2016 SUSTAINABILITY REPORT Creating extraordinary places, connecting and enriching communities. REPORT OVERVIEW Welcome Staff engagement & Volunteering Community engagement Operating COMMUNITY Platform Designing and operating assets in tune with customers and community needs and expectations Employment Energy & Creating & Labour Emissions PEOPLE ENVIRONMENT extraordinary Creating a safe, Diversity & Equal Creating resilient healthy, inclusive Materials places, connecting opportunity assets operating at and supportive and enriching workplace optimum level Health & Safety Waste communities. ECONOMIC PERFORMANCE uality of Reducing risk and maintaining COMPANY PROFILE Portfolio value over the long-term Making our Investor engagement Financial business Scentre Group resilience MESSAGE FROM OUR CEO 2016 sustainable at a glance SUSTAINABLE BUSINESS What is relevant to Peter Allen Highlights Framework Scentre Group? PAGE 3 PAGE 4 PAGE 5 PAGE 6 PAGE 7 PAGE 8 ENVIRONMENT ECONOMIC PERFORMANCE ECONOMIC PERFORMANCE ECONOMIC PERFORMANCE ENVIRONMENT ENVIRONMENT Energy & Overview Financial resilience Investor engagement Overview Waste emissions PAGE 10 PAGE 11 PAGE 14 PAGE 15 PAGE 16 PAGE 18 COMMUNITY COMMUNITY PEOPLE ENVIRONMENT COMMUNITY PEOPLE Community Staff engagement Diversity & Water & materials Overview Overview engagement & volunteering inclusion PAGE 19 PAGE 21 PAGE 22 PAGE 26 PAGE 27 PAGE 28 PEOPLE SUSTAINABILITY REPORT PEOPLE OUR APPROACH Gender diversity & PEOPLE OUR APPROACH Report profile Employment Ethics & return-to-work Health & safety Governance & labour compliance performance PAGE 29 PAGE 30 PAGE 31 PAGE 32 PAGE 33 PAGE 35 SCENTRE GROUP | Sustainability Report 2016 | 2 MESSAGE FROM OUR CEO Peter Allen Sustainability is not just about the environment: it is about seeing our business through the eyes of our staff, retailers, customers and community. Our ability to grow and make a difference for the future requires a sustainable business model. In 2016 we continued to focus on ensuring the long-term We are dedicated to achieving our 2018 vision of being the To help bring our purpose to life, we undertook one of future of our business is sustainable in every sense of place for talent to thrive. We have improved workplace Australia’s largest surveys gathering feedback from some the word. Our purpose - to create extraordinary places, flexibility and made mental health and wellness a priority. 29,000 community members and will continue to seek new connecting and enriching communities - gives meaning and Our Diversity and Inclusion agenda focussed on improving and meaningful ways to connect and enrich our communities direction to every activity undertaken at Scentre Group. the participation of women in our industry and our LGBTI in the future. Action Plan was released to ensure all employees feel safe Sustainability is a priority that underpins our purpose and As we continue on our long-term journey to make our to be themselves at work. Importantly, we also launched our the aim of our sustainable business practice is to operate business sustainable, our strong and united team remains inaugural Reconciliation Action Plan during NAIDOC week, safely and efficiently, conserve energy, produce less waste, focussed on pushing the limits in everything we do, and the articulating our commitment to end the disparity between engage meaningfully with our stakeholders and utilise Board of Directors and I look forward to delivering long-term, Indigenous and non-Indigenous Australians in one generation technology and design to create extraordinary shopping sustainable growth that leaves a positive legacy and genuine through employment. Our first employee engagement survey centres. We are continuing to drive sustainability efforts value for all our stakeholders. scored an impressive 85% for favourable engagement. across four pillars: Community, People, Environment and Economic Performance. We are steadily managing and minimising our environmental impacts. At Westfield Warringah Mall – located in a floodplain – In 2016 we brought our purpose to life in delivering several the $310 million project included major civil works to manage extraordinary redevelopments including major projects the flow of stormwater, significantly reducing the centre’s at Westfield North Lakes, Casey Central and Warringah Peter Allen future environmental risks. We have invested in Australia’s Mall. At Westfield Marion in Adelaide we opened a fresh largest car park canopy solar installation at Westfield Marion Chief Executive Officer food market and started work on a new lifestyle and and have implemented other environmental initiatives aimed at entertainment precinct in Perth at Westfield Whitford City. reducing our long-term energy usage and carbon footprint. In Each of these projects has considered the needs of the 2017 we will focus on understanding and managing the supply local area and aims to enhance amenity for communities. chain impacts of our construction projects. Our business continues to generate excellent financial returns for security-holders. SCENTRE GROUP | Sustainability Report 2016 | 3 2016 Highlights Economic People Environment Benchmarking Awards performance Leading Joe Curlewis Property 1 49% in ACSI’s 2016 research Trust Industry Award 85% report, Corporate for general excellence in employee engagement Reporting in Australia: Innovation and Outstanding score, placing Scentre Group Disclosure of sustainability risks Achievement category in top 5% globally among S&P/ASX200 companies 7 shopping centre openings 5.09 LTIFR (6.59 in 2015) 0.38 GJ/sqm energy CDP3 score improvement Shopping Centre Council of and redevelopments including only one LTI across intensity of our portfolio from C (2015) to B Australia Marketing Awards development projects (2015: 0.37 GJ/sqm) - Community Award for ‘Sing with Us’ campaign Community Diversity & Inclusion agenda expanded to include: star average GRESB4 score improvement • Mental Health & Wellness 3.5 NABERS energy rating, from (2014) to • Reconciliation Action Plan 51 74 2016 Stormwater NSW in line with industry average2 369 • Domestic Violence Awards for Excellence employee days used • LGBTI - Managing flood risk at for volunteering (2015: 408) Westfield Warringah Mall 5 MWh added solar 1. Australian Bureau of Statistics: The construction industry’s linkages with the economy 2. NABERS 2015/2016 Annual Report, shopping centre industry average is 3.5. capacity by 2020 nabers.gov.au/AnnualReport/2015-2016/201516-program-statistics.html 3. Carbon Disclosure Project 4. Global Real Estate Sustainability Benchmark SCENTRE GROUP | Sustainability Report 2016 | 4 Making our business sustainable • Stakeholder engagement on sustainability strategy • New Board appointments brought total number of female directors to three, • Sustainable Business Framework meeting our 2015 commitment to and Roadmap launched achieve 30% representation of females • Update to Parental Leave policy at Board level • Creation of Scentre Group through the • Introduction of Workplace Flexibility policy • Reconciliation Action Plan launched merger of Westfield Retail Trust and • Introduction of Purchase Annual • Held Safety Week and ‘people Westfield Group’s Australian and NZ business Leave policy protecting people’ campaigns • New culture embedded through new • Environmental, social and economic • LGBTI, Health and Wellness campaigns • Update Environmental policy purpose and defined DNA sustainability risk review • Domestic Violence policy launched • Develop Community strategy • CEO Peter Allen appointed by Property • Establish Sustainable Business Council Council of Australia as Male Champion • Participation of top 80 leaders in • Develop Responsible Materials of Change • Launch of Safety Cultural Change program unconscious bias awareness training Procurement policy 2014 2015 2016 Next Steps SCENTRE GROUP | Sustainability Report 2016 | 5 >$3 bn future COMPANY PROFILE development pipeline Scentre Group has a clear strategic direction for growing its business 2,776 >525 m >$22 bn $605 m $665 m through owning, managing and developing the best employees customer visits retail sales projects projects retail assets in Australia and New Zealand started completed BRISBANE 10,714 Australia $4.7BN New Zealand 831 Retail Outlets Retail Outlets 2 3 WHOLLY JOINT 34 OWNED VENTURES 5 0.2 m/sqm 3.4 m/sqm SYDNEY centres centres Gross Lettable Area 5 Gross Lettable Area $31.1 bn 3 $1.2 bn 3 14 $16.8BN PERTH SCG Interest SCG Interest ADELAIDE 2 NZ $1.7BN 7 5 $1.3BN $1.2BN $12.3 bn 5 $1.1 bn 2 1 3 JOINT WHOLLY JOINT JOINT MELBOURNE 7 7 VENTURES OWNED VENTURE VENTURES JV Partner WHOLLY JOINT JV Partner Interests CANBERRA OWNED VENTURES Interests $4.8BN $1.2BN 1 1 $43.4 bn WHOLLY JOINT $2.3 bn OWNED VENTURE 1 6 Assets Under WHOLLY JOINT Assets Under Management OWNED VENTURES Management TOTAL AUSTRALIA AND NEW ZEALAND Assets Under Weighted Average # Retail Outlets Gross Lettable Area SCG Interest (bn) JV Partner Interests (bn) Occupancy Rate Management (bn) Capitalisation Rate 11,545 3.6 m/sqm $32.3 $13.4 $45.7 5.33% >99.5% at 31 December 2016 previous SCENTRE GROUP | Sustainability Report 2016 | 6 next SUSTAINABLE BUSINESS Staff engagement & Volunteering Community Framework engagement The Sustainable Business Framework Operating COMMUNITY Platform identifies our sustainability guiding principles Designing and operating assets in tune with customers and community and material issues. It helps the Group ensure needs and expectations that its sustainability practices contribute