Creating enduring value through sustainability Our 2030 Real - - PowerPoint PPT Presentation

Creating enduring value through sustainability

Our 2030 Real Estate Sustainability Strategy

AMP Capital Real Estate

Sustainability team

Chris Nunn Head of Sustainability Melanie Louie Reporting & Data Lina Rico Gomez Program Manager Darren Teoh Sustainability Performance Manager Abi Balakumar Office & Logistics Sustainability Coordinator Chandni Mishra Shopping Centre Sustainability Coordinator Binowee Bayles First Australians Program Manager

Shaping a better future to thrive in a changing landscape Through our strategy, we are aiming to: – Enhance value and minimise risk for

• ur 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

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Creating enduring value through sustainability

2030 Real Estate Sustainability Strategy

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Key focus areas

2030 Real Estate Sustainability Strategy

Environment Social Governance

Energy & climate Waste minimisation Biodiversity & habitat Culture & community Equity & diversity Supply chain

Zero net carbon Compostable packaging Conservation reserve Social sustainability Accessibility Modern slavery Committed to implementing zero net carbon by 2030 through phasing out fossil fuels, running on 100% renewable energy and making

• ur buildings highly efficient

and resilient. Committed to working to minimise waste to landfill and help keep plastic pollution out

• f the ocean by providing

appropriate recycling resources and encouraging our retail tenants to choose reusable and compostable

• ptions.

Committed to creating a biodiversity conservation reserve that directly matches the physical footprint of our assets on the land. Committed to establishing community partnerships that represent our goals and implement social sustainability plans at every asset. Committed to implementing best practice standards of accessibility, for our building users with a variety of special needs including physical mobility, but also hearing or vision impairments, mental health disorders or dementia. Committed to implementing processes to minimise ESG- related supply chain risk, implement consistent minimum sustainability performance expectations and strive for best practice in procurement on modern slavery, materials safety, sustainable timber and embodied carbon.

A timeline of our goals to 2030

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Delivering on our strategy

2030 Real Estate Sustainability Strategy

2021

New developments to achieve 6 Star Green Star for Offices and 5 Star for Shopping Centres

2029

Encourage retailers to avoid single use plastic and switch to reusable

• r compostable

packaging alternatives

2023

80% diversion rate for construction strip out waste Quantify local jobs created Explore green bond debt raising EV charging available at all relevant sites

2027

Solar PV on viable rooves ISO14001 certified Environmental Management System New developments to achieve NABERS Energy 5.5 Star for Offices and 5 Star for Shopping Centres

2020

Governance Social

Reconciliation Action Plan actions taken at every site Social sustainability strategies for every asset e-waste collections at every asset

2024

Create native habitat at appropriate sites Improve accessibility in our assets and own

• ffices, including

measures such as adult changing facilities Green Star Performance 3 Star portfolio average

2026

Zero Net Carbon 5.5 Star NABERS Energy ratings for all Offices and 5 Star NABERS for Shopping Centres 100% renewable electricity Support the creation

• f a conservation reserve

equal to our land footprint

2030

Create a community partnerships strategy & appoint social sustainability role Establish an AMP Capital Sustainable Real Assets Fund Climate Change adaptation plans for every asset

2022

Health & Wellbeing improvement plan for all relevant assets

Environmental

2025

Achieve NABERS Water average of 4.0 Stars (Offices) and 3.5 Stars (Shopping Centres)

Rising expectations

• Core institutional investors: negative screens
• Impact investors: positive screens

ESG in Real Estate

72

71 72 76 80 83 86

90

90

AMPC funds Average score

72

Global average score

81

AU / NZ average score

AMPC RE all funds GRESB Average, progression over time

2019

property fund respondents

100

assets

1,005 100,000

GRESB Survey covers US

$4.1 trillion

in asset value

Investor members

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ESG measurement & reporting

2019 GRESB: AMPC RE Funds versus all GRESB respondents AMPC RE Average 90

90

AMPC funds Average score

72

Global average score

81

AU / NZ average score

Australian RE outperforms

• AU region
• utperformed other regions for 9 years
• About 10% higher than global average

ESG measurement & reporting

GRESB category weightings

Performance Indicators Stakeholder Engagement Risks & Opportunities Building Certifications Policy & Disclosure Monitoring & EMS Management

8.6% 9.4% 7.9%

25.2% 25.2% 12.9% 10.8%

GRESB category weighting

> Staff training & KPIs > Employee satisfaction surveys > Health & safety > Health & wellbeing > Tenant engagement & satisfaction surveys > Tenant fit-out guides > Green lease clauses > Procurement & supply chain > Community engagement > Energy consumption > GHG emissions > Water consumption > Waste management > Energy, Water & Waste targets > Renewable energy generation > ESG risk assessment process > Energy & water audits > Green Star Design & As Built > Green Star Performance > NABERS ratings > Reporting sustainability performance > 3rd party assurance of data > Sustainability policies in place > Sustainability governance: management & committee > Environmental & data management systems > 3rd party assurance > Automated energy & water monitoring

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.)

• Improve accessibility for people with a disability (10.2.)
• Promote sustainable transport (11.2.)
• Identify and tackle corruption and bribery (16.5) and address modern slavery (8.7.)

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ESG measurement & reporting

2030 Real Estate Sustainability Strategy

17 goals set in 2015 for the year 2030

• 169 targets
• 231 performance indicators

SDGs & Real Estate Targets and performance indicators developed for National Governments (not companies)

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ESG measurement & reporting

2030 Real Estate Sustainability Strategy

17 goals set in 2015 for the year 2030

• 169 targets
• 231 performance indicators

Targets Performance indicators

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

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ESG measurement & reporting

2030 Real Estate Sustainability Strategy

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)

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ESG & value

2030 Real Estate Sustainability Strategy

• 1. https://www.ampcapital.com/content/dam/capital/04-articles/insights/2019/october/why-sustainability-matters-in-real-estate.pdf

• 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

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Summary

2030 Real Estate Sustainability Strategy

• 1. https://www.ampcapital.com/content/dam/capital/04-articles/insights/2019/october/why-sustainability-matters-in-real-estate.pdf

ampcapital.com

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Thank you

Important note

While every care has been taken in the preparation of this document, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) makes no representation or warranty as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This document has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This document is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of AMP Capital.

15 AMP Capital Real Estate - October 2019