Material issues

We need to understand and manage issues that have the potential to influence significantly our ability to deliver our vision. These material issues are reviewed on an annual basis through a cross-business workshop facilitated by our advisors EY, who provide challenge and add rigour to the process.

Our approach

In identifying material issues we considered internal factors as well as global megatrends such as rapid urbanisation, technological advances, changes in demographics, consumer behaviour and business models, climate change and resource scarcity, and the shift in global economics.

What is material is defined as an issue that would impact our Board and Committee decisions.

Each issue was scored on a scale 1-5 across three areas, namely:

  • its economic impact on the business;
  • the degree to which our principal external stakeholders are concerned with it; and
  • the extent to which it is likely to grow in significance and impact in the future.

From an initial list of 15, the scoring identified the ten material issues below.

Material issues

Key to resources and relationships

Our ability to control or influence our response to the issue:

 

  • Direct control – Our response to the issue is entirely within our control
  • Shared control – Control in how we respond to the issue is shared with, or exercised through, another organisation or third party
  • Strong influence – We have the ability to influence our response to the issue within our own business and value chain
  • Some influence – We have the ability to influence our response to the issue within our own business.
Reputation and trust
Resources and relationships affected  Material-issues-Reputation and trust
What it's about Maintaining the trust of our customers, business partners, suppliers, political stakeholders and local communities enables us to operate successfully and meet our responsibilities.
Key risks most relevant to the issue

1. Investment performance.

2. People.

3. Ability to manage a major incident (including cyber security breach).

5. Health and safety.

6. Inability to deliver against our development pipeline.

Our ability to control or influence our response to the issue Strong influence.
Health of the economy
Resources and relationships affected Material-issues-Economy
What it's about

Sustainable and profitable long-term growth in response to market cycles enables us to meet our business targets while maintaining the resilience of our business. Our commercial targets are to increase our net revenue surplus at an agreed rate with the Treasury and outperform our Total Return IPD benchmark on a three-year rolling basis.

Key risks most relevant to the issue

1. Investment performance.

6. Inability to deliver against our development pipeline.

Our ability to control or influence our response to the issue

Some influence.

Government policy, constitutional change and governance
Resources and relationships affected Material-issues-Government policy
What it's about As an independent commercial business, created by Act of Parliament, The Crown Estate can be affected by changes to Government policy and regulations that can influence our markets and how we operate and invest.
Key risks most relevant to the issue

6. Inability to deliver against our development pipeline.

8. Government policy.

9. Adverse effect of climate change.

Our ability to control or influence our response to the issue Some influence.
Urbanisation
Resources and relationships affected  Material-issues-Urbanisation and Strategic counterparties
What it's about Changes and trends in urban environments can have an impact on our portfolio, such as increased demand for high quality commercial properties in central urban locations and the opportunities this creates for placemaking.
Key risks most relevant to the issue

4. London’s attractiveness/competitiveness.

6. Inability to deliver against our development pipeline.

Our ability to control or influence our response to the issue

Some influence.

Influence of strategic counterparties
Resources and relationships affected Material-issues-Urbanisation and Strategic counterparties
What it's about Creating strategic partnerships and attracting investors are one way that we can access capital that we can reinvest in our business. We always aim to partner with organisations who share in our values and long-term outlook.
Key risks most relevant to the issue

1. Investment performance.

6. Inability to deliver against our development pipeline.

Our ability to control or influence our response to the issue Shared control.
Customer expectations
Resources and relationships affected Material-issues-Customer expectations
What it's about The provision of excellent customer service to meet customer expectations is essential in the maintenance of our position as landlord of choice which, in turn, has a direct impact on our financial performance.
Key risks most relevant to the issue

1. Investment performance.

4. London’s attractiveness/competitiveness.

Our ability to control or influence our response to the issue

Strong influence.

Attraction, development and retention of best talent
Resources and relationships affected Material-issues-Talent
What it's about

To succeed in being a progressive commercial business creating significant value beyond financial return we need to attract and retain employees with the right skills, experience and values.

Key risks most relevant to the issue

2. People.

Our ability to control or influence our response to the issue

Strong influence.

Useful documents  

Our People performance (PDF, 2.13 MB)

Technological advances
Resources and relationships affected Material-issues-Technological change
What it's about Technological innovation is changing the way information is shared and how communications are managed by organisations. Data security is becoming an increasingly high risk area. Hyperconnectivity is having a transformative impact on how office space is used and the nature of retailing.
Key risks most relevant to the issue

3. Ability to manage a major incident (including cyber security breach).

7. Information systems.

Our ability to control or influence our response to the issue

Strong influence.

Climate change
Resources and relationships affected Material-issues-Climate change
What it's about Recent changes in the global climate are unprecedented and are expected to continue. Climate change is increasingly expected to threaten natural ecosystems and their biodiversity, erode global food security, threaten human health and increase inequality. The effects of climate change also present opportunities for our business, such as the impact of Government policy on de-carbonising the UK’s energy supply and the subsequent growth of the UK’s offshore energy industry.
Key risks most relevant to the issue

9. Adverse effect of climate change.

Our ability to control or influence our response to the issue

Some influence.

Availability of natural resources
Resources and relationships affected Material-issues-Natural resources
What it's about Our business depends on natural resources, from resources that provide us with energy, to the materials we build buildings with, to soil on our farms. Some natural resources are finite and need to be managed responsibly if supply chains are to be secured and costs controlled.
Key risks most relevant to the issue 9. Adverse effect of climate change.
Our ability to control or influence our response to the issue

Some influence.

Useful documents