Sustainability

Sustainability

Vicinity’s vision of delivering the leading retail property and lifestyle experience in Australia requires us to find the right balance and create the best outcomes for the social, environmental and economic aspects of our business. We know that our shopping centres are the centrepiece of communities across Australia and are therefore an important contributor to establishing smart, sustainable cities with high-quality living experiences that are well positioned to drive our future economy. Our purpose - Enriching Community Experience – recognises this contribution, and requires us to secure the long term future of our business by delivering value for our customers, investors, people and the communities in which we operate.

Our strategy

Sustainability principles

Approach and performance

Key achievements

Key performance highlights in FY16 

Key performance highlights

Recognition and awards

Vicinity Centres, and the former Novion Property Group, have received independent recognition relating to sustainability performance, with the following notable listings:

 CDP
  • Included in the ‘A-‘ band for performance for the fifth consecutive year by CDP in 2016.
 GRESB
  • Participated in the Global Real Estate Sustainability Benchmark (GRESB) since 2011 and Vicinity direct portfolio ranked fifth in the Australian retail sector in 2016.
 DJSI-main
  • Inclusion in the Dow Jones Sustainability Index (DJSI) suite of leadership indices from 2004 to 2014 and 2016.
 FTSE4Good
  • Inclusion in the FTSE4Good index since 2001.

Governance

Our Board and management team are committed to sustainability and maintaining the highest ethical standards.

We are guided by a suite of internal and external governance policies which outline the business behaviours expected from our Directors, Executive Committee, employees and contractors. At Vicinity, responsibility for our sustainability agenda is allocated to the highest levels of the organisation. The Board has ultimate responsibility for sustainability, seeing it as a way of creating long-term value for the business and our stakeholders.

Our Sustainability Committee and Diversity Forum are an important part of Vicinity’s management committee structure. Both are chaired by our CEO and Managing Director, and have membership including the Executive Committee and senior leader representatives. Sustainability updates are also regularly provided to the Board.

Board Of Directors

The sustainability team leads Vicinity’s sustainability agenda and programs, monitoring and driving continuous improvement in our performance across the business. Responsibility for implementation of our strategy sits with each relevant business unit, with support from the Sustainability team through provision of tools and advice.

For more information on our corporate governance, see our 2016 Corporate Governance Statement.

Stakeholder engagement and materiality

Vicinity’s key stakeholders include our customers, retailers, securityholders, suppliers, joint venture partners and wholesale fund investors, government and regulators, industry groups, employees and community organisations. We engage with our stakeholders in many ways throughout the year to understand their expectations of Vicinity and to build and nurture strong relationships. 

Stakeholder relationships are managed by people across the business – from the management teams at our centres to executives and senior leaders at our corporate offices – who monitor issues raised by stakeholders throughout the year.  

Materiality

Vicinity has completed a materiality assessment to understand our long-term economic, environmental, social and governance risks and opportunities.

Our materiality review process considered:

  • the outcomes of materiality reviews completed previously by our historical organisations,
  • the latest property, retail industry and consumer trends, and
  • views of, and feedback from, several key internal and external stakeholders.

The most material issues for Vicinity broadly relate to how our business:

  • maintains an engaged and high performing workforce with the right skills and capability to deliver our Group Strategy,
  • has the agility and capacity to innovate and strategically respond to disruptive forces that impact consumer behaviours,
  • manages business risks from economic and market trends that impact real estate, retail and consumer markets, and
  • develops a climate resilient retail portfolio that can withstand long-term physical risks from climate change, support community resilience and leverage commercial opportunities.

Results of the materiality review have been integrated within Vicinity’s Enterprise Risk Register where appropriate, and have directed the establishment of our Sustainability strategy and reporting. To see how we are responding to these material issues, refer to page 8 of our 2016 Sustainability report.

Reporting

Sustainability Report

Our Sustainability Reports for the past two years can be found below.

CDP reports

Our CDP (formerly Carbon Disclosure Project) survey responses for the past seven years can be found below.

Responses prior to and including 2015 cover the former Novion Property Group. The 2016 response covers Vicinity Centres.

London Benchmarking Group (LBG) reports

Our London Benchmarking Group (LBG) community investment reports for the past four years can be found below.

Reports prior to and including 2014 cover the former Federation Centres. Reports from 2015 onwards cover Vicinity Centres.

Our memberships

Vicinity community partnership

Industry collaborations are an important way for us to learn, share knowledge and drive collective action on sustainability. They also help us stay informed about latest industry trends and monitor emerging risks and opportunities for our business.

Vicinity holds membership with, and participates in, a number of industry groups and external initiatives in Australia and internationally.

pca_logo
  • Our CEO and Managing Director is a Director of the Property Council of Australia (PCA) and a Property Male Champion of Change
  • Our people sit on a number of roundtables, for example, General Manager Sustainability sits on the National Sustainability Roundtable.
SCCA
  • Our CEO and Managing Director is a Director of the Shopping Centre Council of Australia (SCCA)
gbca1
  • Our Chief Investment Officer is a Director
  • Vicinity benchmarks its performance using the Green Building Council of Australia’s (GBCA) Green Star rating system.
PIF_CHARITY_LOGO_COL
  • Vicinity makes an annual contribution to the Property Industry Foundation (PIF) and provides support via sponsorships and donations throughout the year.
Beacon _logo _RGB
  • Vicinity has partnered with the Beacon Foundation to help deliver our community investment program at a corporate and centre level, which is focused on disengaged and unemployed youth. 
  • Beacon’s programs mobilise secondary schools, parents, businesses and communities to work together to support young people into employment by making school more industry-relevant. Beacon primarily operates in disadvantaged communities and areas of high youth unemployment, where the risk and need are often the greatest. Beacon also has a broad presence throughout Australia, with programs at secondary schools in proximity to our network of centres, and a proven track record of creating a positive social impact.
GRESB
  • Vicinity participates in the Global Real Estate Sustainability Benchmark (GRESB) survey to benchmark environmental, social and governance performance annually. For more information, see ‘Reporting’.
CDP
  • Vicinity reports climate-related risks and opportunities, and performance annually through CDP. Click here to download our CDP reports.  
DJSI-main
  • Vicinity participates in the Dow Jones Sustainability Index (DJSI) survey annually to benchmark economic, environmental, social and governance performance. For more information, see ‘Reporting’.
LBG-Logo
  • Vicinity benchmarks our community investment spend annually through the London Benchmarking Group (LBG). Click here to download our LBG reports

 

 

Case studies

Northland

CASE STUDY: Northland tackling crime and youth unemployment

Vicinity’s Northland shopping centre in Preston, Victoria sits in a challenging suburb with a high amount of social housing. The centre was once known among local residents for its longstanding issues including crime, theft and antisocial behaviour, predominantly among local youth.

In 2013, Northland’s centre management formed an alliance with the City of Darebin (the Council) and Victoria Police, creating the Northland Precinct Action Group (NPAG), with the goal of making Northland a safer and welcoming centre with a strong positive connection with the local community.

The partners soon adopted the NPAG Action Plan, which undertook to implement a number of initiatives, such as training and equipping Northland’s security to respond to incidents at the centre together with Victoria Police, driving better collaboration between NPAG partners and the broader community and creating employment opportunities for young people with Northland retailers.

A couple of years later, the initiative is delivering outstanding results. Northland’s crime rate has more than halved compared to three years ago, and so have arrests of local youth within the trade area. Some of our retailers have reported a 60 per cent drop in stock losses, saving hundreds of thousands of dollars every year.

“If you asked me now if Northland has a youth issue, I’d say no we don’t anymore,” says Northland’s Operations Manager, Paula Willcock. “But for us, this isn’t enough. We need to provide long-term solutions for these young people.”

Northland is now working with the Council, Victoria Police and Northland Youth Centre to create employment pathways for young people in the community. This is aligned with Vicinity’s community investment program which focuses on addressing youth unemployment and disengagement in communities where we operate.

Andrew Drivas, Northland’s Centre manager says, “Instead of prosecuting them, NPAG are now working to identifying troubled youth and support them to become better contributors to society.”

In September 2016, the centre hosted a successful Jobs Fair to connect local job seekers with retailers at the centre, where prospective candidates could apply for jobs on the spot. The event saw about 500 people attend and apply for positions. Northland retailers collected more than 180 applications, and have indicated they would happily participate again. In the lead up to the event, the Youth Centre provided resume assistance and interview advice for young people.

Northland is now rolling out a new Youth Leadership Program, in partnership with NPAG stakeholders. The program will see a group of selected youth progress through a three phase program focusing on learning, employability skills development and application. As a part of this program, Northland centre management will provide selected young people with resume building and interviewing skills, helping them find employment at the centre, with an NPAG partner or other organisations in the community.

“We are trying to remove youth from their often negative environment, and show them that being active members in the community has benefits.”

 

Cleaning -services

CASE STUDY: Promoting positive practices in our cleaning services

Cleaning services make up 38 per cent of Vicinity’s operational spend, and cleaning contractors are identified as a critical supplier base with many inherent risks.

This year, we completed a full evaluation of our cleaning contracts as a part of our annual formal procurement review. The evaluation aimed to identify a smaller mix of suppliers that could provide an improved, consistent scope of services across our portfolio, with a focus on improving presentation standards.

During the tender process, we asked prospective suppliers to provide detailed information about their sustainability practices. The information provided informed our selection of eight quality accredited partners who could work with Vicinity over the long-term to achieve shared goals and objectives.

We included strict clauses in each supplier’s contract to ensure that robust environmental and workforce practices are adopted through the duration of our partnership. These included gaining approval from Vicinity before engaging sub-contractors, ensuring that all workers (including sub-contractors) are paid in accordance with relevant regulations and awards, and that Vicinity has the ability to undertake supplier audits.

We also incorporated best practice environmental criteria into the agreements, such as the use of eco-friendly cleaning chemicals and consumables, deploying 100 per cent new and efficient cleaning equipment, and implementing training programs that drive improved waste management practices.

A consolidated base of cleaning contractors is now bringing in many benefits for Vicinity. We have achieved greater productivity, safety and operational efficiency in cleaning outcomes and a consistent presentation standard across our assets. We have developed a centralised reporting framework to measure and improve performance, and we have reduced a number of our sustainability risks.

 

Coffee -recycling

CASE STUDY: Coffee recycling 

Vicinity has a recycling program at our centres that aims to increase our organics recycling and reduce the amount of waste sent to landfill. In FY16 Vicinity managed to recover 4,600 tonnes of organic waste that was composted or sent to an energy recovery facility, avoiding disposal to landfill.

During our waste audit process, we identified coffee grounds as a significant organic waste stream in terms of both volume and weight that warranted a specific recovery process.

Recovering coffee grounds avoids expensive landfill costs, but also reduces the associated environmental impacts with landfill, which generates greenhouse gas emissions.

We first trialled recycling coffee grounds at Runaway Bay Shopping Centre in QLD, where the centre management team worked with retailers to design and implement a simple process to recover used coffee grounds. They also provided equipment and developed specific signage and education materials to support the initiative.

The trial resulted in approximately 20 tonnes of organic waste diverted from landfill over the course of a year, and a six per cent reduction in waste costs due to savings in landfill and transport costs. We shared the great results of the project with our other centres and developed plans to roll-out the initiative across the whole portfolio.

As part of the broader roll out, we developed a coffee recycling tool kit to assist the centre teams with implementation. Coffee grounds recycling is now available at around 20 centres within our portfolio, including Chadstone, Midland Gate, Emporium Melbourne and Grand Plaza, with plans to roll-out across the remaining centres in the next year.

Upfront engagement with our tenants to secure their support was key to the success of this project. Designing a simple process that is tailored to suit the operations of our centres also made it easy to implement and roll out across our portfolio.

In regions where there was no recycling opportunity our centre teams have developed innovative ways to reuse coffee grounds, such as onsite composting and providing it to retailers to take home and use as fertiliser.

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