Sustainability Report 2021 - Charter Hall Group - AFR
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Charter Hall Group Sustainability Report 2021
Sustainability Report 2021
Sustainability Acknowledgment Contents
of Country
Report 2021 Charter Hall is proud to work with our Introduction
customers and communities to invest Alignment with sustainability best
About this report in, develop, and create property assets practice and reporting frameworks 3
In our 30th year as a business, we welcome on land across Australia. We pay our Managing Director & Group CEO message 4
you to our tenth annual Sustainability Report respects to the traditional owners, their About Charter Hall 5
elders past and present and value their
(the Report). This report relates to the Property portfolio 6
care and custodianship of these lands.
business activities of our managed property FY21 highlights 7
funds and assets for the financial year
ending 30 June 2021 (FY21). Progress against targets 8
The environmental data in this report relates specifically to assets
and activities within our direct operational control as Charter Hall Sustainability overview
Group, unless stated otherwise. It doesn’t include data for other
parties such as our tenants, suppliers and contractors. Integrating sustainability into decision making 16
In preparing this report, we have been guided by the Global Sustainability framework 17
Reporting Initiative’s (GRI) sustainability reporting standards.
For further details on our disclosures, please refer to the Key sustainability issues in FY20/21 18
Databook.
We commissioned Deloitte Australia to provide assurance Governance 20
for this report (see page 43) across a range of non-financial
performance metrics, including environmental and social. Economic 25
The assurance is limited to the environmental performance of Environment 28
the assets under our operational control. As we transition to a
low carbon economy, we recognise our influence on our tenants Social 32
environmental performance, and are actively partnering with
them to reduce emissions. We are actively working to establish
a Scope 3 emissions target through FY22. Non financial data 38
Thank you for taking the time to read more about what we are Environmental data 39
doing to be a sustainable and responsible business.
Asset ratings and certifications 40
If you have any questions or comments, please contact us via
details on page 44. Social data 41
Contact us 44
Cover, left:
Wesley Place, Melbourne Vic;
Image Credit: City of Melbourne
– Melbourne Knowledge Week 2021.
Cover, clockwise from top right:
NAIDOC Week 2021, South Hedland
Square, South Hedland WA;
1 Shelley Street, Urban Green vertical farm
Sydney NSW – 1 Shelley Street, Sydney NSW;
Charli launch – The Argus Centre,
5.5 Star
300 La Trobe Street, Melbourne Vic;
NABERS Energy
Gateway Plaza, Leopold Vic.
6.0 Star
NABERS Water
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us
overview
Sustainability Report 2021
Introduction
Alignment with
sustainability best
practice and reporting
frameworks
Financial Performance
In this, our tenth year of sustainability Annual Report 2021
reporting, we are aiming to make The ongoing COVID-19 pandemic continued to Sustainability Non Financial Performance
our sustainability performance and challenge global economies, businesses and
Report 2021 Databook 2021
societies this year. Our 2021 Annual Reports for
associated data more accessible. Charter Hall Group (CHC), Long WALE REIT (CLW),
This is the core document This year we extracted key trend
This page provides links to key sources of information Retail REIT (CQR) and Social Infrastructure REIT data to provide an overview of our
on performance data (our Databook), financial data (our (CQE) showcases that, despite this, our strong and for presenting our performance against key metrics
adaptable strategy, clear purpose and the trust in this Sustainability Report, and
Annual Report), alignment with key reporting frameworks
and partnerships we have built with our people,
sustainability progress consolidated our sustainability
(TCFD, UNGC COP and SDGs), as well as our Modern
Slavery Statement. Active links are also provided customers and communities, have enabled us to over the past 12 months. performance data into a
throughout this report for ease of navigation between deliver a record performance. comprehensive Databook.
documents and to find more detailed information. View here > View here >
For any information beyond this, please contact us via
details on page 44.
Charter Hall’s approach to:
Task Force on Climate-Related UN Global Compact (UNGC) Alignment to the UN Sustainable Modern Slavery
Financial Disclosures (TCFD) Communication on Progress (COP) 2021 Development Goals (SDGs) 2021 Statement
Our investors need clear, The UNGC is a global movement of companies The SDGs are a blueprint to achieve Our inaugural FY20 Modern
comprehensive, reliable information and stakeholders aiming to create a more a better and more sustainable future Slavery Statement outlined
on climate change impacts to better sustainable world. To achieve this, the UNGC by 2030. These goals address global the approach our business
evaluate climate-related risks to encourages companies to align their strategies challenges, including poverty, inequality, has taken to understand,
our business, make more informed and operations with its Ten Principles on human climate change, environmental degradation, identify, manage and
decisions on capital allocation, and rights, labour, environment and anti-corruption, peace and justice. They are part of a UN mitigate the risks of modern
to better manage risks over the and to take actions that advance better societal Resolution called ‘The 2030 Agenda’. slavery in our operations
short, medium, and long term. outcomes through collaboration and innovation. Australia was one of 193 countries that and supply chain. Our FY21
adopted this Agenda in September 2015. Modern Slavery Statement
We use the TCFD to improve and We are proud to have been a signatory to
is underway and will be
increase our reporting of climate-related the UN Global Compact since 2019. This Achieving these goals will require a ‘whole
available on our website by
financial information. These disclosures year, we continued our commitment to the of Australia’ effort. While the government
31 December 2021.
cover risks and opportunities from UNGC principles and documented how we’re has a role to play, so do the various business
rising temperatures, climate policy, and making progress on these principles. and industry sectors in Australia, including View here >
emerging technologies that enable the property sector. We have documented
View here >
more informed investment decisions. how we align our sustainability goals,
responses and targets to the SDGs.
View here >
View here >
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 3
overview
Sustainability Report 2021
Introduction
Managing Director We continue to work with our
people, customers, investors and
Meaningful action on climate change
Each year we go further in our commitment to
our ESG objectives. The most recent report by the
The importance of partnership
The rise of sustainable finance and responsible investing,
as well as societal expectations to better respond
& Group CEO communities to generate opportunities
that create mutual success.
Intergovernmental Panel on Climate Change (IPCC)
has brought into sharp focus the importance of
environmental stewardship and how delivering on our
to issues such as urbanisation, inequality, and social
isolation, are just some of the socio-economic challenges
that require significant attention and well-considered
message Our ongoing commitment to better futures for the people
and businesses with whom we work and partner was
climate initiatives has never been more important.
We are acutely aware of the global impacts that the
solutions from the whole corporate community.
In fact, these mega-issues cannot be resolved by any single
strongly evident in financial year 2021 (FY21). It shone property sector and the built environment produces in entity and require partnership, collaboration and a market-
through in a record financial result, as we simultaneously relation to greenhouse gas emissions, biodiversity, resource wide response.
pursued and achieved environmental, social and usage and especially action on climate change. We’ve made
governance (ESG) outcomes right across our diversified It is in our DNA to partner with our tenant customers and
significant efforts in recent years to understand how as a
business model, despite ongoing challenges and investors to achieve better futures for all. This gives us
business we can take meaningful action against climate
economic setbacks due to the COVID-19 pandemic. an advantage as we look to amplify and broaden our
change. We have proactively implemented plans across
response and find better solutions. We focus on developing
our platform to contribute towards a low carbon economy.
solutions that are informed and strategic rather than
Performance in the face of Pleasingly, we’ve made significant progress towards reactionary and tactical, and created in partnership to
unprecedented challenges achieving our Net Zero by 2030 target, even accelerating that ensure maximum societal benefit can be achieved. We
timeline where possible. Our Industrial & Logistics portfolio believe continued investment and innovation will drive
As we celebrated an important milestone this year –
has committed to Net Zero by 2022 and our Retail portfolio by the next generation of sustainable real estate and create
30 years since the founding of Charter Hall and our 16th
2025. During FY21, we added another 20MW of onsite solar inclusive and more resilient places, today and for tomorrow.
year as a publicly listed Group – it has been an opportunity
generation to our assets, backing clean energy outcomes
to reflect on our journey, including the successes, As businesses around the country continue to plan their
for our direct operations and supporting tenants with clean
partnerships and growth, as well as the challenges return to workplaces, supporting healthier assets is critical.
energy solutions. We focused on better understanding
that we have faced. The global pandemic continued to We worked with the International WELL Building Institute
upfront carbon emissions, partnering with our supply chain
present unprecedented challenges and we responded to baseline human health and wellness, with a focus
to achieve Climate Active certification for carbon neutral
with financial assistance for communities and support on measuring and improving the indoor environment in
construction services at 140 Lonsdale Street, Melbourne.
for our people. The turbulence has persisted into the our workplace assets for our tenant customers. In FY21,
We are also enabling a net zero in operations development
current year and, like most businesses, we continue to we became one of the first groups globally to achieve a
at 60 King William Street, Adelaide which will be all electric
navigate the ongoing social and economic upheaval. WELL Portfolio Score across 996,294sqm of real estate.
and powered by renewables at practical completion.
In line with our philosophy of resilience, which is at the Further, as a signatory to the United Nations Global
foundation of everything we do, we have been investing Since 2017, we have reduced our emissions intensity Compact, we continue to embed its principles in our
in support for our tenant customers, investors and our by 19%, despite a 43% increase in floor area over the strategy and culture. We also aligned our sustainability
For 30 years, Charter Hall has people, while ramping up our contribution to initiatives that
improve resilience and recovery in the wider community.
same time period. This demonstates putting plans into initiatives with the UN Sustainable Development Goals.
action as we execute our approach to strategic growth
committed to achieving better For example, we have partnered with our tenant customers
linked to sustainable returns. We continue to focus
We are continuously looking at ways to further embed ESG
into our partnership approach. To that end, we recognise
on reducing our Scope 1 and 2 emissions and remain
futures for all our partners and to provide rent relief, develop hygiene initiatives in our
committed to scaling up our use of renewables, whilst
the need to be more proactive in engaging on sustainability
assets and development sites, increase digital engagement issues and solutions. We have stepped up our stakeholder
the communities in which we and offer support with returning to their workplace. We’ve
maintaining our approach to certifying properties with
engagement to better capture a wide range of views,
recognised sustainability rating tools. There is much
operate. We’re accelerating our supported our people with care packages and well-being
more we can do as a business and industry - the IPCC
to gain a deeper appreciation of their challenges and
initiatives, including mindfulness, mental health awareness opportunities, and to improve our responsiveness where
approach to addressing climate and enabling connections despite being apart. We’ve
report is a stark reminder of this. We continue to assess
opportunities to make further progress through our
it falls short. This is key to our mission of adding value to
continued to focus on being a responsible investment the market, which in turn adds value to our business.
change and firmly believe that partner and deliver sustainable growth for our business.
operations and our industry and customer partnerships.
our partnerships will continue to And we’ve been there for our communities, through Inputs welcome
A responsible approach is good business
unlock environmental and social our partnerships with charitable organisations across
As part of this process of improvement, I would like
Australia, our initiatives in bushfire-ravaged communities Robust governance and environmental responsibility
value, alongside financial returns. and providing a sizeable donation to support COVID-19 underpin our values and business model. By building
to extend to you and invitation to provide feedback
on our reporting of our ESG performance, as contained
crisis appeals locally and overseas. In total, we contributed portfolios that address the challenges and opportunities
David Harrison within this report. Please use this link to take a
$2.54 million in direct donations and in kind space of changing climate and providing healthier and more
Managing Director short survey. Your input is very much appreciated as
to support our communities. Our people, despite resilient places, we are aligning our objectives to the
& Group CEO we undertake an extensive review of our materiality,
working remotely for part of the year, contributed more needs of our customers. This in turn enables us to
targets and sustainability strategy in the year ahead in
than 1,200 volunteering hours in the community. continue to attract and retain the best customers.
response to the IPCC findings and other key inputs.
Looking ahead to FY22, our efforts will be focused We have actively aligned our climate resilience roadmap to
Thank you for your interest in Charter Hall.
on invigorating our response to climate change the recommendations of the Task Force on Climate-Related
and working with our partners to lead in creating Financial Disclosures to ensure meaningful steps from
environmental and social value in the property sector. Board level to meet our objectives. We have also begun
proactively working with contractors and suppliers to reduce
impacts across our supply chain and engaged with our
tenant customers to find solutions to mitigate their energy-
related emissions. Currently, 54% of the 41MW of solar David Harrison
installed on our assets is supplied directly to our tenants. Managing Director & Group CEO
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 4
overview
Sustainability Report 2021
Introduction
Funds under Scale
management We focus on quality investments in
core sectors, creating an Australian
About Charter Hall Our FUM grew 29% from previous year funds management business
of scale by global standards
Charter Hall Group (ASX:CHC) is one of Australia’s leading
integrated property groups. Our diversified property and
FUM by sector
ffice $22.8bn
O
43.6%
$ 52.3bn
funds management platform extends across the Office, Industrial & Logistics $15.5bn
FUM
1,388
Industrial & Logistics, Retail and Social Infrastructure
29.7%
properties
L ong WALE Retail $6.7bn
sectors. Through active partnership, we drive value and 12.8%
mutual success for our customers. hopping Centre Retail $3.8bn
S
We believe the right places inspire people, solve challenges, and foster community
7.3%
ocial Infrastructure $3.4bn
S
$ 10.1bn
and inclusion, growing cities and prosperity now and in the years ahead.
Sustainability is how we deliver on our purpose, to secure better futures for all.
6.5% transactional
Our values drive us, and understanding our strengths and weaknesses, as well as
20+ active 7.2bn
$ activity
listening to our stakeholders, focus us to where we can have the greatest impact
FUM by equity source funds & market
and influence. Sustainability is integrated into how we think and work. It’s the holesale Equity $33.3bn
W partnerships capitalisation
forward-focused lens we use to assess, manage and achieve our goals. It’s also
part of how we work in partnership with our customers, to create long-term risk
63.7%
L isted Funds $10.8bn
9.0m sqm
adjusted returns for investors and healthier places for people and our planet. Our
of lettable area
focus on delivering sustainable growth and returns and responsibly managing third
party capital enables us to respond to the needs of customers through integrating
20.6%
Direct (Retail) Equity $8.2bn
ASX 100 across the Group
sustainable outcomes into our core capabilities. 15.7% listed company
ESG integrated into investment decisions
Purpose Strategy Values Capabilities Stakeholders
Our commitment to mutual Our ESG strategy aligns with our Our culture is based on mutual reward We use our cross sector capability and Active partnership governs
success underpins all our goals approach to creating long-term and nurturing relationships with our integrated platform to drive an ESG our relationships with our
sustainable growth and returns. customers. We understand that, like competitive differentiation, supporting tenant and investor customers,
This supports Charter Hall to: our customers, ESG is key to our our customers needs. This communities and employees
people and approach to creating: approach supports us in:
Access
Accessing equity from
Active
Investment
management
Asset
management 45,000+
listed, wholesale and
Accessing equity to Driving performance customers
retail investors Partnership secure properties to and creating
generate returns outstanding spaces
Deploy for customers
Creating value through
attractive investment Genuine
Property
management Property >890
opportunities Insight Day-to-day leasing communities
management Securing long- nationally
We create Manage
Inventive
of properties term leasing by
delivering solutions
better futures by Managing our funds,
assets and leasing and Spirit
Property
development
to customers needs
driving value and development services
Delivering innovative
Portfolio
integration
560+
mutual success Invest
developments employees
Powered that focus on
sustainability and
Providing integrated
property portfolios
Investing alongside
our capital partners by Drive adding value for customers 5 workplaces
nationally
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us
overview
Sustainability Report 2021
Introduction
Property We are proud to have Australia’s largest footprint
of Green Star rated assets and will continue to use
Funds management
portfolio Green Star, NABERS and WELL to support a healthier
portfolio
built environment for both people and planet. This report outlines the sustainability
Charter Hall has a demonstrated track record in using independent rating
tools to benchmark and measure operational performance of its property
strategy and achievements for all
portfolios. As a member of the Property Council of Australia and the Charter Hall entities including the
5.0 Star NABERS Energy weighted Green Building Council of Australia, we actively participate in establishing following funds and partnerships:
average rating for Office portfolio. and piloting rating standards for sectors like Industrial & Logistics.
78% of Office sector funds under
Listed entities
management (FUM) with a rating.
– Charter Hall Group (ASX:CHC)
– Charter Hall Retail REIT (ASX:CQR)
– Charter Hall Long WALE REIT (ASX:CLW)
– Charter Hall Social Infrastructure REIT (ASX:CQE)
4.6 Star NABERS Energy weighted
average rating for Retail portfolio. 59% Unlisted funds
of Retail sector FUM with a rating. Direct Funds
– Charter Hall Direct Industrial Fund No. 4 (DIF4)
– Charter Hall Direct Office Fund (DOF)
WA Qld NSW & ACT – Charter Hall Direct PFA Fund (PFA)
Portfolio value: Portfolio value: Portfolio value: – Charter Hall Direct Long WALE Fund (LWF)
4 Star Green Star Performance
4.2bn 8.5bn 22.7bn
(Previously known as DCSF)
$ $ $
Rating for Office portfolio. 60% of
Office sector FUM with a rating. of which 29% is in the of which 38% is in the of which 53% is in the
Wholesale Property Funds
following weighted following weighted following weighted
– Charter Hall Prime Office Fund (CPOF)
average rating: average rating: average rating:
– Charter Hall Prime Industrial Fund (CPIF)
5.0 Star NABERS 4.8 Star NABERS 5.0 Star NABERS – Charter Hall Prime Retail Fund (CPRF)
Energy Office Energy Office Energy Office
2 Star Green Star Performance Partnerships
Rating for Retail portfolio. 97% of 3.8 Star NABERS 5.0 Star NABERS 4.5 Star NABERS – Charter Hall Office Trust (CHOT)
Retail sector FUM with a rating. Energy Retail Energy Retail Energy Retail – Charter Hall Counter Cyclical Trust (CCT)
– Charter Hall DVP Fund (DVP)
SA Vic Tas –
–
Charter Hall Brisbane Square Wholesale Fund (BSWF)
Charter Hall Retail Partnership No. 1 (RP1)
Portfolio value: Portfolio value: Portfolio value:
2 Star Green Star Performance – Charter Hall Retail Partnership No. 2 (RP2)
Rating for Industrial & Logistics $ 2.4bn $ 12.9bn $ 0.6bn –
–
Charter Hall Retail Partnership No. 6 (RP6)
Charter Hall Australian Investment Trust (CHAIT)
portfolio. 50% of Industrial & of which 38% is in the of which 34% is in the of which 20% is in the
Logistics sector FUM with a rating. following weighted following weighted following weighted – Charter Hall Core Logistics Partnership (CLP)
average rating: average rating: average rating: – Charter Hall Long WALE Hardware Partnership (LWHP)
5.4 Star NABERS 5.0 Star NABERS 3.2 Star NABERS
Energy Office Energy Office Energy Office
5.2 Star NABERS 4.9 Star NABERS
Energy Retail Energy Retail For more information on our fund
portfolio please visit:
charterhall.com.au/investments/funds
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 6
overview
Sustainability Report 2021
Introduction
Environment Social
Charter Hall will
be powered by
FY21 19 %
Highlights 100 %
renewables by 2025
2030
Net Zero
emission
intensity
reduction
Employer
of Choice > 900k sqm
WELL portfolio
Industrial & Logistics: achieved in FY21 target for since FY17 in which
for Gender Equality rated Office space
Throughout the year, we Office: from July 2021 Scope 1 and 2 time floor area
worked in partnership to deliver
1.8m space 739k
Retail: will be achieved in FY25 emissions increased by 43%
key outcomes relating to our $ $
41
environmental, social and spent with community
governance goals. Each of
these are discussed in more MW
$ 100 m
in sustainable
provided in kind
for community
partnerships
though social enterprises and
organisations charitable organisations
detail throughout the report. debt finance
solar PV
installed
a 20MW increase
since last year #
2 in Property,
Construction
& Transport category
Reconciliation
Action Plan
Stage One Reflect RAP
1.7m sqm
of Office space uses
conditionally endorsed by social procurement through
Reconciliation Australia Two Good partnership
#
1 largest
6 star 2020 PRI 90%
Green Star Leaders Established
Green Star ratings engagement state-based
performance targeted on all
Group score community
footprint in new CBD Office recognition for from our partners
Australia developments climate disclosure employees
Governance
CPIF was awarded Modern
Industrial Slavery
21 funds
completed
Global
Development
piloted PCA’s supplier
pre-qualification with our
top 100 suppliers, with a
TCFD alignment
underway
with ESG Committee driving platform-
GRESB assessment Sector Leader further 100 suppliers to be
added year on year wide alignment and integration
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 7
overview
Progress
Responding againstto our
targets
key material issues:
Economic
We monitor and disclose our progress against
our sustainability targets. We’ve summarised our
FY21 performance and detailed agreed targets
for FY22 and beyond in the following tables.
In light of the IPCC Sixth Assessment Report
and our own materiality review, we intend
to undertake a thorough review of our key
sustainability targets and approach. Results from
this review and any updates to our approach will
be shared in our FY22 Sustainability Report.
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 8
overview
Sustainability Report 2021
Progress against targets
Environment
Environment
Targets
FY21 achievements FY22 Looking further ahead
Carbon and We became a signatory to the
We achieved a 19% Develop a roadmap to transition
away from fossil fuels and align with
100% reduction in Scope 1
and 2 emissions by FY30.
climate change WGBC Net Zero reduction in our carbon asset Capital Expenditure (CAPEX)
Embed decarbonisation
Building resilience for Carbon Commitment emission intensity (Scope 1 and 2)
and Operational Expenditure
(OPEX) budgets over lifecycle.
strategies within strategic asset
This initiative aligns with our target of plans by FY25 or earlier.
our business, properties since FY17, despite a 43% increase in area over
Net Zero for Scope 1 and 2 emissions by 2030. that time and an 8.7% reduction against last year.
and communities
We are partnering with tenants to understand Continue solar roll out across Develop a Scope 3 emissions target
downstream Scope 3 emissions and support the Industrial & Logistics sector. aligned to science-based target
operational efficiency: Commence roll out in the Social methodology during FY23 - see Energy
Infrastructure sector - see Energy efficiency and renewables on page 30.
– Installation of solar for on-site usage; – Providing off-site renewables to Office tenants efficiency and renewables on page 30.
– Roll out of energy efficiency initiatives such that are on embedded networks, passing on
environmental benefit in the process; and As we partner on reducing Scope 3
as LED lighting and installation of skylights emissions, we will report around tenant
in Industrial & Logistics portfolio; – Benchmarking energy performance of tenancies engagement on energy efficiency
using the NABERS Co-Assess tool in the Office and emission reduction - see Energy
sector. efficiency and renewables on page 30.
We commenced piloting Net Zero office
developments to address upfront Scope 3
Climate Active Certified Develop guidelines for Net Zero
Office developments - see Energy
Net Zero upfront carbon emissions
(embodied carbon and construction)
and operational emissions. construction services provided at 140 Lonsdale efficiency and renewables on page 30. achieved for all new Office and Retail
Street, Melbourne. Construction emissions were site developments by FY30.
60 King William St, Adelaide offset by Australian Carbon Credit Units (ACCU)
created at the Colodon Native Forest Project.
was designed to be highly energy efficient with
a 5 Star NABERS Energy rating, fossil fuel free
through an all-electric mechanical central plant,
climate friendly refrigerants and powered by
renewables.
Achieved internal agreement to pursue local Implement a local nature-based Residual operational and construction
nature-based carbon offsets with social co-benefits. offset strategy for residual emissions emissions offset in line with local
to achieve our Net Zero goals nature based offset strategy by FY30.
and enhance outcomes as we
transition away from fossil fuels.
Resilience and We commenced
Roll out CCAP for remaining
Industrial & Logistics, Office and Retail
Embed in decision making
and track decarbonisation and
adaptation Climate Change and sectors and incorporate CCAP into adaptation planning in Strategic
decision making processes including Asset Plans by FY25 - see Climate
Understanding and Adaptation Plans (CCAP) on-boarding new assets - see Climate change adaptation on page 29.
responding to the physical for our Industrial & Logistics portfolio
change adaptation on page 29.
and transitional risks of (now 70% complete by floor area) based on
a changing climate RCP8.5 as a worst case scenario.
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 9
overview
Sustainability Report 2021
Progress against targets
Environment
Targets
FY21 achievements FY22 Looking further ahead
Energy efficiency We met our FY25 NABERS Energy Office
target early by achieving
We exceeded our FY25 NABERS Energy
Retail target by achieving
Establish new NABERS targets
at both portfolio and asset levels
Achieve new NABERS targets by FY25.
Increasing energy efficiency by FY22 - see Energy efficiency
to deliver environmental and 5.0 Star 4.6 Star and renewables on page 30.
Expand our coverage of NABERS
financial value for operations NABERS Energy NABERS Energy ratings to Retail sites 15,000sqm. - see Energy efficiency and
renewables on page 30.
We completed our renewable 100% of grid supplied Office Retail electricity to be sourced
Clean energy energy strategy ahead of target. electricity to be sourced from from onsite and offsite renewable
offsite renewable electricity. electricity from FY25.
Investing in onsite and
offsite renewables and To date 41 MW Solar PV We procured
leveraging the scale of installed across the portfolio with the potential
to generate 58.9GWh of electricity
100% offsite
our national platform (equivalent to powering 8,305 homes).
renewable
electricity for our Industrial
& Logistics portfolio.
We implemented waste management We increased our organics waste Deliver a waste strategy aligned Achieve 4.5 Star NABERS Waste
Waste plans at all sites where we manage waste. stream to include to circular economy principles, portfolio weighted average for
with the long-term aim of the Office portfolio by FY25.
Minimising the generation
of waste in our operations 3 1% of waste diverted from
landfill from Office sector in operations.
over 60% of our Office assets,
and piloted Anaerobic digestion systems
eliminating waste to landfill.
75% waste diversion from landfill
in operational assets by FY30.
at select Retail sites.
40% of waste diverted from
landfill from Retail sector operations,
We improved waste data integrity
through alignment with the Better
inclusive of recovery rates for cooking Buildings Partnership.
oil and grease traps.
We exceeded our FY25 NABERS Water target Establish new NABERS targets Prepare a water strategy to address
Water early by achieving: at portfolio and asset level by future climate scenarios by FY25.
FY22 - see Energy efficiency
Increasing water efficiency
across our operations 4.0 Star 4.6 Star and renewables on page 30.
NABERS Water NABERS Water
weighted average rating for weighted average rating for
Retail sector >15,000sqm. Office Sector.
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 10
overviewSustainability Report 2021
Progress against targets
Social
Social
Targets
FY21 achievements FY22 Looking further ahead
Social value We continued to lead with purpose in
our quest to lift the future of communities
We donated Continue to contribute 1% of our
profits, spaces and people’s time
Pledge 1% targets by FY25:
739,000
People: 6,000 hours volunteered
Through partnership, through our ongoing participation in the $ to community partners each year
in the community.
to help them achieve positive
deliver positive impacts Pledge 1% initiative, donating 1% of profits1,
to social enterprises and social impacts - see Community Place: up to 1% of underutilised
1% of place and 1% of people’s time
for the communities in (volunteer hours): charitable organisations. and social inclusion on page 33. space provided to community.
which we operate Refine our social sustainability strategy Profits: up to 1% donated to
to maximise the social impact of our community partners to achieve
We provided
35% of our employees community initiatives and develop positive social outcomes.
> 41,000 sqm of space, volunteered a total of 1,200 hours
in the communities, in a year
a national partnership framework
to bring the strategy to life.
valued at over $1.8 million, impacted by COVID-19 restrictions.
to community groups.
Employment We established state-based partnerships with
four social enterprises to support employment
Our support saw Deliver 100 meaningful employment
outcomes for vulnerable youth (and
Continue to support disadvantaged
youth by creating 400 meaningful
opportunities
Building better futures for
for vulnerable youth. These partnerships will
enable over 100 employment opportunities
> 4,500 training hours
others in need) - see Community and
social inclusion on page 33.
youth employment outcomes by FY25.
Those opportunities will increase to
per year. worked through Kick Start cafes. 1,200 youth employment outcomes by
vulnerable young Australians 2030 - see Community and
through meaningful We supported Since our partnership began, 12 trainees social inclusion on page 33.
have graduated from the program.
employment 11 youths This partnership has supported the
establishment of our FY22 goal relating
to receive employment training
to employment opportunities.
at Kick Start cafes in NSW.
First Nations Our inaugural We celebrated First Nations history and cultures
with art activations across a range of our Retail
Launch our RAP in early FY22.
We will then focus on bringing
100% of employees and xx%
of suppliers receive cultural
engagement Reconciliation Action Plan and Office assets including No.1 Martin Place, our RAP to life by engaging with awareness training by FY23.
(RAP) has been conditionally approved by NSW; 130 Lonsdale Street, Vic; Raine Square, our employees, raising cultural
Promoting reconciliation Reconciliation Australia and will be launched awareness and supporting indigenous
WA; and GPO Exchange, SA.
and mutually beneficial in early FY22. businesses and employment.
We partnered with local WA indigenous group
relationships with our We partnered with indigenous author Maree Blak Lash, to design a digital Acknowledgment of
Acknowledge Traditional
Yoelu (McCarthy) and local schools across Owners at 100% of Charter
indigenous stakeholders Country for lift screens at our Office properties. Hall operational assets.
our Retail communities to create a children’s
storybook, ‘Dancing for Country’, in celebration We included smoking ceremonies and Welcome
of NAIDOC Week. to Country for each new Office development.
1. 1% of profits related to Property Funds Management.
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 11
overviewSustainability Report 2021
Progress against targets
Social
Targets
FY21 achievements FY22 Looking further ahead
Health, safety We were recognised by the International
WELL Building Institute (IWBI) as being part
WELL Portfolio, achieving a rating across
more than 900,000sqm
Increase coverage of the WELL
Portfolio rating to 1,200,000sqm,
Increase coverage of the WELL
portfolio rating to all of the
and well-being of a small group of global leaders in the adoption of office space, benefiting
representing more than 68% of the Office portfolio by FY25
current Office footprint - see Health,
38,000
Creating a culture that fosters of the WELL Portfolio Rating measuring and
the well-being and resilience of advancing human health and wellness in > safety and well-being on page 35.
buildings.
our employees and customers of our tenant customers.
We received We are targeting Achieve WELL Building accreditation
for all new Office developments by
Gold WELL Certification Platinum WELL Certification FY25 - see Health, safety
and well-being on page 35.
for GPO Exchange, Adelaide SA. at 130 Lonsdale St, Melbourne Vic.
We achieved our FY25 target of WELL Portfolio Maintain WELL Portfolio accreditation Maintain WELL Portfolio
accreditation for all Charter Hall workplaces. and partner to align with the Health accreditation with two additional
Safety Standard of the rating tool. workplaces to achieve at least
sliver accreditation by FY25.
We achieved a Achieve 5 Star NABERS Indoor
Environment weighted average
4.4 Star for the Office portfolio by FY25.
NABERS Indoor Environment
weighted average rating for the Office portfolio.
We cared for our customers through COVID-19 with rent relief, Partner with our customers to achieve a
hygiene initiatives, adaptation of digital engagement and smooth transition back to the Targets
support with returning to workplace. workplace - see Customer engagement
and satisfaction on page 34.
We recorded a lost time injury and and a total recordable Implement a new incident management Workplace health and safety
lost time injury frequency rate of injury frequency rate of system and train employees to framework embedded in
Zero
position Charter Hall to efficiently react, the business by FY25.
1.11 understand and respond - see Health,
safety and well-being on page 35.
In response to the roll out of our well-being
strategy, our work environment continues to be
regarded highly by our employees:
76% Enhance our well-being strategy
to adapt to the challenging needs
of the business and measure
were favourable on our well-being approach,
success through employee
14% above the Australian norm; and
83% agree surveys - see Health, safety
and well-being on page 35.
we promote a healthy work environment,
35%
18% above the Australian norm; of our Victorian team used the extra 10 days
Woodlands by of leave provided for them to home school
Wesley Place,
during the COVID-19 lockdowns in 2020.
130 Lonsdale Street,
Melbourne Vic.
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 12
overviewSustainability Report 2021
Progress against targets
Social
Australian Workplace ReCharge
Equality Index Awards launch
Targets
FY21 achievements FY22 Looking further ahead
Creating inclusive We improved customer We launched ‘ReCharge’ our Office
Establish NPS targets
for all sectors.
Enhance customer experience
in our places, measured through
spaces and engaging satisfaction measures across workplace wellness program that brings premium
lifestyle amenities, health seminars, wellness
customer satisfaction surveys.
customer experiences all sectors1, with Net Promoter services and surprise activations to our tenant All large new Office and Retail
customers. developments to meet the Places
Support customers to Scores and satisfaction results credit criteria for Green Star
go further by enhancing at a 5 year high. We extended our award winning customer Buildings by supporting the creation
experience program, ‘Charli’, to connect over of safe, enjoyable, integrated and
connection, engagement, comfortable places by FY25.
We successfully involved the local community in
productivity and innovation the development of Wesley Place, Vic through
15,000 users and 860,000sqm
of workspace across 32 Office buildings
the community reference group, contributing to
nationally.
the sense of place.
Employee We achieved We continued to grow our LGBT+ network and Improve AWEI recognition for
LGBT+ inclusion by achieving
Female participation on the CHC
Board of >40%, and in senior
90%
improved our score in the Australian Workplace
Bronze status by FY22. management of >40% by FY25.
Creating a diverse and employee engagement. Equality Index (AWEI) by 31% when compared
Continue to maintain 50% female
with FY20.
inclusive culture and Continue to achieve employee
participation across the workplace.
95%
of our people recommend engagement above global
environment within our Charter Hall as a good place to work. We ranked second in the Property high performing norm. Continue to evolve our approach
own community Construction & Transport category in the to LGBT+ inclusion by reaching
We recorded not only strong results across all 2021 Best Places to Work. Gold status in the AWEI.
our culture measures but also a high performing We achieved
employee experience compared to benchmarks.
WGEA Employer of
We achieved 28.6% female participation on the
CHC Board; 29% in senior management;
Choice for Gender Equality and 55% across the workplace.
citation.
1. Excludes Social Infrastructure and Office portfolios. We did not survey Office
customers in 2020 due to COVID-19 and have not yet commenced 2021 surveys.
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 13
overviewSustainability Report 2021
Progress against targets
Governance
Governance
Targets
FY21 achievements FY22 Looking further ahead
Ethics All our people received training on governance
and risk management policies, including our
We joined the Ethical Alliance Achieve 100% employee participation
in risk and compliance training.
Publish responsible and ethical
investment framework by FY25.
(managed by The Ethics Centre).
Conducting business Code of Conduct. Maintain >80% in the Risk Culture
This community of organisations is
activities in line with the
highest ethical standards
We achieved 86% Risk Culture Index
in our annual culture survey (13% above Australian
committed to lead, inspire and shape better
futures.
Index in our annual culture survey.
norm) driving a positive employee experience We implemented a Risk and Compliance
year on year. system to automate advice on changes in
legislation and regulation.
Innovation and We joined the We actively engaged in the Property Council of
Australia’s Cyber Security Roundtable to address
Embed and continuously evolve
information security and privacy
Work across our technology
and operational supply chain
technology Sustainable Digitalisation emerging cyber threats as an industry. practices in our operations. Continue to increase cyber awareness,
Harnessing the opportunities Project as a Silver Member We reported zero major cyber security incidents
to drive digital technology and
innovation to enhance experience and
maturity and readiness by FY25.
of digital technology to be part of an industry approach to responsible, for the year. Our cyber security strategy is well-being, operate efficiently and
ethical and sustainable digitalisation. modelled on the internationally recognised sustainably, and safeguard against risk.
and data while actively standard ISO27001 and audited annually.
protecting the privacy of
individuals and companies
Responsible inaugural Modern
We launched our We implemented a Supplier Code of Expand the number of high risk
suppliers completing the modern
Deliver a Sustainable Supply Chain
Framework that addresses modern
supply chain Slavery Statement in FY21 and Conduct outlining mandatory modern slavery pre-qualification. slavery, preferred materials, and
published our annual communication on slavery compliance for all our suppliers. circular economy principles by FY25.
Creating an integrated progress to United Nations Global Compact
sustainable supply chain (UNGC). Targets All employees received modern slavery refresher
training, including the process of reporting
strategy and ensure delivery We identified five suppliers for independent issues or suspect modern slavery in our
on UNGC commitment review to identify opportunities for improving operations or supply chains.
their risk ratings.
We engaged three high risk suppliers
across construction, cleaning and facilities
management to be involved in supplier ‘Deep
Dive’ workshops focused on understanding how
they are identifying, assessing and mitigating
risks in their operations and supply chains.
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 14
overviewSustainability Report 2021
Progress against targets
Governance
Woodpark Logistics
Estate, Smithfield, NSW
5 Star Green Star
Design & As Built.
Targets
FY21 achievements FY22 Looking further ahead
Policies and processes We progressed the implementation of our Environmental
Management System across the portfolio.
Implement Environmental
Management System during FY22.
Embed a ISO14001 certified
Environmental Management
System in place by FY25.
Managing our properties
and funds effectively Our Board continued to oversee the Group Our Executive Committee continued to have Complete full alignment with the
and with integrity sustainability strategy and policies (including strategic oversight of ESG strategy and TCFD Framework by FY25.
our approach to climate change and integrating implementation, bolstered by the
ESG) through the Audit Risk and Compliance
Committee.
establishment of an
Our Executive and Non-Executive Directors ESG Committee to drive platform-wide
engaged on climate change and scenarios. alignment and implementation.
Reporting and ratings We use best practice reporting frameworks and
guidelines to measure our ESG performance,
All Office developments in
progress are targeting
Develop guidelines for
Net Zero Office developments
Target 6 Star Green Star Design
and As Built ratings for all new CBD
incorporating Net Zero targets. Office Developments by FY25.
Using independent rating including GRI, PRI, UNGC, the SDGs and alignment
tools to benchmark and with TCFD. We also use independent rating tools
and assessments for our assets and portfolios,
5 Star Green Star
measure our progress including GRESB, Green Star, NABERS and WELL. Design & As Built
in integrating ESG Industrial & Logistics development
into our platform at Woodpark Logistics Estate achieved 5 Star NABERS
5 Star Green Star Energy rating
Design & As Built
Industrial & Logistics and Office sector Work with GBCA on the piloting of the Achieve a 3 Star Average Green
Retail sectors achieved achieved new Green Star Performance tool. Star Performance rating across
the portfolio by FY25.
2 Star Green Star 4 Star Green Star
Performance rating Performance rating
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 15
overviewSustainability Report 2021
Sustainability
overview
Integrating sustainability
From left:
Greg Chubb, Retail CEO;
Carmel Hourigan, Office CEO;
into decision making Steven Bennett, Direct CEO;
Sheridan Ware, Chief
Information and Technology
Officer; David Harrison,
Managing Director & Group
CEO; Russell Proutt, Chief
Factoring sustainability into our decision-making is how Financial Officer; Richard
Stacker, Industrial & Logistics
we choose to do business. In fact, it’s embedded and CEO; Natalie Devlin, Chief
integrated platform-wide across our Group operations. Experience Officer;
Sean McMahon, Chief
Investment Officer.
Board Policies
Our Board has oversight of our Policies and Codes of Practice help
sustainability strategy, policies, risks translate our values and commitments
and opportunities, including our into actions.
approach to climate change and the
integration of ESG into our systems. In relation to sustainable and responsible
business practices, we are guided by
ARCC our Group Sustainability Policy and our
Human Rights Policy, along with policies
The Audit Risk and Compliance
addressing diversity and inclusion,
Committee (ARCC) receives regular
whistleblowing, privacy, conflicts
updates from the Executive Committee
of interest, work health and safety,
on sustainability issues and initiatives.
and bribery, fraud and corruption.
Charter Hall Board
Executive Committee We enact these policies through codes
The Executive Committee implements of conduct for our employees and Review reporting from Management regarding potential material risks and opportunities; approve sustainability policies
sustainability policies across the
Group and, along with the Board,
suppliers, as well as through instruments
such as our Modern Slavery Statement. >
Information and feedback on sustainability performance
has ultimate responsibility for overall
Audit, Risk and Compliance Committee (ARCC)
All our managed funds adopt our Group
implementation and governance of Oversee and review Group sustainability strategy and policies; propose required amendments to Board
policies, including this Report. In addition,
sustainability across the business. each fund has its own governance
structure, which determines decision- Managing Director & Group CEO
ESG teams making about assets within the portfolio
Our Group Head of ESG and team and in accordance with Group policies, Day-to-day management of the Group and overall strategic direction
regularly reports our performance against codes of conduct and charters.
ESG goals and targets to the Executive
Committee, and quarterly to the Managing Ultimate responsibility for the above Executive Committee
Director & Group CEO. The ESG team also rests with the Executive Committee
Accountable for implementation of sustainability strategy and policies across the platform
delivers the strategic and tactical aspects and Board. We provide accountability
of our sustainability endeavours and is and transparency for our processes
supported by ESG Leads in our Office, and outcomes through our internal and
Chief Chief Chief Chief Information Industrial
Retail and Industrial & Logistics portfolios. external reporting, including this Report. Direct CEO Retail CEO Office CEO
Financial Officer Experience Officer Investment Officer & Tech Officer & Logistics CEO
ESG Committee
Our ESG Committee have focused this Group Head of ESG
Sector ESG Leads
year on endorsing procurement of 100% Facilitate the management of sustainability policies; support
Sector implementation of ESG initiatives and operational performance
renewables for Industrial & Logistics implementation of policies across managed entities
and Office, continued alignment to the
TCFD, creating approaches for rolling
out Climate Change & Adaptation ESG Committee
Plans for all our assets, signing off on Established to drive platform wide alignment and implementation of our ESG strategy to address risks and opportunities
work relating to our social procurement
strategy and establishing social
Community Investment
value partnerships. The Committee TCFD Working Group Modern Slavery Working Group First Nations Working Group
Working Group
remains focused on driving platform-
<
wide alignment and implementation
of ESG strategy and initiatives. Asset Management, Operations and Development teams
Implement sustainability policies across assets, developments, operations and business activities
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 16
overviewSustainability Report 2021
Sustainability
overview
Sustainability framework
Creating better futures by driving
value and mutual success
Environment Social Governance
Climate Strong Responsible
resilience communities business
We are committed to building resilience in our assets to We create safe, equitable and inclusive We behave in line with the highest ethical
support customers through resource efficiency, carbon environment for our employees, partners, standards, strive for a sustainable supply chain
emission reduction and embedded climate change customers and communities. and transparently disclose our performance.
adaptation measures, to deliver long term value.
Climate change Sustainable growth Health, safety Community and Business ethics and Responsible
adaptation and returns and well-being social inclusion compliance investment
Energy efficiency Resource Customer engagement Employee engagement Responsible and Innovation and
and renewables efficiency and satisfaction and satisfaction sustainable supply chain technology
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 17
overviewSustainability Report 2021
Sustainability
overview
Charter Hall Materiality Matrix
3 Energy efficiency
and renewables
Key sustainability
Very Sustainable growth
High and returns 2
1
issues in FY20/21 Responsible investment
Business ethics
Climate change
Importance to external stakeholders
adaptation
10 and compliance
9
Innovation and
technology
8
11
We conducted an intensive materiality process Responsible and
4
this year to guide our sustainability strategy and Community and
sustainable supply chain
Employee engagement
reporting, and to ensure that our approach to social inclusion and satisfaction
managing our social, environmental, economic 6
and governance performance is informed and Health, safety 7
and well-being
focused. This process involved three key steps:
5
Customer engagement
1 3 and satisfaction
Research into megatrends and thought A material issues review and
leadership in the market, to help us prioritisation workshop that enabled High
better understand and appreciate our Board and Executive Committee Importance to internal stakeholders Very
the key issues, challenges and to consider, discuss and prioritise High
opportunities that we will be exposed the ESG matters that would shape
to, both now and into the future. not only the Report, but our overall Environment Social Governance
strategy for the coming period.
1 Climate change adaptation 4 Community and social inclusion 8 Innovation and technology
2 The resulting range of material topics 1
Building the resilience of our business, Supporting and contributing to the prosperity Harnessing digital technologies and
Engagement, through interviews are shown in the Materiality Matrix. properties and communities against the of local communities, promoting social data across our assets in partnership
and surveys, of our key internal and These were prioritised by the Board physical impacts of climate change and inclusion of vulnerable groups; and creating with our customers to solve industry
external stakeholders – our employees, and Executive Committee as the most preparing for changing regulations and opportunities for the economic uplift of challenges and meet customer needs.
investors, tenants and other informants. critical to account for in this Report. markets in a low carbon economy. young Australians, those with disabilities,
Based on the AA1000 Stakeholder Indigenous peoples, and others in need. 9 Business ethics and compliance
Engagement Standard 2015, this
2 Energy efficiency and renewables Conducting our business activities in line
engagement provided insights into The use of process redesign and technological 5 Customer engagement with the highest ethical standards across
modifications to allow a defined process and satisfaction environmental, social and governance standards
ESG issues that are material to our
stakeholders and provided a deeper or task to be carried out using less energy Exceeding the business needs of our tenants and complying with all relevant regulations and
and the use of renewable energy sources and investors to ensure they have a deep sense transparently reporting on our performance.
understanding of their perceptions
such as wind, solar, hydro, and biomass. of belonging and satisfaction in our assets.
about our approach to ESG and what 10 Responsible investment
we can do to lift our performance.
Economic 6 Employee engagement Integrating ESG considerations into our
and satisfaction investment decisions (due diligence,
3 Sustainable growth and returns Through building a diverse and inclusive property management and day-to-day
Providing services that satisfy the highest culture and workplace within our own operations) and ongoing engagements to
professional standards of the industry to ensure community, our people can be at their best. ensure sustainable growth and returns.
long-term, mutually beneficial relationships
and returns for the company and investors. 7 Health, safety and well-being 11 Responsible and
The promotion of physical and mental health sustainable supply chain
and well-being for everyone, including our Facilitating procurement practices and supply
employees, contractors and customers, as well chain management in a responsible and
as the general public that use our spaces. sustainable way, including the management of
human rights, sustainable procurement, modern
slavery, anti-corruption and anti-bribery.
Charter Hall Group Introduction Targets Sustainability Governance Economic Environment Social Data Contact us 18
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