Goodman Property Trust Annual Report 2022
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Corporate performance

The material factors critical to the success of our business include:
  • Sustainable structure, operations and results
  •  Stakeholder and community engagement
  • Environmental stewardship
  • Responsible investment
  • Non-financial performance

The table alongside includes the specific targets we have adopted in relation to these factors.

 

 

 

 

 

John Dakin

Key targets Progress Status
Retain investment grade credit rating of BBB
  • Stable financial metrics with gearing of 21.3% within our preferred 20% to 30% range
  • Sustainable distribution policy with a payout ratio of between 80% and 90% of cash earnings
  • Portfolio occupancy of more than 99%
External certification
  • Sustainable Finance Framework established, and inaugural green bond issued on 14 April 2022
  • Carbon neutral operations with Toitū carbonzero certification1
  • Improved CDP Climate Score of B and Supplier Engagement Score of A-
Governance and disclosure
  • Continued alignment with the NZX Corporate Governance Code
  • Corporate Social Responsibility Committee, made up of senior management personnel, established
  • Hybrid annual meeting held
  • GRI reporting framework
Task Force on Climate related Financial Disclosures (TCFD)
  • New Zealand standards for climate risk assessment and disclosure being established
  • First TCFD compliant report expected to be 2023
Community support
  • Almost $400,000 distributed through the Goodman Foundation in FY22
  • Support included initiatives promoting health and wellbeing initiatives associated with the pandemic

1 Certification encompasses Goodman (NZ) Limited, Goodman Property Services (NZ) Limited and Goodman Property Trust. It includes emissions from operational activities and from the buildings and spaces within the portfolio where the Manager has operational control.

John Dakin briefing media at Roma Road Estate, Mt Roskill. John Dakin briefing media at Roma Road Estate, Mt Roskill.
John Dakin briefing media at Roma Road Estate, Mt Roskill.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

We monitor our performance and provide investors, regulators, customers and community partners with objective information about our business activities. Transparent and robust governance structures give these stakeholders confidence in our reporting, and we engage regularly across a variety of communication channels on the full range of ESG topics.

The Board of Goodman (NZ) Limited is committed to delivering the business strategy of GMT in a sustainable way. It oversees a risk management framework that includes consideration of all strategic, operational, financial and compliance risks. Non-financial issues, including the impacts of climate change, are also included within this risk framework.

A dedicated Corporate Social Responsibility Committee, made up of senior management personnel, oversees the implementation of our sustainability programme. Regular Board reporting includes performance against targets to reduce emissions, increase renewable energy use and lower the embodied carbon within our developments.

The behaviour of our people is governed by a comprehensive suite of employment policies, including a code of conduct. These articulate our standards and the expectations that come with being part of the Goodman team.

The corporate governance section on page 106 compares our governance practices against the principles and recommendations of the NZX Corporate Governance Code. The full suite of governance documents is available online: https://nz.goodman.com/who-we-are/corporate-governance.

FINANCIAL STABILITY

Financial stability is a prerequisite for a sustainable business.

Maintaining high occupancy and customer retention levels is a key driver of our success. The strength of these businesses underpins our own financial performance, providing the strong rental cashflows that drive earnings growth and returns to investors.

Low gearing and substantial liquidity provide funding capacity for new investment. It also provides resilience against negative market events that could impact property values.

The creation of a sustainable finance platform this year has extended the range of funding sources available to GMT. The platform allows the Trust to issue new bonds and loans to support the delivery of sustainable property solutions for customers.

The inaugural issue of $150 million of green bonds was made on 14 April 2022, following the Trust’s financial year end.

 

INVESTMENT GRADE CREDIT RATING

Our financial strength is reflected in our credit rating.

GMT’s low gearing, prudent capital structure, sustainable operations and results, and responsible investments are all reflected in the investment grade credit rating of BBB from S&P Global Ratings.

As a result of the mortgage security held over the Trust’s property assets, its debt (including the new green bonds) is rated one notch higher at BBB+.

Both ratings have remained stable since first assigned in 2009.

 

BENCHMARKING

Regular benchmarking against respected international standards is a requirement of any business focused on continuous improvement and best practice.

A commitment to reducing our carbon footprint has seen us participate in the annual CDP survey every year since 2009. This global initiative encourages participants to monitor greenhouse gas emissions, reduce carbon pollution and minimise climate change impacts.

The implementation of emission management and reduction strategies as part of our Toitū carbonzero certification has contributed to an improved result in 2021 with a climate score of B, compared to B- in 2020. It was the highest rating achieved by a New Zealand organisation in 2021, with the top honour being shared with a number of other leading local companies.

There were 23 New Zealand businesses that submitted data with CDP evaluating over 13,000 organisations worldwide.

CDP also awarded a Supplier Engagement Score of A-, the first time this assessment has been made. It’s an area of increasing focus as businesses look to manage their indirect emissions and improve wider environmental and social outcomes.

Our commercial contracts are being updated with social procurement clauses and requirements for suppliers to measure and report emissions. Starting with construction agreements, we will look to extend this requirement across our entire supply chain over time.

You can find out more about CDP and the rating process at www.CDP.net.

REPORTING

As a leading NZX investment entity, we have a responsibility to provide timely, balanced and readily available information. We engage with the investment community on a regular basis, through a variety of communication channels, including formal reporting, market announcements and briefings, newsletters and more directly through open days, road shows, presentations, and meetings.

We have adopted the GRI framework as the standard for our sustainability reporting. The index on page 44 allows stakeholders to access and review key information around our sustainability programme, enhancing transparency and accountability.

Our future reporting will be extended to ensure it is consistent with the New Zealand climate standards, currently under development. Work is underway to assess the performance of the Trust under a variety of climate scenarios across short, medium and longer timeframes and we expect to complete our first TCFD report in 2023.

We are active industry participants. Our corporate memberships and partnerships include Australasian Investor Relations Association, Diversity Works, Global Women, Greater East Tāmaki Business Association, NZ Green Building Council, New Zealand Shareholders Association and Property Council of New Zealand.

COMMUNITY SPIRITED

Engagement with our communities and broader stakeholders is an important part of who we are as a business. We encourage and foster these relationships, building positive connections that give us the social licence to operate.

Our connection with tangata whenua is one of the most important of these stakeholder relationships. We celebrate Māori culture and work alongside local iwi in our investment and social initiatives, acknowledging our heritage while striving for an equitable future.

Through the Goodman Foundation we invest in programmes and enterprises that aim to improve the quality of life, standard of living and health of the most vulnerable in our communities. We contributed almost $400,000 in support over the last 12 months.

This year we have also supported the WWF Whale Tale initiative (pictured left), sponsoring the creation of a decorated sculpture at Highbrook Business Park. It was one of 160 similar tail sculptures designed by artists and children and displayed across Tāmaki Makaurau. Inspired by the Bryde’s Whale the art trail brings to life themes of protecting and restoring the mauri of our oceans.

Goodman Foundation