For the first time in five years Stockland has failed to make the cut for the Global 100 corporate sustainability rankings released in conjunction with the World Economic Forum in Davos, Switzerland.
In 2014 Stockland ranked 32 on the list and had been the only Australian property company to appear in the top 100 for five consecutive years.
Other Australian companies also saw a slip in their grades, with Westpac dethroned from its first place in 2014, down to 41, and ANZ slipping from 19 to 78. Commonwealth Bank, meanwhile, rose slightly in the ranks from 25 to 21, and there was one new Australian sustainability entry, with Wesfarmers ranking at number 92.
What’s being measured, though?
The rankings take into account corporate sustainability performance, that is a company’s internal processes, but do not seem to factor in the sustainability of products produced, such as a property company’s portfolio, or contain analysis to make comparisons of companies operating in different sectors.
A Stockland spokesman told The Fifth Estate it was unlikely the sustainability performance of its portfolio was factored into the equation.
“As far as we can tell, the sustainability and overall environmental performance of our portfolio is not considered,” he said.
The lending practices of financial institutions, such as whether they are finance fossil fuel projects, are also not taken into account, which might explain why the Commonwealth Bank appears ahead of Westpac.
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The top performer from the property sector was Singapore’s Keppel Land, ranked at number four in the top 100. As a developer, the firm has a track record for green developments across the commercial, residential and hospitality sectors in Singapore, China, Indonesia, the Philippines, Myanmar and Vietnam.
The company’s investment arm Keppel REIT holds an interest in a number of Australian commercial properties including a 50 per cent interest in 8 Chifley Square and 77 King Street in Sydney, a 50 per cent interest in 8 Exhibition Street in Melbourne, a 50 per cent interest in 275 George Street in Brisbane and a 50 per cent interest in a new 35-storey A Grade 5 Star Green Star commercial office building being developed by Mirvac on the site of the Old Treasury Building in Perth.
The Global 100 index is calculated by German index provider Solactive for Canadian media and investment advisory company Corporate Knights. It initially considers all listed companies with market capitalisation of more than US$2 billion. Four “screens” are applied to develop the shortlist, including sustainability reporting, with companies needing to disclose at least 75 per cent of the priority indicators for their industry category.
The KPIs for which companies are scored include:
- Energy productivity – the amount of revenue generated for every gigajoule of energy used
- Carbon productivity – revenue for each tonne of scope one and two greenhouse gas emissions
- Water productivity
- Waste productivity – revenue generated for each tonne of non-recyclable waste created
- Innovation capacity, measured by the ratio of revenue to research and development expenses
- Percentage of tax paid, as an indicator of compliance with taxation policies and reduced tax avoidance through utilising loopholes
- The degree of disparity between the chief executive’s salary and the average workers wages
- Leadership diversity
- Pension fund status
- Employee turnover
- Safety record
- The use of performance-based sustainability incentives that are linked to executive pay packets
See the full Global 100 listing.
– with Cameron Jewell