sustainability report 2022
ESG is an integral part of Goodman’s business strategy. We make investment decisions based on strategic long-term thinking and operate with sustainability goals front of mind.
As Goodman has grown to become Australia’s largest listed-property company, our commitment to ESG principles continues to shape our operations.
Our role in providing essential infrastructure for supply chains means we are uniquely positioned to identify and adapt to global trends. As the world begins to work more actively on climate mitigation, Goodman continues to seek and embrace opportunities to become a truly sustainable business. In doing so we’re not only aiming to meet the expectations of our stakeholders, but we’re acting in alignment with our own company values.
Under our 2030 Sustainability Strategy, Goodman has committed to making change across a range of ESG activities. This includes working towards measurable and ambitious sustainability targets, to help make a tangible and positive difference in the world.
The breadth of our targets means we’re able to embrace the strategic opportunities currently available to those willing to make real change in their organisations and supply chains. It also mitigates against key ESG risks which come with inaction.
Our strategy includes actions that will reduce carbon emissions and increase the use of renewable energy across our portfolio. We’re also very active in our development of greener buildings, an action which not only helps the planet, but leads to healthier work environments with greater amenity for our customers.
People are integral to our strategy too. We’re creating diverse leadership teams, building more equitable supply chains, and partnering with community groups who deliver life changing support in our communities.
We don’t consider this activity ‘additional’ to our day-to-day. Instead, it’s embedded within our core business. We also firmly believe our approach will help deliver sustainable returns and positive outcomes for our stakeholders.
Operating across a global network presents both challenges and opportunities for our people. While we’ve set ourselves global sustainability targets, achieving these requires contribution from local teams in each of our markets.
While we have a relatively small global workforce of around 1,000 people, a large number of people have been with the business for many years. Our team is motivated and incentivised to demonstrate our corporate values of determination, innovation, integrity and sustainability. The people at the top of our business aim to lead by example as they demonstrate these values in their behaviours and decision making. Our values are also part of how we assess the performance of our people.
Although our global business allows us to share knowledge and best practice across jurisdictions, it also highlights the disparity between the policies and opportunities across the markets where Goodman operates. Our ambition to use 100% renewable energy is one example of how great this challenge is. In some markets, this commitment is in line with customer expectations and market trends; while in others, availability of renewable energy options makes the transition more difficult.
Regardless of the location however, we’re determined to find pathways to achieve the sustainability targets we’ve set for ourselves. The challenge requires our team to think strategically, collaborate with market leaders and create opportunities to overcome hurdles.
In 2019, Goodman set its 2030 Sustainability Strategy based on six material ESG priorities. We believed each was not only critical to our business and ESG performance but would also be an area where we could make a tangible and positive impact.
It’s important that these material priorities are dynamic and are reviewed regularly. We start by considering them alongside global sustainability trends to gain an understanding of where and how they interconnect. Next, they’re influenced by our stakeholders, customers and investment partners. Lastly, we factor in the broader economic and social context.
This approach aligns our sustainability strategy with our operational drivers to address shared global challenges.
With the above in mind, we reviewed our material ESG priorities in 2022.
We partnered with leading sustainability advisors BWD Strategic for the review. The process was rigorous and involved a series of interviews with external stakeholders as well as an assessment of the effectiveness and suitability of our strategy. The review also considered how our measurable targets respond to a suite of current and emerging global ESG trends.
The result saw us keep our original six material issues and add two more. The updated list of material ESG issues for Goodman includes:
We consider these priorities to be essential to Goodman’s continued success and have shaped our sustainability strategy accordingly.
Our buildings are fundamental to Goodman’s business strategy.
Goodman’s developments increasingly include a range of sustainable design features and innovations that improve energy efficiency, water efficiency and the wellbeing of our customers.
Sustainability also plays a role in our choice of locations. Our strategy of prioritising properties in urban infill markets that are close to large consumer populations is gaining momentum.
These properties (often re-purposed existing buildings in older industrial precincts) are in high demand. Not only do they present opportunities for our customers to improve efficiency and reduce transport-related emissions and costs, but they can also unlock positive social outcomes. We’ve found that revitalising underused and outdated precincts quickly provides new opportunities for employment and other community benefits.
While sustainable building design is prioritised on every Goodman property, we look well beyond the design itself. We find opportunities to innovate with materials and onsite energy generation, taking a building lifecycle approach. This is helping us transition to carbon neutral developments, and to meet growing market demand for reducing carbon emissions.
As our properties have emerged as essential infrastructure for the storage and movement of goods around the world, we’ve seen automation become a priority for many supply chains. This global trend is impacting the design of our buildings. We are developing buildings that enable our customers to incorporate automation and technology.
Partnerships like this shift the value proposition for well-located and well-designed logistics properties. Often, they result in longer lease periods, which aligns with Goodman’s long-term strategy.
Climate risk presents a real and unfolding challenge to Goodman’s business and properties.
Goodman’s Boards and leadership teams are fully committed to taking pragmatic action to identify, mitigate and respond to this risk, including designing and building properties which are resilient in the face of climate-related disruptions.
This year, Goodman reinforced its support of the Paris Agreement, by developing an emissions reduction target, which aligns with the Science Based Targets initiative, to limit global warming to 1.5 degrees. The process was an extension of our 2021 carbon neutral operations achievement and involved an in-depth review of our global carbon emissions and the opportunities to reduce them.
Our targets consider our Scope 1, Scope 2 and Scope 3 emissions. We look at our design and construction processes and actively engage with our supply chain to encourage the supply of low carbon materials.
For the time being, carbon offsets are part of our transition to a lower carbon business. However, based on conversations we’re having with investors and our supply chain, new technologies will play a greater role in enabling us to achieve our sustainability goals and rely less on offsets.
Our commitments to solar and renewable energy targets remain resolute. They’re an essential piece of our low carbon future and a vital element to reduce global emissions.
Our commitments to solar power are also a very tangible way to make a positive difference. This aligns well with the ambitions of many of our large global customers, who are increasingly setting their own carbon reduction targets.
Meeting the needs of our stakeholders is paramount to Goodman’s ongoing success. Regular engagement with our stakeholders and nurturing of long-term relationships helps us understand their priorities and anticipate their needs. This way we can better support their ambitions and deliver sustainable returns for our investors.
We prioritise the effective disclosure of our ESG performance to our stakeholders. These include our customers, investors and securityholders, our employees, suppliers and local communities.
We disclose through multiple channels and provide regular updates via Goodman’s website, our Sustainability and Annual Reports, and the ESG reporting benchmarks we work towards.
Goodman has a diverse range of global and local customers within the ecommerce, logistics, retail, consumer goods, automotive, pharmaceutical and technology industries. Our business is focused on their current and future needs.
We work with our customers to gain a deep understanding of their real estate needs. We also look for where our sustainability goals align. This provides new and ongoing opportunities to collaborate.
Most of our top 10 global customers have set significant carbon emissions reduction targets and renewable energy commitments. As a result, they’re increasingly looking for partners who can help them take action and make significant progress towards their targets.
We’re gaining momentum too, when it comes to the quality and number of conversations we’re having with our customers about aligned sustainability goals. These discussions usually centre around the future of green buildings and focus on opportunities, such as onsite power generation, where we can innovate to fast-track our shared and individual goals.
Through our managed Partnerships, Goodman has developed longstanding relationships with several of the world’s largest and leading pension and sovereign wealth groups.
Engagement with our investment partners about our ESG strategy has increased this year, as well as become broader and more detailed. Many of our equity partners are increasingly intent on working with companies with clearly articulated ESG strategies. Goodman’s strong ESG approach is integral to their decision to do business with us.
Many of our investment partners operate according to their own dynamic ESG policies. This in turn has an influence on Goodman’s development and management activities. We regularly seek feedback from our investment partners during our investor updates and customer meetings. This feedback helps us to review our material sustainability priorities and impacts of our business.
In the last few years, we’ve increased our use of video conferencing and online communication tools to communicate with a wide group of investors, without the need to travel. We see this as a long-term trend that aligns well with our own sustainability goals.
Finally, we participate in several ESG benchmarks and ratings, including GRESB, MSCI and Sustainalytics. These platforms review the non-financial ESG performance aspects of our operations and provide value to the investment sector.
With a global workforce of more than 1,000 employees and a relatively flat organisational structure, constant engagement and communication across our global teams is vital. It is one of the many ways we remain focused on our strategy, performance, and the direction of our business.
The health and wellbeing of our people remains a significant priority for Goodman. Programs such as the (good) life aim to support our people to find a productive work life balance. We survey our employees periodically. Throughout the COVID period we increased communication as well as online team engagement.
We induct new employees using e-learning modules and one-on-one sessions during their early months at Goodman. Ongoing training is generally delivered online and is available to all Goodman employees.
Half yearly and annual performance reviews help us understand which people are suitable for role progression and a training plan. This allows us to identify succession opportunities, career aspirations and boost diverse leadership.
We prioritise the rewarding and advancing of our people’s careers, on skills development and the provision of challenging work opportunities. We believe our high retention rate is partly due to programs like our long-term employee equity plan which gives our people a stake in the business.
The Goodman Foundation utilises our people, properties and resources to address disadvantage in the world. Together, they make a tangible and sustainable difference to people’s lives. By partnering with likeminded charities and funding projects with clearly defined timelines and outcomes, we’re able to provide real support where it is needed most.
For the broader community, Goodman provides a comprehensive overview and regular updates on its ESG performance. We do this through our website, media releases and social media platforms including LinkedIn, Twitter and Instagram.
We also respond to enquiries through our website and emails to our investor relations team.
Our supply chain consists of small, medium and large-scale suppliers who we partner with to help deliver our global property development, property management and funds management activities.
We’ve established, extensive supply chain relationships across each of our operating regions. We engage with these partners at every stage, from initial development through to operation and management.
We also actively engage with suppliers and organisations who can help us make progress on our sustainability targets. This work includes engineering organisations and associations such as the Materials and Embodied Carbon Leaders Alliance (MECLA), whose members are driven to reduce embodied carbon in the building and construction industry.
