This year we’ve continued to prove our capabilities in all areas of Goodman’s business.
We have a robust strategy to deliver essential infrastructure for the digital economy with an experienced and passionate team. We seek to realise our vision of making positive change to the environment and communities we operate in.
Throughout the year, we have progressed our sustainability initiatives across all aspects of the Environmental, Social and Governance areas. You will see throughout this report that our focus is on both short-term programs that we can implement and measure today, while establishing long-term strategies that will have an enduring impact on our business – and that of our customers – and stakeholders into the future. This includes the Group’s Long Term Incentive Plan which provides alignment with securityholders and incorporates environmental and sustainability targets in assessing performance for all employees.
Over several years, the Group has been working to expand its innovation strategy. We aim to facilitate and invest in products that provide sustainable solutions to customers across property technology, supply chain, transport, construction and manufacturing. Examples include smart metering, carbon neutral building products, on-site safety management and the use of robotics and electric vehicles to assist with logistics and transportation.
Our investment strategy across these technologies provides the Group with greater access, visibility and insight into the technological trends affecting real estate. Our focus is on evaluating how these can be applied to our own portfolio to improve sustainable outcomes for all.
From 1 October, we will be establishing a new Sustainability and Innovation Committee to support the management team, and to enhance the Board’s visibility and efficacy on our ESG initiatives. This Committee will be Chaired by Chris Green with Phil Pryke and newly appointed Directors Hilary Spann and Vanessa Liu as members. Chris, Hilary and Vanessa are all New York-based, actively work in the sustainability and innovation space in their day-to-day businesses, and therefore are expertly positioned for these roles. Phil has experience in the green energy field, is the Chair of the Remuneration Committee and plays an important role in setting and reviewing the aforementioned LTIP targets.
In summary, the Committee will have responsibility in relation to overseeing the Group’s:
This year we have made significant progress to deliver on our strategy to maintain a diverse Board with the appropriate mix of skills, gender and geographic representation. To this effect we have appointed two US-based Directors.
In April we appointed Hilary Spann, a highly experienced global real estate executive with an extensive background in public and private equity markets, both in the US and globally, with a particular focus on real estate. She is currently a senior executive at NYSE-listed Boston Properties, Inc.
Vanessa Liu was appointed in May. She’s an experienced technology innovator, business leader and digital media entrepreneur. Vanessa is currently Co-Founder and CEO of SaaS technology company Sugarwork, and an Independent Director of ASX-listed artificial intelligence company, Appen Ltd.
Both Hilary’s and Vanessa’s experience and insights are well aligned to our long-term strategy and values, while bringing greater diversity to the Board and helping continue to shape Goodman as a forward-thinking company.
This report demonstrates Goodman’s continued determination to deliver tangible outcomes that will have a measurable and meaningful impact on the business and the wider community. Our Sustainability initiatives are entrenched into the Group’s strategy and will continue to remain a key priority for the Board and management.
Through our location choices, sustainable building approach, and focus on relationships, we work to make a tangible difference today, and long into the future. We integrate sustainability throughout our business. It’s embedded in our values, our investment strategy and our key performance indicators for executive remuneration.
With $73 billion of assets under management and $13.6 billion of developments in progress around the world, we are one of the largest developers of industrial property globally. This scale comes with enormous responsibility. We acknowledge that our actions today can have significant implications in the future, so we lead by example.
Our properties add value to local communities and the wider economy and we know it’s important that we continue to operate in a responsible and sustainable way. We continue to assess the most material issues for our business and have refined our 2030 sustainability strategy as the roadmap for our wide range of ESG activities.
Our strategy creates a framework to deliver on our sustainability targets that minimise our adverse impacts and maximise positive outcomes for people and planet. It shapes the operation of our core business, and we focus on the areas where we have the greatest control and influence, including the development and management of a global portfolio of sustainable industrial properties.
Through our strategy, Goodman is proactively responding to the global challenges of climate change. We’re taking action now by reducing carbon emissions, using renewable energy and developing greener buildings. We’re also adopting circularity, regenerating infill sites, building more equitable supply chains, and partnering with community groups. You’ll read more about these activities and more throughout this report.
We believe that allocating financial resources and human capital to reduce potential impacts now makes commercial sense over the long term. By integrating sustainability throughout our business, we also achieve our financial goals as our properties and services will be more attractive to customers and investors well into the future.
Reducing our carbon emissions is vital on the path to Net Zero.
Goodman is on track to maintain its carbon neutral status for its global operations for the second consecutive year. We continue to work on decarbonising our development projects, taking into account upfront embodied emissions and designing for efficiency throughout the whole building’s lifecycle.
We are ready to go further. This year we developed science-based targets that will see us significantly reduce our global greenhouse gas (GHG) emissions by 2030. We are aiming to reduce absolute Scope 1 and 2 GHG emissions by 42% and relative Scope 3 emissions by 50% from an FY21 base year. These targets are approved by the Science Based Targets initiative and are aligned to the Paris Agreement’s objective to keep global warming below 1.5 degrees. Meeting these goals, particularly Scope 3 goals, will require collaboration with our stakeholders including both suppliers and customers.
Achieving these targets won’t be easy. It will require genuine commitment, and significant investment in time, money and resources. However, we see both a moral and a financial business case for sustainability.
While we’ve been investing in the sustainability space for a number of years, our future commitment has increased to approximately $820 million from $700 million across the Group and Partnerships. This investment will fund our sustainability initiatives to 2025.
While it includes standard programs such as solar installations, LED lighting upgrades, water saving features, carbon reduction and renewable energy, we’re also pushing well beyond these programs. We are investing in technology and innovation that will drive significant long-term change.
Our first priority is to reduce our carbon emissions. Where we’re unable to reduce our operational and embodied emissions, we purchase carbon offsets. As part of our approach, Goodman has recently made a strategic investment in an integrated carbon credit and regeneration platform – Wyuna Regenerative Agriculture.
Investing alongside Australia’s Clean Energy Finance Corporation, this innovative project responds to multiple UN Sustainable Development Goals (UNSDGs), operating at the intersection of land regeneration, sustainable food production and carbon markets. It’s focused on regenerating large areas of land driving biodiversity value and sustainable red meat production, together with the creation of carbon credits.
Achieving carbon neutral buildings that require little to no offsets requires low-carbon, innovative building products and close collaboration. That’s why we’re working with material suppliers, industry groups and experts in the field to support the development of materials with lower embodied carbon.
We’re also investing in innovative ways to get more productivity and operational efficiencies out of our buildings for customers. One solution is to invest in PropTech or other specialist technology companies to help them develop and grow. In return, we learn more about the future of these technologies and what they mean for our customers and industry. Examples include drone delivery technology and infrastructure through Skyports, parking management and traffic management systems, and smart meters for energy and water.
Another way we help improve the efficiency of buildings is by optimising land use. Goodman’s focus is on infill locations, close to consumers, where we can regenerate existing sites and optimise space by building multi-storey facilities.
A growing number of our customers are now on their own sustainability journeys. By providing the sustainable infrastructure they need, we’re helping them achieve their own sustainability goals.
Although our sustainability investments are significant, they’re prudent. Our customers increasingly require a minimum standard of sustainability features. For many, we help them go beyond that.
The benefits are twofold. While our actions drive positive customer relationships they make financial sense too – we believe buildings that aren’t sustainable and adaptable, will become obsolete over time.
For a business to be truly sustainable, it needs to be financially sustainable. Goodman’s consistent and prudent financial management provides the resources we need to carry out our sustainability vision. Capital markets endorsed this approach, so we created a Sustainable Finance Framework which provides us with financial flexibility to issue sustainability-linked bonds and loans.
This year, the Group issued a $US500 million sustainability-linked bond. Additionally, several of our Partnerships have entered into sustainability-linked finance instruments. This is just one element of a capital management strategy which sees Goodman with available liquidity of $20.9 billion across the Group and our Partnerships.
Goodman recognises the importance of Aboriginal and Torres Strait Islander communities in Australia. We also recognise the need for reconciliation and this year we’ve moved through the Reflect stage of our Reconciliation Action Plan (RAP).
We have created economic empowerment through charitable and business opportunities, as well as created cultural learning occasions for our people. We move forward through our RAP process with a strong determination to take action and make a difference.
This year we continued to play close attention to the health and safety of our own people as well as the workforces of our customers and contractors. Goodman has embraced a flexible work environment that helps retain and attract the best staff globally. This flexibility supports our diverse and inclusive team by improving wellbeing, morale and productivity.
For our customers, we continue to evolve our designs to provide spaces that encourage wellbeing across their own workforce, such as providing more natural light, outdoor fitness equipment, stylish staff amenities and creating more breakout areas. This focus has led to Goodman being the first logistics real estate company in Hong Kong to achieve the WELL Health-Safety Rating from the International WELL Building Institute.
In another challenging year, the Goodman Foundation made a tangible and sustainable difference to the communities we operate in, facilitating $11.6 million in donations. We also extended beyond our established pillars, responding to emergencies including the humanitarian crisis in the Ukraine and the floods in Europe and Eastern Australia.
In addition to the worthy programs we support around the world, we also increased our support of the Australian Indigenous community.
Goodman has taken meaningful action and is making significant progress in achieving our sustainability targets. I’d like to thank our people, customers, investors and all other stakeholders for their continued support and contribution to Goodman’s sustainable growth.
We have the strategy in place to make a difference and the committed capital, people and resources to execute it.
Group Chief Executive Officer