Goodman: Meeting the sustainability demands

With many of its top 10 customers announcing carbon reduction targets, Goodman Property Services (NZ) Limited has refined its investment strategy to meet the demand for sustainability, says chair John Dakin. 

The property investment and development business has more than 215 customers in New Zealand, with many showing an increased awareness of climate change. 

“The growing awareness of climate impacts among our warehouse and logistics customers is a significant shift,” says Dakin. “Eight of our top 10 customers have publicly stated carbon reduction targets. The increased awareness is contributing to the growing demand for sustainable and resource-efficient distribution facilities, close to consumers.

“We’ve refined our investment strategy to meet this demand, building new facilities to a minimum 5 Green Star rating, retrofitting energy efficient technologies to improve the environmental performance of the portfolio and focusing on brownfield redevelopment opportunities.”

Dakin says investing in Green Star-rated properties and other sustainability initiatives helps Goodman’s customers achieve their climate goals and deliver lower emissions and reduced operating costs for these businesses.

The Goodman board has widened its focus to include Scope 3 emissions and is thinking about the longer-term impacts of its investment decisions. These are indirect emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions.

“Our focus has quickly widened to include Scope 3 emissions and thinking about the longer-term impacts of our investment decisions,” Dakin says.

He stresses the importance of comprehensive greenhouse gas monitoring and independent auditing to fully understand the emissions profile of a business. “This knowledge is essential to establishing a meaningful carbon reduction and management plan with targets for a lower-emission, more-climate-resilient future.”

Boards also need to acknowledge that this is a rapidly evolving area of focus, with climate science and regulation requiring ongoing learning.

Dakin says the entire board has responsibility with climate reporting an agenda item at every meeting. “Our internal reporting has become more comprehensive, as business processes have evolved alongside climate regulation.”

On the board is independent director Laurissa Cooney CMInstD, who sits on the IOD Chapter Zero steering committee and provides valuable industry expertise, says Dakin.

Risk specialists have also helped understand the physical risks to the company’s portfolio under various climate scenarios. 

“Using lifecycle assessments, engineering specialists assess the embodied carbon within our new developments. We have a target of reducing upfront embodied carbon by between 10 per cent and 20 per cent compared to a standard reference building.

“We also leverage the global platform that Goodman Group has to ensure we are at the forefront of international thinking in this area,” he says. 

“Internal workshops have explored the risks and opportunities to our business and distilled these into the most material considerations.

“As a property investment and development business, our development activity is the largest source of emissions. Directing our efforts toward more sustainable development solutions provides the greatest opportunity to reduce climate impacts.”

Dakin says directors need to be curious, consult widely and be prepared to have traditional thinking challenged. They also need to think strategically – “if your current business plan isn’t sustainable and doesn’t have emission reduction targets your financial viability will be compromised.”

Goodman has participated in the annual CDP (formerly the Carbon Disclosure Project) survey since 2006, providing a reporting framework ahead of regulatory reporting requirements. 

“Toitū net carbon-zero certification has provided assurance around these business processes, and the targets we have established,” Dakin says. “Our CFO, Andy Eakin, chaired the property and construction sector working group that established the climate scenarios for our industry.

“As a business we are publicly releasing our action plans and rating submissions to assist other companies in their climate journey.”

Dakin says this is not an issue you can solve on your own. “It is very much a bipartisan issue and journey we are on – sharing progress with others is a critical component in addressing the massive challenge.”

And the IoD is playing an important role as educator and facilitator in this regard, he says. “Climate change is an area of collective responsibility, sharing knowledge benefits everyone.”