Charter Hall is committed to an “authentic position” on sustainability.
- In 2023, the NABERS SPI Office Energy Index included ratings on 418 assets, amounting to 8.56 million sqm of rated area, or 27% of the national office market
- The SPI Office Water Index follows closely behind, with 385 assets representing 8.22 million sqm of rated area, or 26% of the total national office market.
- The number of funds disclosing Indoor Environment performance grew by 38%, with eight new funds listed.
In 2023, Charter Hall listed a record 12 portfolios on the NABERS Sustainable Portfolios Index (SPI). The Index, now in its fifth year, offers the only publicly available, whole-of-portfolio view of actual performance of Australia’s offices and retail assets.
In 2023, the Index captured 64 office and shopping centre portfolios, up from 53 in 2022. But these numbers don’t adequately express the size of the commercial space now covered by NABERS, nor the scope of ambition of the asset owners engaged.
The area Charter Hall assesses with NABERS is enormous. Take Charter Hall’s Office Sector portfolio, for instance. These 81 assets add up to more than 1.4 million square metres of space – or the size of 7,500 average Australian homes laid end to end. NABERS Energy captures 98% of the Charter Hall Office Sector portfolio, making the 5-star portfolio rating without the contribution of GreenPower an impressive achievement.
It's this “platform-wide scale” that Charter Hall leverages to replicate best practice across the business, says Group Head of ESG, Andrew Cole.
“We are committed to an authentic position on sustainability and use independent rating tools like NABERS to verify our performance and to focus on continuous improvement.”
Andrew Cole, Group Head of ESG, Charter Hall
Sustainability at scale
Charter Hall is certainly leveraging its large platform to drive sustainability at scale.
Australia’s buildings are responsible for around a quarter of our carbon emissions – and this makes a 100% reduction in operational carbon emissions a key focus for Charter Hall.
Since 2017, Charter Hall has reduced its absolute carbon emissions by 54% against its FY17 baseline year. In 2022, Charter Hall accelerated its commitment to net zero carbon emissions across Scope 1 and Scope 2, bringing forward its target from 2030 to 2025.
From 2025, all Charter Hall’s assets will operate on 100% renewable energy. To reinforce that commitment, Charter Hall signed a Power Purchase Agreement in 2022, with 152 assets powered through 151GWh wind and solar energy each year. This is the equivalent to the annual energy consumption of 26,000 average Australian homes.
Charter Hall’s 2022 sustainability report outlines other achievements worthy of applause. The Group installed 600 kilowatts of solar over the 2022 financial year, for example, taking its total solar platform to 47.8 megawatts.
Climate change adaption plans now cover 6.5 million sqm of assets – including 85% of offices by floor size and 98% of shopping centres. A carbon offset strategy guides the purchase of quality offset units for the Group’s residual emissions. Charter Hall also maintains Australia’s largest Green Star-rated footprint, with the 5.2 million sqm of Green Star space an increase of 25% in just one year.
Measurement leads to better management
The NABERS mantra has always been “measurement leads to better management”.
Charter Hall uses NABERS Energy ratings to track improvements in its energy performance. Since 2017, the Group’s NABERS Energy for Office portfolio rating has improved 0.7 stars, for instance, while the NABERS Energy for Retail portfolio rating has increased by 0.9 stars.
“Our investors are very engaged in the sustainability conversation, and the NABERS SPI is a well understood metric that helps them assess performance,” says the Group’s Sustainability Manager Jeanine Hill.
Charter Hall’s sustainability team recognises the direct link between data-backed decision-making and the delivery of positive outcomes, and has created or adopted tools and processes to enable fund and asset managers to measure, manage and improve sustainability outcomes over time.
Charter Hall has partnered with CIM to provide building analytics to improve efficiency, sustainability and comfort in 58 Office assets. “This system has helped us to fine tune our assets and make constant incremental improvements to performance.”
The strength of Charter Hall’s sustainability credentials has secured billions in green financing over the last two years – or around 10% of its total debt. To learn more about how banks, non-bank lenders and investors are using NABERS ratings to structure sustainable finance transactions, download the NABERS Sustainable Finance Criteria.
Transparency builds trust
Perhaps the most powerful leadership lesson from Charter Hall is its commitment to transparency across all portfolios.
“Our Annual ESG Databook discloses all the NABERS Energy, NABERS Water and Green Star Performance for all our currently rated assets,” says Jeanine.
As a property company Charter Hall is competitive by nature. “There is definitely a friendly rivalry among our teams, as they try to outdo each other to improve their buildings’ performance. Competitive nature aside, it demonstrates a real shift across the business in how ESG performance is factored into overall asset performance. Our people are not only along for the journey, but actively contributing to our progress in this space.”
Charter Hall’s leadership in sustainability is a virtuous circle. “As we are increasingly emphasising the importance of sustainability to our business and our investors’ and customers’ businesses, our people are learning more about what we’re doing to deliver better outcomes and how they can contribute in their roles,” Jeanine concludes.
Learn more about the NABERS Sustainable Portfolio Index 2023