We recognise the investment performance benefits of embedding practices that reduce our environmental footprint, and continually monitoring our performance against key objectives.
In a world first for the retail property sector, the QIC Shopping Centre Fund (QSCF) has issued an AUD300 million Climate Bond Initiative (CBI) certified green bond, enabled by QIC GRE’s commitment to enhancing environmental performance across its Australian retail portfolio.
The QSCF green bond was five times oversubscribed and attracted new investors with green and ESG investment mandates to the Fund from across Asia and Australia. Issuing a green bond is an important milestone for QSCF and the retail property sector globally and is an endorsement of QIC GRE’s progress and ongoing focus on sustainability.
This significant result has re-set green debt market expectations in Australia. The path to green bond issuance for QSCF began in 2016 and was not always straightforward. QIC GRE explored the standards used for incorporating commercial property into green bond issuance, under which CBI criteria stipulate an office building must be in the top 15% for carbon efficiency levels by capital city. However, most office buildings that meet criteria are new or recently built while equivalent criteria did not yet exist for shopping centres.
There were additional challenges with the scale of the fund’s portfolio of regional shopping centres and that its holdings are existing assets being redeveloped in stages over an extended period. However, most office buildings that meet the criteria are new or recently built, and equivalent criteria did not yet exist for shopping centres.
In the end, the portfolio has established a target of a minimum 30% reduction in emissions intensity in order to achieve CBI certification using the property-upgrade criteria. QIC GRE has also set an internal target for its shopping centre portfolio to have an average 4-star NABERS rating by 2021.
In 2018, QIC GRE entered into a partnership with the Clean Energy Finance Corporation (CEFC). The landmark agreement to invest $200 million into the QIC Shopping Centre Fund (QSCF), an Australian retail property first, will support improvements in energy performance across the portfolio.
In March 2019, a QIC Red Paper was released, co-authored with the CEFC – ‘Collaboration drives sustainability outcomes’. The paper, which showcases the power of a combined focus on driving improved energy efficiency and sustainability, illustrates tangible examples of the collaboration with CEFC in aligning investment strategies, enhancing sustainability performance, reducing greenhouse gas emissions, and driving genuine improvements to the bottom line.
Click here to download the QIC GRE Insights Paper.
We are implementing the environmental initiatives set-out below across our portfolio to deliver our commitments on energy, water and waste reduction targets.
Our short to medium-term (1-5 year) environmental objectives, are:
Target | Status |
Reduce our electricity, water and waste intensity by 20% by 2020 | Under review* |
NABERS energy and water ratings for all core retail assets | Complete |
All new development projects to be designed to receive minimum 5-star NABERS energy rating | Ongoing |
Adopt real time energy monitoring to optimise energy efficiency | Complete |
Engage with our tenants and communities to grow environmental education across the portfolio | Ongoing |
30% of energy sourced from renewables by 2025 | Ongoing |
Deliver average 4-star NABERS energy rating by 2021 and minimum 4-star rating by 2023 | New for 2019 |
*Target to be superseded by move to a new commitment around a net zero emissions pathway.
Whilst significant progress has been made in reducing electricity intensity, achieving the 20% reduction target by June 2020 will be challenging. Planning is advanced on a range of energy reduction initiatives including rooftop solar at a number of QIC's shopping centres and we are aiming to commence our solar program in 2020. The current target and our performance in the chart below applies to QPF. It shows an 8% reduction in electricity intensity since in the baseline year, 2015.
1 Data as at 30 June 2019
Our long-term objectives are:
NABERS is a national ratings system that measures the environmental performance of Australian buildings. QIC GRE submits properties in QPF, QSCF and QGOF portfolios for NABERS energy and water assessment.
In the most recent NABERS assessment period, the average portfolio energy ratings achieved were:
The implementation of environmental initiatives is delivering ongoing annual improvements in these scores, with the goal of an average 4.0 star rating in future NABERS assessments a key target for QSCF assets in particular (a key target of QIC GRE’s partnership with the Clean Energy Finance Corporation).
Green Star is an internationally-recognised sustainability rating system for buildings, fitouts and communities. Well suited to assets <20,000m2 GLA, the Green Star Performance Benchmark provides a holistic sustainability performance measure.
In 2018, QIC GRE commenced submission of retail assets in our QARP and QACPF portfolios for Green Star Performance Portfolio Ratings, with both receiving 1-star ratings.
The Global Real Estate Sustainability Benchmark (GRESB) is used by institutional investors to engage with their investments, with the aim of improving the sustainability performance of their investment portfolio, and the global property sector.
QICGRE has participated in GRESB reporting since 2012 for its QIC Shopping Centre Fund (QSCF) and QIC Property Fund (QPF) and started reporting for both the Queensland Government Office Fund (QGOF) and QIC Active Retail Property Fund (QARP) in 2016. Our results are detailed in the table below.
For 2019 we improved results for four out of our five real estate funds, with a small decrease in performance for the QIC Property Fund associated with certifications.
Fund | 2016 Score | 2017 Score | 2018 Score | 2019 Score | 2019 Movement | Overall Score vs GRESB Average | Global Ranking |
QIC Property Fund | 82 | 89 | 88 | 85 | -3 | 85 vs 72 | 184 out of 964 |
QIC Shopping Centre Fund | 82 | 90 | 84 | 85 | +1 | 85 vs 72 | 195 out of 964 |
QIC Australia Core Plus Fund | NA | NA | 76 | 84 | +8 | 84 vs 72 | 222 out of 964 |
QIC Government Office Fund | 79 | 88 | 84 | 90 | +6 | 90 vs 72 | 97 out of 964 |
QIC Active Retail Property Fund | 83 | 87 | 82 | 83 | +1 | 83 vs 72 | 271 out of 964 |
QIC GRE’s Environmental Reporting Standards define the scope and methodology for all environmental data reported through this ESG Report and other public interfaces.
Key observable trends in FY19 include:
The following should be noted regarding the below data tables:
ELECTRICITY | |||||
FY17 | FY18 | FY19 | YEAR ON YEAR VARIANCE | YEAR ON YEAR VARIANCE % | |
Number of metered areas | 64 | 64 | 66 | 2 | 3.1% |
Area (m2) | 1,517,383 | 1,578,599 | 1,820,325 | 241,726 | 15.3% |
Raw data (MJ) | 138,638,991 | 138,145,589 | 149,144,541 | 10,998,952 | 8.0% |
Intensity (MJ/m2) | 91 | 88 | 82 | -6 | -6.4% |
GAS | |||||
FY17 | FY18 | FY19 | YEAR ON YEAR VARIANCE | YEAR ON YEAR VARIANCE % | |
Number of metered areas | 12 | 11 | 13 | 2 | 18.2% |
Area (m2) | 603,668 | 551,991 | 761,674 | 209,683 | 38.0% |
Raw data (MJ) | 98,037,800 | 100,368,322 | 176,966,212 | 76,597,890 | 76.3% |
Intensity (MJ/m2) | 132 | 182 | 232 | 51 | 27.8% |
WATER | |||||
FY17 | FY18 | FY19 | YEAR ON YEAR VARIANCE | YEAR ON YEAR VARIANCE % | |
Number of metered areas | 54 | 55 | 58 | 3 | 5.5% |
Area (m2) | 1,473,222 | 1,513,142 | 1,785,775 | 272,633 | 18.0% |
Raw data (kL) | 1,452,561 | 1,503,035 | 1,716,663 | 213,629 | 14.2% |
Intensity (L/m2) | 986 | 993 | 961 | -32 | -3.2% |
WASTE - LANDFILL | |||||
FY17 | FY18 | FY19 | YEAR ON YEAR VARIANCE | YEAR ON YEAR VARIANCE % | |
Number of metered areas | 43 | 44 | 50 | 6 | 13.6% |
Area (m2) | 1,364,335 | 1,407,003 | 1,692,581 | 285,578 | 20.3% |
Raw data (tonnes) | 17,939 | 18,551 | 22,457 | 3,905 | 21.1% |
Intensity (tonnes/m2) |
0.0131 |
0.0132 | 0.0133 | 0 | 0.6% |
RECYCLING | |||||
FY17 | FY18 | FY19 | YEAR ON YEAR VARIANCE | YEAR ON YEAR VARIANCE % | |
Number of metered areas | 39 | 40 | 46 | 6 | 15.0% |
Area (m2) | 1,341,024 | 1,357,217 | 1,657,585 | 300,368 | 22.1% |
Raw data (tonnes) | 9,440 | 9,557 | 12,430 | 2,872 | 30.1% |
Intensity (tonnes/m2) | 0.0070 | 0.0070 | 0.0075 | 0 | 6.5% |
WASTE - % DIVERTED | |||||
FY17 | FY18 | FY19 | YEAR ON YEAR VARIANCE | YEAR ON YEAR VARIANCE % | |
Number of metered areas | 43 | 44 | 50 | 6 | 13.6% |
Area (m2) | 1,364,335 | 1,407,003 | 1,692,581 | 285,578 | 20.3% |
% Diverted | 0.34 | 0.34 | 0.36 | 0.42 | 4.8% |
SCOPE 1 GHG | |||||
FY17 | FY18 | FY19 | YEAR ON YEAR VARIANCE | YEAR ON YEAR VARIANCE % | |
Number of metered areas | 12 | 11 | 13 | 2 | 18.2% |
Area (m2) | 603,668 | 551,991 | 761,674 | 209,683 | 38.0% |
Raw data (tCO2-e) | 5,064 | 5,199 | 9,157 | 3,958 | 76.1% |
Intensity (tCO2-e/m2) | 0.0084 | 0.0094 | 0.0120 | 0 | 27.6% |
SCOPE 2 GHG | |||||
FY17 | FY18 | FY19 | YEAR ON YEAR VARIANCE | YEAR ON YEAR VARIANCE % | |
Number of metered areas | 63 | 63 | 65 | 2 | 1.6% |
Area (m2) | 1,517,383 | 1,578,599 | 1,820,325 | 241,726 | 15.3% |
Raw data (tCO2-e) | 120,599 | 122,655 | 134,959 | 12,303 | 10.0% |
Intensity (tCO2-e/m2) | 0.0795 | 0.0777 | 0.0741 | -0 | -4.6% |
Please note: The information in the tables above represents the best available data at time of report publication.
Climate change and its impact on investments are an increasingly important focus of QIC’s Responsible Investment framework, with the potential to impact a wide range of asset classes and investments.
The QIC Board formally adopted climate action onto its agenda in 2016, and in 2018, QIC began disclosing under the Taskforce on Climate-related Financial Disclosure framework via the QIC Sustainability Report.
QIC’s Responsible Investment team leads QIC’s climate strategy and collaborates with QIC investment teams to develop our understanding of the risk and opportunities associated with our work at the organisational level. Projects to date include:
For more on QIC’s approach to understanding the risks and opportunities posed by observed and projected changes in the climate, see the 2019 QIC Sustainability Report.
As holder of a large number of real assets on behalf of our investors, QIC GRE has been actively involved in work to better understand and manage climate risk, including the co-development of a ‘Climate Change Resilience Study’ with an academic partner to understand the potential physical impacts of climate change on our assets.
Phase 1 of this study, which included mapping climate projections over different periods for more than 40 retail and commercial assets in Australia, was completed in 2018. Work is now underway to combine the results of this project with QIC’s climate scenario modelling, with the aim of building a comprehensive view of portfolio-level climate risk exposure.
QICGRE has undertaken a major redesign of its property operations, using advanced automation technology to interrogate individual asset performance data on energy consumption and equipment maintenance, which is delivering real-time information that materially enhances operational efficiency and sets a new standard in best practice asset management.
QIC GRE recently partnered with leading Australian technology company CIM Enviro to optimise its energy efficiency across its major shopping centre portfolio, using a data-driven approach that collates and interrogates data from all the existing sensors across a building.
Failures and deteriorations in asset energy performance instantly generate an alert that details the location of each fault, the root cause, the cost impact and the solution. Each alert automatically becomes an assigned maintenance ticket for onsite teams to close out rapidly, ensuring energy wastage is addressed without delay.
This technology is already delivering significant savings and reducing energy consumption as the rollout continues. For more information, read our case study.