman
And do you think that the fact that real estate is responsible for such a high proportion of carbon emissions and therefore you know there is an awful lot to do to try to turn things around and improve things, is that a challenge that is going to bring more young people from different backgrounds into real estate, to just try to deal with the problem or does it put them off?
Dan Labbad
I think the former. I do think that when I grew up in Lendlease and I did my 22 year apprenticeship with Lendlease, the wonderful thing about that organisation is that it allowed you to discover a whole host of things and you didn’t think about real estate in a box and I think we do need to start to break down industry categorisations because the edges are blurring and you know when I say, when I meet a younger surveyor in, or a young engineer, in our business today, or even a young accountant or young lawyer, a young anything, the key message I give them is that your career is no longer on railroad tracks because the world is no longer on railroad tracks and you’ve got to think about, and I did this organically just because I always followed, I went and ran a non-profit and then came back and worked in construction, then I worked in development and then I worked in investment, I had the opportunity to work you know with and for some great people but where all that has led to, is me having I guess a no fixed categorisation in terms of who I am or where I come from and then if I’m dealing with challenges around agriculture, I can think about well, you know how do we solve that problem, if I think about challenges around the marine environment and the infrastructure involved, how do we solve that problem if I’m thinking about digitisation, how do we solve that problem and I think that today, when you think about the fact that if you’re in real estate, you need to understand digitisation, you need to understand energy provision, you need to understand the world of diversity, equity and inclusion and yes, your training gave you a fantastic foundation but how you build from that and build outwards, not upwards, will give you the skills I think you’re going to need for the future, in a much more specific way than trying to build a linear career path upwards and so, you know, I think that you know if I think about the leadership skills that we’re trying to develop at The Crown Estate, we are trying to attract people that are interested and are curious about learning diverse things, learning different things and help build their systems thinking, as opposed to be branded by some of those traditional categorisations of the past and I think that’s the wonderful thing about the world because on one hand, the fact that the rules have been ripped up a bit is hugely intimidating but on the other hand, hugely exciting and I think if I was a young person today and I was giving a young person advice, I’d play into the excitement.
Susan Freeman
It is, yeah, it’s exciting and it’s quite scary isn’t it, and I agree with you that we need to get rid of the silos and we need people who think differently and there’s no point sitting round with people who all, you know, think the same way and have been brought up the same way. So, Dan, when you reach the end of your period as custodian of The Crown Estate, what in your mind will you see as a success and what do you want your legacy to be?
Dan Labbad
I think firstly and foremost that we have a team at The Crown Estate and a supply chain and a customer base that are part of an ecosystem that they feel is purposeful and yes, they’re doing good business but they’re doing good business the right way. You know, we’re not there yet but I’d really like to leave that culture behind because I think that coming back to my point about creating options for the future, without that capability, it won’t happen and it’s not just The Crown Estate, it’s, you know, we are a small team but our ecosystem is huge and the influence we can have across that ecosystem is massive, so that’s, that’s the first thing. You know, and secondly, I’d like to leave the organisation in a way commercially and more broadly, in a position where it has more options for the future to go on and do even more. I think also, I’d want to have at least to have made a big dent in both the carbon reduction of our organisation but also in the deployment of our products in the area of renewables. We have a big role to play there and that is a big part of what I need to ensure that we do over the coming years. And finally, you know all of that, coming back to your point, Susan, needs to be in an organisation that’s reflective of the country from a diversity inclusion perspective. I talked earlier about The Crown Estate maybe the perception was that it was traditional. I don’t, I only want it to be modern, I want it to be modern, I want it to be diverse and I want it to be inclusive. Coming back to this, you know, fundamental sort of impact of my upbringing on that, I you know I really believe that in order to solve these problems, we need to be open to difference and see the beauty in difference, something that I often say, see the beauty in difference because that’s where the power is.
Susan Freeman
That’s fantastic, that’s brilliant. Well that’s I think given us a lot to think about, Dan, so thank you so much for your time today.
Dan Labbad
Thanks, Susan. Thank you so much.
Susan Freeman
Thank you so much Dan for sharing some incredibly valuable insights into the amazing opportunities and of course the challenges of running and repositioning The Crown Estate’s very diverse portfolio.
So, that’s it for now. I hope you enjoyed today’s conversation. Please join us for the next PropertyShe podcast interview coming very soon.
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