Understanding the material ESG risks and opportunities that could influence our ability to deliver on strategy and maximise long-term investment returns allows us to anticipate and adapt our approach in a constantly changing environment.   

We undertake regular materiality assessments to ensure our ESG Strategy responds to the most material risks and opportunities across our portfolio as these evolve over time. We conducted our first materiality assessment in 2021, with a subsequent assessment completed in 2024. Both included research on current and emerging megatrends, and extensive engagement with external and internal stakeholders. Outside these formal materiality assessments, we monitor our material themes on a regular basis, including through our involvement in industry working groups.    

We use the outputs of our Real Estate materiality assessments to review our strategic approach to ESG in consultation with QIC Real Estate’s Sustainability Committee and set long- and short-term targets against which to monitor our performance. These are detailed in this section of the report.   

Targets addressing material ESG themes are also included in QIC Real Estate’s scorecard and the KPIs of our Senior Leadership, and other relevant team members who play a leading role in their delivery. These are linked to remuneration outcomes.  

The process for our materiality assessments is detailed below. 

Table 1: QIC Real Estate materiality assessment process

Figure 1: Material sustainability themes¹³ 

Figure 2: Description of material themes 

QIC Real Estate’s ESG strategy aims to amplify our efforts on ESG themes identified as most material and strategically important to the real estate portfolio, with a focus on driving the greatest value commercially for our assets and clients, as well as for the environment and community. Our approach builds on our sustainability achievements to date and positions us to realise opportunities, manage risks and continuously improve our performance. Through our ESG strategy, we endeavour to align with best practice and anticipate and adapt our approach in a constantly changing environment to position ourselves to respond to ESG trends as they develop. Our strategic focus on material environmental and social issues is underpinned by a commitment to high standards of governance.  

Figure 3 illustrates our ESG ‘strategy on a page’, which focuses our efforts around four priority areas.   

Figure 3: QIC Real Estate ESG Strategy  

A set of long-term (to 2030) and short-term (FY26) objectives have been developed to guide the implementation of our ESG strategy, against which we continuously monitor our progress over time. 

We have mapped our four strategic focus areas and long-term objectives to some of the relevant targets or indicators of six of the United Nations Sustainable Development Goals (SDGs), to ensure they reflect both global sustainability priorities and issues that are material to our stakeholders.

Figure 4: QIC Real Estate long-term and short-term objectives   

We use our ESG strategy and objectives to guide our integration approach. ESG integration occurs across three key business decision-making processes:  

• Capital transactions  
• Development projects  
• Active asset management.   

ESG is integrated through tools and guidance documents that are incorporated into key business decision-making processes. This ensures that ESG considerations are driven across the business in accordance with our ESG strategy. We have several governance processes in place to oversee our approach within QIC Real Estate (see Our Governance section for more information on how ESG is governed more broadly across Real Estate and QIC, including the role of the Board).  

Figure 5: QIC Real Estate ESG integration framework  

Capital transactions

Our processes include the assessment of ESG considerations as part of our capital transactions due diligence for asset acquisition or divestment opportunities through a review of how the transaction could impact our ability to deliver our ESG strategy and objectives.  This includes a review of any ESG-related risks or opportunities associated with the transaction.

We undertake an early stage ESG assessment on capital transactions to aid our understanding of how the potential acquisition might impact our existing performance levels and support or hinder the ongoing delivery of our ESG strategy and long-term objectives. This assessment is informed by our ESG strategy focus areas and includes a review of climate-related physical and transition risks, such as the asset’s exposure to extreme weather events and its ability to support the achievement of our fund level 2028 Net zero carbon emissions targets. We also consider other ESG performance factors related to historical energy and water use intensity, waste generation and diversion from landfill, and property-level benchmarking results such as NABERS and Green Star, which we compare against our strategic objectives and the performance of similar assets in our existing portfolio. This involves an assessment of how these factors could present risks or opportunities, including commercially.

Where a potential property acquisition progresses to technical due diligence, we undertake a deeper assessment of factors across our ESG strategic focus areas to better understand any risks or opportunities, based on the information requested from and provided by the seller and any other data we have access to. This provides us with a more granular view of the effort and cost associated with maintaining our existing ESG performance levels, meeting future ESG objectives, and managing risks and realising opportunities if we were to acquire the asset into the portfolio. The results of this assessment are incorporated into the overall evaluation of the investment opportunity and are reviewed by the Trustee Governance Committee as part of their decision-making processes.

Potential asset divestments are also assessed against how the divestment may impact our existing performance levels and ongoing ability to achieve our ESG strategy and related long-term objectives. The findings are then incorporated into the divestment opportunity evaluation, including the Trustee Governance Committee’s review, to ensure any possible impacts are broadly understood and if necessary, the recalibration of ESG objectives can be considered.

Development projects

QIC Real Estate designs, develops and manages vibrant urban destinations that anchor thriving communities. Our development pipeline comprises future expansion and improvement opportunities across several of our assets. We are also responsible for the master-planning of the above ground precincts related to the Queensland Government’s Cross River Rail project.   

Our focus on sustainability extends to our development work. Our Sustainable Design Brief (the Brief) guides sustainability decisions in the design and delivery of our development, major renovation and capital upgrade projects, and supports these projects to deliver outcomes that align with our sustainability strategy and objectives. The Brief aligns with our development decision-making process and includes sustainability checks and reviews at key project gateways. During FY25, the Brief has been updated and trialled on a live project and feedback from this process will result in its finalisation in FY26.   

The Brief incorporates various criteria to help achieve our sustainability objectives across our four priority focus areas. It also includes our target to achieve 5 Star Green Star Building certifications on new developments at core assets¹⁴, as well as requirements related to the actions of our contractors and suppliers. These include the promotion of diversity, the facilitation of workforce participation and economic development of disadvantaged and under-represented groups¹⁵ and the reduction of physical and mental health impacts on construction sites¹⁶.   

In major projects, the Brief requires the engagement of a sustainability peer review to challenge status quo thinking and ensure our ESG strategy objectives are being met through these projects. This is in addition to the sustainability consultant engaged as part of the development project team.  

The Brief also incorporates an Indigenous Design Framework, which aims to support our developments to meaningfully and effectively engage with First Nations communities, and respond to the needs and aspirations of First Nations peoples through the design and delivery of our projects. Our intention is to create greater First Nations voice and agency, embed sustainable and Country-centred design thinking, create employment opportunities, and continuously protect and be in the right relationship with Country as part of project delivery. Within the Indigenous Design Framework, there are four ‘Cultural Domains’ which include participatory-based design principles and a checkpoint/indicator form that acts as an evaluation and accountability tool.

Figure 6: Four cultural domains forming the foundation of the Indigenous Design Framework

Active investment and asset management

Our ESG strategy is integrated into our active investment and asset management practices across our property portfolio, to ensure we appropriately manage any ESG-related risks and realise associated opportunities. Initiatives that support its delivery are incorporated into strategic asset plans, capital plans and annual budgets. Portfolio-level initiatives are developed and implemented in collaboration with our Investment Management, National Operations and Marketing teams, and asset-level management employees are engaged to address ESG risks and opportunities specific to their assets. Key performance indicators that align with our ESG strategic objectives are incorporated into business unit plans and individual team member scorecards which are remuneration-linked to incentivise continued commitment to the delivery of our ESG strategy.  

We leverage sustainable finance instruments to enhance our integration efforts and accelerate ESG performance improvements across our real estate assets and funds. 

We began this journey in 2019, when the QIC Town Centre Fund (QTCF) issued a A$300 million Climate Bond Initiative (CBI) certified Green Bond¹⁷, a world-first for the retail property sector and an important milestone for our ESG journey. In FY24, we developed an updated Sustainable Finance Framework (the Framework) with support from a consortium of selected banks. The Framework outlines the parameters for the issue and management of sustainable finance instruments¹⁸ across the Funds within the Real Estate portfolio and aligns with our ESG strategy and voluntary process guidelines accepted as best practice for the issuance of sustainable finance instruments globally¹⁹. 

Our Sustainable Finance Framework can be found here. 

In FY25, we leveraged the Framework to convert A$3.75 billion of bank loans into Sustainability-Linked Loans (SLLs) for our two largest real estate funds — the QIC Property Fund (QPF) and the QIC Town Centre Fund (QTCF). We also repositioned our sustainability approach for QIC Australia Core Plus Fund (QACPF)²⁰, attracting an equity investment from the Clean Energy Finance Corporation (CEFC)²¹. More on these achievements can be found here. 

We manage our environmental approach and 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. 

Figure 7: Summary of QIC Real Estate’s Environmental Management System 

We review environmental risks and existing mitigation measures (including those associated with climate-related physical risks) at all the assets we manage and integrate these risks into individual Asset Risk Registers. Maintained via an online platform, these risk registers are the key operational risk and opportunity management device used across the business. A risk-based approach is used to set the frequency of risk reviews. Risks with a rating of ‘medium’ or above are reviewed at least annually, to promote a focus on continual improvement and risk mitigation efforts.

Our business manages risk in accordance with the QIC Board’s Risk Appetite Statement and Risk Management Framework, including the Enterprise Risk Management Policy. The risk management process is consistent with International Standard ISO 31000: Risk Management. Our Risk Management Framework includes an enterprise-wide methodology for rating risks and provides for assessment of business risks using the consequence and likelihood tables incorporated into the Risk Rating Procedure included in the Board’s Risk Appetite Statement.

The integration of our separate environmental and workplace health and safety management systems into a single WHS&E system continued during FY25. This work includes reviewing and updating numerous policies, procedures and standards, and will help to further integrate the effective management of our health, safety and environmental risks and opportunities across the business. This includes integration of the identification and management of environmental risks into QIC’s WSH&E risk and incident management system, ‘Beakon’. Through Beakon, we aim to proactively identify risks, effectively respond to incidents, and ensure that all employees have the tools and knowledge to contribute to a culture of safety and accountability.

The QIC Real Estate Sustainability Report is distributed annually. The reported information has been prepared with reference to the Global Reporting Initiative’s (GRI) Standards.

This report:

• Follows our 2024 Sustainability report with no significant changes from previous reporting periods in terms of material topics and topic boundaries
• Covers the FY25 period from 1 July 2024 to 30 June 2025
• Covers the economic, governance, environmental and social topics we consider material to our business, as identified under the GRI Standards
• Incorporates a GRI Content Index with links to content under the GRI topics 
• Covers the physical Australian assets we manage, encompassing relevant properties held under the QIC Property Fund (QPF), the QIC Town Centre Fund (QTCF), the QIC Office Fund (QOF), the QIC Government Office Portfolio (QGOP), the QIC Active Retail Property Fund (QARP) and the QIC Australia Core Plus Fund (QACPF)²². 

QIC maintains memberships and affiliations with the following organisations and governing bodies. These memberships allow us the opportunity to contribute to the development of a range of initiatives, while also gaining relevant insights into the latest developments in the ESG space.

QIC’s and QIC Real Estate’s current memberships and partnerships include:

• UN-backed Principles for Responsible Investment (UN PRI)
• Responsible Investment Association Australasia (RIAA)
• Investor Group on Climate Change (IGCC) 
• Financial Services Council (FSC)
• Australian Sustainable Finance Institute (ASFI)
• Property Council of Australia (PCA)
• Global Real Estate Sustainability Benchmark (GRESB) 
• Green Building Council of Australia (GBCA)
• Climate Action 100+
• Business for Societal Impact (B4SI)
• UN Global Compact Network Australia
• Net Zero Asset Managers (NZAM) initiative²³
• World Green Building Council Net Zero Carbon Buildings Commitment.

Within QIC Real Estate, we are also active members of a range of ESG-related forums and working groups, which included the following during FY25:

• Shopping Centre Council of Australia
• Property Champions of Change
• Property Council of Australia, National Sustainability Roundtable
• Property Council of Australia, National Social Sustainability Roundtable
• Property Council of Australia, Human Rights and Modern Slavery Working Group
• Property Council of Australia, Diversity and Inclusion Committees — New South Wales and Queensland
• Informed 365 Modern Slavery Property Supplier Platform Working Group
• Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV) Sustainability Committee
• Sustainable Digitalisation Project (SDP) Steering Group and Roundtable
• World Green Building Council’s Net Zero Carbon Buildings Commitment Working Group
• IGCC Real Assets Sub-Working Group.