Our customers and suppliers

Engaging with our suppliers

As a developer, a large portion of our impact on people and the environment occurs through our contractors and suppliers. These include, for example, builders and civil contractors, security and cleaning service providers. Despite our lack of direct control over these activities, we can influence the decisions made by our contractors on the selection of materials and the working conditions of their employees, by setting clear expectations.

From March 2008 to July 2008, we conducted a pilot program to engage with our suppliers as part of our Sustainable Supply Chain Management (SSCM) program, which aims to align our key suppliers to our CR&S values.

The program 'road tested' the draft SSCM policy and draft Supplier Code of Conduct and identified actions with our key suppliers. Suppliers completed a questionnaire on corporate governance, environmental management and social governance.

Ten key suppliers, identified by spend and capability to align with our CR&S values in their area of expertise, participated in this first stage. We originally said we would expand this program by engaging with a further ten key suppliers. However, following a review of the program in FY09 we decided to take a different approach. Our corporate procurement spend represents only around 10 per cent of our total spend, with the majority of our spend directed through our Residential and Commercial Property business units. In FY09 we extended our engagement to reach these suppliers. For our Residential business unit this includes builders and civil contractors, whilst for our Commercial Property business this includes waste, security and cleaning contractors.

Participating suppliers were requested to complete CR&S and health, safety and environment questionnaires and return them with their tender response. The CR&S questionnaire enables the supplier to identify their progress in respect of policies in areas such as waste management, resource and environmental management, labour standards and human rights and health and safety. In FY09 the suppliers we engaged with on CR&S covered the full range of our supply spend, with the combined spend totalling $200.4 million.

Total spend of suppliers who have completed our CR&S questionnaire in FY09

In our Commercial Property business unit, CR&S requirements are now included in tenders and contract documentation for waste, cleaning and security services.

Engaging civil engineering contractors on sustainability

A project to engage with our five highest spend civil engineering contractors on corporate responsibility and sustainability in New South Wales, Victoria, Queensland and Western Australia will begin in July and August 2009. This project stemmed from working with these contractors on the National Greenhouse and Energy Reporting Scheme (NGERS) reporting requirements for our residential developments and the FY09 CR&S capability review.

We aim to meet with the five contractors to determine the following:

• How advanced they are in implementing CR&S policies, supported by completion of a questionnaire,
• What do they do well at present,
• What challenges they have and how we can assist,
• Where would they like to go and how can we assist.

On conclusion of the meetings we intend to develop mutually beneficial projects with the contractors.

Partnering with suppliers on sustainability

We partner with suppliers on a regular basis to deliver outcomes around environmental sustainability. Some of our partnerships are with builders and subcontractors on Green Star and NABERS Energy in office developments.

The Green Star As Built tool measures the environmental aspects of a project at the Practical Completion stage and requires documentation from the consultants, owner, builder and subcontractors to demonstrate implementation. Additionally, tracking the buildings in operation to deliver energy and water outcomes has led to our operations teams working closely with subcontractors, builders and consultants.

Performance management tool

A performance management tool for suppliers who provide services to our office and industrial businesses was developed in late 2006 and formally implemented in March 2007. This tool systematically audits compliance in the following areas:

• Occupational Health and Safety (OH&S),
• Service Level Agreement (SLA)/Key Performance Indicator (KPI) Adherence,
• Corporate Responsibility and Sustainability (CR&S),
• Financial and administrative performance.

The management tool has since been reworked and ownership of the tool is with Stockland's Commercial Property operating team, now encompassing retail shopping centres. The online tool was implemented in December 2008 and measures the performance of cleaning, security, waste, fire and heating, ventilation and cooling equipment and service suppliers who provide services to our Commercial Property portfolio.

The CR&S aspect of the tool is customised according to types of services provided. For example, cleaning service suppliers are performance rated on waste management and safety management.

Labour standards and requirements are based on national and/or local laws and are specified in all tendering documentation and contracts.