NABERS is a national ratings system that measures the environmental performance of Australian buildings. QIC Real Estate submits properties in QIC Property Fund (QPF), QIC Town Centre Fund (QTCF) and QIC Office Fund (QOF) portfolios for NABERS Energy and Water assessments annually.¹

QIC Real Estate transitioned from the use of calendar year to financial year ratings periods for NABERS Energy and Water ratings in FY23. Waste ratings will move to calendar year from next year's report. In the NABERS results received in FY23 (covering the FY22² reporting period), the following average portfolio ratings were achieved:

Table 2: QIC Real Estate NABERS ratings

Note: The above table presents self-calculated portfolio ratings based on formal individual asset ratings provided by NABERS in the years displayed. Portfolio ratings use average weighted star ratings and ownership percentage to determine a final result.

The ongoing implementation of environmental initiatives aims to deliver continuous annual improvements in these scores, in line with the ESG objectives identified in Our Approach. Recent NABERS Energy and Water ratings are based on the FY22 performance period where COVID-19 lockdowns in Victoria and New South Wales may have partially contributed to score uplift for funds more heavily weighted with assets in these geographies.

Green Star is an internationally recognised sustainability rating system for buildings, fitouts and communities. The Green Star Performance rating system provides a holistic sustainability performance measure in relation to the operation of existing buildings.

In FY23, QIC Real Estate submitted all retail and commercial assets (excluding peripherals) for Green Star Performance Year 1 ratings. Due to a lack of availability of Green Star accredited assessors we are yet to receive our finalised Year 1 ratings, however draft performance analysis indicates QIC Real Estate will achieve a portfolio average performance of 3-Stars.⁷

⁷ QIC is a member of the Green Building Council of Australia who administer the Green Star sustainable building rating tools, and we pay an annual fee. 

GRESB is one of many tools 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.

QIC Real Estate has participated in GRESB reporting since 2012 for QTCF and QPF, and started reporting for QOF, QIC Australia Core Plus Fund (QACPF) and QIC Active Retail Property Fund (QARP) in 2016.⁸

We continue to work closely with the Property Council of Australia and its members to ensure the GRESB benchmark further evolves as a useful tool for investors to understand and compare performance, reward demonstrated leadership in real performance, and appropriately measure the industry's contribution to mitigating climate change impacts and the many other significant ESG challenges faced by Australian real estate managers. Our 2023 results, alongside prior year results, are detailed in the table below.

Table 3: FY23 GRESB ratings

• Our 2023 GRESB results relate to the CY2022 performance period.

• Improvements were seen in the 2023 scores for QACPF and QARP when compared to 2022 results. This is largely attributed to improvements in energy performance and the adoption of a broader range of ESG performance targets.

• QOF upheld its 2022 score of 92 and maintained its 5-Star rating.

• QTCF and QPF suffered declines in their scores compared to 2022 results. The declines relate to fewer points being achieved in the Energy, Carbon, and Water aspects of the survey’s Performance section. GRESB’s methodology assesses like-for-like performance across these aspects, comparing the current reporting period (CY22), with the previous reporting period (CY21) to calculate a score based on how a fund’s year-on-year performance compares to the benchmark values reported by other funds contained in the same peer group. QTCF and QPF saw an increase in energy and water use in CY22 compared to CY21, driven by a return to ‘back to normal’ operating hours at Victorian, New South Wales, and Australian Capital Territory based assets in CY22 compared to CY21, when those States/Territories all experienced significant periods of COVID-19-related lockdowns. QACPF, QARP and QOF did not experience a similar impact due to their portfolios being weighted towards assets outside of Victoria, New South Wales, and the Australian Capital Territory.

⁸ QIC is an investor member of GRESB and pays an annual fee. 
⁹ 2023 GRESB scores cover the 2022 calendar year performance period. 
¹⁰ Average score of all GRESB participants in 2023.

FY23 was the first financial year since FY19 not impacted in some way by COVID-19 related lockdowns. The return to ‘back to normal’ operating hours and foot traffic experienced at our Victorian, New South Wales and Canberra-based assets in FY23 compared to recent years resulted in increases in energy and water use and a reduction in our waste recycling performance.

Aside from this, several initiatives were undertaken throughout the year to improve our performance across the retail and office portfolios against various environmental sustainability metrics: 

• QIC Real Estate's large-scale solar rollout continued during the reporting period, with the completion of additional rooftop solar systems at Merrifield City (VIC, 0.33MW), Bathurst City Centre (NSW, 0.605MW), The Village Upper Mount Gravatt (QLD, 0.346MW), and Nerang Mall (QLD, 0.515MW). Renewable energy generated by onsite solar systems accounted for 15% of QIC Real Estate’s total direct energy use in FY23, contributing to a reduction in grid-sourced electricity use, and the avoidance of more than 12,300 tonnes of Scope 2 carbon emissions across the portfolio during the reporting period.
• Despite the implementation of a number of key plant and equipment upgrades across the portfolio to improve energy efficiency, energy use across the portfolio increased slightly as a result of a return to ‘back to normal’ operating hours and foot traffic experienced at our Victorian, New South Wales and Canberra-based assets in FY23.
• Natural gas use increased by 4% in FY23 compared to FY22. This increase was driven by a return to normal operating hours in FY23, which had the greatest impact on performance at our Victorian, New South Wales, and Canberra-based assets. These assets account for the majority of our natural gas usage across the portfolio and experienced significant COVID-19 lockdowns, reducing gas use during FY22. This year-on-year increase, driven by operational hours, has hidden efficiencies achieved through a focus on winter tuning of heating setpoints and boiler operation optimisation that has been a focus of our partnership with CIM during FY23. 
• Despite a 4% increase in natural gas use, Scope 1 carbon emissions decreased overall by 24% in FY23 compared to FY22.  This was due in large part to an improvement in data capture processes related to the use of refrigerant gases within the HVAC systems at our assets. The improvement has meant that we can now report on actual gas use amounts and related carbon emissions instead of relying on industry standard leakage rates to estimate related carbon emissions.
• The recycling rate across QIC Real Estate's asset portfolio has declined during the reporting period, from 39% in FY22 to 37% in FY23. The variations in recycling rates across the past five years can be attributed to COVID-19 related lockdowns experienced during FY20, FY21 and FY22, which reduced the amount and mix of waste being generated across our asset portfolio during this time, as well as improvements to the accuracy and completeness of data capture over this period. Recent actions to drive improvements in our recycling rates include the completion of physical waste assessments at all retail and office assets during FY22, and the incorporation of findings from these assessments into asset level operational waste management plans during FY23. 
• With reference to the Greenhouse Gas Protocol 'Corporate Value Chain (Scope 3) Accounting and Reporting Standard', our reported Scope 3 carbon emissions include Category 3, 5, 13 and 15 emissions from fuel and energy related activities, waste generated in operations, downstream leased assets and investments. The increase in scope 3 carbon emissions between FY20 and FY21 was due to the inclusion of emissions related to major tenant energy use from FY21 onwards.

Note: This table presents aggregated data from QIC Real Estate's portfolio of retail, office and industrial assets. The FY23 data in the table has received limited assurance. Data from assets that QIC does not have operational control over is excluded, including our joint venture assets, Westfield Coomera and Claremont Quarter.

Intensity metrics are calculated by dividing annual usage data by gross lettable area, allowing presentation of relative annual performance while accounting for changes in portfolio structure over time.

This downloadable spreadsheet presents asset level FY23 ESG performance data for each of QIC Real Estate's five funds: QIC Real Estate FY23 Asset ESG Performance Data. 

To calculate the emissions related to major tenants' energy use, QIC Real Estate has: 

• Used actual FY23 energy use figures provided by the tenant, or
• Used actual CY22 energy use figures provided by the tenant, or
• Estimated FY23 energy use based on actual FY23/CY22 energy intensity (kWh/m2) of an alternative tenant that most closely matches the expected operational profile of the tenancy that requires estimation. This method was applied to approximately 31% of the total gross lettable area occupied by major tenants across the portfolio of retail assets which accounts for 11% of scope 3 emissions.

¹¹ Location-based scope 2 carbon emissions.

QIC Real Estate continued to monitor our annual performance against a set of short-term targets during the FY23. These targets can be seen in the table below, along with a status update on our performance against them. 

Our current FY24 short-term targets can be viewed in ESG Strategy.

Table 5: Performance against FY23 goals

¹² 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.