Climate and our environment

Focus	Achievement	Result		In the future
Climate change and energy Energy efficiency	Achieved a NABERS Office Energy weighted average across the portfolio of of 3.9 - an increase of 0.3 from the previous year. Assessed 2 retail centres- Wetherill Park and Forster using the NABERS Retail Energy tool: Stockland Wetherill Park: 3.5 Stars Stockland Forster: 6 Stars - the first 6 star NABERS Retail Energy rating. Reduced emissions by 7 per cent across our office portfolio, and reduced our emissions by 2 per cent across our retail portfolio.	Ongoing		> Significantly reduce greenhouse gas emissions and energy use, particularly across our retail portfolio, towards our five year targets: reducing our greenhouse gas emissions and energy use across our Commercial Property portfolio by 20 per cent from FY09 to FY14, attaining a 4.5 star average NABERS Office Energy rating for our Office portfolio by FY14. > Following refinement of the retail NABERS tool, Stockland will commence a national roll-out of assessment of all retail centes- scheduled for finalisation in 2013. > Roll out LED lights in retail centres where the payback is viable to do so. > Further expand the application of the CCAP tool to assist asset managers in understanding the monthly energy and water performance of each retail and office asset. > Analyse the results of our energy efficiency training for retail tenants. > Work on a program to ensure and assist in the implementation of requirements set out in the clauses. > Develop a Distributed Energy Strategy addressing the supply and generation of low carbon and renewable energy for our operational and development sites where this is commercially viable. > Continue to pilot alternative energy solutions in our projects. > Engage and train our Development Managers in the use of tools to improve decision-making on eco-efficiency projects, including investment in cost-effective low carbon and renewable energy technology. > Benchmark our existing projects using CCAP PRECINCT Design tool and will establish targets on new pilot projects. > Continue to pilot our high-performance low carbon homes initiative. > Pilot sustainable living behaviour change initiatives. > Develop a Residential case study in response to Energy Efficiency Opportunities legislation. > Building on our group adaptation strategy, undertake specific analysis and prepare adaptation plans for those assets likley to be most at risk to impact from weather and a changing climate. > Continue to reduce water use across our Commercial Property portfolio towards our five year targets: reducing our water intensity across our Commercial Property portfolio by 10 per cent by FY14, attaining a 4.0 Star average NABERS Office Water rating for our Office portfolio by FY14. > Improve our water usage through capital expenditure on water efficient devices and through closer monitoring and regular internal reporting on water usage. > Pilot innovative water management practices and develop water useage and quality targets for residential developments. > Develop asset specific targets for poor performing buildings. > Undertake a study to assess biodiversity impacts of previous restoration activities > Continue to build case studies of best preactice biodiversity initiatives from across the business. > Deepen our understanding the impacts of greenfield development, with the goal of further minimising negative effects and optimising benefits for both the environment and society.
Energy efficiency	Identified shortcomings in the recently developed NABERS retail tool. Stockland continues to work with the NSW government and other industry peers to improve the rigour of this tool.	Ongoing
Energy efficiency	Commenced installation of LED lights, achieving significant energy reductions at Stockland Nowra. Assessment indicates that the same quick payback and energy efficiency are not certain across the portfolio.	Achieved Outcome
Greenhouse gas and energy metrics	The CCAP tool has been amended to provide the business with monthly reporting on an asset- by- asset basis. This tool provides clear reporting metrics and images to assist in informing senior management of performance.	Achieved Outcome
Climate change	Established a position statement on carbon and climate change.	Achieved Outcome
Energy efficiency	Commenced the roll out of energy efficiency training for retail tenants - in conjunction with NSW government and an external training provider.	Achieved Outcome
Green leases	Amendeded all standard lease templates to include green lease clauses across all asset classes.	Achieved Outcome
Distributed energy	Developed pilot programs to trial new energy supply and management technologies. Developed partnerships with a number of energy providers to pilot alternative energy solutions.	Ongoing
Climate change	Developed asset marginal abatement cost curves work to assesss the most cost effect methods by which we can reduce emissions across our retail and office assets.	Achieved Outcome
Efficient communities	Piloted provision of solar PV systems at no cost to new land purchasers on three projects. 25 systems were taken up by customers during the pilot. Updated our residential sustainability policy to include requirements for 7 star housing to be considered for inclusion in our display villages. Partnered with builders to build high-performance low carbon homes that have the capacity to produce more energy than they consume, in both QLD and VIC. Piloted the CCAP PRECINCT Sustainability design tool and prepared case study to inform project teams of the initiative.	FY12 Priority
Climate change adaptation	Completed an organisation-wide climate adaptation strategy. Completed a climate change adaptation case study assessment of an asset with actions being considered for adoption.	Achieved Outcome
Water Water efficiency	Reduced water use across our office portfolio by 11 per cent and our retail portfolio by 10 per cent.	Achieved Outcome
NABERS ratings	Our Office NABERS Water rating has dropped by 0.2 to 3.4 Stars.	Ongoing
Water efficiency	Moved towards an outsourced water submetering provider with the majority of our sites, and all of these sites have a 10% water reduction target.	Ongoing
Water sensitive urban design	Developed Water Sensitive Urban Design guidance and case studies.	Achieved Outcome
Waste Waste reduction	Achieved a small improvement in diversion of office waste from landfill of 67 per cent (up from 66 per cent), and retail waste from landfill of 28 per cent (up from 26 per cent), however we fell short of our targets.	Ongoing
Biodiversity Biodiversity management	Prepared a best practice case study of our response to biodiversity Management at Brightwater. Commenced a pilot partnership with national provider to develop and deliver biodiverity restoration and community education program.	Ongoing

Our strategic approach - Climate change action plan The risks associated with climate change affect the way in which our organisation, governments, communities and other key stakeholders view the built environment. Stockland has a proactive approach to climate change, developing policies and implementing action plans over a number of years. We have made a commitment to better understanding these risks and the opportunities for mitigation and adaptation. We recognise that placing a price on carbon is important to encourage a shift to lower carbon and renewable alternatives, and needs to be achieved in a manner that is timely, and globally in step, sustaining overall national economic stability. To read more on how we support a low-carbon future please click here or see our Climate Change Position Paper. In 2009, we developed a clear and dedicated strategy to guide our climate change actions - Climate Change Action Plan. Over the past 12 months we have continued to prioritise these action areas and have significantly expanded our knowledge on climate change and implemented the appropriate business responses. Our Climate Change Action Plan covers five themes - improve how we monitor our emissions, continue to reduce our greenhouse gas emissions, adapt to a changing environment, innovate through low-carbon and renewable technology and communicate our position and performance. Our actions and achievements in FY11 are detailed against these five action themes. Monitor: streamline reporting and monitor emissions and energy targets We have continued to improve how we set and monitor energy efficiency and emissions targets for our businesses through our carbon abatement cost curve work. Please refer to our Stockland Nowra case study. Reduce: reduce emissions where we have both direct control and scope to influence We continue to seek opportunities to cut our emissions, however this will become progressively harder as the easier, low-cost initiatives are completed. Over the coming year Stockland expects to achieve significant cuts by rolling out sub-metering and undertaking mechanical equipment upgrades in shopping centres.

Our Commercial Property GHG emissions intensity results for FY12 were pleasing as our office portfolio continued to minimise their emission intensity by 7 per cent. Our retail portfolio also had a modest reduction in emissions intensity of 2 per cent. Energy efficiency is the most cost effective way for our organisation to reduce emissions – please refer to the energy efficiency section for more details.

Adapt: research and respond to potential climate risks

Earlier this year Stockland made a significant investment in expanding its understanding of climate risks and developed an organisation-wide climate adaptation strategy. The strategy helps us determine the type of action, timing and specific assessments needed for our organisation to prepare for changes in the climate. This work builds on previous bushfire, sea level rise and flooding assessments undertaken by parts of the organisation.

Our climate adaptation strategy examines primary climate effects such as: temperature, precipitation and sea level rise, as well as secondary climate effects such as: bushfires, flooding and drought, cyclones, wind and relative humidity - in regions/corridors where Stockland has a presence.

Innovate: integrate innovative solutions into operations and development projects

In the last 12 months we have made significant progress toward embedding innovative solutions into our operations and development projects. Three project examples are included throughout the report, Shellharbour, Nowra and Amberton.
The business is also working with the CSIRO to investigate the viability of low carbon, renewable energy and distributed energy technologies in retail centres and residential communities.

Communicate: effectively communicate our position and performance

We engage with all levels of government and our peers to share our learnings and partner in research projects. We also engage with ESG (environment, social and governance) analysts and participate in the development of a global common carbon metric for property. This engagement ensures that our response to climate change remains relevant and provides sector leadership.

One area of significant stakeholder attention and public debate in the last 12 months has been the Federal Governments proposal to introduce a carbon price. In April 2011, we publicly released our Climate Change Position Paper highlighting our in-principle support for a price on carbon.

Energy Efficiency

Energy efficiency remains the most cost-effective way for our organisation to reduce greenhouse gas emissions. Over the past year we have continued to improve how we set and monitor energy efficiency targets across our businesses. We have undertaken a number of energy efficiency projects and have continued to apply minimum standards for energy efficiency in our operations and developments.

Commercial Property

In FY09 our Commercial Property business committed to a 20 per cent energy intensity reduction by FY14 and a NABERS Office Energy portfolio average rating of 4.5 Stars by FY14.

Our office portfolio has continued to deliver energy efficiency within existing and new buildings through capital investment in high-efficiency chillers, building management systems, lighting controls and variable speed drives. We extended our commitment to sub-metering with new sub-metering to an additional four office buildings and energy upgrades to ten existing office sub metering sites.

We have made a modest improvement in our energy performance in our retail portfolio, acheiving a turn around in FY11 as compared to our poor energy efficiency results in FY10. Over the past year we have been working hard to find the balance between upgrading existing assets whilst achieving energy savings. We remain committed to our FY14 target and have focused on initiatives to improve our results.

Retirement Living

The acquisition of Aevum has almost doubled the size of our Retirement Living portfolio. While an assessment of energy infrastructure and usage was undertaken in FY10, the release and implementation of this work was delayed to ensure the new villages were considered in the process. This was particularly relevant as Stockland has Operational Control for all of the villages acquired from Aevum.

A review of the legislative obligations arising from the acquisition identified a need to capture and report energy and greenhouse gas data under the National Greenhouse and Energy Reporting Act. A new data collection system has also been built for FY12 that will ensure energy and GHG usage is captured via invoicing through the accounts payable process.

The review also identified the need to undertake Energy Opportunity Assessments under the Energy Efficiency Opportunities Act. Energy assessments have been completed for four villages: Cardinal Freeman, Lourdes, Salford Park, and Gillin Park. We will use the results of these assessments to identify energy efficiency and saving initiatives for these four villages but will also identify initiatives that can be rolled out to other villages.

Residential

We recognise that the biggest impacts we can have is through our influence rather than our direct control. Over the past 12 months, we have focused on how we can influence greenhouse gas reduction on our sites and begin to help our customers to understand the impacts of energy on their ongoing costs.

We have established a number of pilot and demonstration projects across the country that will help us to better understand how we can best combine technical and capacity building solutions:

• Pilot project in partnership with energy providers to offer 1.5 kW solar photovoltaic (PV) systems to customers at no cost;
• Demonstration project in partnership with our builders showcasing high performance homes capable of producing more energy than they will use;
• Partnership with Ergon energy at our North Shore (Qld) community to develop a range of energy efficiency initiatives including: a Green Living guide, electric vehicles, and trials for smart meters, and household battery packs ;
• Updated our requirements to ensure 7 star display homes are considered for inclusion in all new display villages and all sales centres include solar PV.
• Piloted the CCAP PRECINCT Sustainability design tool (see our Amberton case study).

Over the next 12 months we will undtake initiatives focused on energy efficiency, distributed energy, targets and alternative energy supply technology.

Biodiversity

We know that most developments have some impact on biodiversity, typically through the removal of native vegetation. Our aim is to actively manage and reduce our impacts to preserve and enhance areas of biodiversity value on the sites we develop.

Residential and Retirement Living

We believe biodiversity conservation is most effective when large parcels of good quality, intact ecological communities and threatened species habitat are placed into public ownership for ongoing management. Given the many competing interests of new greenfields developments such as design requirements, increased density, housing located close to schools, shops and public transport facilities, optimal conservation outcomes can become compromised. The best conservation outcomes can sometimes be found by looking beyond project site boundaries, for catchment-based landscape planning solutions. For example:

• Private or community ownership;
• Restoration activities;
• Education;
• Conservation of migration and foraging corridors; and
• Landscape for amenity integration.

Independent environmental impact assessments are conducted for all of our projects to help our project teams, the local regulatory authorities and the local community, understand any biodiversity we have on our site. Our Residential Sustainability policy ensures that we look for the best conservation opportunities as part of our urban design approach. We firmly believe that when good biodiversity conservation outcomes can be achieved it improves the resilience of our local landscapes, as well as our relationships with local communities and regulatory authorities, enhances our approval prospects and improves the overall amenity of our communities.

As of end FY11, none of our Retirement Living projects contained significant species habitat as defined by state and federal legislation.

Commercial Property

We have committed to using the Green Star environmental rating tool on new developments and major redevelopments. When purchasing a new site, we undertake a thorough environmental assessment of the site and the surrounding sites including proximity to areas of ecological significance, threatened and endangered species, climate change risk and soil contamination. As well, historical uses of the site are examined to ensure that minimal risks are present from a land use perspective. These assessments are undertaken as part of our Commercial Property Sustainability Guidelines Asset Acquisitions.

Water

Effectively managing our water use is a priority for our business. We aim to actively reduce our water consumption and improve our water efficiency.

Each of our business units has minimum performance standards for water management and conservation. These range from applying water sensitive urban design principles and water efficient landscaping, to installing water-efficiency fixtures and fittings for our built dwellings, and minimising irrigation using potable water.

Commercial Property

Our office portfolio has continued to deliver improvements in water efficiency through a strong focus on management and upgrade of water metering systems as required. This year we achieved a NABERS Office Water portfolio average rating of 3.4 Stars and an 11 per cent reduction in the water intensity of our office portfolio. In FY09 we committed to a 10 per cent reduction in water intensity by FY14 and a NABERS Office Water portfolio average rating of 4.0 Stars by FY14. Although we have already exceeded the water intensity target for FY14 in our office portfolio, this target was set for the whole Commercial Property portfolio, which has achieved a five per cent reduction. Until Commercial Property exceeds the overall target, we will not reset this.

In FY12 we will work to improve our water usage both through capital expenditure on water efficient devices and through closer monitoring and regular internal reporting on water usage.

Residential and Retirement Living

Water is a major influence on how we design and construct our residential and retirement communities. In particular, decisions on how we supply, use, treat and dispose of waste water all impact the natural and urban environments in which we operate. Water is used by us directly, for example in our sales suites and landscape maintenance, and indirectly through our contractors. Contractors use water for dust suppression, road construction, to establish landscaping and concreting. The amount of water we use is heavily influenced by climatic conditions. More water is used during low rainfall but very little during periods of rain. Our water use also depends on the location of the project and the types of soil on site.

We prefer to use non-potable water on our projects, but where required for drinking, not available or too costly to supply, we use potable water from reticulated local water supplies. Over the next 12 months we will continue to work with our contractor partners to refine our data collection processes to ensure we continue to build confidence in our reporting.

Waste

This year our Commercial Property business has continued to engage with our tenants, retailers and customers to further improve the levels of recycling at our sites. Some of the waste initiatives implemented this year are:

• Increased our minimum recycling target for our retail assets to 30 per cent diversion from landfill, up from 20 per cent the previous year. This year we achieved 28 per cent diversion from landfill for retail. While this is up two per cent on last year, it falls two per cent below our new target.
• Specific "diversion from landfill" KPIs have been set for FY12 for all Commercial Property sites to ensure that our overall waste and recycling goals are being achieved each year.
• We set minimum standards for construction waste recycling for all office, retail and industrial development projects. A minimum of 60 per cent construction waste must be recycled in retail and industrial projects, and a minimum of 80 per cent in office development projects.
• All our retail projects this year are now reporting on their development waste, up from only 50% in FY10

We continue to collect data from our residential development contractors. This year, 93 per cent of waste collected from our projects was recycled either on site or through waste recycling facilites. This is down on last year's figure of 97 per cent, most likely due to an increase in non-recyclable or hazardous waste.

Materials

Materials selection for Commercial Property development projects is guided by the Green Building Council’s Green Star tool, which covers materials such as timber, steel, concrete and PVC. For office and retail tenancy fitouts, we have specific guidelines for materials selection, set out in our Green Office Fitout Guide and the Retail Design and Fitout Guide. In addition, our office, industrial and retail leases all now contain clauses which encourage tenants to implement fitouts which utilise materials recommended in their respective tenancy fitout guides.

	Greenhouse gas emissions Greenhouse gas emission reduction is a priority action area for our Climate Change Action Plan. The climate and our environment section explores our total emission (under NGERS legislation), and breakdowns our Total scope 1 emissions Total scope 2 emissions Total scope 3 emissions
	Electricity consumption Energy efficiency plays a large role in the reduction of our emissions. The climate and our environment section breaks down the electricity consumption across our business.
	Gas consumption Gas consumption contributes to our overall emissions and plays an important role in our energy efficiency strategy. The climate and our environment section breaks down the gas consumption across our businesses.
	Water consumption Reducing our impact on natural resources and effectively managing our water use is a priority for our business. Each of our business units has reflected this priority by implementing minimum standards for each of our assets. The climate and our environment section explores the results of our Commercial Property, Residential and Retirement Living businesses.
	Waste We aim to reduce and reuse our waste, rather than sending it to landfill. We collect waste data on a monthly basis for 100 per cent of our office sites, where we have operational control over waste, and 100 per cent of our retail sites. We have collected waste data from Residential and Retirement Living contractor activities for the first time this year. These results are explored in the climate and our environment section.
Biodiversity In the past year we have refined our register of threatened species and communities so that we can better understand our biodiversity holdings. The climate and our environment section details our threatened species register.