Not-for-profit organisation Catalyst Australia has released a report showing that the overall sustainability performance of Australia’s property sector is lifted by only a few key players.
The majority of companies underperform on environmental metrics.
Titled ‘Building Sustainability: A review of company performance in the commercial real estate and property sector’, the research examined 19 property sector companies listed on the ASX 200, rating their reporting standards and outcomes in the areas of environmental performance, gender equality, labour standards, supply chains, sustainability engagement and community investment.
According to Catalyst’s executive director Jo-anne Schofield, the results show a clear distinction between the companies, with four key leaders in the sector and others lagging far behind.
“The leaders, Stockland, GPT Group, Dexus Property Group and Mirvac Group, scored comparatively well against most indicators across the range of different topics and appear to have integrated environmental and social issues into their business performance and evaluation,” said Schofield.
“However, even among this group there was room for improvement – with two reaching a score of 13 of a possible 24 in the index.”
Reflecting global trends, companies with a higher sustainability ranking tended to have a larger proportion of offices. The analysis also found that even though larger players lead on sustainability in other sectors of the economy, this did not hold true for the property sector, with the largest companies – Westfield Group and Westfield Retail Trust – performing well under-par.
Key areas in which the property sector as a whole is underperforming include carbon emissions and energy efficiency, with the report predicting that energy consumption in commercial buildings would rise by 24 per cent by 2020. This increase would largely be a result of the retail sector.
“Given that the retail sub-sector already accounts for 4-5 per cent of total national emissions and is projected to continue to grow, more rigorous uptake of ’green’ and energy saving initiatives, as has taken place in the office sector, would make a significant difference to energy use in this sector overall,” the report said.
Environmental reporting in the sector was also found to be “very patchy”. As a result, the report recommends the introduction of a standardised environmental reporting framework which includes disclosures about absolute as well as per square metre averages for carbon emission, energy consumption, water usage and water production.
The research was undertaken by Catalyst in collaboration with union United Voice, with contributions by academics, stakeholders and sponsors. The rating scale that underpins the research was developed by Catalyst Australia in 2012/13, and captures benchmarks and policies set by governments, intergovernmental organisations, NGOs, regulatory agencies and industry groups.
A full copy of the report can be found here.