The last financial year was marked by COVID-related lockdowns in Australia, so it was heartening to see a move away from this during financial year 2022, signalling certainty for our communities, tenants and staff. Throughout these challenging few years, I have remained impressed with the continued focus on implementing our environment, social and governance (ESG) Strategy across our asset portfolio.

Progressing our efforts to address climate change is evidence of this continued focus. I am pleased to announce that during the year we established net zero carbon emissions targets by 2028 (Scope 1 and 2) for two additional funds: QIC Active Retail Property Fund (QARP) and QIC Australia Core Plus Fund (QACPF). This brings alignment in our carbon ambition across all five QIC Real Estate funds¹. We also commenced Tranche 2 of our onsite solar rollout program², an important stepping stone towards achieving our longer term net zero carbon targets.

Another highlight of FY22 was the progression of our work to better understand the impacts of climate change across the portfolio. This year, we further assessed physical climate risk exposure across our assets, with a particular focus on the relationship between climate drivers and Net Operating Income (NOI). This builds on our earlier climate scenario analysis work and enhances our understanding of our risks to better identify opportunities to continue to build asset resilience.

Our privilege as a real estate owner and manager is the role we play in serving our communities, while also delivering for our clients. This year we were pleased to launch our Community Investment Program, focused on the flagship theme of physical health and wellbeing, and begin our joint partnership with Nutrition Australia and YMCA, both well-known and respected brands, to deliver focused activations across our asset portfolio. Having already completed extensive research to understand the most material social issue across the communities in which we operate, we established this joint partnership which we believe will deliver positive outcomes for both the community and our assets. We have already set to work with our partners to co-design a pilot program of in-centre activities focused on healthy eating and opportunities for exercise, and we look forward to rolling out our pilot Wellness Hub across more of our assets in FY23.

This new strategic community partnership, along with other contributions, saw QIC Real Estate provide approximately $1.2 million in community contributions³ in FY22, a notable increase from the previous year. We recognise the important role our centres play in our communities, and we are pleased to have the opportunity to contribute in this way.

This report provides further insights on these topics and details all of our progress against our strategy and targets, including insights into, and rich examples of, our community, staff and Indigenous programs.

My team and I are pleased to present our 2022 ESG Report.

2022 Report Highlights:

• Net Zero Carbon Emissions (Scope 1 & 2) by 2028 commitments expanded to include QIC Active Retail Property Fund (QARP) and QIC Australian Core Plus Fund (QACPF)¹.
• Continued to deliver our onsite solar PV system program³, commencing the roll-out of tranche 2 of the program, which will add an additional ~11 Megawatts of onsite solar to the ~15 Megawatts already installed across our retail assets. 
• Continued to build our understanding of our climate risks with a third-party assessment of the relationship between climate drivers (acute and chronic risks) and the Net Operating Income (NOI) for each asset. 
• Joint partnership established to deliver our Community Investment Program, focused on the flagship theme of 'physical health and wellbeing', selecting Nutrition Australia and YMCA as preferred delivery partners to deliver programs across the portfolio focused on healthy eating and opportunities for exercise. 
• ~$1.2 million in community contributions this year, an increase of 81% from FY21 due to our new strategic community partnership with Nutrition Australia and YMCA and delivery of other community support programs. Our community contributions for FY22 have been verified by Business for Societal Impact (B4SI)².
• Comprehensive sustainable design brief established to guide ESG decisions in the design and delivery of our developments, major renovations and capital upgrade projects and ensure the delivery of our long term ESG objectives. 

QIC respectfully acknowledges the Traditional Owners and Custodians of Country throughout Australia and recognises their continuing connection to land, sea and community. We pay our respects to Elders past, present and emerging.

¹All long-term objectives, short-term targets and Net Zero Carbon Emissions target apply to only assets that are 100% owned and managed by QIC (making up the following percentages of each Fund's portfolio value at 30 June 2022 - QTCF: 91%, QPF: 90%, QARP: 100%, QACPF: 98%, QOF: 99%). Short term targets to reduce carbon emissions are line with each Fund's Net Zero Carbon Emissions target, which rely on increase in renewable energy consumption through onsite solar roll out and purchase of grid sourced renewable energy (QPF and QTCF: ~70%, QOF: ~60%, QARP: ~64%, QACPF: ~68%) and reduction in electricity consumption through efficiency upgrades (QPF/QTCF: ~25%, QOF: ~35% including efficiencies achieved to date (~26%), QARP: ~21%, QACPF: ~22%). Baselines: (QPF and QTCF: 2018, QOF: 2015, QARP: 2021, QACPF: 2021). Carbon offsets will be purchased for residual emissions from sources with no existing fossil fuel free alternatives. Progress is quantified and receives limited independent assurance annually, in accordance with the Australian Standard on Assurance Engagements (ASAE3000). QPF, QTCF and QOF are signatories to the World Green Building Council's Net Zero Carbon Buildings Commitment. 

²Community contributions for FY22 have been verified by Business for Societal Impact (B4SI). QIC Real Estate is a member of B4SI and pays an annual fee.

³ Refer to Our Progress for details on our Modern Slavery approach, including reference to the human rights issue and risks associated with the allegations of the use of forced labour of Uyghur and other ethnic minorities. For further information, read QIC’s latest Modern Slavery Statement.