19 December 2012 — GPT head of sustainability Rosemary Kirkby made a presentation to the 3 Pillars’ Creation of Shared Value forum held in Melbourne on 14 November 2012 on the GPT sustainability journey. Following is an edited version of that presentation.
The GPT Group is an active owner and manager of a $14.3 billion diversified portfolio of quality Australian real- estate in the retail, office and business park sectors.
It is listed on the Australian Stock Exchange as:
- with a market capitalisation of approximately $6.3 billion
- n the top 40 ASX listed companies
- has over 55 per cent of it security holders based in Australia.
- funds management platform – two wholesale funds. Around $5.6 billion funds under management
- active ownership model
- 420 employees.
At GPT we estimate that we touch over five million Australians through our assets – workers, community members, our customers, our Retail and Office tenants, employees, contractors, suppliers. Our shopping centres, in particular, are community destinations which attract a wide range of people for work, shopping and leisure.
We have a strong heritage of corporate responsibility, the legacy of our founder, Dick Dusseldorp. Dusseldorp always talked about the community of interest that embraced employees, clients, shareholders and the communities in which we work.
He stressed that a corporation exists for the benefits of all its members, that it must be profitable but that, to quote Dusseldorp, “the company’s activities have to be socially relevant – for the simple reason that most concerned people only want to spend their life on such efforts. And without concerned people, the direction of the enterprise will be lost”.
It was a remarkably prescient and far-sighted view and one that continues to guide us.
This legacy is reflected in the built environments we have created over four decades. Some of the most respected properties in Australia including:
- Rouse Hill Town Centre in Sydney
- The Harry Seidler designed properties which give so much back to the city at the ground plane – Australia Square and the MLC Centre
- Melbourne Central
- NAB headquarters at 800 Bourke St.
How do we give continuing life to Dusseldorp’s vision?
Our heritage is reflected in our purpose: We create and sustain environments that enrich people’s lives.
The degree to which this thinking is embodied in our culture is reflected in our global leadership of the Dow Jones Sustainability Index for three of the last four years.
We know, intrinsically, that there is an inherent interdependency between sustainability and business results. In the environmental sustainability space, the business value of investing in reducing our waste, our emissions has emerged clearly and can be quantified.
GPT’s approach to environmental sustainability has delivered significant savings to the Group since 2005. And we:
- have reduced water intensity by 38 per cent,
- have reduced energy intensity by 28 per cent,
- carbon emission intensity by 36 per cent
- improved recycling rates from 29 per cent to 49 per cent.
These efforts saw GPT avoid $15.9 million in costs.
In the community space, before 2010, we had good examples of shared value thinking but not the same discipline in making decisions about community investment outside the built environment.
The design and operation of Rouse Hill Town Centre – fountain, Main Street protests, private spaces as civic spaces.
In Darwin – The Alcohol Accord we facilitated with other stakeholders to address problem drinking and associated crime in our retail centre.
We had longstanding relationships with the communities in which our assets are located. We focus on designing and operating welcoming places. We have hosted community activities in our centres and office buildings for as long as I can remember; fundraising activities, community activities and school and community gatherings. But it is fair to say these activities sit at the corporate philanthropy end of the spectrum.
It wasn’t until two years ago that we made the decision to systematise our approach and make the shift from corporate social responsibility to the embedded application of shared value thinking. It’s still early days but it happened like this.
In 2010, new chief executive officer Michael Cameron, introduced his objective of becoming Australia’s best performing property group and announced some challenging metrics to go with it.
Many were concerned that the vision which so motivated our people would be lost and vigorous debate ensued.
Could the financial objectives be delivered while honouring our commitment to enrich lives?
Recalling Dusseldorp’s philosophy about the community of interest between investors, clients, employees and the wider community the answer was “yes”.
Progressively, over the last two years we have built our strategy on a page and it confirms the centrality of those communities in which we operate to the sustainability of our business model.
What we stand for
So for us, creating value for the community isn’t new, but the way in which we are going about it is. The concept of shared value is becoming a new lens through which to look at our business and I have high hopes that within 10 years it will be delivering serious sources of new revenue.
In 2011 we enshrined current practice and our aspirations for partnership with the community in a Community Engagement and Development policy.
“At the societal level, we recognise that our most effective contributions will be made through aligning our efforts to our corporate strategy and matching them to the core capabilities of our business. At a local level, our focus is on helping to build the capacity of communities in which we operate to engage in, articulate and realise their vision of a sustainable future.”
We realised that to determine shared value opportunities we needed a systematised approach to determining the areas of intersection between corporate and societal needs, identification of key opportunities and business platforms that can be leveraged for the benefit of all stakeholders.
Step 1 involved understanding more about the communities which surrounds our assets. Working with not-for-profit community development organisation, The Hornery Institute, we’ve researched six communities around our Regional retail centres and we’ve developed a set of tools for embedding the voice of those communities in our business-as-usual practices, the ongoing development of the assets and the daily operation of them.
Step 2 involved determining how to articulate the value that investing in communities brings to our business – finding a way to measure the relationship between building stronger, more sustainable communities and building a stronger, more sustainable business.
For us, shared value is about bringing social sustainability and community involvement back into the core business – it is not something that should happen on the side, or in addition to what we do. It is about moving beyond philanthropy and becoming more effective and impactful around how we make decisions about social sustainability.
It helped us realise that our core strengths are the most effective tools to create positive change for our communities. So, we are now focusing on doing what we do best: being a facilitator and an enabler for change, a link between the community and our tenants, a space for community organisations and our customers to meet. Through a shared value lens, we started to realise how much more we could do to enrich people’s lives by re-thinking how we can truly engage with the community, with community organisations and social enterprises to create innovative solutions to the societal challenges identified across our portfolio.
Shared value has helped us define key principles to re-focus and strengthen our community involvement around what we do as a business:
- Access to and provision of space
- Management expertise and skills
- Access to networks, tenants and customers.
- Create innovative partnerships – we cannot and should not do it all ourselves
Thinking about our investment in communities through the shared value lens helped validate and articulate what we knew implicitly about the value of engaging with and enriching communities – i.e. the business case.
We have carried out a number of case studies our existing initiatives, to learn from our experience and focus on the things that have had a significant impact. We have found that by focusing on using our core skills, our core business and our space, to create social change, we are better able not only to create meaningful impact within communities… but we are also creating genuine business value.
Based on this knowledge, we are developing GPT’s Enriching Communities Toolkit, which includes our shared value principles and strategy, as well as measurement tools that have been developed in consultation with our employees and community partners to help us identify, plan, understand and measure the value that we create for communities, and, for the first time, the value that this brings to the business. This is also a great way for us to assess community involvement initiatives around the shared value that they have the potential to create.
We are now look at measuring shared value by focusing on specific benefits that we have identified are most relevant to GPT and on our key corporate community focus areas– building social capital, social inclusion, healthy living, learning and skills – priorities identified across our assets and where GPT can truly contribute to enriching people’s lives. Those local needs were identified through extensive stakeholder engagement and community research that is uniquely GPT’s.
However, we cannot measure everything, so identifying our priorities and engaging with our stakeholders was crucial. The “shared” element in shared value means that we need to have the discipline to engage with our communities in understanding their needs and aspirations, but also to directly involve our employees, our tenants, our customers – all our key stakeholders – in responding to the challenges our communities are facing. As the journey progresses, we are starting to be more discipline and more innovative about the way we can measure the business and the social value we create. This involves asking the right questions across a range of stakeholders, and having more sophisticated tools that relate directly to our shared value strategy.
Business benefits examples. Our unique approach, through in depth understanding and proximity to our communities, allows us to be at the forefront of identifying emerging challenges and opportunities. This shared value approach is leading us to be more innovative about how we use space in order to create meaningful initiatives which our tenants and customers can benefit from and contribute to.
This translates into the creation of competitive advantages such as:
- the ability to develop and manage spaces that respond to rapidly changing societal expectations and inform our business strategy for the future
- deeper relationships with our tenants and customers
- more engaged and more skilled employees
- better ability to manage risks in our assets
We must apply this further to our core business, acquiring competitive advantage through the development of community initiatives and partnerships that respond to challenges our communities are facing, creating win-win solutions, and scaling us ideas that work. Let me give you an example.
The business value and social value of STREAT @ Melbourne Central
STREAT is a social enterprise established in 2009 which provides youth at risk with work experience, hospitality training, social support and, as an outcome, the hope of lasting employment and a better future. STREAT brings about social change through market-focussed business activities offered via street cafes where young people can learn, train and work. (Homelessness has risen by 20 per cent across Australia since 2005, with 60 per cent under 35 years of age.)
STREAT’s first street cafe opened at Federation Square, Melbourne CBD in March 2010, which closed soon after, followed shortly by a coffee cart at GPT’s Melbourne Central in September of the same year. The coffee cart provides training, work experience, employment and support to dozens of homeless young people who sell Fair Trade organic coffee on site.
More broadly, STREAT’s commercial activities are dedicated to generating funds to address acute social challenges while meeting a known consumer need, such as fresh coffee.
GPT’s support of STREAT is more than “a feel good” initiative. It provided tangible value to GPT, including organisational effectiveness and innovation, allowing Melbourne Central to build on STREAT to develop new ideas around how to use space, enhancing customer experience and building a loyal customer base, improving brand value and reputation and demonstrating employee engagement.
“Working with STREAT allowed us to cast a new lens, breaking away from the traditional tenant-landlord relations. In terms of looking at how we engage with the community in and around our centres, there are lots of things that we have developed from the thinking done through STREAT.” – Justin Shannon, GPT
GPT’s support of STREAT at Melbourne Central created genuine social impact. The GPT team shared their asset management expertise, provided subsidised space for STREAT to run their coffee cart. Other contributions include:
- Provided STREAT Access to 37 million footfall per year of potential customers and supporters
- Enabled STREAT to test their business model and build solid foundations from which to grow the social enterprise
- Led to STREAT supporting over 60 homeless young people into training and employment.
“The great news is that our last year at Melbourne Central has allowed us to completely test all aspects of the business model and prepare ourselves for expansion. This will enable us to provide support, training and employment to 100 homeless youth a year through our business operations. This has been made possible with the support of GPT.” – STREAT chief executive officer Rebecca Scott.
Other speakers at the one-day forum included Creating Shared Value: Redefining Capitalism and the Role of the Corporation in Society co-author Mark Kramer, World Vision chief executive officer Tim Costello, The Great Disruption author Paul Gildking, National Australia Bank Marketing and Communications People group executive Andrew Hagger, IBM Australia and New Zealand chief financial officer Sara Watts, Nestle Australia and New Zealand general manager Martin Brown and IAG community and sustainability head Meg Lupton.