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Tenant well-being to the fore


Most Kiwis are familiar with “green buildings” - reducing their carbon footprint through energy and water efficiency, cleaner air systems, and similar measures.

However, ESG is taking the well-being of tenants and responsibilities of owners to a new level.

Bayleys’ national director property management services Stuart Bent says leading New Zealand corporations are voluntarily taking the high ground, while many others are preparing to comply with various governmental and governance mandates that will soon come into effect.

“ESG is a very broad topic. People have focused on the E rather than S and G until now. We’ll hear more about it at a Property Council forum in July but many of our clients are already reporting these things in their profit results.

“When it comes to the full range of ESG we’re finding that the top-end companies are more interested. They have big tenants with an appetite for buying in. Mid-range building owners and tenants still need more encouragement.

“It used to be about basic rules, but it’s become more sophisticated to embrace procurement for all components, and social and governance criteria,” he says.

Modern slavery is on the social agenda. Bent says property investment and management listed corporate Centuria follows Australian legislation in its operations in New Zealand and elsewhere.

“It extends down to the cleaning staff and use of labour,” he says.

Centuria included its second statement on modern slavery in its 2021 profit report: “Modern slavery is a real yet often hidden industry, built on the exploitation of the vulnerable, for profit. It is estimated around 40 million people live in slavery or slave-like conditions globally, with an estimated 15,000 of those in Australia (based on the 2018 Global Slavery Index),” the company stated.

Centuria says it benefits from a group-wide governance approach to slavery through its whistle-blower policy and code of conduct, which have been updated to refer to modern slavery risks in all the places it operates.

The company has more than 350 suppliers and the report says its slavery policy has revealed a lot about its supply chain that it didn’t know, notably that secondary suppliers are often hidden, and Centuria had identified risks such as back-office staff employed in the Philippines, and in the agricultural industry.

Centuria’s chief financial officer and representatives from across the group take part in its Modern Slavery Working Group which meets regularly to discuss actions taken by each part of the business to assess modern slavery, acknowledging “there may be modern slavery within our operations yet to be uncovered.”

The Centuria report says it has partnered with Bayleys in 2022, focusing on raising awareness of modern slavery and improving supplier due diligence processes. Bent says there is growing collaboration between landlords and tenants who are insisting ESG components are in place in their workplaces.

“Governance and accountability is about more than talk. NZX-listed Argosy has an ESG committee established by its Board; they’re one of the leaders in New Zealand.”

Argosy has a $2 billion portfolio, and among its properties are several landmark Auckland buildings such as 82 Wyndham Street.

Argosy’s latest sustainability report has several goals relating to ESG mandates including obtaining NABERS NZ ratings for all its offices by 2023, a waste management target of 75-percent landfill diversion on all major projects, moving to an electric vehicle fleet for staff, reducing air travel, and reducing carbon emissions by 2031.

The commitment of Argosy and other corporations to ESG extends to encompassing the social well-being of employees and wider society with initiatives such as provision of subsidised gym memberships, and access to independent employee assistance programmes for mental health. Permanent employees are provided with health, life and disability insurance cover as part of their employment.

Argosy also supports community initiatives such as surf lifesaving and tree planting programmes.

Many of the more recent ESG features are likely to soon become part of accounting standards, Bent says.

When it comes to building a precinct such as Harbour Grounds in Wynyard Quarter, managed by Bayleys, the experience is enhanced by “place making” – music, markets, food trucks, and guest speakers, Bent says.

Bayleys Property Services’ Auckland-based head of retail management Michael Gillon says he is working closely with tenants to ensure their ESG ambitions align with landlords.

“Some great work has been done so far with buildings already awarded the New Zealand Green Building Council’s Green Star ratings for design and performance.

“We’re making good headway with the NABERS NZ accreditation for many buildings we manage. However, there are a number of different sustainability accreditations we’re working on including the Global Real Estate Sustainability Benchmark (GRESB),” Gillon says.

One of Bayleys’ clients, 151 Property, has committed to carrying out a full ESG assessment on the property assets it acquires.

In a recent ESG report, 151 Property chief executive Chris Chapple highlighted the value of a diverse and inclusive team: “We want to encourage freedom of opinion, freedom of voice and freedom of choice in our community.

“Through the work of our Diversity and Inclusion committee, we aim to raise awareness of a range of initiatives, including PRIDE, Wear It Purple Day, and Mental Health Month.”

Gender equality is a top priority for 151 Property, with 40-percent female representation in the executive leadership group, and workplace initiatives, such as its flexible working policy.

The report also highlights Bayleys Property Services, which manages 151 Property’s New Zealand office portfolio, for developing a customised engagement programme at its Harbour Grounds at Wynyard Quarter in Auckland. The report states this programme “not only helps connect the spaces they manage, but supports retention and attraction of high calibre customers.”

The report states the programme for Harbour Grounds “was a key priority focused on developing strong partnerships with our customers, moving beyond the traditional property management relationships to gain a deeper understanding of their core values and their people. By working together, Bayleys has been able to deliver engagement activities that not only activate the precinct but also support our customers, their business, their people and their values, with a shared focus on building a community, supporting our environment and creating a culture that is unique.”

In 2020, Bayleys hosted an eco market in partnership with KPMG. The event featured stalls from local operators who produce environmentally friendly products, as well as a variety of food trucks and live music.

“This was truly a community-led event that helped promote environmental sustainability within the precinct, as well as foster a sense of community amongst customers. Given the success of the event, Bayleys has decided to make it a key fixture and aims to grow the stall line-up,” the report says.

“Given one third of a person’s life is spent at work, businesses have a responsibility to create workspaces that support and promote their team’s physical, emotional and mental well-being. Our commitment to this is exemplified through our flexible working policy, provision of fresh fruit and healthy snacks, dedicated wellness room, free annual flu vaccinations and implementation of activity-based working in 2018.”

151 Property has also undertaken various partnerships with various wildlife and social support groups.

Gillon says initiatives by companies like 151 Property demonstrate how corporates are starting to focus on social impacts and governance.

“The social side looks at a wide variety of elements including how the property is contributing to the community it’s located in, health and well-being of staff and supply partners, commitment to living wages, with suppliers treated as equals rather than a master and servant relationship.

“It extends to how happy people are in our buildings and why they would want to occupy them,” Gillon says.

“As we hopefully make our way out of the end of the pandemic, the question will be asked as to what tenants and their commercial landlords will do to entice staff back to buildings. If you have a decent health and well-being strategy it will certainly help.

“When it comes to governance, it’s about how transparent the organisation is, compliance and accountability.”

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