Message from our Corporate Responsibility and Sustainability Board Committee
We are pleased to present Stockland's 2009 Corporate Responsibility and Sustainability Report.
This is the fourth year we have produced a Sustainability Report, which, together with our Financial Report 2009 and Shareholder Review 2009, provides information on our environmental, social and financial performance for the year ending 30 June 2009.
Challenging market conditions
There is no doubt that the past year has been exceptionally challenging for Stockland. The global financial crisis impacted the global economy and caused a sharp downturn in the Real Estate Investment Trust sector around the world. This in turn created challenges for our business.
In response, we adjusted our operations and streamlined our organisation. For example, our Residential Development business responded quickly to changing property market conditions by developing more affordable housing options for purchasers.
In our Commercial Property business we repositioned our office and retail portfolios with the sale of non-core assets and maintained our focus on long-term relationships with our tenants. Our consistent commitment to being a responsible and ethical property owner, manager and lessor has helped us maintain high occupancy rates in our office, retail and industrial properties.
We see the retirement living sector as a key opportunity for growth and as such have established Retirement Living as a separate business unit. This change will enable us to focus on the specialised nature of retirement living properties and the needs of our residents.
In light of the changed market conditions, we have decided to embark on an orderly sale of our UK assets over the next two to three years. In the meantime we will complete projects already underway.
Through all of this, our commitment to corporate sustainability has not wavered. We have continued to strive for balanced environmental, social and economic outcomes. This approach was recognised with our inclusion once again in the Dow Jones Sustainability Index World (DJSI World), an index which tracks the performance of global sustainability leaders.
Our evolving sustainability strategy
This year we continued to refine our approach to sustainability. We have sought feedback from both internal and external stakeholders to better understand their expectations and views on our performance. This ongoing process will help us focus on priority areas and respond earlier and more effectively to emerging issues and concerns.
Part of our business involves developing sites that shape and create communities. Recognising the significance of this, we produced community development guidelines that set out how we will engage with the wider community at each of our developments to ensure the best outcomes for both current and future residents. Our aim is to create structures and communities that will endure long after our development work is complete.
A key challenge for us is to achieve a consistent approach to stakeholder engagement across all parts of our business. We are making continuous improvements in this area but understand that embedding sustainable practices is not a simple process. For example, in 2008 we were one of the first major property groups to discontinue all political donations at all levels of government.
Our people
We are proud that at this difficult time we have continued to achieve high employee engagement. This reflects our internal culture, which has enabled us to maintain an engaged and loyal workforce despite the need to downsize and make substantial structural changes to our business.
Employee engagement remained above 80 per cent, a score that put us above the Global High Performing Companies Norm for the fifth year running. While this is a pleasing result we still have work to do to reduce our regretted employee turnover further.
Our annual employee survey confirmed that our commitment to sustainability contributed to our high level of employee engagement. Our employees are proud of our social contributions and many employees demonstrated this through their own efforts, with 24 per cent of our employees volunteering to mentor students from 28 priority-funded schools in Australia in the past year.
Climate change
Climate change has remained high on the Australian Government's agenda. We continue to promote the merits of mechanisms to encourage energy efficiency such as 'green' depreciation for eco-efficient refits of existing commercial buildings, and the need to streamline energy and carbon reporting requirements.
For us, climate change management is about mitigating risks. Our Climate Change Action Plan provides us with a comprehensive plan to minimise our carbon emissions. We are also undertaking research to better understand the potential physical impacts of climate change on our properties and communities.
These risks also present opportunities. Examining these issues will enable us to develop a more strategic view which will inform how we own, manage and develop resilient buildings and communities which are able to adapt to the future effects of climate change. In recognition of our efforts in this area we were listed in the Australian Climate Leadership Index in 2008 which rates companies with advanced climate change strategies and disclosures.
We have continued to refine the quality of our emissions reporting system in preparation for our first report under the National Greenhouse and Energy Reporting Act 2007 (NGERA) which will be submitted in October 2009. In addition, we actively participate in raising the standards and capability of the property industry as a whole. For example, we have actively worked with our peers in property to understand what NGERA means for our industry.
Eco-efficiency
We also address climate change risk by minimising the environmental impacts of our properties and projects and raising the environmental performance of our entire portfolio. For our existing buildings we use the National Australian Built Environmental Rating System (NABERS), a performance-based ratings system for environmental performance. In the 2008 calendar year we attained an average NABERS Energy rating of 3.4 Stars. While we fell short of our target of 3.5 Stars, we made a significant improvement on our 2007 average of 2.9 Stars.
We have continued to reduce our consumption of electricity. Our retail centre portfolio achieved a 7 per cent reduction in absolute electricity use, surpassing our target of 5 per cent. While this is in part due to the sale of some assets, we have also continued to improve energy efficiency. Our greenhouse gas emission intensities (GHG per m2 ) were reduced by 3 per cent for retail centres and 8 per cent for office buildings over the past year.
We have also achieved two 6 Star Green Star ratings (classified as 'World Leadership') from the Green Building Council of Australia. Our head office in Sydney was the first project in Australia to achieve a 6 Star Green Star Office Interiors v1.1 rating for sustainable office interiors. Our office development at 2 Victoria Avenue in Perth also received a 6 Star Green Star Office Design v2 rating.
Our best practice aspiration
In 2010, we will maintain our momentum in corporate sustainability by focusing on achieving high quality management of economic, social and environmental performance responding to the interests of our customers and local communities. We will continue to develop and manage property assets of long-term value to our customers, tenants, investors and business partners.
Graham Bradley
Chairman
Nick Greiner
Chair of CR&S Board Committee
Barry Neil
Non-Executive Director
Matthew Quinn
Managing Director