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While Canberra dithers, Australian sustainability heavyweights clean up at GRESB, again

Landcom's harts Landing in Penrith
Landcom's harts Landing in Penrith

Australian companies continue to dominate the much vaunted annual GRESB stakes for environmental, social and governance benchmarks for real assets, proving that at the top end at least, there’s a strong commitment to sustainability, regardless of the policy vacuum in Canberra.

Announced at 4 pm on Wednesday, the 2018 global GRESB results focused a spotlight on the new target that has swept the upper end of the real estate investment trusts (REITs) net zero carbon emissions, outperforming other regions, at least on targets.

Investa, Mirvac, Dexus and Lendlease have all announced net zero targets, joined most recently by GPT, with by far the most aggressive target of 2020.

On Wednesday, Lendlease remained the consistent sustainability performer. Its Australian Prime Property Fund Commercial achieved the number one international ranking.

This is the fourth time APPF Commercial has taken out the top global ranking. It achieved the same result in 2014, 2015 and 2017.

The company’s One International Towers Sydney Trust was also named the most sustainable global development fund, and its Australian Prime Property Fund Retail the world’s most sustainable retail development fund.

Lendlease was not the only high performing Australian company. Frasers Property was ranked number one for Global Developer Residential and third in the Global Diversified Office Industrial category for non-listed funds.

Stockland was named global leader for listed companies for the diversified office and retail sector.

Landcom, the only government body to participate, achieved fourth place in the world and third place across the Asia Pacific and third place across the Asia Pacific.

The Dexus Office Trust was ranked the leading Australian listed office entity and Dexus Wholesale Property Fund the leading Australian non-listed diversified office/retail entity.

The results revealed that average like-for-like greenhouse gas emissions for the sector decreased by 4 per cent in the Australia and New Zealand region, and year-on-year energy consumption was down almost 2.9 per cent.

Stockland's Wetherill Park GRESB

Stockland’s Wetherill Park

The region falls short on water, though, with consumption increasing by more than1.2 per cent year-on-year.

Overall sustainability performance of the global real estate sector increased, with the like-for-like global greenhouse gas emissions down to almost 5 per cent – the highest drop in six years.

Australia and New Zealand achieved an average GRESB Score of 76 (up from 73 last year) and outperformed the global average of 68.

Head of Asia Pacific at GRESB Ruben Langbroek said the results painted a picture of a region not only further raising the bar on sustainability performance, but also paving a clear path for others to follow.

“Industry stakeholder collaboration and ambitious target setting are driving the region’s leadership,” Mr Langbroek said.

“To illustrate, the sector has explicitly acknowledged the importance of the carbon positive roadmap for buildings that was released by the Green Building Council of Australia earlier this year.”

This would ensure Australia’s competitiveness and attractiveness for investments while fulfilling international commitments to reducing carbon emissions.

“In addition, regional leaders have expressed their commitment to contribute to the Sustainable Development Goals, implement the Task Force on Climate-related Financial Disclosures recommendations, and are increasingly focusing their attention on social sustainability. The latter has resulted in more awareness on material social topics such as modern slavery, health and well-being, and community impact,” Mr Langbroek said.

The results showed that 85 per cent of participants measure and monitor the impact of their operations on communities and 60 per cent of Australian and New Zealand property companies and funds promote tenant health and well-being through their buildings and services, while this is just 24 per cent globally.

GRESB chairman Mahesh Ramanujam said the proving that expectations have fundamentally changed in the real asset sector and investors are increasingly asking for greater transparency about the ESG performance of real asset portfolios.

Frasers Property's Mulgrave Office Park GRESB

Frasers Property’s Mulgrave Office Park

Feds are missing in action; property industry is on full alert

The Property Council of Australia notably jumped on the opportunity offered by the GRESB stakes to take a swipe at the political quagmire around energy policy at the federal level and highlight the vast contrast of this with the property industry’s action agenda.

“At a time of political paralysis around energy policy, our industry is getting on with the job of delivering great results on ESG criteria,” Property Council chief executive, Ken Morrison, said.

“Australian sustainability know-how is world leading and creates value for investors, attracts tenants and lowers carbon emissions.”

The Green Building Council of Australia said the results were a “momentous achievement” for the Australia/New Zealand region. Chief executive Romilly Madew said the sector’s eighth consecutive number one global ranking illustrated an ever-increasing understanding that sustainability was central to business reputation and reward.

“Voluntary, independently assessed green building certification programs like our Green Star ratings are supporting and driving market transformation here and around the world,” Ms Madew said.

“They are vital standards in helping investors understand and measure the metrics across the full spectrum of environmental, social and economic sustainability measures, increasingly influencing the value of buildings.

“As market support for sustainability continues to grow, so too does the number of Green Star-rated buildings, fit outs and communities certified by the GBCA, which is fast approaching 2000.”

GRESB’s global and regional sector leaders for Australia/New Zealand are:

Global sector leaders

  • Industrial – Listed: Frasers Property Logistics and Industrial Trust
  • Diversified – Office/Retail – Listed: Stockland
  • Developer – Non-Listed: Lendlease One International Towers Sydney Trust, Lendlease

Global and regional sector leaders

  • Retail – Non-Listed: Australian Prime Property Fund Retail, Lendlease
  • Office – Non-Listed: Australian Prime Property Fund Commercial, Lendlease

Regional sector leaders

  • Industrial – Non-Listed: Goodman Australia Industrial Partnership, Goodman Group
  • Diversified – Office/Retail – Non-Listed: Dexus Wholesale Property Fund, Dexus

The full results for 2018 can be found on the GRESB website.

– With Tina Perinotto

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