Property groups Dexus and Investa have become the only Australian companies to be put on the CDP’s 2015 “Climate A List”, joining 113 companies around the world leading on carbon performance.
The news was announced at the Australian Climate Leadership Awards last week and has today (Thursday) been followed with the release of the CDP’s annual Australian Climate Leadership report, based on information requested on behalf of 822 institutional investors with US$95 trillion (A$133 trillion) in assets.
In Australia, 94 companies responded to requests for information, representing 85 per cent of the total market capitalisation of the ASX200.
CDP climate scores comprise two elements:
- a climate disclosure score to assess the completeness and quality of a response, presented as a number out of 100; and
- a climate performance band assessing the level of action on mitigation, adaptation and transparency, presented as a band from A-E
This year there were 113 of around 2000 companies worldwide who scored an A on climate performance. Dexus and Investa were the only two Australian companies on the list, and were joined by New Zealand property company Kiwi Property Group. Global players on the list included Google, Unilever and Simon Property Group.
Other Australian property companies were less successful, with Novion Property Group (now Vicinity) getting an “A-minus”, Stockland getting a B, Scentre and Charter Hall getting a C, and GPT and Mirvac both scoring a D.
As well as achieving an A rating, Dexus also received a perfect climate disclosure score of 100, while Investa scored 97. Other top disclosure performers included the big four banks, Stockland, Novion, Insurance Australia Group and Qantas.
Dexus chief executive Darren Steinberg said his company had a commitment to optimising the environmental performance and resilience of its buildings.
“We have made a commitment to further reduce energy consumption and emissions with the aim of achieving a 40 per cent reduction in emissions intensity from 2008 levels by 2020,” Mr Steinberg said.
“We have also committed to delivering one million square metres of office space with a minimum five star NABERS Energy rating in the same timeframe.”
Speaking to The Fifth Estate, Investa group executive and IOF fund manager Ming Long said carbon performance and disclosure were “fundamental”.
“This is not an optional extra,” she said. “This is mainstream – certainly mainstream for us. It’s not just a nice thing to do; it’s the right thing to do.”
Ms Long said she would be interested to see the outcomes of COP21 in Paris but believed that full disclosure and management of carbon emissions around the world should be standard.
“It’s a pity Australia has been left behind in recent years. It seems to have taken a few steps backwards.”
She said that she had faith we were getting back on track, though regardless of federal government action, she believed the property industry could step up and lead the industry and world.
Programs such as the Better Buildings Partnership were key to this, she said.
“As an industry, when we collaborate together we innovate together.”
Non-responders called out
Property groups including Lendlease, Cromwell Property and Shopping Centres Australasia were labelled “non-responders” to CDP’s annual climate change investor information request.
Lendlease, who participate in CDP from 2007-2010, said its non-response was due to a shift towards a more integrated reporting strategy.
“Our early participation in the CDP annual report – 2007, 2008, 2009, 2010 – was critical in embedding carbon, energy, water and waste into Lendlease’s minimum reporting requirements globally,” Lendlease’s group head of sustainability Geoff Dutaillis told The Fifth Estate.
“In 2014, we decided to move towards an integrated reporting approach through our Sustainability Framework. Lendlease now reports against 12 material elements covering environmental, social and economic performance. To drive near-term performance and operational efficiency we have set clear 20 per cent by 2020 reduction targets for energy, water and waste.
“Lendlease now comprehensively reports on its sustainability performance publicly and through other benchmarks and frameworks provided by independent agencies, such as the United Nations Global Compact, the Dow Jones Sustainability World Index and the Global Real Estate Sustainability Benchmark. These all incorporate carbon disclosure and align with the CDP.”
Crowell Property Group, which featured in a story earlier this year on The Fifth Estate – Cromwell Property: why sustainability matters – has not yet responded to a request for comment.
Why the CDP?
In a reporting landscape featuring a range of external benchmarks – GRESB, DJSI, Global 100 Index – what makes the CDP important?
Speaking with The Fifth Estate, CDP’s Australia & NZ director James Day said the CDP benchmark was a rigorous assessment ranked as the world’s best sustainability benchmark.
“CDP climate leadership indices have been independently ranked as the most credible sustainability ranking in the world,” he said, pointing to a 2013 Rating Survey by Globescan and SustainAbility that “rated the raters” and gave CDP a net credibility score of 73, well above its closest peer, the Dow Jones Sustainability Index, on 54.
The CDP, he said, asked for a range of qualitative and quantitative information not covered by other benchmarks.
“Many people tell us the CPD is the only place where data around climate change risk and opportunities is being disclosed,” Mr Day said.
He said this was “a key part of corporate strategy”, though not a typical part of sustainability disclosure.
This is also the 10th year the CDP has been involved in Australia, which Mr Day says provides “a fantastic and unparalleled data set stretching over that period”.
“It allows investors and companies to benchmark performance against each other over a huge range of data points.”
The other key strength noted was that data given to the CDP is requested on behalf of institutional investors with close to US$100 trillion in assets, who, according to Mr Day, are becoming increasingly concerned by climate risks.
The number of investors becoming engaged with the CDP is instructive, with a 54 per cent rise since 2010 (534 to 822) requesting disclosure of climate change, energy and emissions data.
Relationship between performance and disclosure
Mr Day said there was a strong relationship between reporting of carbon metrics and performance.
“Our experience typically is that requests for disclosure result in performance improvements over time,” he said.
“People say, ‘Why is this chiller plant operating all these hours? Why are our emissions over there so sizeable?’
“It typically results in better management of climate change and other areas of sustainability.
“That process over time then leads to performance improvements.”
This process was clearest in Australia’s property industry, both compared with other Australian companies and global property companies.
“A lot of that is down to the improvements initially driven by a number of disclosure programs, such as NABERS,” he said.