FY20 ENVIRONMENTAL, SOCIAL and GOVERNANCE REPORT a Letter from the CEO 3

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FY20 ENVIRONMENTAL, SOCIAL and GOVERNANCE REPORT a Letter from the CEO 3 FY20 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT A Letter from the CEO 3 Overview 6 Sustainability Highlights and Values 8 Risk Management 11 Stakeholder Engagement 13 Materiality Assessment 15 Environmental Sustainability and Performance 16 External Initiatives 23 Social Sustainability 25 Diversity and Inclusion 28 Work Health and Safety 31 Community Involvement 34 Sustainability Data 36 GRI Content Index 39 1 July 2019 to 30 June 2020 | NEXTDC Limited | ABN 35 143 582 521 NEXTDC Limited FY20 Environmental, Social and Governance Report 2 A LETTER FROM THE CEO Craig Scroggie CEO A year of unprecedented disruption to our personal and business collaborate, and sell, with businesses immediately turning their lives has proven that the data centre and cloud infrastructure focus to their infrastructure platforms to support new ways of industries are more crucial than ever. Digital infrastructure is an working. These macro impacts on all industries have in-turn essential service for governments, enterprise and communities. driven exponential increases in data usage and therefore Our business has seen growth and demand at unparalleled increased the dependence organisations and individuals have on levels as public, private and Government organisations digital infrastructure. These circumstances reinforce the accelerate their digital transformation, driven by both customer importance of our ESG approach and the role NEXTDC plays in demand and requirements imposed by the COVID-19 pandemic. supporting individuals, businesses and communities. We expect One might say that as-a-Service, virtual infrastructure and more businesses to rely on our services and will seek to colocation close to these clouds is more than a rising understand our stakeholders’ evolving needs. megatrend, but the foundation of digital transformation and a Prior to the pandemic, megatrends such as cloud computing, phenomenon that has only been accelerated by the current blockchain, the internet of things, mobile 5G, virtual reality, global health crisis. augmented reality and artificial intelligence were already driving The extraordinary events that have unfolded globally introduced extraordinary data centre growth. That trajectory continues new barriers to traditional business models including social upward and if anything, is accelerating. Social distancing distancing, closed borders, grounded flights and disrupted introduces new tyrannies of distance that are best bridged supply chains. In a matter of weeks, the global economy was through digital technology which keep organisations connected forced to re-think how people and organisations interact, to their teams, customers, partners, and suppliers. NEXTDC has two key pillars for promoting and continuously driving sustainability across our organisation: ENVIRONMENTAL SOCIAL SUSTAINABILITY SUSTAINABILITY NEXTDC is committed to assessing NEXTDC demonstrates commitment to and reducing the environmental corporate values in dealings with our footprint of its data centres. We are customers, our team and wider stakeholders. focussed on the continuous These values are reflected in our Corporate improvement and delivery of Social Responsibility, Employee Code of sustainable initiatives. Conduct, Supplier Code of Conduct and other related policies. Social sustainability improves team engagement, customer loyalty and supplier relationships, which results in improved productivity. We categorise and prioritise the most relevant sustainability issues that affect the organisation and our stakeholders. NEXTDC Limited FY20 Environmental, Social and Governance Report 3 Accelerated 4th industrial revolution Our dependence on information is deeper than ever. Analysts estimate that the amount of data being generated across the world is doubling every two years. Industry analyst IDC forecasts there will be over 180ZBs of data generated by 2025 – a number calculated prior to COVID-19. Research from IDC estimates that the pandemic has advanced the urgency for digital transformation by 3-5 years. As we negotiate this transitional time in human history, our challenge as an industry is to sustainably manage the vast quantity of high-powered computing hardware that is running 24 hours per day, 365 days per year, with the focus on facilitating digital change. The value proposition for colocating this equipment within data centres have been largely proven. What is not quite so understood is how much power and water it takes to run a data centre. How well data centre companies minimise the environmental impact of these operational requirements will increasingly influence customer choice as computing loads continue to multiply. Innovating to meet spiralling energy consumption challenges At NEXTDC, we know that by applying design, engineering, and operational excellence to reduce energy consumption, we can create market differentiation and limit the unintended consequences of digital transformation on future generations. We place extremely high priority on reducing energy usage and consumption of our planet’s finite resources as well as preserving the environment locally, nationally and globally. Without compromising on the safety and resilience of our facilities, we endeavour to innovate across all areas of the business to reduce energy and water consumption. Our efforts have been recognised globally by some of the industry’s most esteemed commentators. Further details relating to awards NEXTDC has been recognised for from global organisations such as DataCenter Dynamics and Frost & Sullivan can be found in the FY20 Annual Report. Setting a new benchmark for energy efficiency With the transformational pressures experienced in the current environment NEXTDC is devoted to driving continuous improvement in energy efficiency and sustainability. Our facilities are designed, engineered and operated at a level of energy efficiency that is superior to competitors in the market. It is an achievement that also allows us to support our customers in their efforts to reduce their carbon footprint and impact on the environment. Our industry-leading Power Utilisation Effectiveness (PUE) ratios, National Australian Built Environment Rating System (NABERS) 5-Star rated facilities and carbon neutral corporate operations are key outcomes from our commitment to environmental sustainability. PUE is a metric that matches total energy consumption by a data centre in comparison to the load required to run the computer equipment in the facility. In FY20, we achieved a national average PUE of 1.3 compared to the industry average of approximately 1.7. The difference is very significant indeed and a testament to the focus we apply to energy efficiency. NEXTDC is the only data centre operator in the country to achieve a NABERS 5-Star rating for energy efficient buildings with that level of certification applying to the M1 and S1 data centre facilities. The M1, S1, C1, B2 and P1 data centres are all certified being under the ISO 14001 certification for Environmental Management Systems. Our second-generation data centres B2, M2 and S2 have all been designed to meet, if not exceed, the current energy efficiency standards and ISO 14001 certification. NEXTDC Limited FY20 Environmental, Social and Governance Report 4 Carbon neutral operations Improving our society through giving back NEXTDC’s environmental credibility is based upon transparency In FY20, we continued to extend our Corporate Social in established accountability metrics. We focus on measurable Responsibility (CSR) programs by helping to improve society and objectives to reduce the environmental impact of our data our local communities. NEXTDC’s ‘Live to Give’ program was centres through minimising power usage and carbon emissions. established to improve the communities in which we live and work. NEXTDC’s ‘Live to Give’ program comprises the following: We continually tune our Mechanical and Electrical Plant (MEP) in real-time to maximise energy efficiency in the environmental ▪ Corporate partnership with The Smith Family, donating conditions prevailing at the time. We also proactively seek to approximately $50,000 in FY20 and $168,000 since launching reduce the risk of any environmental incident at our sites and the program in FY19 in addition to staff volunteering days and strive to reduce the Company’s contribution to landfill. mentor program ▪ Partnership with Pledge 1%, enabling staff to devote 1% of their We take every action to minimise carbon emissions but where time to give back by participating in community and charitable we can’t avoid it, we procure carbon credits through the Qantas endeavours Future Planet (QFP) program. We delivered yet another industry first by having the carbon emissions of our corporate operations ▪ Workplace giving programs with $1:$1 donation matching for audited and accredited under the Australian National Carbon Cancer Council, Beyond Blue, The Smith Family and UN Offset Standard (NCOS - now known as Climate Active) as 100% Women; and carbon neutral. NEXTDC is proud to own and operate its own ▪ One paid Volunteer Day each year, allowing teams and solar array on the roof of its M1 data centre and has also to be a individuals to spend time with their preferred charity or in giving Principal Partner to the Melbourne Renewable Energy Project back to their local community. (MREP) since its inception in 2014. Financial close on this project was achieved during FY18, and the 80MW Crowlands Fostering a diverse and inclusive culture Wind Farm in Victoria was opened in February 2019.
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