Introduction
A message from David Harrison

At Charter Hall, sustainability and community are fundamental to everything we do. As one of Australia’s leading property groups, with a total managed property portfolio of $23.2 billion (at 30 June 2018) and post balance increasing to $26.8 billion, we believe in leaving a positive legacy.

We know sustainability is important for our stakeholders, from investors and tenant customers to communities we operate in, and we are conscious that our business needs to grow sustainably, in terms of investor returns as well as our operational and development footprint.

In FY16/17 we set ourselves carbon reduction targets and we adopted the Science Based Targets methodology. This year, we identified our current and projected emissions, and drafted our pathway to achieve our carbon reduction targets to 2025 and a pathway to our aspiration of net zero emissions.

We also commenced the preparation of climate change adaptation plans across our office, retail and industrial portfolios, to build the resilience of our assets and operations in preparation of potential climate change impacts.

This year, we have experienced the impacts of energy pricing on our operations, and the challenges that increasing energy costs pose to both our business and our tenants. In response, we are working to secure our energy pricing by investing in renewable energy and providing more energy efficient buildings for our tenant customers.

Across our office, industrial and retail sectors, we have now invested in 2,456kW of solar PV installations, generating over 3,670MWh of electricity per annum. This is enough energy to power 245 homes. In FY18, this included our retail portfolio’s first solar investment of a 250kW PV system at our Singleton Shopping Centre and we are now investigating the expansion of this renewable footprint across the retail portfolio. We will continue to work in partnership with our customers to expand the energy efficiency and renewable footprint of our entire portfolio, resulting in mutually beneficial outcomes for both our customers and our business.

Charter Hall is proud to have maintained Australia’s largest Green Star footprint, which continues to grow as our office and industrial developments seek and achieve Green Star ratings. Our alignment with highly regarded industry rating systems ensures that we are constantly improving the operational efficiency of our buildings, benefiting both our customers and the environment. I am pleased to note that our focus on higher energy efficiency has resulted in our office portfolio achieving an increase to 4.6 Star NABERS Energy weighted average rating and our retail portfolio increased to a 3.9 Star weighted average rating. These improvements put us firmly on track to achieve our goal of a 5 Star NABERS Energy weighted average by 2025.

Since FY17, we have supported our communities to address social issues through our Pledge 1% commitment. In FY18, our employee volunteering more than doubled, with 81% of our people volunteering to support a wide range of community initiatives, from working with the homeless, to building solar lights and participating in programs that support victims of domestic violence. Creating community spaces within our assets has remained a focus, giving us new opportunities to provide services to our tenants and more broadly the communities we operate in. Our Pledge 1% initiative has continued to expand with some of our larger developments creating employment programs and charity partnerships that address the needs of the surrounding communities.

"In FY18, our employee volunteering more than doubled."

We recognise that human rights and modern slavery are global issues, material to business and the community alike. In FY18, we prepared our Human Rights Policy and sought to better understand the potential human rights and modern slavery issues that may exist throughout our supply chain and operations. This will form part of our human rights framework.

We believe that our people are our greatest asset and I am particularly proud of our Melbourne and Perth offices achieving the WELL Certified™ Silver Interiors rating from the International WELL Building Institute. This rating, the first WELL rating in Western Australia and the first Interiors rating in Victoria, reflects our desire to provide the best possible environments to foster engagement, improve productivity and enhance wellbeing.

Innovation has also played a prominent role in our business this year, as we recognise that the workplace and our industry is constantly evolving and changing. We have invested in a range of programs to address emerging challenges and keep our workforce inspired and engaged. This innovative spirit was recognised when Charter Hall, the only AREIT, was named in the ASX 200 top 20 most innovative companies in 2018, as rated by innovation consultants, Collective Campus.

Through our sustainability approach, we are creating a resilient portfolio that creates great work spaces and experiences now and into the future.

    David Harrison
    Managing Director and Group Chief Executive Officer