In FY25, we engaged sustainability consultancy Edge Impact to undertake a review of the ESG-related risks across our Real Estate supply chain to provide us with a better understanding of these risks. The work was focused on identifying specific supplier categories that present an inherent higher-risk likelihood across Green Star and ISO 20400-aligned ESG topics, based on the goods and services procured by QIC Real Estate. It also included a separate in-depth assessment of modern slavery risks. This review was later expanded across QIC Ltd’s broader supply chain.

The review process followed five steps:

1. Procurement Category Mapping: QIC Real Estate’s FY24 procurement spend across all supplier categories was reviewed, capturing both domestic and international supply chains. This provided a clear picture of procurement concentration and exposure.
2. Risk Indicator Screening: Each category was screened against recognised global data sources, including the Global Slavery Index, the Social Hotspot Database, EXIOBASE and the Child Rights Index. This was supplemented with sector-specific literature and media reviews.
3. ISO 20400 Heatmapping: Categories were mapped against the ISO 20400 sustainable procurement themes. Categories were then scored for inherent risk severity.
4. Inherent Risk and Influence Scoring: Each category was assessed for both:
   1. Inherent Risk: The likelihood of ESG risk indicators being present based on industry and geography. 
   2. Opportunity for Influence: QIC’s ability to influence supplier practices through spend concentration and direct contractual leverage.
5. Validation and Prioritisation: Preliminary results were tested through internal validation workshops and then consolidated into a heatmap to prioritise categories with the highest ESG risk exposure, along with opportunities to leverage.  

Key insights showed that overall, the highest ESG risk categories included Building, Construction, and Engineering & Electrical categories, largely driven by the environmental impacts in production of relevant products and materials, and potential social risks including labour and modern slavery in the supply and delivery of goods and services related to these categories.  

For environmental risk, mineral resource scarcity was assessed to be the highest impact area identified, followed by climate change and pollution. The assessment also identified the opportunity to leverage materials-related Green Star credits and circular economy strategies, along with strategic procurement as a way to address these risks.   

For social areas, modern slavery and labour were found to be the highest potential impact areas as a result of known labour issues in both the delivery of building and construction services, and the manufacture of building materials.   

Within the social considerations undertaken as part of this review, a separate in-depth assessment of modern slavery risk was conducted. This has assisted us to gain a deeper view of modern slavery-related risks across our Real Estate supply chain, and has enabled us to focus our engagement efforts on suppliers within categories found to be higher risk where we have leverage to do so. During the year, we used the results of the review to identify suppliers to target to complete the Informed 365 Modern Slavery Property Supplier Platform questionnaire. We also used the results to identify suppliers to include in our modern slavery supplier roundtable sessions to drive further engagement on this topic (see Modern Slavery section for further detail). We plan to continue to use the outputs from this review to further embed ESG considerations into our procurement processes in future.

Our commitment to advancing sustainability in the design and fitout of tenancies across our managed retail assets is reflected through targeted collaboration and practical initiatives implemented throughout our value chain.

In FY25, we initiated collaborations with contractors responsible for landlord-led tenancy works across several retail assets to understand their processes for managing construction waste. Together, we are sharing knowledge and supporting these contractors in actively tracking and reporting on construction waste, with the objective of achieving a diversion rate of 90% or higher for these projects in the future. Waste tracking and reporting has been introduced for tenancy remix projects across both Canberra Centre, ACT, and Castle Towers, NSW. Insights gained from these efforts will be shared with contractors more widely to encourage consistent reporting and facilitate future benchmarking across all tenancy construction works.

Our future objective is to work with our contractors to establish consistent tracking and reporting of construction waste from all landlord tenancy projects, while also encouraging and supporting tenant contractors to adopt similar practices. By doing so, we aim to deliver year-on-year reductions in total construction waste generated from retail projects.

Additionally, we committed to developing a new set of tenancy design and fitout guidelines in FY25 which will include a focus on sustainability. The guidelines will prioritise circularity, waste diversion, healthy spaces and electrification, balanced with design and commercial outcomes. By taking this proactive step, we aim to provide our internal teams with the essential tools and resources to collaborate effectively with retailers, fostering and encouraging improved sustainability outcomes for retail fitouts across all our assets.

As an Australian entity with an annual consolidated revenue of more than $100 million, QIC is required to report on the risk of modern slavery across its investment activities and portfolios, as well as through its operations and procurement supply chains under the Modern Slavery Act 2018 (Cth) (the Act).   

QIC’s approach to modern slavery is managed at the corporate level and is focused on continuous improvement. During the reporting period, actions across QIC and our investment teams included:  

• Updating the modern slavery procurement toolkit
• Undertaking a review of the modern slavery e-learning training module
• Updating the Whistleblowing hotline website
• Completing a preliminary review of our connection to human rights issues across our operations, supply chain and most investment activities.

At QIC, we manage diverse asset classes and products on behalf of our clients, and we have different levels of ownership in, and influence over, our investments. Due to this, while our Modern Slavery Framework is consistent, our approach to meeting our obligations under the Act varies across asset classes and investment teams.

Assessing and managing modern slavery within QIC’s Real Estate investment team

QIC Real Estate’s ESG strategy, through the Sustainable Value Chain focus area, works to address modern slavery risk in our operations and supply chain. We acknowledge the potential link between our asset-related activities and areas of elevated modern slavery risk, and are committed to continuously improving our efforts to address the risk of modern slavery. In addition to the QIC corporate-level initiatives outlined above, we have continued to progress the following activities within our Real Estate business during FY25.

Assessing risk 

Using the Fair Supply⁸³ platform, QIC Real Estate's supplier spend for CY24 was analysed at high level, and the modern slavery risk of our supplier industry categories and countries mapped across 10 tiers of the supply chain. This analysis identified most significant modern slavery risks within our supply chain were found to relate to our real estate development projects, due to the potential modern slavery risks associated with construction activities, and the operations of our shopping centres due to the risks associated with commercial services and suppliers (including cleaning contractors and security services). Real Estate suppliers were additionally found to operate in predominantly low-risk industries for forced labour according to the Fair Supply platform.

QIC Real Estate also engaged sustainability consultancy Edge Impact during FY25 to undertake a review of ESG risks in our supply chain, which included a more granular view of modern slavery risks across different supplier categories within Real Estate. The modern slavery risk assessment used a comprehensive set of risk indicators applied across the entire supply chain, from raw material extraction to final product. These indicators considered various factors that could increase vulnerability for people working within the supply chain. High-risk categories identified included building construction (labour and materials), repairs and maintenance, cleaning, security, and manufactured goods such as promotional materials and Christmas decorations.

Based on the supplier analysis undertaken by both Fair Supply and Edge Impact, 88 of QIC Real Estate’s highest risk suppliers were identified and invited to complete or update their previous year’s responses on the Informed 365 Modern Slavery Property Supplier Platform Questionnaire (the Questionnaire) in May 2025.

The Questionnaire is supported by 47 of our property industry peers. It was established to lessen the reporting burden of suppliers to the property industry by asking them about the actions they are taking to address human rights and modern slavery risks across their operations and supply chains, on a single questionnaire and platform. The Questionnaire response rate was 73% (64 suppliers), higher than the average response rate across the broader platform.

Responses to the Questionnaire have been assessed and demonstrate a slight improvement in some areas of our suppliers’ understanding and approach to modern slavery over the past year. The responses have also enabled us to identify areas where our suppliers’ approaches have not improved, and where we are able to provide them further support to help progress their approach to addressing modern slavery, including continuing to directly engage with Tier 1 high-risk suppliers to support them in their approach to addressing modern slavery.

Mitigating risk

Cleaning Accountability Framework (CAF)⁸⁴: QIC Real Estate directly engages cleaning company suppliers as part of the management of our real estate asset portfolio. Cleaning companies have been identified by QIC Real Estate as a higher-risk area for potential modern slavery. QIC Real Estate has been an active participant with CAF since 2018, which exists to end exploitation of cleaners across property services and improve labour standards.

During the reporting period, we obtained CAF certification at six additional assets across the Real Estate portfolio. This was in addition to our existing CAF-certified assets, which maintained their certification and resulted in a total of 13⁸⁵ QIC Real Estate assets now having CAF certification. This is illustrated in the table below.

Table 11: CAF-certified QIC Real Estate assets 

Supplier engagement: Using outputs from the in-depth ESG risk assessment conducted by Edge Impact, we identified 10 of our highest-risk Tier 1⁹³ suppliers to participate in two roundtables across a range of non-compete sectors including building construction, cleaning, security, promotional marketing materials, Christmas decorations, solar, vertical transport and waste management services during FY25. Modern Slavery Roundtables were designed to help us better understand key actions being undertaken to address modern slavery across a cross-section of our supply chain. Key learnings from these roundtables will be used to help us identify areas of focus in FY26.

Supplier due diligence: Due diligence continued during FY25 to assess the risks of proposed new supplier relationships based on the nature of the goods or services being purchased, and their value. If suppliers sit in a higher-risk category, further due diligence is completed to assess their policies and practices. An example is our past engagement of solar panel installation suppliers. We recognise that solar panels have significant risk factors, including the global prevalence of forced labour and slavery, and we may be linked through the suppliers we engage. While no new solar suppliers were onboarded during the reporting period, our standard process includes conducting due diligence on all new solar suppliers to assess their policies, procedures and supply chain due diligence processes.

Tender evaluation: Our tender process includes ESG criteria, including modern slavery questions to ensure human rights are given proper consideration during due diligence, the establishment of contracts and ongoing supplier relationship management. Our internal purchasers are provided guidance on how to perform due diligence and assess the risks of proposed engagements based on the nature of the goods or services being purchased and their value. Tender assessment documents also feature an ESG section which includes a sub-section on modern slavery. 

Contractual clauses: Supplier contracts continue to include a standard clause on modern slavery. QIC’s legal team has continued to review and refresh our template modern slavery contract clauses in supplier contracts, including updating the modern slavery clause in our standard Purchase Order Terms and Conditions.  

Clients: We have continued to see interest from our clients in relation to our approach to assessing and addressing modern slavery through questionnaires received on the topic and general conversations. During the reporting period, one of our major clients undertook a detailed analysis of our approach to ESG, including modern slavery, and also updated obligations within our Investment Management Agreements with them. 

Collaboration with the property industry to address modern slavery risk: QIC Real Estate is an active member of the Property Council of Australia’s Human Rights and Modern Slavery Working Group, which collaborates on the assessment and management of modern slavery risk across Australia’s property and construction sector.

We are a member of the Informed 365 Modern Slavery Property Supplier Platform Working Group, for members using the Property Council of Australia’s Modern Slavery Supplier Platform to assess and address modern slavery risk in their supply chain. This group meets monthly to identify opportunities to continuously improve the platform, analyse supply chain data, and identify where supplier engagement and education might be beneficial.

Tenants: We recognise there are modern slavery risks across the retail sector that have the potential to relate to tenants at our shopping centres. As a first step to address this risk, we continue to integrate modern slavery clauses into leasing contracts, where possible.

For more on QIC's approach to modern slavery, see our latest Modern Slavery Statement.