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Lendlease

PRI reporting framework 2018

You are in Direct - Property » Post-investment (monitoring and active ownership)

Post-investment (monitoring and active ownership)

Overview

PR 08. ESG issues in post-investment activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

08.1. Indicate if your organisation, and/or property managers, considers ESG issues in post-investment activities relating to your property assets.

08.2. Indicate whether your organisation, and/or property managers, considers ESG issues in the following post-investment activities relating to your property assets.

08.3. Describe how your organisation, and/or property managers, considers ESG issues in post-investment activities related to your property assets.

Lendlease's fund specific sustainability strategies and Lendlease's Global Minimum Requirements for Health, Safety and the Environment ('GMRs') provide clear objectives, strategies, and targets for each asset. These tools are used to clearly articulate aspirations and expectations for stakeholders.

Each quarter, sustainability reviews are undertaken and investors are updated on the overall performance of assets. Quarterly investor reports cover several aspects and include ESG issues and performance.

All major and extension developments have a sustainability brief which aims to clearly articulate the sustainability requirements for such projects. Minor development projects are governed by Lendlease's GMRs.

Occupier satisfaction surveys are typically undertaken annually, the results of which are used to inform asset strategy and improve occupier satisfaction. In some cases, occupier surveys are undertaken by a third party organisation to enable industry benchmarking.

Post-investment, the following commitments are made:

- Implementation of the following programs:

• Health and safety;

• Environmental management;

• Energy and water efficiency;

• Waste management;

• Indoor environment and air quality monitoring; and

• Climate resilience and adaptation.

- Incorporating ESG matters into the following key property management documents:

• Building house rules;

• Tenant fitout guidelines; and

• Property management agreements.

- Effective tenant and community engagement including:

• Green lease clauses incorporated into leases;

• Tenant amenities such as end of trip facilities;

• Annual satisfaction surveys; and

• Sustainability guides, reporting and information sharing.

- Responsible supply chain engagement.

- Investigation and implementation of innovative solutions.

- Risk management and governance practices


Property monitoring and management

PR 09. Proportion of assets with ESG targets that were set and monitored

New selection options have been added to this indicator. Please review your prefilled responses carefully.

09.1. Indicate the proportion of property assets for which your organisation, and/or property managers, set and monitored ESG targets (KPIs or similar) during the reporting year.

(in terms of number of property assets)

09.2. Indicate which ESG targets your organisation and/or property managers typically set and monitor

Target/KPI
Progress Achieved
          Base building (excluding tenant) electricity consumption intensity. All LLIM assets
        
          Whole building water consumption intensity. All LLIM assets
        
          Primary waste recycling rate (whole portfolio). All LLIM assets
        
          11% reduction (70.11 kWh/m2/yr at end 2017 vs. 79.21 kWh/m2/yr at end calendar 2014 baseline)
        
          8% reduction (0.78 KL/m2/yr at end 2017 vs. 0.85 KL/m2/yr at end calendar 2014 baseline).
        
          5% reduction in recycling (61% at end 2017 vs. 66% at end calendar 2014 baseline)
        
Target/KPI
Progress Achieved
          Tenant satisfaction surveys issued
        
          Tenant satisfaction survey response rate
        
          Number of community engagement activities
        
          Surveys are issued to most tenants.
        
          The typical response rate varies significantly between asset sectors (eg. from 20-40% for shopping centres, and 60-80% for office building tenants).
        
          Extensive community engagement across retail and commercial assets.
        
Target/KPI
Progress Achieved
          Australian green leases executed in 2017 (as percentage of leasing activity during reporting period)
        
          Asset and portfolio level certification targets (GRESB, Green Mark, Green Star (all types), GBI, NABERS, LEED, BREEAM, WELL).
        
          Assets with a climate resilience and adaptation assessment completed
        
          100% of tenants with leases entered in calendar 2017 have green lease provisions
        
          - GRESB target_Australia core funds, top 5
- NABERS office_4.9 Star  Energy, 4.1 Star Water 
- NABERS retail_4.1 Star Energy, 3.6 Star Water
        
          85% by number of assets (Australia Office, Retail and Industrial)
        

09.3. Additional information. [Optional]


PR 10. Certification schemes, ratings and benchmarks

10.1. Indicate whether your property assets are assessed against certification schemes, ratings and/or benchmarks

10.2. List the certification schemes, ratings and/or benchmarks your property assets are assessed against and what proportion of your property assets they apply to.

Specify
          NABERS Energy and Water (Australia)
        
Proportion of property assets these apply to

(in terms of number of property assets)

Specify
          Green Star (D&AB, Performance)
        
Proportion of property assets these apply to

(in terms of number of property assets)

Specify
          Green Mark (Singapore) & GBI (Malaysia)
        
Proportion of property assets these apply to

(in terms of number of property assets)

10.3. Indicate if your organisation uses property specific reporting standards to disclose information related to your property investments’ ESG performance.

          GRESB and DJSI
        

10.4. Additional information.

The International Towers Sydney (ITS) Tower Two at Lendlease's Barangaroo South development achieved a 6 Star Green Star Design & As-Built certification in 2017. NABERS Energy and Water ratings were undertaken for Tower Two of ITS in 2017 and other assets at ITS will be rated as they meet the eligibility criteria of the NABERS rating program in 2018 and 2019.

In March 2018, International Towers Sydney (ITS) Towers One, Two and Three were the first in the world to ever be awarded WELL Certification for Core & Shell at the Platinum level, the highest certification available from International WELL Building Institute under its WELL Building Standard (WELL). In addition, Lendlease’s global headquarters, Tower Three International Towers, has also achieved a Platinum rating for its office fitout. This is the first WELL New & Existing Interiors Project Type to be awarded WELL Certification at the Platinum level in Australia, and the largest globally.

APPF Commercial achieved a 6 Star Green Star Performance portfolio certification for 10 of its assets, becoming the first portfolio of buildings in Australia to achieve this outcome. Green Star Performance is an Australian-based rating framework developed by the Green Building Council of Australia that assesses the operational performance of buildings across nine impact categories. Lendlease's Australian shopping centre funds (APPF Retail, Lendlease Sub-regional Retail Fund) maintained their Green Star Performance portfolio certifications.

NABERS and Green Star Performance certifications are undertaken annually to maintain continued certifications.

Lendlease's focus on Green Mark in Singapore: Parkway Parade, 313@Somerset and JEM maintained their Platinum certifications. Setia City Mall in Malaysia maintained its Silver Green Building Index certification.

In addition to the local rating schemes noted above, it is important to note that all LLIM's internally managed property funds participate in the GRESB Real Estate assessment on an annual basis. In 2017, several funds in Lendlease's Investment Management business were recognised as global leaders in responsible property investment by GRESB. Australian Prime Property Fund Commercial (APPF Commercial) was ranked first of all 823 global GRESB Real Estate Assessment respondents (850 when including the 27 Developer Assessment respondents).

Lendlease International Towers Sydney Trust (LLITST) and Lendlease One International Towers Sydney Trust (LLOITST) were ranked equal first from 27 global respondents in the GRESB Developer Assessment category.

APPF Industrial was ranked first in the Oceania private unlisted industrial fund category.

Australian Prime Property Fund Retail (APPF Retail) was ranked second in the Oceania private retail fund category with the Lendlease Sub-Regional Retail Fund (LLSRF) ranked third.

Lendlease's Asia Retail Investment Fund's 1 and 3 (ARIF 1, ARIF 3) achieved a first and third GRESB Assessment rank respectively for the Asia region.


Property developments and major renovations

PR 11. Proportion of developments and refurbishments where ESG issues were considered

New selection options have been added to this indicator. Please review your prefilled responses carefully.

11.1. Indicate the proportion of active property developments and major renovations where ESG issues have been considered.

(by number of active property developments and refurbishments)

11.2. Indicate if the following ESG considerations are typically implemented and monitored in your property developments and major renovations.

11.3. Additional information. [Optional]

Compliance with Lendlease's Construction and Asset Global Minimum Requirements (GMR) for safety and environment is a requirement for all Lendlease projects.

For development/refurbishment activities, a comprehensive sustainability brief is developed, working collaboratively with key stakeholders including fund teams, development teams and appointed contractors. By delivering requirements of the brief, LLIM will ensure that the development is socially and environmentally responsible, and that ongoing operating costs will be minimised which, together, will provide long term financial benefits both in income and value to the asset.

In line with Lendlease’s objective to develop high quality green buildings with efficient operating procedures, developments and major renovations are intended to improve ESG performance of the relevant portfolio. Further, developments and major renovations with these attributes are also complementary in supporting Lendlease Group's sustainability framework and aspirations (including those that address minimum standards for each of the twelve sustainability elements and best-in-class) and corporate target goals.


Occupier engagement

PR 12. Proportion of property occupiers that were engaged with

New selection options have been added to this indicator. Please review your prefilled responses carefully.

12.1. Indicate the proportion of property occupiers your organisation, and/or your property managers, engaged with on ESG issues during the reporting year.

(in terms of number of occupiers)

12.2. Indicate if the following practises and areas are typically part of your, and/or your property managers’, occupier engagements.

12.3. Additional information. [Optional]

Strong and consistent engagement with tenants provides LLIM with insights into their evolving needs and demands. This allows the Lendlease to be proactive in meeting those changing requirements now and into the future. We believe that effective tenant engagement leads to tenant retention. 

All fitout guidelines issued to tenants prior to occupation include environmental and social sustainability requirements and recommendations.

Another key component of the tenant engagement strategy is the completion of an annual survey of existing tenants within the portfolio. The survey is used to understand the occupants view on sustainable initiatives. Results of the survey are collated and presented to the owners. Key issues are addressed in asset plans. Further tenant engagement regarding the survey results is undertaken when required.

Training on waste minimisation is typically provided to tenants, particularly where tenants generate a material quantity of waste. Through this process feedback is provided on waste recycling performance.

Additionally, feedback on energy and water performance is provided via tenant portals and/or asset websites.


PR 13. Proportion of green leases or MOUs referencing ESG issues

13.1. Indicate the proportion of all leases signed during the reporting year that used green leases or the proportion of Memoranda of Understandings (MoUs) with reference to ESG issues.

(in terms of number of leases or MoUs)

13.2. Additional information.

All standard leases issued by Lendlease Investment Management's commercial, retail and industrial funds include ESG aspects and requirements. Typically, the standard ESG clauses aim to:

  • Ensure that each party agrees that ESG matters are an important component of property management and occupation;
  • Set out each party's ESG targets, commitments and other requirements; and 
  • Identify information sharing and comply with legislative requirements.

Whilst every effort is made to ensure that the green lease clauses are included in executed leases, there are occasions where the clauses may be diluted and, in some cases, removed.


Community engagement

PR 14. Proportion of assets engaged with on community issues

14.1. Indicate what proportion of property assets your organisation, and/or your property managers, engaged with the community on ESG issues during the reporting year.

(in terms of number of property assets)

14.2. Indicate if the following areas and activities are typically part of your, and/or your property managers’, community engagement.

14.3. Additional information.

Lendlease has a commitment for 100% of Lendlease operations will have a Stakeholder and Community Engagement Plan (https://www.lendlease.com/company/sustainability/our-progress/community-development/)

Lendlease's investment management business is committed to connecting with and making a positive contribution to the local communities in which our assets are located. Community engagement undertaken by Lendlease is focused in regions and sectors where communities stand to benefit the most from its efforts e.g. shopping centres, retail precincts and associated community facilities.

In 2016, Lendlease launched its second Reconcilliation Action Plan (RAP) with Reconciliation Australia, entitled ‘Building Respect: Past, Present, Future’, expanding its commitment to Indigenous participation. Lendlease engages with indegenous communities across Australia, wherever it has operations, projects and assets.

Examples of Lendlease's community engagement include:

Community engagement (mixed use precinct): Lendlease believes that Barangaroo South should be a local place that is loved and owned by all. Lendlease aims to establish Barangaroo South as a exciting and local experienceby creating programming and placemaking initiatives that can be enjoyed by all. The asset implements tailored community offerings to ensure the precinct is well activated seven days a week, night and day. 

Tenant engagement: Initiatives and events undertaken by operations in shopping mall assets in Lendlease Investment Management Asia with themed sustainability events such as 313 Green & Gorgeous at 313@Somerset, Go Green at Parkway Parade, Green Discovery events that are focused on waste recycling initiatives and reducing food waste.

Waste recycling engagement: The optimisation of waste recycling in Australian managed commercial and shopping’s centre assets is an ongoing activity.  External and internal stakeholder education and raising awareness with tenants on waste disposal and recycling practices, has helped to improve waste recycling performance. Additionally, introducing organics recycling at selected commercial and retail assets has also helped to  enhance waste recycling performance.

Indigenous engagement (shopping centre): Cairns Central Shopping Centre has collaborated with local iconic indigenous cultural experience Tjapukai (www.tjapukai.com.au), Cairns Indigenous Art Fair (www.ciaf.com.au) and Chic Management (www.chicmanagement.com.au) to promote diversity and inclusion in the Cairns community. This collaboration supports Lendlease’s vision and is part of its ongoing focus to engage and support local community groups.The theme for the two-week event was ‘Embrace’. The program for the first week, ‘Embrace The Cultural Arts’, showcased local aboriginal culture including dancing performances as well as didgeridoo playing and weaving workshops by Tjapukai ambassadors. The program for the second week, ‘Embrace The New Faces’, was an evolution of the annual Face of Cairns Central Search which included special guest indigenous model Samantha Harris at the launch event. Lendlease also worked closely with Cairns Indigenous Art Fair in the lead up to the competition to target indigenous youth through community engagement activities in order to encourage indigenous diversity and participation (this included school visits, a catwalk confidence workshop and a Napoleon Perdis makeup workshop). The Face of Cairns Central launch event included the first round of minnie (5-7 years), junior (8-12 years) and senior (13-25 years) heats, signing event with model Samantha Harris and a fashion performance by Cairns Indigenous Art Fair. 

Supporting local high school students: Mount Ridley College is a Victorian State Government school for preparatory to Year 12 students. It is located in an area where many students face economic, family or social challenges which often make it difficult to break the cycle of youth unemployment. In partnership with the Australian Business and Community Network (ABCN), Lendlease developed a program that gives Year 10 business students firsthand experience in developing a retail business by providing mentoring and fundraising opportunities for students with their Student Shops program. To bring the Student Shops to life, the Lendlease team at Craigieburn Central provided students with weekly practical lessons in marketing, retail, finance and personal branding. Students used these skills to pitch their business ideas to a Lendlease panel with the winning Student Shop ideas brought to life at Craigieburn Central in October 2016.The Craigieburn Central team continue to support the college with initiatives such as work experience programs, career advice during ‘Speed Career’ Day, free space in-centre to fundraise for uniforms and allowing students to perform in-centre during key retail periods. Following the success of the program, the Craigieburn Central team identified an incoming retailer Best&Less as a potential employer for local students and connected them with Mount Ridley 
College during the store’s recruitment program. Twelve students gained employment as a result of 
this collaboration.

Supporting chartities: Australian Red Cross is part of the world’s largest humanitarian organisation. As an organisation independent of government and with no political, religious or cultural affiliations, its aim is to improve people’s lives and build their resilience – no matter who they are or where they live. Lendlease and Red Cross have collaborated to activate underutilised shopping mall areas by creating donation points to help collect clothing and accessories for Red Cross shops. The temporary donation depots were featured at Caneland Central, Erina Fair, Macarthur Square and Craigieburn Central and are a unique, innovative use of temporary hoarding space that allows Lendlease to connect and engage with the community. Over an eight-week period, over 320 wheelie bins of clothing and accessories (approximately 10,000kg) was donated by customers and retailers, with an estimated value of A$45,000. Importantly, it is estimated that an 80% yield will be achieved which is 70% greater than the yield of a typical charity bin. All donations will be sold via local Red Cross Shops to raise money for vital support services, helping people in need around Australia and overseas.

Where required and appropriate, Lendlease monitors its impact on the community through engagement with local law enforcement agencies, tracking of financial performance of our retail tenants and local competitors, the health and safety of our visitors and the provision and monitoring of important community services.

 


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