Creating enduring value through sustainability Our 2030 Real Estate Sustainability Strategy
AMP Capital Real Estate Sustainability team Melanie Louie Lina Rico Binowee Chris Nunn Gomez Bayles Head of Reporting & Data Sustainability Program First Australians Manager Program Manager Darren Teoh Abi Balakumar Chandni Mishra Sustainability Office & Logistics Shopping Centre Sustainability Performance Sustainability Coordinator Manager Coordinator
2030 Real Estate Sustainability Strategy Creating enduring value through sustainability Shaping a better future to thrive in a changing landscape Through our strategy, we are aiming to: – Enhance value and minimise risk for our investors – Deliver exceptional real estate experiences for our customers – Perform in line with global best practices – Develop our people’s and partners’ sustainability knowledge so they can be advocates – Foster a culture which embraces sustainability as a genuine core value 3
2030 Real Estate Sustainability Strategy Key focus areas Environment Social Governance Waste minimisation Biodiversity & habitat Culture & community Equity & diversity Supply chain Energy & climate Zero net carbon Compostable packaging Conservation reserve Social sustainability Accessibility Modern slavery Committed to implementing Committed to working to Committed to creating a Committed to establishing Committed to implementing Committed to implementing zero net carbon by 2030 minimise waste to landfill and biodiversity conservation community partnerships that best practice standards of processes to minimise ESG- through phasing out fossil help keep plastic pollution out reserve that directly matches represent our goals and accessibility, for our building related supply chain risk, fuels, running on 100% of the ocean by providing the physical footprint of our implement social sustainability users with a variety of special implement consistent minimum renewable energy and making appropriate recycling assets on the land. plans at every asset. needs including physical sustainability performance our buildings highly efficient resources and encouraging our mobility, but also hearing or expectations and strive for best and resilient. retail tenants to choose vision impairments, mental practice in procurement on reusable and compostable health disorders or dementia. modern slavery, materials options. safety, sustainable timber and embodied carbon. 4
2030 Real Estate Sustainability Strategy Delivering on our strategy A timeline of our goals to 2030 2023 2025 2027 80% diversion rate Achieve NABERS Water Solar PV on 2029 for construction average of 4.0 Stars 2021 viable rooves strip out waste (Offices) and 3.5 Stars Encourage retailers to Quantify local (Shopping Centres) Health & New developments to avoid single use plastic jobs created Wellbeing achieve 6 Star Green and switch to reusable EV charging improvement Star for Offices and or compostable available at all Explore green plan for all 5 Star for Shopping packaging alternatives relevant sites relevant assets bond debt raising Centres Reconciliation Action ISO14001 certified Create a community Create native habitat Zero Net Carbon Plan actions taken Environmental partnerships strategy at appropriate sites at every site Management System & appoint social 5.5 Star NABERS Energy Improve accessibility sustainability role ratings for all Offices in our assets and own Social sustainability New developments and 5 Star NABERS for offices, including Establish an AMP strategies for to achieve NABERS Shopping Centres measures such as adult Capital Sustainable every asset Energy 5.5 Star for changing facilities Real Assets Fund Offices and 5 Star for 100% renewable Green Star Performance e-waste collections Shopping Centres Climate Change electricity 3 Star portfolio average at every asset adaptation plans 2020 Support the creation for every asset 2026 2024 of a conservation reserve 2022 equal to our land footprint 2030 Environmental Social Governance 5
ESG in Real Estate Rising expectations - Core institutional investors: negative screens - Impact investors: positive screens AMPC RE all funds GRESB Average, progression over time 90 AMPC funds Average score 81 AU / NZ average score 72 2019 Global average score 1,005 100 Investor property fund members respondents GRESB Survey covers US 100,000 $4.1 trillion in asset value assets 90 72 71 72 76 80 83 86
ESG measurement & reporting 2019 GRESB: AMPC RE Funds versus all GRESB respondents AMPC RE Average 90 Australian RE outperforms - AU region - outperformed other regions for 9 years - About 10% higher than global average 81 90 72 AU / NZ AMPC funds Global average score Average score average score 7
ESG measurement & reporting GRESB category weightings > Sustainability governance: management & committee Management > Environmental & data management systems > 3rd party assurance Monitoring & EMS 7.9% > Automated energy & water monitoring Performance > Energy consumption Indicators > GHG emissions 8.6% 25.2% > Water consumption > Waste management > Reporting sustainability performance > Energy, Water & Waste targets Policy & Disclosure 9.4% > 3rd party assurance of data GRESB > Renewable energy generation > Sustainability policies in place category weighting 10.8% > Green Star Design & As Built Building 25.2% > Green Star Performance Certifications > Staff training & KPIs Stakeholder > NABERS ratings 12.9% > Employee satisfaction surveys Engagement > Health & safety > Health & wellbeing Risks & > Tenant engagement & satisfaction surveys Opportunities > Tenant fit-out guides > Green lease clauses > ESG risk assessment process > Procurement & supply chain > Energy & water audits > Community engagement
2030 Real Estate Sustainability Strategy ESG measurement & reporting SDGs & Real Estate SDGs (targets in brackets) most relevant to real estate - Improve energy efficiency (7.3) and increase renewable energy (7.2) - Strengthen resilience to climate-related hazards (13.1) - Improve resource efficiency (8.4, 12.2), reduce waste generation and improve recycling (12.5), - limit food waste (12.3) and prevent marine pollution (14.1.) - Increase water efficiency (6.4.) - Protect natural heritage (11.4), limit biodiversity loss (14.5, 15.A, 15.2), and improve access to green space (11.7.) - Tobacco control (3.A.) - Protect labour rights and promote safe and secure working environments (8.8.) - End all forms of discrimination against all women (5.1) promote flexible work arrangements (5.4), monitor and promote gender diversity, particularly in leadership positions (5.5, 8.5.) 17 goals set in 2015 for the year 2030 - Improve accessibility for people with a disability (10.2.) - 169 targets - Promote sustainable transport (11.2.) - 231 performance indicators - Identify and tackle corruption and bribery (16.5) and address modern slavery (8.7.) 9
2030 Real Estate Sustainability Strategy ESG measurement & reporting SDGs & Real Estate Targets and performance indicators developed for National Governments (not companies) Targets Performance indicators 17 goals set in 2015 for the year 2030 - 169 targets - 231 performance indicators 10
2030 Real Estate Sustainability Strategy ESG measurement & reporting Maturity of ESG measurement GRI – defines reporting metrics, but non-prescriptive, so huge variation - GRESB – covering RE since 2009; and Infra since 2015, highly granular, good comparability - within RE asset class, but not comparable to other asset classes UN PRI – since 2006, A+, not granular on performance - TCFD – in its infancy - SDGs – lots of ‘alignment’, detail of limited relevance for corporate ESG, - most not reporting consistently against detailed indicators anyway - Still lack of comparability between asset classes using consistent metrics Long way to go toward metrics and rating systems that provide real transparency across - regions and asset classes 11
2030 Real Estate Sustainability Strategy ESG & value Link between ESG & value - Risk mitigation - More stable income - Best buildings always in demand ‘Green Alpha’ - - Lower operating costs - Lower vacancy - Higher rents - Increased valuations - Returns - total return divergence between green buildings and their less- green peers is up to 50bps per annum (over 3 years) 12 1. https://www.ampcapital.com/content/dam/capital/04-articles/insights/2019/october/why-sustainability-matters-in-real-estate.pdf
2030 Real Estate Sustainability Strategy Summary - Australia is a leading region on ESG in Real Estate - ESG measurement in Real Estate is relatively mature - Still a lack of comparability between asset classes - ESG performance does deliver higher returns in Real Estate 13 1. https://www.ampcapital.com/content/dam/capital/04-articles/insights/2019/october/why-sustainability-matters-in-real-estate.pdf
Thank you ampcapital.com 14
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