QIC Real Estate’s ESG Strategy was established following extensive research and engagement with key external and internal stakeholders with the aim of refocusing our approach and amplifying our efforts on ESG themes identified as most material to the real estate portfolio. Our ESG Strategy aims to align our approach with best practice and evolving expectations of clients and other stakeholders, and positions us well to respond to current and emerging ESG themes.

Our approach builds on our sustainability achievements to date and positions us to continuously improve our ESG performance, focused on those themes that we believe drive the greatest value (for QIC, our assets and clients, as well as for the environment and community), realise opportunities and manage risks. Our strategic focus on material environmental and social issues is underpinned by a commitment to high standards of governance.

Our ESG strategy on a page can be seen below, and focuses our efforts around four priority areas: Resource Efficiency & Circular Economy; Climate Change; Sustainable Value Chain; and Community Investment. Progress against these priority areas is reported in the Our Progress section of this report.

A set of long-term (to 2030) and short-term (FY23) objectives have been developed to guide the implementation of our ESG Strategy, and against which we continuously monitor our progress over time.

We have mapped our four strategic focus areas and long-term objectives to the Sustainable Development Goals (SDGs) to ensure they reflect both global sustainability priorities and issues that are material to our investors.

During the year, QIC Real Estate continued to manage our environmental performance via our Environmental Management System (EMS). The EMS provides a framework to drive continuous improvement in our environmental performance and comply with applicable laws, regulations and other environment-related requirements.

The EMS is consistent with the recognised international standard AS/NZS ISO 14001:2016 Environmental Management Systems Requirements with Guidance for Use (ISO 14001). It provides a systematic approach to environmental management, using the Plan-Do-Check-Act approach outlined in ISO 14001:

• Plan: establish environmental goals and processes necessary to deliver results in accordance with QIC Real Estate’s environmental objectives.
• Do: implement the processes as planned.
• Check: monitor and measure progress against the environmental objectives, and report the results.
• Act: take actions to continually improve.

The principal elements of the EMS are outlined below:

• Leadership
• Planning
• Support and operation
• Performance evaluation
• Improvement.

We take a continuous improvement approach to the application of our EMS, and during FY23 it will undergo review to ensure ongoing alignment with the objectives laid out in QIC Real Estate’s ESG Strategy.

QIC Real Estate designs, develops and manages vibrant urban destinations that anchor thriving communities. We have a significant development pipeline across a number of our assets, as well as being responsible for the development of the above ground precincts related to the Queensland Government’s Cross River Rail Project.

Our focus on sustainability extends to our development work, and in FY22 we created a new sustainable design brief to guide ESG decisions in the design and delivery of our development, major renovation and capital upgrade projects to support these projects to deliver outcomes that align with our ESG Strategy and objectives.

The new brief incorporates various criteria to help achieve QIC Real Estate’s ESG objectives across our four focus areas. It also includes our target to achieve 5-Star Green Star Building certifications on new developments at core assets¹, as well as an increased focus on the actions of our contractors and suppliers. This includes requirements for contractors to implement practices that promote diversity, facilitate workforce participation and economic development of disadvantaged and under-represented groups, and reduce physical and mental health impacts on construction sites.

As part of the sustainable design brief’s implementation, QIC Real Estate has engaged an ESG consultant to act as the peer reviewer on all development projects moving forward, to challenge status quo thinking and ensure our ESG Strategy objectives are being met through these projects.

¹ Assets 100% owned and operated by QIC Real Estate

Resource efficiency & circular economy

1. Achieve a total operational waste diversion rate of 45% in FY23 and a total ‘A-Grade’¹ operational waste diversion rate of 40% in FY23.
2. Achieve a total retail portfolio potable water use intensity of ≤820 L/m² and a total office portfolio potable water use intensity of ≤600 L/m² in FY23.
3. Deliver average 5.5-Star NABERS² Energy and 4.5-Star NABERS Water ratings across QOF by 31 December 2025.^
4. Deliver minimum 4-Star NABERS Energy rating by 31 December 2023 for each of the core retail assets.^
5. All new development projects at core retail and office assets to be designed to receive a minimum 5-star Green Star Buildings³ rating.^

Climate change

1. Reduce QPF and QTCF core retail assets’ scope 1 and 2^@ intensity based and absolute^# carbon emissions by 10% in FY23 compared to FY22.
2. Reduce QACPF scope 1 and 2^@ intensity based and absolute^# carbon emissions by 10% in FY23 compared to FY22.
3. Reduce QARP scope 1 and 2^@ intensity based and absolute^# carbon emissions by 15% in FY23 compared to FY22.
4. Reduce QOF scope 1 and 2^@ intensity based and absolute^# carbon emissions by 3% in FY24 compared to FY22.
5. 30% of electricity from centre-based renewable energy by 2025.^ 

Community investment

1. Community investment program focused on ‘physical health and wellbeing’ established with implementation of physical initiatives evident at 50% or more of our retail and office assets.
2. Increase Indigenous spend by 15% against FY22 across retail and office portfolio.

Sustainable value chain

1. Increase social procurement spend (ex. Indigenous) by 10% against FY22 across retail and office portfolio.
2. 100% of high-risk Tier 1 suppliers onboarded to Property Council modern slavery supplier platform⁴.

^ Denotes existing target

# To 2030 unless otherwise stated

~ To FY23 unless otherwise stated. Priority short term objectives (public)

@ Like for like portfolio

¹ Includes materials that may be used repeatedly, constantly being returned to the same production cycle, and can be recovered without any consequent hazardous material build-up in the environment e.g. cardboard, glass, metal, organics etc.

² A lodgement fee is paid to NABERS on QIC’s behalf for each individual rating undertaken.

³ A lodgement fee is paid to Green Building Council of Australia (GBCA) for each individual rating undertaken.

⁴ Refer to the Modern Slavery Statement published at www.qic.com for more.

All 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/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/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.