Our approach

The Commercial Property Sustainability Strategy was refreshed in 2011 following the corporate strategy review and identification of material issues for our stakeholders. Importantly, for the first time the Sustainability strategy was integrated into the broader Commercial Property strategy, a significant step forward in embedding sustainability.

The Commercial Property Strategy for 2011 focuses on creating community hubs in our assets, surpassing our current minimum standards in environmental sustainability and proving to our customers and suppliers that we are the partner of choice. Continuing to work with asset teams to demonstrate the value of integrating sustainability and community development will assist us in converting this strategy into positive environmental and social outcomes.

The Commercial Property Sustainability Policy, introduced in early 2010, outlines minimum requirements and measures for each asset- both operational and development. The policy provides clear guidance for asset managers and developers and improves consistency of performance for the commercial portfolio.

The Commercial Property priorities remain:

• Customer relationships: Improved customer understanding, satisfaction, retention and performance.
• Community relationships: Strengthening and sustaining our reputation within the communities where we operate.
• Energy and climate change: Maximising business and asset performace within emerging climate and energy risk parameters.
• Natural resources: Minimising our impact on natural resources. 

In FY11 all projects that have submitted development applications (DA) have been designed to meet 4 Star Green Star Retail Design and Green Star Retail As Built, beyond our minimum standard for retail developments. Stockland North Shore and Stockland Townsville have both received 4 Star Green Star Design recognition in the past year. Following on from this, the minimum standards set out in our policy will be increased to support continuous improvement.

While our development standards have been a great success, unfortunately we have not been as successful implementing our minumum standards for operational assets. This is due to the diversity of our assets and various requirements that each project has for improved sustainability outcomes.

Our Commercial Property strategy also includes community development initiatives which are progressing well. In 2011, all asset managers received training on the Commercial Property Community Development toolkit and how to apply it to each property. The toolkit focuses on health & wellbeing; learning & economic development; and community vitality. Our approach to Community Development is provided in detail in the 'Our Community' chapter.

The Residential Development Sustainability Strategy sets a framework to help us implement sustainability across our Residential projects. The strategy was derived from Stockland’s overall sustainability strategy and, through consultation with internal stakeholders, has been continually refined over the three years since it was first prepared. Through this process we have identified key four priorities for our residential projects:

• Society priorities: Our broader role in contributing to a strong, vibrant, healthy and economically viable society. For us, this means addressing housing affordability, and our contribution to the economy and job creation.
• Community development: The soft and hard social infrastructure that creates a sustainable community.
• Energy and climate change: Our energy management approach and our current and future climate change impact and adaptation.
• Natural resources - water and biodiversity: Our water management approach and our impact on biological diversity.

To ensure we deliver against this strategy, we have also developed a policy that sets minimum sustainability standards that all projects must meet and measureable targets. A comprehensive check list for development teams to use in the project management of sustainability initiatives further supports the implementation of this policy.

The policy clearly identifies the roles and responsibilities of everyone involved in a project, including the business development and acquisition teams, development managers, designers and sales people, to assign accountability for the delivery of each sustainability component throughout the life of the project.

As an initial focus for the sustainability strategy and the policy beneath it, we have clearly focussed on areas under our direct control such as project design and infrastructure provision. To go beyond this, in 2011 we amended our policy to reflect the role we have in influencing the development of sustainable communities through purchase decisions and behaviour.

For example all projects are now required to promote the delivery of 7 star rated homes in our display villages. At a time where there is a good deal of public debate around government objectives to change mandatory requirements from 5 to 6 stars, we believe there is a portion of the market that wants to build and buy more energy efficient housing. Having a more thermally efficient home generally means the home will be both more comfortable and less expensive to run. We believe our customers should have the opportunity to see and touch more efficient housing to better understand the opportunities that it can provide, and choose the elements that make housing more efficient and see the costs and benefits of providing those elements. 

In 2009, the Retirement Living business developed its first tailored sustainability strategy and policy aligned with the group approach. In FY11 we undertook a review of the priority areas and actions identified in the strategy with a cross-functional group of internal Retirement Living stakeholders including representatives from sustainability, strategy, finance, marketing, sales, operations, development and design. As a result of this workshop we reconfirmed the four priority areas identified in our original strategy:

• Community development - Create and enable healthy, safe, and vibrant communities that over 65s want to be a part of,
• Ageing population - Provide positive solutions to the challenges presented by an ageing population and leverage this for our business,
• Energy and climate change - Improve energy efficiency, reduce costs for our business and residents, and manage climate change impacts,
• Natural resources - water and biodiversity - Manage our impact on natural resources and reduce costs for our business and residents.

These priority areas and appropriate sustainability actions were approved by the Retirement Living Leadership Team and the CR&S Board Committee in June 2011.

These areas also form the focus of the Retirement Living sustainability policy, which requires every project to deliver a minimum consistent performance for sustainability. The policy contains ‘Retirement Living Sustainability Essentials' which apply to new projects from acquisition through to project completion. They also apply to existing projects for any new stages and for ongoing management.

Retirement Living Green Star

An important focus for our Retirement Living business in FY12 is working with the Green Building Council of Australia (GBCA) to achieve two industry firsts that will enhance our sustainability strategy and policy in future years:

• Developing the first Custom PILOT tool for Green Star rating of an entire retirement village; and
• Piloting the GBCA's Green Star Public Building tool on a Retirement Living community centre.

We expect the custom tool, that can be used to rate an entire Stockland village, to be endorsed by the GBCA in early FY12 and we will make an application for our first design rating - for our Mernda Retirement Village - over the coming year.

To pilot the public building tool we have chosen our community centre at Settlers East in WA where planning and design are well progressed. We are aiming to achieve a 4 Star rating under the public building tool and hope that it will not only be the first Green Star rated community centre in a retirement village, but also one of the first ratings under the public building tool.

We believe using these tools to rate our community centres and villages will improve our focus on energy and water efficiency, resulting in cost savings for our residents. The tools also address indoor environment quality and access to local transport which are important factors affecting the comfort and quality of life of residents.

Our commitment to stakeholder engagement

Stockland's stakeholder engagement (SE) framework is now well established and remains a critical focus for each of our business units. It continues to inform our group strategy and the strategies of our operating businesses.

Our stakeholder engagement framework is underpinned by five fundamental principles which were endorsed by our Board and Executive Committee in 2010:

• A proactive, harmonised appraoch across the business,
• Early, prioritised engagement with stakeholders to help build a clear project vision and identify key milestones,
• Clear understanding of our stakeholders and their key drivers to build trust beyond the project,
• Regular communications, recording and reporting with corporate circuit breaking if required, and
• Capturing stakeholder trends across the business to inform our future strategy.

We make public commitments annually that balance the interests of our wide range of stakeholders with our commercial interests as a publicly-listed organisation.

Our stakeholder engagagement approach

We engage directly with a range of stakeholder groups to understand their expectations. For example, we engage with shareholders and the market through our investor relations unit, with our community partners across the country through our Residential, Commercial and Retirement Living businesses, and with governments and agencies at all levels through our Government Relations team.

Over the past year, we have continued to focus on embedding a proactive approach to stakeholder engagement by ensuring it is a part of everyday operations. This focus starts at the beginning of a project with the stakeholder and planning risk assessment process. This process involves our acquisition teams completing a form with our SE team to identify key government and community stakeholders as well as potential planning, environmental and community concerns that may have the ability to impact on the project in the future.

This early identification of key stakeholder and planning issues and concerns ensures we can make strategic and well-informed decisions about acquiring new properties. It also means we can focus on building credibility with local stakeholders from the outset of a project.

Stakeholder engagement plans 

All of our Residential, Commercial and Retirement Living assets have a SE plan in place. The plans identify key stakeholders, key issues and a clear contact plan. We have also developed communication plan templates for project milestones to ensure we link project milestones with briefings and updates to stakeholders.

This year we again used a detailed rigour testing framework to assess the effectiveness of the SE plans and encourage our project teams to continually review and improve their stakeholder engagement at a project level. The rigour test was updated ahead of the scoring process to ensure we continue to set higher benchmarks for our engagement plans.

SE metrics form part of our development, project and centre managers' key performance indicators . The performance objectives of our Executive Committee also reflect these priorities.

Engaging with Indigenous communities

We engage with Indigenous communities on development projects, for example our residentail community project at Sandon Point, on the NSW South Coast. We also have assets in communities where Aboriginal and Torres Strait Islander people form a significant proportion of the local population including Western Sydney, North Queensland and the New South Wales Coast.

We recognise that on some occasions we have been reactive to the concerns of the Indigenous groups. We are working towatd strengthening relationships, including recently joining the Australian Indigenous Mintory Supplier Council. Over the coming year we will start to develop an Indigenous relations strategy to better organise our activities, improve our understanding and build more positive relationships with Indigenous communities.

In August 2010 Stockland announced an offer to acquire Aevum, one of the largest ASX-listed pure Retirement Living companies. The transaction was completed in December 2010 with the delisting of Aevum and the integration of Aevum villages into the Stockland portfolio.

The Aevum business comprised a  retirement village portfolio, which represented about 80 per cent of the business, a modest development pipeline and small aged care operation (four sites representing about 5 per cent of the business).

The acquisition was  in line with Stockland’s 3-R growth strategy - focusing on growth through development and acquisition in our Residential Communities, Retail and Retirement Living businesses.

The integration of Aevum significantly accelerated the growth of our Retirement Living business, nearly doubling its size and delivering complementary geographic spread, enhancing our existing Victorian and Queensland portfolios and providing critical mass in New South Wales. This resulted in improved economies of scale and a national platform for growth.

The Aged Care operation was the only part of the business that was not a direct fit for Stockland as our strategy is focused on independent living, with aged care services offered by specialist providers in separate facilities.

Starting with our initial offer to acquire Aevum, and subsequently in all our communications with employees and residents, we clearly stated our intention to undertake a strategic review of the aged care operations to identify the most appropriate path forward for that part of the business. The review was completed in mid-2011, with the result that Stockland decided to continue to own and operate the former Aevum Aged Care facilities as the best outcome for residents at this time, and is committed to ensuring that we meet the highest standards in our operations.

Stockland’s operation of Aged Care maintained the existing management team, and has the same focus on quality of care as before the acquisition. The Aevum brand will be retained as it has a good reputation and name recognition as a provider of aged care. We have communicated openly about this approach with employees, aged care residents and their families, and the residents at our co-located retirement villages.

Please refer to our case study on how we engaged with employees and residents on the integration of Aevum into our organisation.