Sustainable investing in real estate

Sustainable investing is growing for good reason. Looking after the planet and its inhabitants is fundamental to long-term prosperity, and investments that support those goals are unsurprisingly popular.

Assets in Australian sustainable funds topped $25 billion last year with $4 billion of net flows notwithstanding the pandemic. Retail assets invested grew 35 per cent compared to a year earlier.1

For a variety of reasons, investors are increasingly putting their money into companies and funds that think about environmental, social and governance (ESG) issues: whether they are screening for non-financial risk, using ESG as a proxy for quality assurance, re-weighting toward future growth areas, or practicing impact investing to achieve particular ESG outcomes. Being able to demonstrate ESG credentials is important for many investment strategies.

Reflecting not only the COVID-19 outbreak but also the fierce drought and bushfires earlier in 2020, AMP Capital’s commitment to sustainability in real estate has only strengthened. We responded to last year’s natural disasters directly by raising money for charities and bushfire relief, and adjusted our operating procedures to keep our customers and staff safe during the pandemic. Recognising the toll these challenges place on people, we also increased access for staff and families to mental health support, and researched ways we can continue to improve wellbeing.

Despite the difficulties 2020 brought, it was a year we achieved significant sustainability milestones.

We signed our first 100 per cent renewable electricity contract. Along with buying offsets to compensate for residual emissions (from gas, diesel and refrigerants), our renewable electricity contract means we achieved zero net carbon for Scope 1 and Scope 2 emissions for the internally managed assets within our leading office fund from 1 Jan 2021.2

We achieved a 6-star energy rating at Royal Randwick Shopping Centre in Sydney, and a 6-star energy rating for Bond One, an office building in Sydney’s CBD, and continue to install electric vehicle chargers in our car parks.

At the same time, we improved our NABERS water ratings at 24 assets during 2020. Since 2017, we experienced a 32 per cent reduction in water intensity. In the same period, we’ve seen a five per cent improvement in recycling rates and a 22 per cent reduction in waste generated per square metre.

We introduced our first Charopy smart bins at a shopping centre to improve recycling rates (see box for more detail). We also installed technology that automatically analyses buildings’ ventilation, cooling and heating systems, and makes control changes to optimise the balance between energy efficiency and occupational comfort for tenants.

We installed controls on our waste compactors that improve the way we manage and track waste and recycling, and retailers were encouraged to use compostable packaging as part of a retail food court pilot supported by the NSW Government Environment Protection Authority.

During 2020 we also demonstrated compliance against ISO14001, the world’s best practice standard for Environmental Management Systems, and researched ways to maximise the resilience of our clients’ real estate assets against the impacts of climate change.

We continue to have a strong focus on inclusion and diversity: we track the number of women in senior leadership positions (38%) and across all staff (60%); we opened the first ‘Changing Places’ 24/7 accessible bathroom facility in the Melbourne CBD at Collins Place; we published a Modern Slavery Act Statement; collaborated with the Property Council of Australia on an initiative which surveyed over 900 suppliers to screen for human rights and labour issues; we launched our Innovate Reconciliation Action Plan; and held cultural awareness training sessions that educated over 170 staff about Aboriginal and Torres Strait Islander heritage and installed plaques to acknowledge Aboriginal custodians of the land.

Our 2030 strategy is based on three pillars.

  1. Environment: We operate within environmental limits so that our real estate investments are sustainable in the long-term. We focus on energy and climate, waste minimisation, water efficiency, biodiversity and habitat.

  2. Social: We want everyone to enjoy happy, healthy lives in vibrant, inclusive communities and workplaces. That involves focusing on health and wellbeing, culture and community, equity and diversity, and transport and mobility.

  3. Governance: We respect the rules, behave ethically, transparently disclose our performance and continually strive for best practices. Critical to good governance are policies and procedures, engaging with our supply chain partners, regular performance monitoring and reporting and participating in sustainability ratings and third-party benchmarks.

Since launching AMP Capital’s 2030 Real Estate Sustainability Strategy in 2019, we have delivered on a number of our targets and remain on track to achieve our ambitious plan. Ensuring our entire business is committed to ESG initiatives is a major and necessary task, particularly as we remain one of the largest unlisted real estate fund managers in the Asia-Pacific region3, managing some of the most iconic shopping centres, office buildings and logistics estates across Australia and New Zealand on behalf of global investors.

Many investors want to put their money into assets that provide a financial return as well as making a difference to society. Real estate assets have a major role to play in improving environmental, social and governance outcomes. Our clients and customers are repeatedly telling us that ESG matters, and we hear that message. It matters to us also. We are serious about it and we are making progress toward achieving real sustainability every day.


Breakout Box – Charopy Smart Bin

In 2020, we were the first in Australia to install ‘smart bins’ at a shopping centre.4

The Charopy smart bins have an electronic door controlled by a bar code reader that only admits eligible container deposit scheme recyclable bottles and cans. This helps our customers make the right choice, which prevents contamination of our recycling bins, and helps us to gather a clean stream of higher-value recyclable materials. They were developed by a start-up company under the NSW Treasury Start-Up hub, supported by the CSIRO.

We installed two Charopy bins at Macquarie Shopping Centre’s food court in Sydney. The smart bins allow shoppers to scan the barcode on their beverage bottle or can and the bin aperture lights up green and opens the door if it’s eligible for the 10- cent container rebate. If it’s not an eligible recyclable container, the door stays closed and lights up red.

In the three months from installation to the end of December 2020 we collected 11,872 containers. All funds raised by recycling these containers at Macquarie Centre will be used to install additional sustainable features at the centre.

These smart bins have resulted in improved recycling rates of eligible containers at Macquarie Centre, whereas typically fewer than half the eligible drink containers in NSW end up being recycled.


To read more about AMP Capital Real Estate’s sustainability strategy, click here.  
To read the AMP Capital Real Estate Sustainability Report for 2020, click here.


2 capital signs renewable electricity agreement to accelerate zero net carbon target
3 ANREV/IREV/NCREIF Fund Manager Survey, 2020
4 smart bins are here

Author: Chris Nunn BA, LLB, MSc Head of Sustainability & Platform Operations Sydney, Australia

Source: AMP Capital 30 July 2021

Reproduced with the permission of the AMP Capital. This article was originally published at AMP Capital

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