Optimising the environmental performance and resilience of our buildings
Building on strong environmental foundations
It has been an active year for Dexus as we continued to make progress towards the group’s 2020 targets for energy and emission reductions.
Building on this momentum, we established our New Energy, New Opportunities strategy that sets a pathway for Dexus to achieve net zero carbon emissions by 2030. Read more below in New energy New opportunities.
Supporting this target, Dexus also formally committed to act to reduce emissions under the Science Based Targets Initiative (SBTi), to set a science-based target consistent with a global transition to a 2-degree future.
Key achievements in FY18 include:
- Progressing towards our target to reduce emissions by 10% by 2020. In FY18, we achieved an 8.1% reduction in energy consumption and a 9.5% reduction in Scope 1 and Scope 2 greenhouse gas emissions against FY15 like-for-like baseline
- Continuing to progress towards our target to deliver 1,000,000 square metres of office space with a 5 star NABERS Energy rating or above by 2020, which currently stands at 892,000 square metres
- Maintaining certification as a carbon neutral organisation as part of Australia’s Carbon Neutral Program, offsetting 3,000 tonnes of carbon emissions
Partnering with like-minded investors on clean energy
During the year Dexus partnered with the Clean Energy Finance Corporation (CEFC), through its investment into Dexus’s Healthcare Wholesale Property Fund (HWPF).
Dexus established a fund-specific Clean Energy Policy (CEP) to affirm HWPF’s focus on sustainability and outline the adoption of design and operation practices, use of innovative technology and approaches to maximise energy performance and minimise greenhouse gas emissions across the Fund’s property portfolio.
Through this policy, Dexus and CEFC have commenced integrating design and operational energy efficiency across existing and pipeline healthcare properties, and shared learning on ‘clean energy’ technology and innovation.
HWPF’s pipeline asset, the North Shore Health Hub (NSHH), has benefited from this policy, progressing the following activities during the year:
- Registered for Green Star Design & As Built rating (v1.2) and is targeting a 5 star rating
- Developed a site-specific Climate Change Adaptation Plan to consider climate change impacts across construction and operation
- Conducted a Life Cycle Assessment across the 70% design stage to identify NSHH’s material and environmental hotspots relating to construction and operational resources and impacts, establishing a benchmark against which design improvements can be analysed and measured
Delivering FY18 enriched environment commitments
= Achieved , = Not achieved, = Underway
|Deliver 1,000,000sqm of office property to a minimum 5 Star NABERS Energy rating and 4 star NABERS Water rating by 2020||
|On track to achieve the 2020 target, with 892,000 sqm at a 5 star NABERS Energy rating and 615,000 sqm at a 4 star NABERS Water rating across the group office portfolio|
|Reduce energy consumption and emissions across the Group by a further 10% by 2020 using the FY15 baseline including exploring opportunities for renewables||Progressing towards the 2020 target, achieving an 8.1% reduction in energy consumption and a 9.5% reduction in Scope 1 and Scope 2 greenhouse gas emissions against FY15 like-for-like baseline|
|Consistently demonstrate a resource recovery rate of 80% from de-fitting vacant space by 2020, actively identifying charities and markets for re-use and increasing waste diversion from landfill||Demonstrated a resource recovery rate of 80% from de-fitting vacated space across 11 of 17 reported projects. Moved to single service provider sourcing arrangements across key markets to align objectives and enhance processes|
New energy, New opportunities
Our New energy, New opportunities strategy sets a pathway for Dexus to achieve net zero carbon emissions by 2030 through improving energy efficiency and increasing renewables.
The target is in line with the Paris Climate Agreement which is advocating significant reductions in emissions to keep global warming under two degrees against a pre-industrial baseline.
Our 2030 goal represents the continuation of our successful journey to date in reducing energy use, as well as taking us in new directions to consider the elimination of direct emissions by electrifying our buildings, and proactively decarbonising our electricity, water and waste supply chains.
Read more about our 2030 net zero pathway in our New energy, New opportunities strategy.
Advancing our vision for the workspace
The path to achieving net zero is both exciting and complex. Through extensive collaboration across our business and with customers and strategic partners, we will embed our net zero emission goal within daily operations and deploy new products and technologies across our assets.
We envisage leveraging new technologies, such as artificial intelligence, voice activation and robotics to transform the customer experience, remove energy wastage and improve efficiency.
Buildings will ultimately have the ability to respond more acutely to occupants’ behaviour, preferences, personal styles and ambient conditions, with tailored services providing comfort and convenience to our customers.
|Our goal is to achieve a net zero position for all carbon emissions across Dexus’s managed property portfolio by 2030.
The emissions boundary comprises all emissions sources within our operational control, including upstream and downstream emissions.
|The pathway to net zero emissions|
|Maximising energy and water efficiency at 14 Lee Street, Sydney|
A focus on enhancing operational efficiencies has resulted in improvements to the NABERS Energy and Water ratings at 14 Lee Street, Central, reducing usage and saving costs.
Dexus developed and implemented a Strategic Improvement Plan to capture energy and water management ideas and opportunities formulated by the site teams.
The plan involved improvements to the Building Management and Control System (BMCS), deploying an open protocol system with integrated optimisation initiatives, together with water saving initiations including bathroom fixture leak management.
The enhanced BMCS allowed Dexus to fully integrate within Dexus’s broader ‘virtual engineering’ analytics platform that identifies issues through the use of algorithms, metering and notifications in a timely manner to enable immediate action.
14 Lee Street, Sydney improved its NABERS Energy rating from 5 stars to 5.5 stars, making it one of the most energy efficient properties in the Dexus portfolio.
The building’s NABERS Water rating improved from 3 stars to 4.5 stars, representing an improvement in performance of over 40%.
Together, these initiatives reduced energy by 560GJ, or 15%, and avoided $55,000 in annual energy costs, while reducing water use by 7,500kL, and saving approximately $25,000 in water charges.
Decarbonising our energy supply
In line with our New Energy, New Opportunities strategy, we are accelerating our transition to a low carbon economy by actively pursuing opportunities to decarbonise our energy supply and electrify our buildings to operate from on-site and off-site renewables.
We have broadened our pipeline of on-site solar electricity generation projects, progressing activation of large-scale commercial solar photovoltaic (PV) arrays across 11 retail, office, industrial and healthcare properties, with further properties under investigation.
We anticipate that we will add around one megawatt (MW) of new generation over the next 18 months, with an additional 6 to 9.9MW under detailed review in anticipation of a staged rollout over the next three years.
We commenced our investigation of building electrification, by conducting several feasibility studies across new developments and for gas boilers planned for lifecycle replacement.
We completed preparations to move to progressive purchasing for our major electricity supply, establishing market monitoring and internal governance frameworks required to purchase electricity in an agile way.
Dexus implements waste management plans across each property which involve strategies to reduce waste volumes and segregate streams for recycling in line with our goal to achieve 65% waste diversion from landfill across the group’s office portfolio. In FY18 Dexus achieved 44% diversion across office properties and 32% across retail properties.
Dexus is progressing towards its 2020 targets to achieve 80% waste diversion from tenancy de-fits, with 11 of 17 reported projects across the year.
Recent projects at the MLC Centre and 56 Pitt Street in Sydney have recorded diversion rates of 90% and 73% respectively. Demolition and fit-out contractors are well engaged on Dexus’s target and are actively assisting to maximise recovery through careful separation, identifying downstream material processors, and accessing markets for recycling furniture.
Recognising the importance of biodiversity, we revised our policy through which we aim to enhance, manage and report biodiversity outcomes. Across the year, we assessed over 20 properties to assist with benchmarking their ecological value and identify opportunities to create living spaces for people to interact with the outdoors.
Green Star certifications
Dexus continues to support the Green Building Council of Australia and adopt Green Star for new developments. In FY18, 480 Queen Street, Brisbane was certified 6 star Green Star As Built (Office v3), recognising the successful inclusion of environmental performance features and wellbeing amenities.
Continuing our commitment to incorporating sustainability within new developments, Dexus was awarded a 6 Star Design rating (Office v3) for 105 Phillip Street, Parramatta, and achieved a 5 star Green Star design review rating (Design & As Built v.1.1) for our first smart building at 100 Mount Street North Sydney.
We registered our first healthcare asset, the North Shore Health Hub, targeting a 5 star Design & As Built rating.
Dexus maintained Green Star Performance ratings across 73 office and retail properties, enabling us to benchmark and develop initiatives to improve our results.
National Australian Built Environment Rating System (NABERS)
Dexus continued its strong momentum towards its 2020 target of 1,000,000 square metres of rated office space at 5 stars NABERS energy or higher, achieving 892,000 sqm or 89% progress at June 2018.
In FY18, Dexus’s group office portfolio achieved an average 4.9 star NABERS Energy rating and an average 3.6 star NABERS Water rating.
NABERS Energy ratings of 5.5 stars or higher were achieved at 18 office properties, representing 36% of rated area.
The group office portfolio includes 40 properties representing 74% of total rated area, with a NABERS Energy rating of 5 stars or above.
Our ‘virtual engineering’ analytics platform identifies areas for optimisation, and together with strategic partnerships, has resulted in improvements to the NABERS Energy ratings across 15 Dexus office buildings.
Across retail, a focus on operational efficiency, together with initiatives such as LED lighting upgrades and chiller replacements assisted Beenleigh Marketplace, Sturt Mall and Willows Shopping Centre to achieve half-star ratings improvements.
Progress remained steady towards our commitment to deliver 1,000,000sqm of office property to a minimum 4 star NABERS Water rating by 2020, with 14 properties representing 24% of rated area prioritised for review via water audits and cooling tower efficiency reviews.
Measuring a building’s waste management and indoor environment
Dexus recognises the value of measuring the environmental performance of its properties and has adopted industry standard ratings methodologies and tools, while also benchmarking customer health and wellbeing impacts.
In 2018, Dexus adopted the National Australian Built Environment Rating System (NABERS) Waste rating tool to measure and provide insights into waste data at 1 Bligh Street in Sydney.
NABERS Waste is an industry standard methodology and data tool rating that provides the dual benefits of measuring the effectiveness of waste management processes and benchmarking waste diversion against industry standards. Dexus will adopt NABERS Waste at a further 15 Dexus office properties in FY19.
With a focus on customer health and wellbeing, Dexus has adopted the NABERS Indoor Environment tool to measure the indoor air and lighting quality of a building, together with acoustic quality and temperature and thermal comfort.
Following the achievement of a 5.5 star NABERS Indoor Environment rating at 240 St Georges Terrace – the first office building in Perth to have achieved this rating level – Dexus will assess the health of a further 19 properties in FY19.
FY18 NABERS statistics
|Portfolio||NABERS portfolio average|
|Group office portfolio||4.9||3.6|
|Dexus Office Partnership||4.9||3.7|
|Funds management portfolio||4.9||3.6|
|Dexus Wholesale Property Fund||4.8||3.3|
|Group retail portfolio1||3.4||3.5|
|Dexus Wholesale Property Fund1||3.5||3.5|
|Funds management portfolio1||3.5||3.5|
- Dexus managed properties only.
Engaging our people on the environment
Over the course of the year, Dexus employees engaged on environmental topics including conservation, climate change and waste management.
In October 2017, we held ‘Disposable Truths’, a week-long internal campaign that focused on enhancing the engagement of our people with our sustainability approach. The event’s activities included a ‘KeepCup’ giveaway, presentations from CitySwitch and the sustainability team, an e-waste awareness campaign, and a screening of the ABC’s ‘War on Waste’. The team also got busy planting herbs to green the office.
Greening Dexus's head office as part of Disposable Truths
We continued to support Landcare through staff volunteering with the National Parks and Wildlife Service staff at Bradleys Head in Sydney Harbour National Park, learning about metal conservation and assisting with weeding and planting of native flora.
Dexus is a signatory to the Australian Carbon Neutral program and our corporate head office has been certified as carbon neutral since 2011. We have retired certified offsets equivalent to 3,000 tonnes CO2-e to achieve a net zero position for direct and indirect emissions from our corporate operations.
The risks to Dexus from the adverse effects of climate change are varied and new information continues to emerge regarding the scale, likelihood and areas that could be impacted.
We spend time understanding the physical risks to properties and populations, together with the transitional risks for Dexus, its customers and communities, including socio-economic effects, resource availability, and health and wellbeing impacts.
Dexus’s climate change resilience strategy involves:
- Mitigating our impact through decarbonisation, energy efficiency and renewable energy.
- Adapting to physical and transitional risks relevant to our properties, people and operations, and leveraging climate change-related opportunities.
- Influencing our value chain by engaging customers, tenants and suppliers to reduce climate impacts.
|Waterfront Place benefits from sustainability upgrades|
Waterfront Place, Brisbane has improved its NABERS energy rating to achieve 5.5 stars, representing a half star improvement.
With a focus on energy efficiency, Dexus developed and implemented a Strategic Improvement Plan, which captures energy management ideas and opportunities formulated by the site teams.
The plan included a chiller upgrade which was funded in part by a $22,000 contribution in funding via the network provider, Energex.
Together with the chiller upgrade, the use of predictive analytics was adopted as part of Dexus’s ‘virtual engineer’ program, connecting more than 18,000 data points comprising:
Upgrades to lighting across the property has been upgraded to highly efficient LED fixtures also contributed to improvements in energy efficiency.
Together, these initiatives reduced electricity by 500MWh, or 12%, and avoided $165,000 in annual electricity costs.
Commitment to the TCFD framework
We recognise the value of the Task Force on Climate-related Financial Disclosures (TCFD) framework and the growing investor interest in understanding the financial impacts to Dexus stemming from climate-related risks and opportunities.
We have reviewed our alignment against TCFD reporting expectations, to benchmark our practices and determine how we can further integrate climate change impacts within our leading approach to sustainability.
Read more on our commitment to the TCFD framework in the following section, and for further information on our environmental management practices, refer to the Environment disclosure of management approach.
Dexus is committed to aligning with the TCFD framework and we provide disclosure of against the TCFD recommendations in four key areas:
Governance around climate-related risks and opportunities.
Strategy: The actual and potential impacts of climate-related risks and opportunities to our business, strategy and financial planning.
Risk management: Processes used to identify, assess and manage climate-related risks.
Metrics and targets: Those used to assess and manage relevant climate-related risks and opportunities
The Dexus Board oversees all strategic risks including climate change, with the Board Risk Committee overseeing the Group’s enterprise risk management practices. as well as work health & safety, and environmental management. As a strategic risk, climate change risk is discussed in detail on an annual basis. each year and as needed, the Board approves the group’s sustainability commitments.
The Sustainability team, led by the Executive General Manager, Investor Relations, Communications and Sustainability, and the Head of Group Sustainability and Energy leads the group’s management response, reporting and presenting on a quarterly basis to the Board Risk Committee on progress against targets and to the Board as key topics emerge.
In FY18, the team reported on its climate resilience roadmap (mitigation, adaptation, and influencing value chain). As part of this, the Board Risk Committee has reviewed Dexus’s 2030 net zero strategy from proposal to implementation. The strategy and associated targets were approved by the Board.
Dexus considers climate related risks and opportunities across the following time horizons:
- Short term (0-2 years in line with 2020 goals)
- Medium term (2-7 years in line with interim targets towards 2030, and Capex planning)
- Long term (7-15 years in line with 2030 net zero emissions target) time horizons.
As the nature and impact of transitional risks continues to evolve, Dexus leverages the following activities to gather data and insights to inform investment decision-making:
- Our in-house research team tracks economic conditions, correlates market risks and forecasts real estate market performance in all major commercial, retail and industrial property markets nationwide to identify immediate operational risks, and longer-term megatrends that influence the development of strategy, portfolio planning and new products and services
- We collaborate with peers and with industry associations to undertake work and share knowledge on climate change risk and adaptation
- We engage with customers and conduct social demographic studies across retail properties
- We work with subject matter experts to maintain an up-to-date view of this emerging topic
Climate-related issues are considered as one of several factors within annual asset and property management activities including financial budgeting for capital and operating expenditure, risk-based engineering assessments, managing insurance policy and claims. Financial planning is conducted across short and medium time horizons.
To date, Dexus has applied climate scenarios to inform decision-making as follows:
|RCP8.5 from the 2014 IPCC1 report using 2030 and 2070 time horizons||
Assess property physical risk exposure to identify likely worst-case climate-related outcomes, including the magnitude and specific locations where they are likely to occur.
The outcomes inform Dexus’s acquisition strategy and physical property risk management activities.
|Science-Based Target initiative (SBTi) sectoral decarbonisation trajectory using IEA2 2°C scenario (IEA 2DS:2012)||Climate scenario analysis outcomes used to inform energy use and price modelling out to 2030 with comparison against sector decarbonisation required consistent with 2 degrees warming against pre-industrial levels. In FY18, this analysis has been used to develop our 2030 net zero emissions target in line with science-based outcomes to avoid serious climate-change effects.|
Climate related financial risks and opportunities
|Risk||Time horizon||Financial impact||How Dexus is equipped to manage and monitor risk|
|Policy and legal compliance and potential for emissions taxes/tariffs on energy||Short to medium term||Enhanced emissions-reporting obligations may lead to increased compliance costs
Increased operating costs through new or higher taxes
In-house Sustainability team monitors existing and emerging legislation and embeds compliance into daily processes.
Dexus develops and manages to maximise energy efficiency via continuous improvement design and operational targets, that drive ongoing energy efficiency programs.
|Property physical risk exposure via increased severity of extreme weather events such as cyclones and floods||Short to long term with predicted increase in frequency||Increased insurance premiums and potential for reduced availability of insurance on assets in "high-risk" locations||
Dexus has assessed its portfolio for climate-related risk exposure and climate change impacts are reduced through careful portfolio construction combined with risk evaluation and associated adaptation planning within its certified Environmental Management System.
Dexus actively manages climate exposure risk for wind and flooding to mitigate against higher insurance deductibles imposed by insurers for specific properties located in Far North Queensland due to their inherent risk exposure.
|Changing investor behaviour to divest out of businesses that exhibit high carbon intensity and/or do not articulate a clear strategy for addressing climate change risks||Medium term||Reduced ability to attract and retain investors and raise new capital.
Reduced access to debt or finance arrangements or lead to less favourable interest rates or debt terms
Dexus systematically identifies, quantifies and responds to ESG issues within strategic decision making and operations, to deliver sustained investor returns.
Dexus is a signatory to the UNPRI and has integrated these principles. Dexus conducts ESG due diligence for property transactions, applies technology and operational expertise to reduce resource use and greenhouse gas emissions, and partners with like-minded suppliers.
|Changing customer expectations for minimum building performance||Medium term||Reduced customer demand would lead to increased vacancy, lower rental income, and property devaluation||
Dexus focuses on operational efficiency by setting continuous improvement targets and continues to invest capital expenditure into its properties to maximise building energy efficiency and reduce emissions.
Dexus analyses and responds to consumer trends through market research, focusing on tenant needs and issues to provide service excellence.
|Rising mean temperatures and heat stress||Medium to long term||Increased operating and maintenance costs to maintain indoor temperature to meet occupants’ comfort requirements to maintain health and wellbeing||
Advanced building management systems, supported by virtual engineer analytics monitor building comfort conditions and the indoor environment.
Dexus installs standby generators to maintain energy security for use during blackouts.
|Opportunity||Time horizon||Financial impact||How Dexus is equipped to manage and monitor opportunity|
|Availability of incentives||Short term||Additional revenues through access to new and emerging markets to offset project capital costs||Dexus participates in the NSW Energy Savings Scheme and generates Energy Savings Certificates (ESCs) following successful implementation of prior projects. In FY18 Dexus created 11,915 ESCs.|
|Changing investor behavior||Medium term||Better competitive position to reflect shifting consumer preferences, resulting in attracting and retaining capital||
Dexus is a signatory to the UNPRI and has integrated these principles throughout the organisation.
Dexus leverages its demonstrated reputation for prudent capital management as a responsible investor to raise additional capital and attract new investment partners.
|Changing customer behaviour towards more efficient buildings||Short to medium term||Better competitive position to reflect shifting consumer preferences, resulting higher occupancy and rental returns||
Dexus effectively manages energy use to reduce tenant outgoings and attract customers. Dexus benchmarks its office/retail properties using NABERS1 and is targeting 1,000,000 square metres of 5 star rated NABERS properties by 2020.
Dexus benefits from changing consumer behaviour, including government and some private sector tenants that now require a minimum level of energy efficiency in their office tenancies, and typically require their buildings to achieve 4.5 star NABERS Energy ratings or higher.
|Access to new market revenue opportunities||Short to medium term||Opportunity to leverage Australia’s electricity grid transformation and increases in distributed electricity generation by new market operators.||Dexus is exploring opportunities to self-generate and on-sell electricity or lease the available roof space across its managed industrial portfolio to third party solar energy companies on a large scale.|
- National Australian Built Environment Rating System, administered by the NSW Office of Environment and Heritage.
We see the value in managing climate-related risks while continuing to identify and leverage opportunities to improve sustainability metrics across our portfolio.
Within our submission to 2018 CDP climate change assessment, Dexus lists the financial impacts of key risks and opportunities, and how they are currently impacting Dexus.
The review of our processes against TCFD expectations has highlighted the opportunity to further integrate scenario modelling into annual business stress testing across longer-term time horizons beyond the current 3 to 5-year horizon.
Our goal is to continue to enhance our disclosure of financial impacts beyond those expressed in our 2018 CDP submission, and in line with published TCFD guidance.
Climate-related risks are assessed in accordance with Dexus’s standard framework for managing risks. At a group level each key strategic risk, including climate change risk, is discussed in detail on an annual basis.
Dexus reviews the sustainability risks of a potential acquisition before purchase through a rigorous due diligence process focusing on environmental performance, climate change-related physical risk exposure, and building upgrade and improvement plans, with associated costs to implement upgrades in line with the group’s 5 star NABERS Energy rating target.
The outcomes may affect procurement decisions and determine the investment strategy for the asset, both in the short and long term.
For properties under management, environmental performance and reducing resource consumption is critical and is measured, monitored and managed to meet environmental performance targets. Dexus is committed to operational efficiency across the property portfolio to deliver savings in resource consumption, greenhouse gas emissions and to meet current and future environmental targets.
Metrics and targets
Our goal is to achieve net zero emissions by 2030 through improving energy efficiency and increasing renewables.
Dexus monitors and reports on absolute, like-for-like greenhouse gas emissions and emissions intensity for all properties under operational control.
We report using both location-based and market-based approaches, the former satisfying our regulatory reporting and the latter taking into account voluntary reductions achieved through use of emission-free GreenPower.
|Greenhouse gas emissions (t. CO2-e)|
|Scope 2 (location-based)||128,828||129,871|
|Location based emissions||185,249||185,987|
|Voluntary abatement (t. CO2-e)|
|Market based emissions||180,263||185,157|
|Net greenhouse gas emissions||177,263||182,157|
|Scope 1, 2 & 3 emissions intensity (kg CO2-e/sqm)|
|Location-based emissions intensity||62||61|
|Market-based emissions intensity||61||61|
|Net emissions intensity||60||60|
Enriched environment – performance data
|CFCs||Chlorofluorocarbons (CFCs) are nontoxic, non-flammable chemicals containing atoms of carbon, chlorine, and fluorine. CFCs are believed to be a major cause of stratospheric ozone depletion|
|GBCA||Green Building Council of Australia|
|GHG||Greenhouse gas emissions, measured in equivalent tonnes of carbon dioxide (t. CO2-e)|
|GHG Protocol||The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard – guidance on accounting and reporting greenhouse gas emissions|
|Greenhouse Gas Protocol: Scope 2 Guidance||Guidance on accounting and reporting scope 2 emissions|
|GreenPower||Emission-free electricity sourced via a certified GreenPower Product|
|Green Star||An environmental rating tool, administered by the GBCA for commercial design and construction, used to evaluate a building’s impact against eight categories|
|HCFCs||Hydrochlorofluorocarbons (HCFCs) are compounds containing carbon, hydrogen, chlorine and fluorine. Industry and the scientific community view certain chemicals within this class of compounds as acceptable temporary alternatives to chlorofluorocarbons. The HCFCs have shorter atmospheric lifetimes than CFCs and deliver less reactive chlorine to the stratosphere where the "ozone layer" is found|
|NABERS||National Australian Built Environment Rating System|
|SIP||Strategic Improvement Plan, prepared by Dexus that capture energy, water and waste improvement opportunities and forecast a pathway towards resource efficiency targets|
|TCFD||Task Force on Climate-related Financial Disclosure – a working group that has developed a set of recommendations for voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders|
|Dexus, the group, Dexus group portfolio||Dexus comprising the ASX listed entity (DXS) and the Third Party Funds Management business, unless otherwise stated|
|Dexus portfolio||refers specifically to the portfolio of properties in the ASX listed entity|
|‘Funds management portfolio||refers to properties managed by Dexus on behalf of third party clients including the Australian mandate, three capital partnerships and DWPF|
|DWPF||Dexus Wholesale Property Fund|
Resource consumption methodology
The resource consumption data is derived from office, industrial and retail properties under the operational control of Dexus for part or all of the 12 months ending 30 June 2018 with the inclusion of Dexus corporate tenancies.
Dexus has applied the principles contained within the National Greenhouse and Energy Reporting (NGER) Act 2007 and its associated guidelines to determine the operational control of its properties across Australia and New Zealand. Dexus has operational control of a facility if it has the authority to introduce and implement any or all of the operating, health and safety and environmental policies for the facility.
Dexus excludes energy consumption from tenant spaces where the tenant receives separately metered energy invoices and excludes whole facilities where they are leased to a single tenant occupying the entire premises.
Dexus also included water usage from 10 current and seven previously managed industrial properties where water is purchased by Dexus and consumed by customers and Dexus for property maintenance, e.g. landscaping.
Refer to the Dexus 2018 Assurance Criteria for further details including the list of consumption and emission sources, and references for factors that have been applied. The 2018 Assurance Criteria is available in the CR&S library on the Dexus website.
Like-for-like data has been based on a portfolio whereby operational control and data for energy and water was available for the full 24-month like-for-like period.
Dexus has reviewed its environmental dataset to fully align with NGER by adding minor source items and confirming calculation methods and factors. Non-material historical figures have been applied to all years since the 2008 base year and have been restated for consistency. Prior years’ data has been updated to reflect current information where applicable resulting in minor restatements. Repetition only occurs when there is an overlap of reporting periods. There may be small discrepancies in the totals in some tables due to rounding.
Within its FY18 environmental disclosure Dexus has elected to restate Scope 3 emissions figures across the group, due to the addition of two additional emission sources, namely water & wastewater and recycled waste. Together these sources have added 3,919 tonnes to the FY18 inventory, or approximately 2.2% increase against Dexus’s previous source boundary. For consistency and comparability, Dexus has restated prior years’ emissions to include these sources.
Group managed portfolio - environmental inventory
|Greenhouse gas emissions (tCO2-e) - Property portfolio & corporate tenancies|
|Subtotal Scope 1 & 2||158,176||128,472||153,666||154,427||149,010||148,818|
|Scope 3 - property portfolio||26,304||29,753||30,153||30,850||31,034||35,310|
|Scope 3 - corporate operations||-||1,361||1,452||1,906||1,869||1,859|
|Total Scope 1, 2 & 34||184,481||159,586||185,271||187,183||181,913||185,987|
|Energy and water consumption|
|Total net energy consumption (GJ)4||735,723||595,021||730,059||755,788||727,535||718,207|
|Total net energy consumption (MWh)||204,367||165,284||202,794||209,941||202,093||199,502|
|Water consumption (kL)4||1,499,044||1,442,015||1,704,754||1,759,432||1,813,034||1,863,608|
|Waste and recycling|
|Waste to landfill (tonnes)||4,828||6,430||8,109||8,083||9,480||10,446|
|Total waste (tonnes)2,4||8,559||12,465||15,215||14,624||16,507||17,301|
|Waste data coverage across portfolio3||70%||84%||93%||95%||98%||99%|
- FY08 represents the group’s base year for energy, water and greenhouse gas emissions. FY12 represents the group’s base year for waste diversion from landfill.
- Excludes secure paper.
- Coverage by net lettable area across office and retail portfolio, excludes industrial properties as Dexus does not manage waste.
- FY18 data independently assured.
The inventory above represents the Group’s managed portfolio on an operational control basis. Emissions calculations follow a ‘location-based’ approach, which involves accounting for electricity purchases using published average grid emission factors, as defined within The Greenhouse Gas Protocol: Scope 2 Guidance.
Nominated data metrics have undergone independent assurance as indicated.
Group managed portfolio - consumption/emissions on an intensity basis
|Group office portfolio||Energy consumption (MJ/sqm)||597||366||344||331||346||331||-4.4%|
|Water consumption (L/sqm)||895||666||683||701||696||711||2.2%|
|Scope 1 & 2 emissions (kgCO2 - e/sqm)||131||76||73||71||73||71||-2.6%|
|Waste diversion from landfill (%)||51%||51%||48%||44%||47%||44%||-7.1%|
|Group retail portfolio||Energy consumption (MJ/sqm)||489||530||552||502||410||394||-3.9%|
|Water consumption (L/sqm)||1,267||1,337||1,354||1,308||1,122||1,080||-3.8%|
|Scope 1 & 2 emissions (kgCO2 - e/sqm)||94||98||99||91||79||75||-5.0%|
|Waste diversion from landfill (%)||30%||33%||33%||32%||40%||40%||1.5%|
|Group industrial portfolio||Energy consumption (MJ/sqm)||33.4||13.7||11.9||11.8||12.4||12.3||-0.6%|
|Water consumption (L/sqm)||312||275||291||266||289||255||-11.8%|
|Scope 1 & 2 emissions (kgCO2- e/sqm)||8.4||3.0||2.5||2.4||2.6||2.5||-2.4%|
- FY08 represents the group’s base year for energy, water and greenhouse gas emissions. FY12 represents the group’s base year for waste diversion from landfill.
- Properties under management for FY17 and FY18 periods.
Group managed portfolio – Market-based emissions inventory
In conjunction with Dexus’s target to achieve net zero greenhouse gas (GHG) emissions by 2030, Dexus is adopting market-based emissions accounting.
Taking into account direct (Scope 1) and indirect (Scopes 2 and 3) operational emission sources, Dexus will continue to use published factors, including NGER and Australia’s National Greenhouse Accounts to determine its ongoing emissions footprint, in accordance with the GHG Protocol1. Dexus will take into account purchases of renewable energy through direct Power Purchase Agreements or through Greenpower2, in accordance with the market-based approach to Scope 2 accounting defined within the GHG Protocol1 Scope 2 Guidance.
Dexus’s goal incorporates Scope 3 emission sources where Dexus controls the emissions outcome, including upstream energy-related emissions and emissions resulting from waste from operations and water & wastewater use.
On the pathway to net zero, Dexus will only use certified carbon offsets where all efforts to avoid, reduce and re-source emissions related activities have been exhausted, or should the need to accelerate the transition across all emissions sources arise.
|Electricity – grid-purchases accounted using average grid emission factors||GJ||559,884||426,622||506,789||532,072||517,446||543,148|
|Electricity – GreenPower purchases accounted using source-based emission factor supported by an energy attribute certificate||GJ||55,103||41,639||40,110||26,847||19,457||3,549|
|Total grid-purchased electricity
|Market-based GHG emissions (tCO2-e)|
|Scope 1 GHG emissions (tCO2-e)||6,226||11,050||15,881||17,680||19,689||18,946|
|Scope 2 market-based GHG emissions (tCO2-e), comprising:||138,150||106,599||127,467||129,802||123,842||129,041|
Electricity – grid-purchases accounted using average grid emission factors
Electricity – GreenPower purchases accounted using source-based emission factor supported by an energy attribute certificate
|Scope 3 GHG emissions (tCO2-e)||27,630||33,969||34,972||36,292||36,732||37,169|
|Scope 1, 2 & 3 market-based GHG emissions (tCO2-e)||172,006||151,617||178,319||183,774||180,263||185,157|
|Voluntary offsets surrendered by Dexus2||-||2,200||2,700||2,700||3,000||3,000|
|Net GHG emissions (tCO2-e)||172,006||149,417||175,619||181,074||177,263||182,157|
- FY10 represents the group’s base year.
- Offsets comprise eligible offset units, each relating to 1 tonne of carbon dioxide equivalent, recognised under Australia’s Carbon Neutral Offset Standard.
The inventory above represents the Group’s managed portfolio on an operational control basis.
Emissions calculations follow a ‘market-based’ approach which involves accounting separately for electricity purchases using a source-based emission factor supported by an ‘energy attribute certificate’, and separately for electricity purchases using published average grid emission factors, as defined within The Greenhouse Gas Protocol: Scope 2 Guidance.
Dexus corporate operations - voluntary greenhouse gas abatement
Dexus is a signatory to Australia’s Carbon Neutral Program which is administered by the Federal Department of the Environment. An emissions inventory is developed annually in line with the program’s National Carbon Offset Standard (NCOS) across Dexus’s Corporate Operations.
In 2011 Dexus was the first real estate investment trust in Australia to achieve a carbon neutral certification for our head office. Since then, the reporting boundary has been expanded across Corporate Operations, including:
- Dexus office tenancies for Sydney, Brisbane and Melbourne, and proportion of base building services attributable to those tenancies
- Corporate travel and employee commuting for all staff employed directly by Dexus nationally
The group has offset:
- Direct emissions from refrigeration and electricity usage
- Indirect tenancy-related emissions including waste and recycling, office paper use and stationary, water & wastewater, telecommunications, IT equipment and data warehousing, and catering
- Indirect employee-related emissions including corporate air travel, car mileage claimed for national employees, taxi travel, hire cars and employee commuting
|Greenhouse gas emissions (tCO2-e)|
|Scope 3 comprising the following:||1,841||1,970||1,685||1,762||2,330||2,312||2,246||2,269|
Tenancies and base building energy/refrigerants
Office paper use and waste
IT, catering, accommodation, water use
|Avoided emissions from renewable energy purchased by Dexus||-81||-66||-28||-||-16||-||-2||-|
|Avoided emissions from carbon neutral products purchased by Dexus||-||-||-||-||-||-||-||-6|
|Total emissions (scopes 1, 2 & 3)||2,165||2,238||1,929||1,995||2,599||2,561||2,511||2,575|
|Voluntary carbon abatement (tCO2-e)|
|Carbon offsets purchased and retired by Dexus||2,200||2,300||2,000||2,200||2,700||2,700||3,000||3,000|
- 2013: Boundary expanded to include Melbourne Office.
- 2014: Employee commuting included.
- 2015: Boundary expanded to include Brisbane Office and additional scope 3 sources.
NABERS ratings - office portfolio
|Like-for-like basis||Absolute basis1|
|As at 30 June each year||FY10||FY11||FY12||FY13||FY14||FY15||FY16||FY17||FY18|
|Dexus listed portfolio|
|NABERS Energy performance||2.8||3.0||3.5||4.2||4.4||4.4||4.5||4.5||4.7|
|Dexus Office Partnership|
|NABERS Energy performance||4.7||4.7||4.7||4.8|
|Funds Management portfolio|
|NABERS Energy performance||2.8||3.3||3.7||3.7||4.2||4.4||4.4||4.6||4.7|
|Dexus Wholesale Property Fund|
|NABERS Energy performance||2.0||2.9||3.6||3.4||4.0||4.1||4.2||4.5||4.6|
|Dexus group office portfolio|
|NABERS Energy performance||2.8||3.1||3.5||4.0||4.3||4.4||4.5||4.6||4.7|
- Dexus commenced reporting its NABERS portfolio on an absolute basis from FY14.
- As at 30 June each year.
NABERS ratings - retail portfolio
Dexus Wholesale Property Fund - managed portfolio
|Funds Management - managed portfolio|
Progress against group commitments
Progress: Group’s FY20 5 star NABERS Commitment
In FY15, Dexus committed to deliver by 2020:
- 1,000,000 square metres of office space rated at least 5 Star NABERS Energy rating
- 1,000,000 square metres of office space rated at least 4 star NABERS Water rating
The table below reports on performance against the five year target, which is reported in absolute terms on a like-for-like basis against the FY15 baseline.
|Rated at 5 star NABERS energy or higher||597,320||707,432||634,594||892,393||295,003|
|Progress against NABERS energy target (%)||60%||71%||63%||89%||+29%|
|Rated at 4 star NABERS water or higher||770,270||706,963||615,884||615,074||-155,196|
|Progress against NABERS water target (%)||77%||71%||62%||62%||-15%|
Progress: Group’s FY20 10% energy reduction commitment
In FY15, Dexus committed to reduce energy consumption and emissions across the group by a further 10% by 2020 using the FY15 baseline including exploring opportunities for renewables.
The table below reports on performance against the five year target, which is reported in absolute terms on a like-for-like basis against the FY15 baseline.
|Energy consumption (GJ)||557,719||558,726||526,982||512,788||-8.1%|
|Energy consumption (MWh)||154,922||155,202||146,384||142,441||-8.1%|
|Scope 1 and 2 greenhouse gas emissions (t. CO2-e)||119,394||116,785||110,499||108,041||-9.5%|
The FY15 like-for-like boundary includes all properties under operational control that were within the reporting boundary for a continuous period between 1 July 2014 and 30 June 2018, and excludes properties acquired, divested and those where their net lettable area (NLA) has increased or decreased by 15% or more in the reporting year when measured against FY15.
Voluntary greenhouse gas abatement
|Energy consumption (MWh)||FY14||FY15||FY16||FY17||FY18|
|Low carbon energy (MWh)|
|Volume of GreenPower procured/committed||11,566||11,142||7,457||5,405||986|
|Electricity generated from solar energy||115||106||183||276||292|
|Electricity generated from cogeneration||1,434||2,027||2,008||2,205||1,354|
|Electricity from renewable and low carbon sources (MWh)||13,116||13,275||9,648||7,885||2,631|
|Emissions abatement from renewable sources (t.CO2-e)|
|GreenPower purchases (Scope 2 only)||10,823||10,318||6,987||4,986||830|
|Electricity from solar energy (Scope 2 & 3)||122||105||169||240||250|
|Emissions abatement from low carbon sources (t.CO2-e)|
|Avoided grid-purchased electricity emissions (Scope 2 & 3)||2,152||2,840||2,704||2,904||1,741|
|Natural gas emissions for generation (Scope 2 & 3)||-1,473||-1,870||-1,781||-1,757||-1,042|
|Net abatement (Scope 2 & 3)||679||970||923||1,147||698|
|Total emissions abatement from use of electricity from
renewable & low carbon sources (t.CO2-e)
|% of Group emissions that have been abated||6.7%||5.7%||4.1%||3.3%||0.9%|
Energy Savings Scheme (ESCs)
- Includes 25,389 ESCs transferred to Dexus for properties acquired within the Dexus Office Partnership in April 2014.
Dexus participates in the NSW Energy Savings Scheme and generates Energy Savings Certificates (ESCs) based on demonstration of electricity reductions due to energy efficiency projects. These certificates are traded to realise extra funds for repaying projection implementation capital costs and for use in further building works.
Each ESC is equivalent to 1 tonne of carbon dioxide equivalent (tCO2-e).
Energy consumption and production by source
Energy consumption (MWh)
|Electricity - grid-purchases||155,523||118,506||140,775||147,798||143,735||150,875|
||Electricity - GreenPower purchases||15,306||11,566||11,142||7,457||5,405||986|
|Electricity consumed from on-site thermal and solar generation||106||2,137||2,480||2,796||3,095||2,259|
|Total energy consumption||204,474||167,420||205,274||212,738||205,188||201,761|
|Energy production (MWh)|
|Electricity produced from thermal and solar generation for on-site use||106||2,137||2,480||2,796||3,095||2,259|
|Electricity generated and exported off site||-||-||-||-||-||-|
|Total energy production||106||2,137||2,480||2,796||3,095||2,259|
|Net energy consumption (MWh)|
|Total net energy consumption||204,367||165,284||202,794||209,941||202,093||199,502|
|Proportion of group energy consumption from renewable sources (%)||7.5%||7.1%||5.5%||3.6%||2.8%||0.6%|
- FY08 represents the group's base year.
Net energy consumption comprises energy that is consumed within properties as measured at the property boundary and excludes energy produced or consumed within a property through energy transformations such as cogeneration.
Net energy consumption excludes energy that is purchased by Dexus and on-sold to customers. Dexus does not consume or export steam, heating or cooling from/to district thermal sources.
Water consumption by source
|Water consumption (kL or cubic metres)||FY081||FY14||FY15||FY16||FY17||FY18|
|Total potable water consumption (kL)||1,499,044||1,441,188||1,700,885||1,749,145||1,805,019||1,853,040|
|Recycled water recovery||-||827||3,869||10,288||8,070||10,568|
|Total water consumption including recycled water (kL)||1,499,044||1,442,015||1,704,754||1,759,432||1,813,034||1,863,608|
|Proportion of water use from recycled sources (%)||0.0%||0.1%||0.2%||0.6%||0.4%||0.6%|
- FY08 represents the Group's base year.
Reported water consumption comprises potable water purchased from local water utilities, plus on-site water treatment to recycle water at 1 Bligh Street Sydney, 123 Albert Street Brisbane and 145 Ann Street Brisbane, in which greywater is collected from the building’s showers and hand basins and recycled in a treatment plant for reuse in within the building and for irrigation.
Dexus does not consume fresh surface water. Dexus consumes an immaterial amount of bore water at Willows Shopping Centre from a rechargeable source which not included in the figures for water consumption.
Waste and recycling from property operations by stream
|FY18 waste stream (tonnes)||Office||Retail|
|Dexus managed waste collection|
|Cardboard||1,517||1,509||Sent to Environment Protection Agency (EPA) licensed receiving facilities that process into raw materials for new products or packaging or on transferred to waste to energy recovery facilities for combustion.|
|Organics and used cooking oil||238||67||Sent to EarthPower or similar receiving facility for conversion to green energy and nutrient-rich fertiliser. Energy is produced through the burning of bio gasses that are produced by the bacteria that digest the organic waste. The digested organic component can then be processed into a fertiliser pellet.|
|E-waste||52||-||Collected by MRI and sent to their handling facilities for structured disassembly with recovery rate of over 96%.|
|Waste to landfill||5,893||4,553||Sent directly to landfill or to receiving stations that may process the waste within a bio-reactor to produce energy, conduct downstream material separation and recycling and/or on transferred to waste to energy recovery facilities for combustion.|
|Total waste & recycling (tones)||10,594||6,707|
|Tenant managed waste collection outside Dexus's waste reporting boundary|
In FY18 there were no significant spills of waste or hazardous materials. There was no solid or liquid waste (deemed hazardous under the Basel Convention Annex) transported locally from one location to another for treatment.
Emissions of ozone depleting substances
|Emissions of ozone depleting substances (t.CFC-11e)||n/a||0.1||0.9||0.2||1.2||1.2|
Dexus does not produce CFCs, HCFCs, halon or methyl bromide. Minor amounts of gases are used in air conditioning units across properties under management. Ozone-depleting substances are being phased out as required.
Greenhouse gas emissions by gas type
|Direct greenhouse gas emissions (tCO2-e)|
|Carbon Dioxide (CO2)||6,207||6,564||9,414||10,186||9,850||8,864|
|Nitrous Oxide (N2O)||7||5||6||7||7||6|
|Sulphur Hexafluoride (SF6)||-||-||-||-||-||-|
|Nitrogen Trifluoride (NF3)||-||-||-||-||-||-|
|Scope 1 GHG emissions (tCO2-e)||6,226||11,050||15,881||17,680||19,689||18,946|
|Indirect greenhouse gas emissions (tCO2-e)|
|Scope 2 GHG emissions (tCO2-e)||151,951||117,422||137,788||136,789||128,828||129,817|
|Scope 3 GHG emissions (tCO2-e)||27,630||33,969||34,972||36,292||36,732||37,169|
Dexus has determined its emissions resulting from the common greenhouse gases reported under the Kyoto Protocol, being carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3).
Emissions are aggregated into carbon dioxide equivalents (CO2-e) using factors called global warming potentials (GWPs).
Greenhouse gas emissions by source
|Greenhouse gas emissions (tCO2-e)|
|Total Scope 1 & 2 GHG emissions (tCO2-e)||158,176||128,471||153,666||154,469||148,517||148,818|
|Energy transmission and distribution losses||26,304||22,668||21,195||20,269||19,495||18,856|
|Waste to landfill||-||7,073||8,920||10,508||11,376||12,535|
|Water & wastewater||1,326||693||764||1,083||1,202||1,232|
|Total Scope 3 GHG emissions (tCO2-e)||27,630||33,969||34,972||36,292||36,732||37,169|
Additional environmental data for the Dexus portfolio, Funds Management portfolio, Dexus Wholesale Property Fund and Dexus Office Partnership is available in the 2018 Enriched Environment Sustainability Performance Pack .