CHARTER HALL GROUP - Environmental & Social Information 2021

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Charter Hall Group Sustainability Report 2021

Sustainability Report 2021

About this report

In our 30th year as a business, we welcome you to our tenth annual Sustainability Report (the Report). This report relates to the business activities of our managed property funds and assets for the financial year ending 30 June 2021 (FY21).

The environmental data in this report relates specifically to assets and activities within our direct operational control as Charter Hall Group, unless stated otherwise. It doesn’t include data for other parties such as our tenants, suppliers and contractors.

In preparing this report, we have been guided by the Global Reporting Initiative’s (GRI) sustainability reporting standards. For further details on our disclosures, please refer to the Databook.

We commissioned Deloitte Australia to provide assurance for this report (see page 43) across a range of non-financial performance metrics, including environmental and social.

The assurance is limited to the environmental performance of the assets under our operational control. As we transition to a low carbon economy, we recognise our influence on our tenants environmental performance, and are actively partnering with them to reduce emissions. We are actively working to establish a Scope 3 emissions target through FY22.

Thank you for taking the time to read more about what we are doing to be a sustainable and responsible business.

If you have any questions or comments, please contact us via details on page 44.

1 Shelley Street, Sydney NSW 5.5 Star NABERS Energy 6.0 Star NABERS Water

Acknowledgment of Country

Charter Hall is proud to work with our customers and communities to invest in, develop, and create property assets on land across Australia. We pay our respects to the traditional owners, their elders past and present and value their care and custodianship of these lands.

Introduction

Alignment with sustainability best practice and reporting frameworks 3 Managing Director & Group CEO message 4 About Charter Hall 5 Property portfolio 6 FY21 highlights 7 Progress against targets 8 Sustainability overview Integrating sustainability into decision making 16 Sustainability framework 17 Key sustainability issues in FY20/21 18 Governance 20 Economic 25 Environment 28 Social 32 Non financial data 38 Environmental data 39 Asset ratings and certifications 40 Social data 41 Contact us 44

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Cover, left:
Wesley Place, Melbourne Vic;
Image Credit: City of Melbourne
– Melbourne Knowledge Week 2021.
Cover, clockwise from top right:
NAIDOC Week 2021, South Hedland
Square, South Hedland WA;
Urban Green vertical farm
– 1 Shelley Street, Sydney NSW;
Charli launch – The Argus Centre,
300 La Trobe Street, Melbourne Vic;
Gateway Plaza, Leopold Vic.
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Introduction

Targets Sustainability Governance Economic Environment overview

Social

Data

Charter Hall Group

Sustainability Report 2021 Introduction

Alignment with sustainability best practice and reporting frameworks

In this, our tenth year of sustainability reporting, we are aiming to make our sustainability performance and associated data more accessible.

This page provides links to key sources of information on performance data (our Databook), financial data (our Annual Report), alignment with key reporting frameworks (TCFD, UNGC COP and SDGs), as well as our Modern Slavery Statement. Active links are also provided throughout this report for ease of navigation between documents and to find more detailed information.

Financial Performance Annual Report 2021

The ongoing COVID-19 pandemic continued to challenge global economies, businesses and societies this year. Our 2021 Annual Reports for Charter Hall Group (CHC), Long WALE REIT (CLW), Retail REIT (CQR) and Social Infrastructure REIT (CQE) showcases that, despite this, our strong and adaptable strategy, clear purpose and the trust and partnerships we have built with our people, customers and communities, have enabled us to deliver a record performance.

View here >

Sustainability Report 2021 This is the core document for presenting our sustainability progress over the past 12 months.

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Non Financial Performance Databook 2021

This year we extracted key trend data to provide an overview of our performance against key metrics in this Sustainability Report, and consolidated our sustainability performance data into a comprehensive Databook. View here >

For any information beyond this, please contact us via details on page 44.

Charter Hall’s approach to:

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Task Force on Climate-Related Financial Disclosures (TCFD) Our investors need clear, comprehensive, reliable information on climate change impacts to better evaluate climate-related risks to our business, make more informed decisions on capital allocation, and to better manage risks over the short, medium, and long term.

We use the TCFD to improve and increase our reporting of climate-related financial information. These disclosures cover risks and opportunities from rising temperatures, climate policy, and emerging technologies that enable more informed investment decisions.

View here >

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UN Global Compact (UNGC) Communication on Progress (COP) 2021

The UNGC is a global movement of companies and stakeholders aiming to create a more sustainable world. To achieve this, the UNGC encourages companies to align their strategies and operations with its Ten Principles on human rights, labour, environment and anti-corruption, and to take actions that advance better societal outcomes through collaboration and innovation.

We are proud to have been a signatory to the UN Global Compact since 2019. This year, we continued our commitment to the UNGC principles and documented how we’re making progress on these principles. View here >

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Alignment to the UN Sustainable Development Goals (SDGs) 2021

The SDGs are a blueprint to achieve a better and more sustainable future by 2030. These goals address global challenges, including poverty, inequality, climate change, environmental degradation, peace and justice. They are part of a UN Resolution called ‘The 2030 Agenda’. Australia was one of 193 countries that adopted this Agenda in September 2015. Achieving these goals will require a ‘whole of Australia’ effort. While the government has a role to play, so do the various business and industry sectors in Australia, including the property sector. We have documented how we align our sustainability goals, responses and targets to the SDGs. View here >

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Modern Slavery Statement

Our inaugural FY20 Modern Slavery Statement outlined the approach our business has taken to understand, identify, manage and mitigate the risks of modern slavery in our operations and supply chain. Our FY21 Modern Slavery Statement is underway and will be available on our website by 31 December 2021. View here >

Introduction

Targets Sustainability Governance overview

Economic Environment Social

Data

Charter Hall Group

Sustainability Report 2021 Introduction

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Managing Director & Group CEO message

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For 30 years, Charter Hall has committed to achieving better futures for all our partners and the communities in which we operate. We’re accelerating our approach to addressing climate change and firmly believe that our partnerships will continue to unlock environmental and social value, alongside financial returns.

David Harrison Managing Director & Group CEO

We continue to work with our

people, customers, investors and communities to generate opportunities that create mutual success.

Our ongoing commitment to better futures for the people and businesses with whom we work and partner was strongly evident in financial year 2021 (FY21). It shone through in a record financial result, as we simultaneously pursued and achieved environmental, social and governance (ESG) outcomes right across our diversified business model, despite ongoing challenges and economic setbacks due to the COVID-19 pandemic.

Performance in the face of unprecedented challenges

As we celebrated an important milestone this year – 30 years since the founding of Charter Hall and our 16th year as a publicly listed Group – it has been an opportunity to reflect on our journey, including the successes, partnerships and growth, as well as the challenges that we have faced. The global pandemic continued to present unprecedented challenges and we responded with financial assistance for communities and support for our people. The turbulence has persisted into the current year and, like most businesses, we continue to navigate the ongoing social and economic upheaval. In line with our philosophy of resilience, which is at the foundation of everything we do, we have been investing in support for our tenant customers, investors and our people, while ramping up our contribution to initiatives that improve resilience and recovery in the wider community.

For example, we have partnered with our tenant customers to provide rent relief, develop hygiene initiatives in our assets and development sites, increase digital engagement and offer support with returning to their workplace. We’ve supported our people with care packages and well-being initiatives, including mindfulness, mental health awareness and enabling connections despite being apart. We’ve continued to focus on being a responsible investment partner and deliver sustainable growth for our business.

And we’ve been there for our communities, through our partnerships with charitable organisations across Australia, our initiatives in bushfire-ravaged communities and providing a sizeable donation to support COVID-19 crisis appeals locally and overseas. In total, we contributed $2.54 million in direct donations and in kind space to support our communities. Our people, despite working remotely for part of the year, contributed more than 1,200 volunteering hours in the community.

Looking ahead to FY22, our efforts will be focused on invigorating our response to climate change and working with our partners to lead in creating environmental and social value in the property sector.

Meaningful action on climate change

Each year we go further in our commitment to our ESG objectives. The most recent report by the Intergovernmental Panel on Climate Change (IPCC) has brought into sharp focus the importance of environmental stewardship and how delivering on our climate initiatives has never been more important.

We are acutely aware of the global impacts that the property sector and the built environment produces in relation to greenhouse gas emissions, biodiversity, resource usage and especially action on climate change. We’ve made significant efforts in recent years to understand how as a business we can take meaningful action against climate change. We have proactively implemented plans across our platform to contribute towards a low carbon economy.

Pleasingly, we’ve made significant progress towards

achieving our Net Zero by 2030 target, even accelerating that timeline where possible. Our Industrial & Logistics portfolio has committed to Net Zero by 2022 and our Retail portfolio by 2025. During FY21, we added another 20MW of onsite solar generation to our assets, backing clean energy outcomes for our direct operations and supporting tenants with clean energy solutions. We focused on better understanding upfront carbon emissions, partnering with our supply chain to achieve Climate Active certification for carbon neutral construction services at 140 Lonsdale Street, Melbourne. We are also enabling a net zero in operations development at 60 King William Street, Adelaide which will be all electric and powered by renewables at practical completion.

Since 2017, we have reduced our emissions intensity by 19%, despite a 43% increase in floor area over the same time period. This demonstates putting plans into action as we execute our approach to strategic growth linked to sustainable returns. We continue to focus on reducing our Scope 1 and 2 emissions and remain committed to scaling up our use of renewables, whilst maintaining our approach to certifying properties with recognised sustainability rating tools. There is much more we can do as a business and industry - the IPCC report is a stark reminder of this. We continue to assess opportunities to make further progress through our operations and our industry and customer partnerships.

A responsible approach is good business

Robust governance and environmental responsibility underpin our values and business model. By building portfolios that address the challenges and opportunities of changing climate and providing healthier and more resilient places, we are aligning our objectives to the needs of our customers. This in turn enables us to continue to attract and retain the best customers.

We have actively aligned our climate resilience roadmap to the recommendations of the Task Force on Climate-Related Financial Disclosures to ensure meaningful steps from Board level to meet our objectives. We have also begun proactively working with contractors and suppliers to reduce impacts across our supply chain and engaged with our tenant customers to find solutions to mitigate their energyrelated emissions. Currently, 54% of the 41MW of solar installed on our assets is supplied directly to our tenants.

The importance of partnership

The rise of sustainable finance and responsible investing, as well as societal expectations to better respond to issues such as urbanisation, inequality, and social isolation, are just some of the socio-economic challenges that require significant attention and well-considered solutions from the whole corporate community.

In fact, these mega-issues cannot be resolved by any single entity and require partnership, collaboration and a marketwide response.

It is in our DNA to partner with our tenant customers and investors to achieve better futures for all. This gives us an advantage as we look to amplify and broaden our response and find better solutions. We focus on developing solutions that are informed and strategic rather than reactionary and tactical, and created in partnership to ensure maximum societal benefit can be achieved. We believe continued investment and innovation will drive the next generation of sustainable real estate and create inclusive and more resilient places, today and for tomorrow.

As businesses around the country continue to plan their return to workplaces, supporting healthier assets is critical. We worked with the International WELL Building Institute to baseline human health and wellness, with a focus on measuring and improving the indoor environment in our workplace assets for our tenant customers. In FY21, we became one of the first groups globally to achieve a WELL Portfolio Score across 996,294sqm of real estate. Further, as a signatory to the United Nations Global Compact, we continue to embed its principles in our strategy and culture. We also aligned our sustainability initiatives with the UN Sustainable Development Goals.

We are continuously looking at ways to further embed ESG into our partnership approach. To that end, we recognise the need to be more proactive in engaging on sustainability issues and solutions. We have stepped up our stakeholder engagement to better capture a wide range of views, to gain a deeper appreciation of their challenges and opportunities, and to improve our responsiveness where it falls short. This is key to our mission of adding value to the market, which in turn adds value to our business.

Inputs welcome

As part of this process of improvement, I would like to extend to you and invitation to provide feedback on our reporting of our ESG performance, as contained within this report. Please use this link to take a short survey. Your input is very much appreciated as we undertake an extensive review of our materiality, targets and sustainability strategy in the year ahead in response to the IPCC findings and other key inputs.

Thank you for your interest in Charter Hall.

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David Harrison Managing Director & Group CEO

Introduction Targets Sustainability Governance Economic Environment Social overview

Data Contact us

Charter Hall Group

Sustainability Report 2021 Introduction

About Charter Hall

Charter Hall Group (ASX:CHC) is one of Australia’s leading integrated property groups. Our diversified property and funds management platform extends across the Office, Industrial & Logistics, Retail and Social Infrastructure sectors. Through active partnership, we drive value and mutual success for our customers.

We believe the right places inspire people, solve challenges, and foster community and inclusion, growing cities and prosperity now and in the years ahead. Sustainability is how we deliver on our purpose, to secure better futures for all.

Our values drive us, and understanding our strengths and weaknesses, as well as listening to our stakeholders, focus us to where we can have the greatest impact and influence. Sustainability is integrated into how we think and work. It’s the forward-focused lens we use to assess, manage and achieve our goals. It’s also part of how we work in partnership with our customers, to create long-term risk adjusted returns for investors and healthier places for people and our planet. Our focus on delivering sustainable growth and returns and responsibly managing third party capital enables us to respond to the needs of customers through integrating sustainable outcomes into our core capabilities.

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Funds under
management
Our FUM grew 29% from previous year
FUM by sector
Office $22.8bn $52.3bn
43.6%
FUM
Industrial & Logistics $15.5bn
29.7%
Long WALE Retail $6.7bn
12.8%
Shopping Centre Retail $3.8bn
7.3%
Social Infrastructure $3.4bn
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Social Infrastructure $3.4bn 6.5%

20+ active $7.2bn funds & market partnerships capitalisation

FUM by equity source

Wholesale Equity $33.3bn 63.7%
Listed Funds $10.8bn 20.6%

ASX 100 listed company

Direct (Retail) Equity $8.2bn 15.7%

Scale

We focus on quality investments in core sectors, creating an Australian funds management business of scale by global standards

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1,388
properties
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$10.1bn
transactional
activity
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9.0m sqm of lettable area across the Group

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ESG integrated into investment decisions

Purpose

Our commitment to mutual success underpins all our goals

We create better futures by driving value and mutual success

Strategy

Our ESG strategy aligns with our approach to creating long-term sustainable growth and returns. This supports Charter Hall to:

Access

Accessing equity from listed, wholesale and retail investors

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Deploy Creating value through attractive investment opportunities

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Manage Managing our funds, assets and leasing and development services

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Invest Investing alongside our capital partners

Values

Our culture is based on mutual reward and nurturing relationships with our customers. We understand that, like our customers, ESG is key to our people and approach to creating:

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Active Partnership Genuine Insight Inventive Spirit

Capabilities

We use our cross sector capability and integrated platform to drive an ESG competitive differentiation, supporting our customers needs. This approach supports us in:

Investment Asset management management Accessing equity to Driving performance secure properties to and creating generate returns outstanding spaces for customers

Property Property management Day-to-day leasing management Securing longof properties term leasing by delivering solutions Property to customers needs development Portfolio Delivering innovative developments integration that focus on Providing integrated sustainability and property portfolios adding value for customers

Stakeholders

Active partnership governs our relationships with our tenant and investor customers, communities and employees

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45,000+ customers

890 communities nationally

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560+ employees

5 workplaces nationally

Introduction Targets Sustainability Governance Economic Environment Social Data Contact us overview

Charter Hall Group

Sustainability Report 2021 Introduction

Property portfolio

5.0 Star NABERS Energy weighted average rating for Office portfolio. 78% of Office sector funds under management (FUM) with a rating.

We are proud to have Australia’s largest footprint of Green Star rated assets and will continue to use Green Star, NABERS and WELL to support a healthier built environment for both people and planet.

Charter Hall has a demonstrated track record in using independent rating tools to benchmark and measure operational performance of its property portfolios. As a member of the Property Council of Australia and the Green Building Council of Australia, we actively participate in establishing and piloting rating standards for sectors like Industrial & Logistics.

Funds management portfolio

This report outlines the sustainability strategy and achievements for all Charter Hall entities including the following funds and partnerships:

Listed entities

Charter Hall Group (ASX:CHC)
Charter Hall Retail REIT (ASX:CQR)
Charter Hall Long WALE REIT (ASX:CLW)
Charter Hall Social Infrastructure REIT (ASX:CQE)

4.6 Star NABERS Energy weighted average rating for Retail portfolio. 59% of Retail sector FUM with a rating.

Unlisted funds

Direct Funds

Charter Hall Direct Industrial Fund No. 4 (DIF4)

4 Star Green Star Performance Rating for Office portfolio. 60% of Office sector FUM with a rating.

2 Star Green Star Performance Rating for Retail portfolio. 97% of Retail sector FUM with a rating.

WA

Portfolio value:

$4.2bn

of which 29% is in the following weighted average rating:

5.0 Star NABERS Energy Office 3.8 Star NABERS Energy Retail

Qld

Portfolio value:

$8.5bn

of which 38% is in the following weighted average rating:

4.8 Star NABERS Energy Office

5.0 Star NABERS Energy Retail

NSW & ACT

Portfolio value:

$22.7bn

of which 53% is in the following weighted average rating:

5.0 Star NABERS

Energy Office

4.5 Star NABERS Energy Retail

Charter Hall Direct Office Fund (DOF)
Charter Hall Direct PFA Fund (PFA)
Charter Hall Direct Long WALE Fund (LWF) (Previously known as DCSF)

Wholesale Property Funds

Charter Hall Prime Office Fund (CPOF)
Charter Hall Prime Industrial Fund (CPIF)
Charter Hall Prime Retail Fund (CPRF)

Partnerships

Charter Hall Office Trust (CHOT)
Charter Hall Counter Cyclical Trust (CCT)
Charter Hall DVP Fund (DVP)

2 Star Green Star Performance Rating for Industrial & Logistics portfolio. 50% of Industrial & Logistics sector FUM with a rating.

SA

Portfolio value:

$2.4bn

of which 38% is in the following weighted average rating:

5.4 Star NABERS Energy Office 5.2 Star NABERS Energy Retail

Vic

Portfolio value:

$12.9bn

of which 34% is in the following weighted average rating:

5.0 Star NABERS Energy Office 4.9 Star NABERS Energy Retail

Tas

Portfolio value:

$0.6bn

of which 20% is in the following weighted average rating:

3.2 Star NABERS Energy Office

Charter Hall Brisbane Square Wholesale Fund (BSWF)
Charter Hall Retail Partnership No. 1 (RP1)
Charter Hall Retail Partnership No. 2 (RP2)
Charter Hall Retail Partnership No. 6 (RP6)
Charter Hall Australian Investment Trust (CHAIT)
Charter Hall Core Logistics Partnership (CLP)
Charter Hall Long WALE Hardware Partnership (LWHP)

For more information on our fund portfolio please visit:

charterhall.com.au/investments/funds

Introduction Targets Sustainability Governance Economic Environment Social overview

Data

Charter Hall Group

Sustainability Report 2021 Introduction

Environment

Social

FY21 Highlights

Throughout the year, we worked in partnership to deliver key outcomes relating to our environmental, social and governance goals. Each of these are discussed in more detail throughout the report.

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Charter Hall will be powered by 100[%]

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19[% ] emission intensity reduction

2030 Net Zero

renewables by 2025

target for since FY17 in which Scope 1 and 2 time floor area emissions increased by 43%

Industrial & Logistics: achieved in FY21 Office: from July 2021 Retail: will be achieved in FY25

41MW solar PV installed a 20MW increase since last year

$ 100m in sustainable debt finance

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# 6 star 1 largest Green Star Green Star ratings performance targeted on all footprint in new CBD Office Australia developments

2020 PRI Leaders Group recognition for climate disclosure

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Employer of Choice for Gender Equality

>900k sqm WELL portfolio rated Office space

$1.8m space $739k spent with community provided in kind partnerships for community though social enterprises and organisations charitable organisations

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# in Property, 2 Construction & Transport category

1.7m sqm of Office space uses social procurement through Two Good partnership

Reconciliation Action Plan Stage One Reflect RAP conditionally endorsed by Reconciliation Australia

90[%]

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Established engagement state-based score community from our partners employees

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Governance

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21 funds completed GRESB assessment

CPIF was awarded Industrial Global Development Sector Leader

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Modern Slavery

piloted PCA’s supplier TCFD alignment pre-qualification with our top 100 suppliers, with a underway further 100 suppliers to be with ESG Committee driving platformadded year on year wide alignment and integration

Introduction

Targets Sustainability Governance overview

Economic Environment

Social

Data

Charter Hall Group

Progress against Responding to our targets key material issues: We monitor and disclose our progress against Economic our sustainability targets. We’ve summarised our FY21 performance and detailed agreed targets for FY22 and beyond in the following tables.

In light of the IPCC Sixth Assessment Report and our own materiality review, we intend to undertake a thorough review of our key sustainability targets and approach. Results from this review and any updates to our approach will be shared in our FY22 Sustainability Report.

Introduction

Sustainability Governance Economic Environment Social Data overview

Targets

Charter Hall Group

Sustainability Report 2021 Progress against targets Environment

Environment

Targets

FY21 achievements FY22 Looking further ahead

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We became a signatory to the WGBC Net Zero Carbon Commitment

100% reduction in Scope 1 and 2 emissions by FY30. Embed decarbonisation strategies within strategic asset plans by FY25 or earlier.

Develop a roadmap to transition away from fossil fuels and align with asset Capital Expenditure (CAPEX) and Operational Expenditure (OPEX) budgets over lifecycle.

Carbon and climate change

We achieved a 19[%]

reduction in our carbon

Building resilience for our business, properties and communities

emission intensity (Scope 1 and 2)

This initiative aligns with our target of Net Zero for Scope 1 and 2 emissions by 2030.

since FY17, despite a 43% increase in area over that time and an 8.7% reduction against last year.

We are partnering with tenants to understand downstream Scope 3 emissions and support operational efficiency:
Installation of solar for on-site usage;
Roll out of energy efficiency initiatives such as LED lighting and installation of skylights in Industrial & Logistics portfolio;
Providing off-site renewables to Office tenants that are on embedded networks, passing on environmental benefit in the process; and
Benchmarking energy performance of tenancies using the NABERS Co-Assess tool in the Office sector.

Continue solar roll out across Develop a Scope 3 emissions target the Industrial & Logistics sector. aligned to science-based target Commence roll out in the Social methodology during FY23 - see Energy Infrastructure sector - see Energy efficiency and renewables on page 30. efficiency and renewables on page 30. As we partner on reducing Scope 3 emissions, we will report around tenant engagement on energy efficiency and emission reduction - see Energy efficiency and renewables on page 30.

We commenced piloting Net Zero office developments to address upfront Scope 3 and operational emissions.

60 King William St, Adelaide

was designed to be highly energy efficient with a 5 Star NABERS Energy rating, fossil fuel free through an all-electric mechanical central plant, climate friendly refrigerants and powered by renewables.

Climate Active Certified

construction services provided at 140 Lonsdale Street, Melbourne. Construction emissions were offset by Australian Carbon Credit Units (ACCU) created at the Colodon Native Forest Project.

Develop guidelines for Net Zero Net Zero upfront carbon emissions Office developments - see Energy (embodied carbon and construction) efficiency and renewables on page 30. achieved for all new Office and Retail site developments by FY30.

Achieved internal agreement to pursue local nature-based carbon offsets with social co-benefits.

Implement a local nature-based Residual operational and construction offset strategy for residual emissions emissions offset in line with local to achieve our Net Zero goals nature based offset strategy by FY30. and enhance outcomes as we transition away from fossil fuels.

Resilience and adaptation Understanding and responding to the physical and transitional risks of a changing climate

We commenced

Climate Change and

Adaptation Plans (CCAP)

for our Industrial & Logistics portfolio (now 70% complete by floor area) based on RCP8.5 as a worst case scenario.

Roll out CCAP for remaining Embed in decision making Industrial & Logistics, Office and Retail and track decarbonisation and sectors and incorporate CCAP into adaptation planning in Strategic decision making processes including Asset Plans by FY25 - see Climate on-boarding new assets - see Climate change adaptation on page 29. change adaptation on page 29.

Introduction

Sustainability Governance overview

Economic Environment

Social

Targets

Data

Charter Hall Group

Sustainability Report 2021

Progress against targets Environment

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Targets
FY21 achievements FY22 Looking further ahead
Energy efficiency We met our FY25 NABERS Energy Office We exceeded our FY25 NABERS Energy Establish new NABERS targets Achieve new NABERS targets by FY25.
target early by achieving Retail target by achieving at both portfolio and asset levels
Increasing energy efficiency by FY22 - see Energy efficiency
to deliver environmental and 5.0 Star 4.6 Star and renewables on page 30.
financial value for operations NABERS Energy NABERS Energy Expand our coverage of NABERS ratings to Retail sites <15,000sqm
and developments weighted average rating for Office sector. weighted average Retail sector >15,000sqm. - see Energy efficiency and
renewables on page 30.
We completed our renewable 100% of grid supplied Office Retail electricity to be sourced
Clean energy energy strategy ahead of target. electricity to be sourced from from onsite and offsite renewable
offsite renewable electricity. electricity from FY25.
Investing in onsite and We procured
To date 41 MW Solar PV
offsite renewables and
leveraging the scale of installed across the portfolio with the potential 100 [%] offsite
our national platform to generate 58.9GWh of electricity renewable
(equivalent to powering 8,305 homes).
electricity for our Industrial
& Logistics portfolio.
We implemented waste management We increased our organics waste Deliver a waste strategy aligned Achieve 4.5 Star NABERS Waste
Waste plans at all sites where we manage waste. stream to include to circular economy principles, portfolio weighted average for
with the long-term aim of the Office portfolio by FY25.
Minimising the generation eliminating waste to landfill.
75% waste diversion from landfill
of waste in our operations 31 [%] of waste diverted from over 60 [%] of our Office assets, in operational assets by FY30.
landfill from Office sector in operations. and piloted Anaerobic digestion systems
at select Retail sites.
40 [%] of waste diverted from We improved waste data integrity
landfill from Retail sector operations, through alignment with the Better
inclusive of recovery rates for cooking Buildings Partnership.
oil and grease traps.
We exceeded our FY25 NABERS Water target Establish new NABERS targets Prepare a water strategy to address
Water early by achieving: at portfolio and asset level by future climate scenarios by FY25.
FY22 - see Energy efficiency
Increasing water efficiency 4.0 Star 4.6 Star and renewables on page 30.
across our operations
NABERS Water NABERS Water
weighted average rating for weighted average rating for
Retail sector >15,000sqm. Office Sector.
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Introduction

Sustainability Governance Economic overview

Environment

Social

Targets

Data

Charter Hall Group

Sustainability Report 2021 Progress against targets Social

Social

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Targets
FY21 achievements FY22 Looking further ahead
Social value We continued to lead with purpose in We donated Continue to contribute 1% of our Pledge 1% targets by FY25:
our quest to lift the future of communities profits, spaces and people’s time
People: 6,000 hours volunteered
Through partnership, through our ongoing participation in the $ to community partners each year in the community.
deliver positive impacts Pledge 1% initiative, donating 1% of profits1% of place and 1% of people’s time [1] , to social enterprises and 739,000 to help them achieve positive social impacts - see Community Place: up to 1% of underutilised
for the communities in (volunteer hours): charitable organisations. and social inclusion on page 33. space provided to community.
which we operate Refine our social sustainability strategy Profits: up to 1% donated to
We provided to maximise the social impact of our community initiatives and develop community partners to achieve positive social outcomes.
35 [%]
of our employees
a national partnership framework
>
41,000 sqm of space, volunteered a total of 1,200 hours to bring the strategy to life.
in the communities, in a year
valued at over [$] 1.8 million ,
impacted by COVID-19 restrictions.
to community groups.
Employment We established state-based partnerships with Our support saw Deliver 100 meaningful employment Continue to support disadvantaged
four social enterprises to support employment outcomes for vulnerable youth (and youth by creating 400 meaningful
opportunities for vulnerable youth. These partnerships will > others in need) - see Community and youth employment outcomes by FY25.
4,500 training hours social inclusion on page 33.
enable over 100 employment opportunities Those opportunities will increase to
Building better futures for
per year. worked through Kick Start cafes. 1,200 youth employment outcomes by
vulnerable young Australians 2030 - see Community and
through meaningful We supported Since our partnership began, 12 trainees social inclusion on page 33.
have graduated from the program.
employment 11 This partnership has supported the
youths
establishment of our FY22 goal relating
to receive employment training
to employment opportunities.
at Kick Start cafes in NSW.
First Nations Our inaugural We celebrated First Nations history and cultures Launch our RAP in early FY22. 100% of employees and xx%
Reconciliation Action Plan with art activations across a range of our Retail We will then focus on bringing of suppliers receive cultural
engagement and Office assets including No.1 Martin Place, our RAP to life by engaging with awareness training by FY23.
(RAP) has been conditionally approved by our employees, raising cultural
Promoting reconciliation Reconciliation Australia and will be launched NSW; 130 Lonsdale Street, Vic; Raine Square, awareness and supporting indigenous
WA; and GPO Exchange, SA.
and mutually beneficial in early FY22. businesses and employment.
We partnered with local WA indigenous group
relationships with our We partnered with indigenous author Maree Acknowledge Traditional
Blak Lash, to design a digital Acknowledgment of
indigenous stakeholders Yoelu (McCarthy) and local schools across Country for lift screens at our Office properties. Owners at 100% of Charter
our Retail communities to create a children’s Hall operational assets.
We included smoking ceremonies and Welcome
storybook, ‘Dancing for Country’, in celebration
of NAIDOC Week. to Country for each new Office development.
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1% of profits related to Property Funds Management.

Introduction

Sustainability Governance overview

Economic Environment

Social

Targets

Data

Charter Hall Group

Sustainability Report 2021 Progress against targets Social

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Targets
FY21 achievements FY22 Looking further ahead
Health, safety We were recognised by the International WELL Portfolio, achieving a rating across Increase coverage of the WELL Increase coverage of the WELL
WELL Building Institute (IWBI) as being part more than 900,000sqm Portfolio rating to 1,200,000sqm, portfolio rating to all of the
and well-being of a small group of global leaders in the adoption of office space, benefiting representing more than 68% of the Office portfolio by FY25
current Office footprint - see Health,
Creating a culture that fosters of the WELL Portfolio Rating measuring and
> safety and well-being on page 35.
advancing human health and wellness in
the well-being and resilience of 38,000
buildings.
our employees and customers of our tenant customers.
We received We are targeting Achieve WELL Building accreditation
for all new Office developments by
Gold WELL Certification Platinum WELL Certification FY25 - see Health, safety
and well-being on page 35.
for GPO Exchange, Adelaide SA. at 130 Lonsdale St, Melbourne Vic.
We achieved our FY25 target of WELL Portfolio Maintain WELL Portfolio accreditation Maintain WELL Portfolio
accreditation for all Charter Hall workplaces. and partner to align with the Health accreditation with two additional
Safety Standard of the rating tool. workplaces to achieve at least
sliver accreditation by FY25.
We achieved a Achieve 5 Star NABERS Indoor
Environment weighted average
for the Office portfolio by FY25.
4.4 Star
NABERS Indoor Environment
weighted average rating for the Office portfolio.
We cared for our customers through COVID-19 with rent relief, Partner with our customers to achieve a
hygiene initiatives, adaptation of digital engagement and smooth transition back to the Targets
support with returning to workplace. workplace - see Customer engagement
and satisfaction on page 34.
We recorded a lost time injury and and a total recordable Implement a new incident management Workplace health and safety
lost time injury frequency rate of injury frequency rate of system and train employees to framework embedded in
position Charter Hall to efficiently react, the business by FY25.
Zero 1.11 understand and respond - see Health,
safety and well-being on page 35.
In response to the roll out of our well-being Enhance our well-being strategy
strategy, our work environment continues to be 76 [%] to adapt to the challenging needs
regarded highly by our employees: were favourable on our well-being approach, of the business and measure
success through employee
14% above the Australian norm; and
surveys - see Health, safety
83 [%] and well-being on page 35.
agree
35 [%]
we promote a healthy work environment,
18% above the Australian norm; of our Victorian team used the extra 10 days
Woodlands by of leave provided for them to home school
Wesley Place,
during the COVID-19 lockdowns in 2020.
130 Lonsdale Street,
Melbourne Vic.
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Introduction

Targets Sustainability Governance overview

Economic

Environment

Social

Data

Charter Hall Group

Sustainability Report 2021 Progress against targets Social

Australian Workplace Equality Index Awards

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ReCharge
launch
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Targets

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Creating inclusive spaces and engaging customer experiences

Support customers to go further by enhancing connection, engagement, productivity and innovation

Employee

Creating a diverse and inclusive culture and environment within our own community

FY21 achievements

We improved customer satisfaction measures across all sectors[1] , with Net Promoter Scores and satisfaction results at a 5 year high.

We successfully involved the local community in the development of Wesley Place, Vic through the community reference group, contributing to the sense of place.

We achieved

90[%] employee engagement.

95[% ] Charter Hall as a good place to work.[of our people recommend ]

We recorded not only strong results across all our culture measures but also a high performing employee experience compared to benchmarks.

We achieved WGEA Employer of Choice for Gender Equality citation.

We launched ‘ReCharge’ our Office workplace wellness program that brings premium lifestyle amenities, health seminars, wellness services and surprise activations to our tenant customers.

We extended our award winning customer experience program, ‘Charli’, to connect over 15,000 users and 860,000sqm of workspace across 32 Office buildings nationally.

We continued to grow our LGBT+ network and improved our score in the Australian Workplace Equality Index (AWEI) by 31% when compared with FY20.

We ranked second in the Property Construction & Transport category in the 2021 Best Places to Work.

We achieved

28.6[%] female participation on the CHC Board; 29% in senior management; and 55% across the workplace.

FY22 Looking further ahead

Establish NPS targets for all sectors.

Enhance customer experience in our places, measured through customer satisfaction surveys. All large new Office and Retail developments to meet the Places credit criteria for Green Star Buildings by supporting the creation of safe, enjoyable, integrated and comfortable places by FY25.

Improve AWEI recognition for Female participation on the CHC LGBT+ inclusion by achieving Board of >40%, and in senior Bronze status by FY22. management of >40% by FY25. Continue to maintain 50% female Continue to achieve employee participation across the workplace. engagement above global high performing norm. Continue to evolve our approach to LGBT+ inclusion by reaching Gold status in the AWEI.

Excludes Social Infrastructure and Office portfolios. We did not survey Office customers in 2020 due to COVID-19 and have not yet commenced 2021 surveys.

Introduction

Sustainability Governance overview

Economic Environment

Social

Targets

Data

Charter Hall Group

Sustainability Report 2021 Progress against targets Governance

Governance

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Targets
FY21 achievements FY22 Looking further ahead
Ethics All our people received training on governance We joined the Ethical Alliance Achieve 100% employee participation Publish responsible and ethical
and risk management policies, including our in risk and compliance training. investment framework by FY25.
(managed by The Ethics Centre).
Conducting business Code of Conduct. Maintain >80% in the Risk Culture
This community of organisations is
activities in line with the Index in our annual culture survey.
We achieved 86 [%] Risk Culture Index committed to lead, inspire and shape better
highest ethical standards futures.
in our annual culture survey (13% above Australian
norm) driving a positive employee experience We implemented a Risk and Compliance
year on year. system to automate advice on changes in
legislation and regulation.
Innovation and We joined the We actively engaged in the Property Council of Embed and continuously evolve Work across our technology
technology Sustainable Digitalisation Australia’s Cyber Security Roundtable to address emerging cyber threats as an industry. information security and privacy practices in our operations. Continue and operational supply chain to increase cyber awareness,
as a Silver Member to drive digital technology and maturity and readiness by FY25.
Project
Harnessing the opportunities We reported zero major cyber security incidents innovation to enhance experience and
of digital technology to be part of an industry approach to responsible, for the year. Our cyber security strategy is well-being, operate efficiently and
and data while actively ethical and sustainable digitalisation. modelled on the internationally recognised sustainably, and safeguard against risk.
standard ISO27001 and audited annually.
protecting the privacy of
individuals and companies
Expand the number of high risk Deliver a Sustainable Supply Chain
Responsible We launched our inaugural Modern We implemented a Supplier Code of suppliers completing the modern Framework that addresses modern
supply chain Slavery Statement in FY21 and Conduct outlining mandatory modern slavery pre-qualification. slavery, preferred materials, and
published our annual communication on slavery compliance for all our suppliers. circular economy principles by FY25.
Creating an integrated
progress to United Nations Global Compact
sustainable supply chain (UNGC). Targets All employees received modern slavery refresher
strategy and ensure delivery training, including the process of reporting
We identified five suppliers for independent issues or suspect modern slavery in our
on UNGC commitment
review to identify opportunities for improving operations or supply chains.
their risk ratings.
We engaged three high risk suppliers
across construction, cleaning and facilities
management to be involved in supplier ‘Deep
Dive’ workshops focused on understanding how
they are identifying, assessing and mitigating
risks in their operations and supply chains.
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Introduction

Sustainability Governance Economic Environment Social overview

Targets

Data

Charter Hall Group

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Sustainability Report 2021

Progress against targets Governance

Woodpark Logistics Estate, Smithfield, NSW 5 Star Green Star Design & As Built.

Targets

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FY21 achievements FY22 Looking further ahead
Policies and processes We progressed the implementation of our Environmental Implement Environmental Embed a ISO14001 certified
Management System across the portfolio. Management System during FY22. Environmental Management
Managing our properties System in place by FY25.
and funds effectively Our Board continued to oversee the Group Our Executive Committee continued to have Complete full alignment with the
and with integrity sustainability strategy and policies (including strategic oversight of ESG strategy and TCFD Framework by FY25.
our approach to climate change and integrating implementation, bolstered by the
ESG) through the Audit Risk and Compliance establishment of an
Committee.
Our Executive and Non-Executive Directors ESG Committee to drive platform-wide
alignment and implementation.
engaged on climate change and scenarios.
Reporting and ratings We use best practice reporting frameworks and All Office developments in Develop guidelines for Target 6 Star Green Star Design
guidelines to measure our ESG performance, progress are targeting Net Zero Office developments and As Built ratings for all new CBD
Using independent rating including GRI, PRI, UNGC, the SDGs and alignment incorporating Net Zero targets. Office Developments by FY25.
tools to benchmark and with TCFD. We also use independent rating tools 5 Star Green Star
and assessments for our assets and portfolios,
measure our progress including GRESB, Green Star, NABERS and WELL. Design & As Built
in integrating ESG
Industrial & Logistics development
into our platform at Woodpark Logistics Estate achieved 5 Star NABERS
5 Star Green Star Energy rating
Design & As Built
Industrial & Logistics and Office sector Work with GBCA on the piloting of the Achieve a 3 Star Average Green
Retail sectors achieved achieved new Green Star Performance tool. Star Performance rating across
the portfolio by FY25.
2 Star Green Star 4 Star Green Star
Performance rating Performance rating
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Introduction

Targets Sustainability Governance overview

Economic

Environment

Social

Data

Charter Hall Group

Sustainability Report 2021

Sustainability overview

Integrating sustainability into decision making

Factoring sustainability into our decision-making is how we choose to do business. In fact, it’s embedded and integrated platform-wide across our Group operations.

Policies

Board

Our Board has oversight of our sustainability strategy, policies, risks and opportunities, including our approach to climate change and the integration of ESG into our systems.

Policies and Codes of Practice help translate our values and commitments into actions.

In relation to sustainable and responsible business practices, we are guided by our Group Sustainability Policy and our Human Rights Policy, along with policies addressing diversity and inclusion, whistleblowing, privacy, conflicts of interest, work health and safety, and bribery, fraud and corruption.

ARCC

The Audit Risk and Compliance Committee (ARCC) receives regular updates from the Executive Committee on sustainability issues and initiatives.

Executive Committee

We enact these policies through codes of conduct for our employees and suppliers, as well as through instruments such as our Modern Slavery Statement.

The Executive Committee implements sustainability policies across the Group and, along with the Board, has ultimate responsibility for overall implementation and governance of sustainability across the business.

All our managed funds adopt our Group policies, including this Report. In addition, each fund has its own governance structure, which determines decisionmaking about assets within the portfolio and in accordance with Group policies, codes of conduct and charters.

ESG teams

Our Group Head of ESG and team regularly reports our performance against ESG goals and targets to the Executive Committee, and quarterly to the Managing Director & Group CEO. The ESG team also delivers the strategic and tactical aspects of our sustainability endeavours and is supported by ESG Leads in our Office, Retail and Industrial & Logistics portfolios.

Ultimate responsibility for the above rests with the Executive Committee and Board. We provide accountability and transparency for our processes and outcomes through our internal and external reporting, including this Report.

ESG Committee

Our ESG Committee have focused this year on endorsing procurement of 100% renewables for Industrial & Logistics and Office, continued alignment to the TCFD, creating approaches for rolling out Climate Change & Adaptation Plans for all our assets, signing off on work relating to our social procurement strategy and establishing social value partnerships. The Committee remains focused on driving platformwide alignment and implementation of ESG strategy and initiatives.

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From left: Greg Chubb, Retail CEO; Carmel Hourigan, Office CEO; Steven Bennett, Direct CEO; Sheridan Ware, Chief Information and Technology Officer; David Harrison, Managing Director & Group CEO; Russell Proutt, Chief Financial Officer; Richard Stacker, Industrial & Logistics CEO; Natalie Devlin, Chief Experience Officer; Sean McMahon, Chief Investment Officer.

Charter Hall Board

Review reporting from Management regarding potential material risks and opportunities; approve sustainability policies Audit, Risk and Compliance Committee (ARCC) Oversee and review Group sustainability strategy and policies; propose required amendments to Board Managing Director & Group CEO Day-to-day management of the Group and overall strategic direction Executive Committee Accountable for implementation of sustainability strategy and policies across the platform Chief Chief Chief Chief Information Industrial Direct CEO Retail CEO Office CEO Financial Officer Experience Officer Investment Officer & Tech Officer & Logistics CEO Group Head of ESG Sector ESG Leads Facilitate the management of sustainability policies; support Sector implementation of ESG initiatives and operational performance implementation of policies across managed entities ESG Committee Established to drive platform wide alignment and implementation of our ESG strategy to address risks and opportunities Community Investment TCFD Working Group Modern Slavery Working Group First Nations Working Group Working Group Asset Management, Operations and Development teams Implement sustainability policies across assets, developments, operations and business activities

Introduction

Targets Sustainability Governance Economic Environment overview

Social

Data

Charter Hall Group

Sustainability Report 2021 Sustainability overview

Sustainability framework

Creating better futures by driving value and mutual success

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Environment

Climate resilience

We are committed to building resilience in our assets to support customers through resource efficiency, carbon emission reduction and embedded climate change adaptation measures, to deliver long term value.

Climate change adaptation

Sustainable growth and returns

Energy efficiency Resource and renewables efficiency

Social

Strong communities

We create safe, equitable and inclusive environment for our employees, partners, customers and communities.

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Community and social inclusion

Health, safety and well-being

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Customer engagement and satisfaction

Employee engagement and satisfaction

Governance Responsible business

We behave in line with the highest ethical standards, strive for a sustainable supply chain and transparently disclose our performance.

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Business ethics and Responsible compliance investment

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Responsible and Innovation and sustainable supply chain technology

Introduction

Sustainability Governance overview

Economic Environment

Social

Targets

Data

Charter Hall Group

Sustainability Report 2021 Sustainability overview

Charter Hall Materiality Matrix

Key sustainability issues in FY20/21

We conducted an intensive materiality process this year to guide our sustainability strategy and reporting, and to ensure that our approach to managing our social, environmental, economic and governance performance is informed and focused. This process involved three key steps:

3

1

Research into megatrends and thought A material issues review and leadership in the market, to help us prioritisation workshop that enabled better understand and appreciate our Board and Executive Committee the key issues, challenges and to consider, discuss and prioritise opportunities that we will be exposed the ESG matters that would shape to, both now and into the future. not only the Report, but our overall strategy for the coming period.

2

The resulting range of material topics[1] are shown in the Materiality Matrix. These were prioritised by the Board and Executive Committee as the most critical to account for in this Report.

Engagement , through interviews and surveys, of our key internal and external stakeholders – our employees, investors, tenants and other informants. Based on the AA1000 Stakeholder Engagement Standard 2015, this

engagement provided insights into ESG issues that are material to our stakeholders and provided a deeper understanding of their perceptions about our approach to ESG and what we can do to lift our performance.

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3 Energy efficiency
Very Sustainable growth and renewables
High and returns 2
1
Responsible investment Climate change
Business ethics
10 and compliance adaptation
9
Innovation and
technology
8
11
4 Responsible and
sustainable supply chain
Community and Employee engagement
social inclusion and satisfaction
6
Health, safety 7
and well-being
5
Customer engagement
and satisfaction
High
Importance to internal stakeholders
Importance to external stakeholders
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Very High

Environment

Social Governance

1 Climate change adaptation Building the resilience of our business, properties and communities against the physical impacts of climate change and preparing for changing regulations and markets in a low carbon economy.

8 Innovation and technology Harnessing digital technologies and data across our assets in partnership with our customers to solve industry challenges and meet customer needs.

4 Community and social inclusion Supporting and contributing to the prosperity of local communities, promoting social inclusion of vulnerable groups; and creating opportunities for the economic uplift of young Australians, those with disabilities, Indigenous peoples, and others in need.

9 Business ethics and compliance

2 Energy efficiency and renewables The use of process redesign and technological modifications to allow a defined process or task to be carried out using less energy and the use of renewable energy sources such as wind, solar, hydro, and biomass.

Conducting our business activities in line with the highest ethical standards across environmental, social and governance standards and complying with all relevant regulations and transparently reporting on our performance.

5[Customer engagement ] and satisfaction

Exceeding the business needs of our tenants and investors to ensure they have a deep sense of belonging and satisfaction in our assets.

10 Responsible investment

6[Employee engagement ] and satisfaction

Integrating ESG considerations into our investment decisions (due diligence, property management and day-to-day operations) and ongoing engagements to ensure sustainable growth and returns.

Economic

3 Sustainable growth and returns Providing services that satisfy the highest professional standards of the industry to ensure long-term, mutually beneficial relationships and returns for the company and investors.

Through building a diverse and inclusive culture and workplace within our own community, our people can be at their best.

[Responsible and ] sustainable supply chain

7 Health, safety and well-being The promotion of physical and mental health and well-being for everyone, including our employees, contractors and customers, as well as the general public that use our spaces.

Facilitating procurement practices and supply chain management in a responsible and sustainable way, including the management of human rights, sustainable procurement, modern slavery, anti-corruption and anti-bribery.

Introduction

Targets Sustainability Governance Economic Environment Social overview

Data

Charter Hall Group

Sustainability Report 2021 Sustainability overview

Key sustainability issues in FY20/21

Last year, we reported on several issues material to our ESG performance. As noted in the table, our ongoing attention and response to those issues over the past 12 months is either detailed in this report or a reference is provided as to where further information can be found online.

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FY20 material topics

Reference to response:

Business ethics and Business ethics and compliance under compliance Governance: Responding to our key material issues on page 21. Infectious disease Health, safety and well-being under Social: Responding to our key material issues on page 35. GHG emissions GHG emissions under the following sections in this report: Climate change adaptation on page 29, Energy efficiency and renewables on page 30, and Clean energy on page 30. Diversity and inclusion Refer to Databook > Energy efficiency Energy efficiency and renewables and renewables under Environment: Responding to our key material issues on page 30. Climate change adaptation Climate change adaptation under Environment: Responding to our key material issues on page 29 . Responsible investment Responsible investment under Governance: Responding to our key material issues on page 21. Responsible and Responsible and sustainable supply sustainable supply chain chain under Governance: Responding to our key material issues on page 23. Health, safety and well-being Health, safety and well-being under Social: Responding to our key material issues on page 35. Sustainable growth Sustainable growth and returns under Economic: and returns Responding to our key material issues on page 26.

Employee engagement and satisfaction

Employee engagement and satisfaction under Social: Responding to our key material issues on page 35.

Customer engagement Customer engagement and satisfaction and satisfaction under Social: Responding to our key material issues on page 34. Cyber security and Innovation and technology under Governance: data protection Responding to our key material issues on page 22. Waste management Refer to Databook > Water management Refer to Databook > Protecting the natural Refer to website > environment Community and Community and social inclusion under S ocial: social inclusion Responding to our key material issues on page 33. Innovation and Innovation and technology under Governance: technology Responding to our key material issues on page 22. Local economic Refer to website > contributions Employee training Employee engagement and satisfaction and development under Social: Responding to our key material issues on page 35 .

Introduction

Targets Sustainability Governance overview

Economic Environment Social

Data

Charter Hall Group

Governance

Responding to our key material issues

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Governance

Introduction

Targets Sustainability overview

Economic

Environment

Social

Data

Charter Hall Group

Sustainability Report 2021

Governance Responding to our key material issues

Governance

Responding to our key material issues

Business ethics and compliance

We remain focused on our fiduciary duty, never forgetting that we’re managing other people’s money. Good governance allows us to operate a safe, honest and responsible business.

Our good governance practices are predicated on our ethical behaviours, due diligence, leadership and values-driven culture.

Responsible governance underpins our core values and business model. Our governance framework aligns with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (4th Edition). Our Corporate Governance Statements for our listed funds can be found here.

Our business culture embraces ethical practices, complies with all relevant regulations, and aims to be fully accountable and transparent with our market around any fines, breaches or other business transgressions. Our Whistleblower Policy and hotline supports this outcome.

In FY21, we did not receive any fines, however we reported one breach where an external service provider to Charter Hall failed to send transaction confirmations to a particular group of Charter Hall clients within the required timeframe. Upon discovery, the impacted clients were sent the confirmations and a voluntary report of the matter was made to ASIC.

As detailed on earlier under “Integrating sustainability into decision making”, our suite of policies and codes help translate our values and commitments into actions and therefore guides our decision-making.

All our people receive learning support on governance and risk management policies, including our Code of Conduct, which defines the principles and the behaviours we embrace to operate safely, honestly, and responsibly. Our Code also requires us to treat each other courteously and respectfully. Our approach to business ethics, compliance and ethical business practice scored over 90% in our most recent employee engagement survey.

Led by our Board

Our Board of Directors sets the tone in relation to good governance, and provides the necessary leadership, guidance and direction to the business in terms of ethics and values-driven behaviours.

There are four standing Board Committees that assist the Board to fulfil its responsibilities. Each Committee operates under a specific charter, which can be found on our website’s Corporate Governance section. Each Committee must have at least three non-executive members (a majority of independent directors) and be chaired by an Independent Non-Executive Director. Details on Board and Committee meetings held this year and meetings attended by directors are available here.

Daily management of the Group is the responsibility of the Managing Director & Group CEO, assisted by the Executive Committee. The Managing Director & Group CEO engages with the Chair about issues that warrant the attention of the Board. Our ‘Delegations of Authority’ document sets out the expenditure and capital boundaries within which the Managing Director & CEO and senior executives must operate. More information is available here.

During FY21, we also joined the Ethical Alliance (managed by The Ethics Centre), a community of organisations committed to lead, inspire and shape better futures.

Looking ahead, we are aiming to more consistently embed values-based considerations into our decision making processes.

Responsible investment

As awareness around the influence that non-financial factors have on value, longevity, reputation and returns continues to grow, investors are demanding greater transparency around where and how their money is being invested.

They also want clear and concise information on the ESG aspects of a business, particularly in terms of its risks and opportunities, and how well those aspects are managed and monitored.

In addition, regulation around responsible investment has increased, spurred on by well-publicised examples of companies that have failed to act responsibly in managing the money entrusted to them. Regulators also recognise the positive outcomes that responsible investment can deliver in addressing current challenges around climate change, modern slavery and fair trade.

In response, there has been a 77% growth in companies declaring assets under management of U$121.3 trillion signing up to the Principles for Responsible Investment (PRI) framework.

In the property sector, the Global Real Estate Sustainability Benchmark has enjoyed a similar rise with a 74% increase in gross asset value participating in their annual assessment, highlighting a core focus on ESG-aligned for both the sector and investor members.

Well embedded principles in our business

Our funds management platform continues to be active, with 20 funds and partnerships transacting on property assets during FY21. Integrating sustainability considerations into our investment decisions helps underpin sustainable growth and returns.

We have been a signatory to the Principles for Responsible Investment (PRI) since 2008 and remain committed to its six Principles. These Principles reflect the increasing relevance of ESG issues to investment practices.

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Our platform-wide sustainability framework drives performance and discipline for our business and to benefit our stakeholders at the entity and operating asset levels. Our approach focuses on four key outcomes:

Environmental stewardship

Governance

We are committed to best practice governance at an organisational and entity level. We do this through our risk management practices, ensuring climate change preparedness by managing both transitional and physical risks, and by applying responsible supply chain management - for more detail see responsible and sustainable supply chain detail see page 23.

Our portfolios deliver environmental value through a focus on resource efficiency, using low carbon energy in assets, recycling water and maximising water efficiency and increasing recycling rates. The environmental value is measured through the use of the existing benchmarking tools of NABERS and Green Star Performance – for more details see pages 30 and 40.

Social purpose

Stakeholders

Our portfolios deliver social outcomes by focusing on the safety, health and well-being of our people and tenants. We remain focused on customer satisfaction and creating healthier property assets. We’re also working to foster diversity and inclusiveness and create social value by aligning our people, places and contributions to communities through our Pledge 1% initiative - for more detail see page 33.

Throughout the reporting period, we engaged with key internal and external stakeholders to better understand material responsible investment/ESG matters that require ongoing focus and attention. We also responded to the 2021 PRI Transparency Report as part of our commitment to stakeholder accountability. Likewise, we responded to the Global Real Estate Sustainability Benchmark (GRESB) for 21 funds, as a way to benchmark and assess our progress against our ESG strategy.

Introduction

Targets Sustainability Governance Economic Environment Social Data overview

Charter Hall Group

Sustainability Report 2021

Governance Responding to our key material issues

Innovation and technology

Innovation and technology go hand in hand with mitigating risks, especially those related to cybersecurity, and creating opportunities that enhance the sustainability of our portfolio. To address these opportunities and challenges effectively, we focus on fostering a culture of agile thinking, entrepreneurship and intrapreneurship.

We encourage innovation through collaboration and knowledge sharing, drawing on diversity to encourage different thinking. We actively seek to bring people together from different disciplines and across industries to stimulate new ways of solving industry problems and customer needs.

We managed the seamless connection of a hybrid workforce through a one-touch video conferencing solution in-office and on any device.
We joined the Sustainable Digitalisation Project to engage with industry on responsible, ethical and sustainable practices in an increasingly digital world.

Our culture ensures that we keep learning, talking to our customers about their changing needs and continuously evolving our property solutions. This includes applying emerging technologies and leveraging data to create smarter, more sustainable buildings, while ensuring our people are engaged and empowered through automation, artificial intelligence and digital skills building.

We took a leadership role on the Property Council of Australia's Cyber Security Roundtable to address emerging cyber threats as an industry.

In the coming year, we will continue to drive innovative ways to solve customer and organisational needs with a particular focus on secure and sustainable practices.

Technology advances this year

We are looking to:

Over the past 12 months we have successfully completed a broad range of technology initiatives and, along the way, received peer recognition for the work we are doing:

Deliver new digital ways to connect with tenant and investor customers to complement their real-world experience and provide greater convenience;
GPO Exchange – one of our latest smart building developments – was recognised with the 2020 Global Realcomm Digie Award for Most Intelligent Office Building, the 2020 Australian Engineering Excellence Award for Smartest Commercial Office Building and the 2020 SA UDIA Awards for Best Environmental Excellence and Best Urban Renewal. It was also a finalist in the 2020 PCA Excellence Awards for Best Development Innovation, which recognises innovation that creates significant advancement and improvement.
Increase the use of automation, artificial intelligence and analytics to help our people future-proof their careers through digital skill building and learning opportunities;
Co-create innovations with customers in our property portfolio by using digital technology and data to enhance the wellbeing and experience of their employees;
Harness the power of digital technology and data to operate our buildings more efficiently and sustainably and in a way that safeguards against risks;
Across our Office assets, building services analytics has been deployed to deliver operational, economic and environmental benefits. This provides a combination of analytics, machine learning and technical engineering support into real-time, data-driven insights for maximising efficiency, effectiveness, tenant comfort and sustainability.
Co-create innovations with customers to enhance their experiences and well-being, operate efficiently and sustainably, and protect against risks;
Support the development and integration of responsible, ethical, and sustainable digitalisation practices in the design of new innovations; and
Continue to evolve the industry’s cyber security maturity through the Property Council of Australia’s Cyber Security Roundtable.
We continued our digital transformation journey by exploring new automation and AI technologies to underpin our employee experience and the ways in which we can serve customers more conveniently and effectively.
We continued evolving our systems to underpin our tenant relationship activities and the onboarding of new properties.
We implemented new space booking and utilisation technologies to support the safe return to our offices and inform future workspace planning.

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Clockwise from top left:

Cyber security - using data securely

GPO Exchange, Adelaide SA

Digital technology and data permeate all aspects of our lives, and while opportunities to innovate abound, so do risks when leveraging technology, particularly in safeguarding our digital landscape and protecting data from cyber security threats.

5.5 Star NABERS Energy

5.5 Star NABERS Water

737 Bourke Street, Melbourne Vic

5.5 Star NABERS Energy

5.5 Star NABERS Water

Wesley Place, 130 Lonsdale Street, Melbourne Vic

5.0 Star NABERS Energy

Our practices focus on protecting the privacy of personal information and using what we know ethically to enrich people’s lives. Safeguarding of information is a whole of business responsibility. All employees received refresher privacy training in FY21.

4.5 Star NABERS Water

Workshop, No.1 Martin Place, Sydney NSW

GPO Exchange, Adelaide SA

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We’ve set out our expectations for all levels of the business, documented in our Code of Conduct, data governance and information security policies, and expressed the associated risk tolerance in our organisational Risk Appetite Statements.

5.5 Star NABERS Energy

5.5 Star NABERS Water

Our cyber security strategy is modelled on internationally recognised standard ISO27001 and audited annually. Reports are provided on a quarterly basis to our Executive and Board. Through our disciplined focus on data security there were no major cyber security incidents for the year.

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Charter Hall Group

Sustainability Report 2021 Governance Responding to our key material issues

Responsible and sustainable supply chain

For Charter Hall, responsible and sustainable supply chains embrace a multiplicity of aspects. These include working with our suppliers on their sustainable business practices; effectively managing our supplier relationships; supporting the procurement of sustainably delivered services, products and materials; and actively supporting and promoting supply chain practices that align with circular economy principles.

Our business is committed to upholding universal principles on human rights, labour, environment and anti-corruption and we have an ongoing ethical obligation that all our business partners do likewise. We also expect them to adhere to regulations in relation to insider trading, antitrust, price fixing and market manipulation. To enact these commitments, we have reviewed our standard agreements, processes and guidelines to integrate our actions on human rights and modern slavery. In early 2021, we finalised our Modern Slavery Statement in line with the Australian Modern Slavery Act 2018. Our cross sector Human Rights and Modern Slavery Working Group reviews and manages our responses across our portfolios. We are a signatory to the UN Global Compact, and a member of the Cleaning Accountability Framework (CAF), which addresses potential modern slavery issues in the cleaning industry. We also require our suppliers and contractors to read and sign our Supplier Code of Conduct.

Why tackling modern slavery matters is so important to us

Modern slavery situations occur where businesses or individuals use coercion, threats or deception to exploit people and limit their freedom. This can include human trafficking, slavery, servitude, forced labour, debt bondage, forced marriage, and child labour. Around 7 per cent of the global workforce is employed by the property and construction sector. These industries also account for an estimated 18 per cent of modern slavery victims.

Here in Australia, we would like to think we are immune to such issues, but this isn’t the case. Our own supply chain is diverse, supporting both our own operational management and development functions and involving multiple partnerships in our nationwide real estate portfolio. These partnerships include the sourcing and employment of cleaning companies, security personnel and facilities management employees, as well as construction labour hire and extended, sometimes offshore, supply chains. Many of these are susceptible to modern slavery arrangements.

A whole of sector response

In terms of sector-wide responses to modern slavery, we continued to collaborate with the Property Council of Australia, leading property organisations, Informed365 and industry experts to create a Property Council prequalification supplier platform. This platform asks suppliers about the actions they are taking to assess and address human rights issues and modern slavery risks across shared operations and supply chains. The supplier prequalification portal also recognises that our suppliers in turn work with others in the property industry and enables them to complete a survey on their supply chains and practices, which can be shared with other property organisations.

We apply a human rights and modern slavery risk matrix to almost 4,000 of our suppliers that ranks them in terms of risk versus spend and identifies those needing to participate in a pre-qualification assessment. Building on the 100 suppliers we invited for assessment in FY20, we identified five suppliers for independent review to identify opportunities for improving their risk ratings. In FY21, we conducted CAF audits of labour management and practices of our cleaners across four office buildings. In addition, we engaged with three of our high-risk suppliers in supplier ‘Deep Dive’ workshops to understand how they are identifying, assessing and mitigating risks in their operations and supply chains.

Education is key

Education is a big part of effectively managing these risks and to that end, we have lifted awareness and understanding through internal presentations and e-learning modules. All our people received modern slavery refresher training, including training on the process of reporting issues should they find or suspect modern slavery in our operations or supply chains. We continued to communicate with our suppliers on human rights and their responsibilities and provided further education resources through the Property Council of Australia modern slavery initiative, which we co-chair. We also report annually on our progress to our commitments to United Nations Global Compact.

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Looking ahead, we will continue to identify those suppliers needing to complete the modern slavery prequalification, with a focus on suppliers in the industries that pose the greatest potential risk - specifically cleaning, security, maintenance and electricals. We still have work to do to further develop our responsible supply chain practices and modern slavery framework and to integrate these across all our assets and developments.

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Economic

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Charter Hall Group

Sustainability Report 2021

Governance Responding to our key material issues

Diving deep into modern slavery

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In FY21, as part of Charter Hall’s approach to modern slavery and human rights, we engaged three high-risk suppliers to participate in a ‘Deep Dive’ workshop.

These suppliers work in the construction, cleaning and facilities management sectors, which are known to be in the high-risk area for poor labour practices. The ‘Deep Dive’ is an approach we adopted to better understand how suppliers are identifying, assessing and mitigating untoward labour practice and related human rights risks in their operations and in their own supply chains. The ‘Deep Dive’ workshops were also a knowledge-sharing exercise to explore challenges and opportunities for collaboration and improvement.

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Engaging suppliers through the ‘Deep Dive’ workshops has proven to be a powerful mutual learning opportunity. It not only helps make change possible, but also fosters trust with suppliers and provides direct insights into the current state of modern slavery in the market.

During the workshops, suppliers’ responses to the Property Council of Australia Questionnaire (PCAQ) were discussed and opportunities identified for collaborating on improving practices and standards in the sectors. The information and insights gained from the workshops provided clear next steps for Charter Hall in relation to identifying, assessing and mitigating modern slavery risks.

The participating suppliers reported that completing the PCAQ has resulted in them being more aware of and alert to modern slavery risks in their businesses. They identified challenges around engaging and assisting smaller suppliers in their own supply chains. But they also acknowledged the value to their industry of collaborating, both with the Property Council of Australia and with Charter Hall, in areas such as education of small suppliers and enhancing third-party auditing. The suppliers in the workshop also agreed that industrywide KPIs in this area could be very effective.

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We are considering expanding the ‘Deep Dive’ workshops across a broader range of suppliers, including smaller suppliers, to gain further insights into supply chain risks and opportunities, and through this, also minimising risk in our own procurement approach.

Engaging suppliers through the ‘Deep Dive’ workshop is a powerful mutual learning opportunity. It not only helps drive change, but also fosters trust with suppliers and provides direct insights into the current state of modern slavery in the market. The approach has also identified areas of improvement in supplier identification, surveys and engagement process, both for the Property Council of Australia and for Charter Hall.

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Economic

Environment

Social Data Contact us

Charter Hall Group

Economic

Responding to our key material issues

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Economic

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Targets Sustainability Governance overview

Environment

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Charter Hall Group

Sustainability Report 2021

Economic Responding to our key material issues

Economic

Responding to our key material issues

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225 St Georges Terrace, Perth WA 5.0 Star NABERS Energy

Sustainable growth and returns

Our sustainable growth and returns stem from responsibly managing third party capital.

Our approach examines how we manage and balance the needs and skills of our people, our business strategy, and, importantly, the places we manage for investors and tenant customers.

In order to deliver long-term risk-adjusted returns for our investors and mutually beneficial outcomes through a long-term view of partnerships, we must consider not just our fiduciary responsibilities but also how our approaches will enhance local employment, community well-being and social uplift. We also fully acknowledge that these decisions affect environmental protection, biodiversity, resilience and heritage restoration and preservation.

Major economic achievements this year Among our key achievements this year:

Continuing growth and resilience. Our operating earnings post-tax was $284 million or 61.0cps;
Our return on contributed equity was 16.5%, a leading return within the A-REIT sector;
Funds under management (FUM) growth of $11.7 billion, brings our total FUM to $52.3 billion at 30 June 2021;
The Group’s balance sheet remains resilient, reflecting the quality of our long-leased investments, particularly in the Industrial & Logistics and the triple net sectors;
We managed our portfolios to preserve capital and drive resilient income returns, optimising earnings growth from our managed assets; and
Finally, we continue to invest $2.4 billion, alongside our capital partners, building partnerships and supporting future returns.

Our investors and tenants are our customers. Many are also ownership partners or potential vendors of sale and leaseback transactions. The resilience of our major tenants and our concentration in essential industries underpins the defensive nature of our portfolios and their ongoing performance.

Creating environmental and social value, alongside financial returns, is a critical growth element. Indeed, it provides us not only with an ongoing social license to operate but also acts as a smart strategy to drive a range of qualitative and quantitative benefits for our customer. These include:

Lower costs of operating;
Higher returns;
Greater wellness benefits linked to amenity;
Indoor environments that enhance productivity in workers;
Better learning outcomes in children; and
Stronger asset valuations.

We also know that high performance Green buildings, which we are developing as part of our pipeline, reduce stress on the electricity network, support a low cost-of-carbon abatement approach to realising our Net Zero Carbon target, and encourage replication across our industry to drive households and businesses towards a low carbon economy.

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Charter Hall Group

Sustainability Report 2021 Economic Responding to our key material issues

Climate related risks and opportunities

Global climate change will generate impacts on the environment and in the communities in which we operate that will pose a serious challenge to our business. In response, we’ve initiated a range of actions and partnerships with our customers to create low carbon solutions across our Office, Industrial & Logistics, Retail and Social Infrastructure assets and funds.

These are some of the measures we’ve taken this year:

Governance

Strategy

Risk management

Metrics and targets

Climate scenarios

Our Board continued to oversee Group sustainability strategy and policies (including our approach to climate change and integrating ESG) through the Audit Risk and Compliance Committee (ARCC).
Our Executive and Non-Executive Directors engaged on Climate Change and Scenarios.
Our Executive Committee continued to have strategic oversight of ESG strategy and implementation, bolstered by the establishment of an ESG Committee to drive platform wide alignment and implementation.
We established a cross-business TCFD Working Group that includes representation from the Chief Financial Officer, Chief Investment Officer, Chief Experience Officer, General Counsel and Company Secretary, and Group Head of Risk and Compliance.
We developed and disclosed our Scenarios.
We published our TCFD approach.
We made a commitment to being Net Zero Carbon in operation by 2030 (Scope 1 & Scope 2).
We created a climate and carbon transaction framework for acquisition and investment strategies.
We completed physical risk assessments portfolio-wide.
We commenced CCAP for Industrial & Logistics sector (70% complete by floor area) using RCP8.5 as our worst case scenario. CCAP for our Office and Retail sectors will commence in FY22.

Business Operations:

New Projects:

We are designing for Net Zero in operations at 60 King William Street, Adelaide development.

Target: Achieved: Established Net Zero 19% reduction in Carbon Scope 1 & carbon emission Scope 2 by 2030 intensity (Scope 1 and 2) since FY17, Target: despite a 43% 100% renewables increase in area for Scope 2 over that time

We piloted Net Zero developments (embodied carbon and construction emissions) at two childcare centres located within Retail shopping centres in WA.
We piloted Climate Active certified construction services on 140 Lonsdale Street, Melbourne development.

As a business, our strategy has adopted two scenarios to test resilience and enable us to prepare for physical and transitional risks.

Business-as-usual (RCP8.5) scenario

Transition to a low carbon economy (RCP2.6) scenario

Outcome:

Likely to exceed 4°C+ by 2100

Not likely to exceed 2°C by 2100 in accordance with the Paris Agreement

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From top:

60 King William Street, Adelaide SA development (artist impression)

140 Lonsdale Street, Melbourne Vic development (artist impression)

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Economic

Environment

Social

Data Contact us

Charter Hall Group

Environment

Responding to our key material issues

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Environment

Introduction

Targets Sustainability Governance Economic overview

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Charter Hall Group

Sustainability Report 2021 Environment Responding to our key material issues

Environment

Responding to our key material issues

Climate change adaptation

The latest Intergovernmental Panel on Climate Change (IPCC) Report recognises that climate change is already affecting many weather and climate extremes.

For Australasia these changes include increased incidence of heat extremes, drought, extreme fire weather days, heavy rainfall and river floods and occurrence of dust storms. These changes will only become larger in the years ahead. They will also have a material impact on our properties and for our tenants:

Increased days of extreme temperature will have a significant impact on our thermal comfort services;
Increased extreme fire weather days and dust storms will have a significant impact on our indoor air quality services;
Increased days of drought will put stress on potable water supply; and
Higher instances of heavy rainfall and floods will significantly impact the physical structures of our buildings, and potentially cause people and businesses harm.

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The Glasshouse,
45-61 Waterloo Road,
Macquarie Park, Sydney NSW
5.5 Star
NABERS Energy
6.0 Star
NABERS Water
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Our embedded response

Plans for our assets

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In FY21, we completed Climate Change Adaptation Plans (CCAP) for 70% of the Industrial & Logistics portfolio and have commenced planning for the Office and Retail portfolios. Our CCAPs consider climatic zone risk exposure impacts employing RCP8.5 and data sourced from CSIRO Climate Change in Australia database. We will incorporate our adaptation measures into our capital upgrade programs and strategic asset plans to build resilience against the physical impacts of climate change.

As reported last year, we embedded stronger climate governance and oversight, including management of transitional risk, by establishing a cross-business Task Force on Climate-related Financial Disclosures (TCFD) Working Group, with representatives from strategy, finance, “ transactions, risk and compliance and sustainability to guide our climate resilience strategy and TCFD approach. We also prepared information materials for further Board engagement on our strategy and approach to climate resilience, TCFD and our relationship to ASX Corporate Governance Principles. We also reviewed Board charters for inclusion of climate-related risks within our risk registers.

The Green Building Council of Australia is delighted to partner with Charter Hall on their Net Zero Carbon Buildings Commitment for 2030 through the World Green Building Council. It’s incredibly exciting to see them commit to approximately 2 million square metres of buildings for net zero, and even better to see the progress with over 41MW of solar installed and renewables for more than 65% of total floor area from July this year.”

We commenced work on our approach to Climate Change Adaptation Planning for Social Infrastructure during FY21, and will commence work on Long WALE Retail in FY22.

In addition, during FY21, we:

Became a signatory to the WGBC Net Zero Carbon Commitment. This aligns with our net zero target for Scope 1 and 2 emissions by 2030;

Increased risks

As we move to the low carbon economy, transitional risks from changing regulations and markets could entail extensive policy, legal, technology, and market changes to address mitigation and adaptation requirements. Depending on the nature, speed, and focus of these changes, transition risks may pose varying levels of financial and reputational risk to our business. But equally, they may provide us with unique opportunities.

Achieved a 15% reduction in carbon emission intensity (Scope 1 and 2) since FY17, despite a 29% increase in activity during that time;
Were recognised for our work in climate reporting by:

Davina Rooney

CEO Green Building Council of Australia

2020 PRI Leaders Group for climate related disclosure, and
2020 GRESB Industrial Global Development Leader for our industrial fund, CPIF;
Completed physical risk assessments portfolio wide.
Looking ahead, we aim to ensure that all Office, Retail and Industrial & Logistics assets have climate change adaptation plans and that these are incorporated into Strategic Asset Plans by FY25.

Environment

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Charter Hall Group

Sustainability Report 2021 Environment Responding to our key material issues

Carbon emissions[2]

Energy efficiency and renewables

The latest IPCC Report states that global warming of between 1.5oC and 2oC will be exceeded during this century unless deep reductions in carbon emissions occur in the coming decades.

In our FY19 Sustainability Report, we committed to a 100% reduction in carbon emissions (Scope 1 and 2). In our FY20 Report, we identified our pathway to Net Zero aligned with a sciencebased target methodology, through a combination of energy efficiency, onsite and offsite renewables and carbon offsets.

Emissions from our Office and Retail portfolio form the majority of our Scope 1 and 2 emissions. To date, we have achieved a 19% reduction in emissions intensity (kgCO2-e/sqm) since FY17 despite a 43% increase in footprint. The reductions have been achieved through energy efficiency initiatives and portfolio movements. A portion of the reductions is due to lower occupancy in the Office sector, and a milder summer compared to previous years. We are now on a pathway to deep reductions through:

Procurement of off-site renewable electricity for our Office sector from July 2021, which will result in >65% reduction in our emissions;
– Our Retail sector committing to achieve Net Zero by FY25; and
Incorporating electrification and climate friendly

refrigerant programs into our strategic asset plans.

We have commenced designing for Net Zero in operations in our Office developments. For example, 60 King William Street, Adelaide SA was designed to be highly energy efficient with a 5 Star NABERS Energy rating, fossil fuel free through an all-electric mechanical central plant, climate friendly refrigerants and powered by renewables.

Dual reporting on emissions added

In FY21, we introduced dual reporting on emissions in line with international best practice methodology. We have retained the locationbased method, which is consistent with the National Greenhouse and Energy Reporting (NGER) Act and reports emissions in the context of the emissions intensity of the electricity grid at the location. We have also introduced the market-based method, which reports emissions in the context of different electricity products and markets, including voluntary retirement of renewable energy certificates. This method reports lower emissions as it recognises the ActewAGL supply of net zero electricity in the ACT and the procurement of offsite renewables for our Industrial portfolio and a select number of office assets. The electricity accounts within our operational control in the Industrial & Logistics portfolio were supplied with 100% renewable electricity in FY21.

Scope 2 emissions for Industrial & Logistics relates to common area security lighting at a number of assets.

The graph is a visual representation of Charter Hall carbon emissions and is based on coverage by area rather than actual carbon emissions.

Scope 2 carbon emissions

	Scope 2 emissions	Scope 2 emissions
	(tCO2-e)	(tCO2-e)
	location based	market based
Ofce	57,211	53,825
Shopping	24,156	23,334
Centre Retail
Diversifed	967	914
Industrial &	115	-
Logistics1
Total	82,449	78,073

Energy efficiency

We measure improvement in energy efficiency through the NABERS Energy industry benchmark. This year, we exceeded our FY25 targets for NABERS Energy performance with 5.0 Star NABERS Energy weighted average rating for our Office assets, and 4.6 Star NABERS Energy weighted average rating for our Retail assets over 15,000sqm.

For the Office portfolio, the 6% improvement in one year is a combination of permanent reductions through the roll out of data analytics software within the portfolio, and temporary reductions due to lower occupancy from COVID-19.

Moving forward, we will prepare new NABERS targets for the portfolio with consideration for the upcoming changes in methodology, as well as expanding NABERS Ratings to Retail assets less than 15,000sqm.

Weighted average NABERS Energy ratings

	FY17	FY18	FY19	FY20	FY21
Retail	3.7	3.9	3.9	4.1	4.6
Ofce	4.4	4.5	4.6	4.7	5.0

Clean

energy

To date 41MW of solar has been rolled out on our assets, of which 20MW was installed this year. Over 50% of the solar is on our Shopping Centre Retail assets, supplying to our major tenants or contributing to the renewable within the electricity grid.

In FY25, the solar generated from the Shopping Centre Retail assets will supply the Retail portfolio, achieving 100% renewable electricity. Over 40% of the solar is installed on our Industrial & Logistics assets, which supplies our tenants.

During FY22, we are expanding the roll out of solar on our Industrial & Logistics assets. Our Social Infrastructure assets includes 350 childcare centres, and we are exploring opportunities to install solar across this portfolio.

During FY21, we developed and commenced implementation of our renewable electricity strategy. The strategy has resulted in:

100% offsite renewable electricity supply to the Industrial & Logistics portfolio within our operational control, resulting in Net Zero Scope 2 emissions;
Securing >54GWh per annum offsite renewable electricity supply to the Office portfolio from 1 July 2021; and
Plans to engage the market during FY22 to secure a Power Purchase Agreement for the long term supply of off-site renewable electricity to the portfolio.

Solar installed by sector

Office 957MW

Shopping Centre Retail 21,068MW
Long WALE Retail 1,540MW
Industrial 17,533MW

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Scope 1 & 2 Emissions

Upstream Emissions - Embodied Carbon and Construction
Downstream Emissions - Tenants Energy Consumption

Scope 3 emissions

Charter Hall has made significant progress towards Net Zero Carbon in operation for Scope 1 and Scope 2, we are focused on investing in both onsite and offsite renewables and actively working on transitioning way from fossil fuels in new and operational assets. We recognise that Scope 3 emissions are material for our business and include:

Upstream Activities – embodied carbon and construction emissions from our developments; and
– Downstream Activities – tenant energy consumption in our assets.

For our downstream emissions, we are working proactively with our tenants to reduce their energy related emissions.

We will continue to explore opportunities for additional solar power for our assets, with a focus on the Social Infrastructure and Industrial & Logistics sectors;
We have partnered with our Industrial & Logistics customers on LED lighting and skylights programs to improve energy efficiency; and
To understand our full footprint, we have commenced data sharing arrangements with major tenants as well as rolling out sub-meters in our Industrial & Logistics portfolios.

For our upstream emissions, this year we have piloted:

Zero upfront emissions at two separate childcare developments within our Shopping Centre Retail precincts at Wanneroo and Secret Harbour, WA. Through a comprehensive life cycle assessment we identified the embodied carbon and construction emissions and offset through Australian Carbon Credit Units (ACCU) created at the Paroo River North Environmental Project. The Paroo River North Environmental Project supports regeneration of native forest growth improving habitat for native wildlife as well as providing alternative revenue streams for landholders and Traditional Owners; and
Climate Active Certified Construction Services at 140 Lonsdale Street, Melbourne Vic where the construction emissions were offset by Australian Carbon Credit Units (ACCU) created at the Colodon Native Forest Project, Qld which is regenerating 3,000 hectares of natural woodland.

Looking forward, we have committed to developing a Scope 3 emission goal aligned to science-based target methodology. We will be engaging with our tenants and suppliers, and will be seeking opportunities to partner to accelerate the transition to the low carbon economy.

Environment

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Charter Hall Group

Sustainability Report 2021

Environment Responding to our key material issues

Retail Clean Energy Program

A PPA is a contractual agreement between energy buyers and sellers, whereby they come together and agree to buy and sell an amount of energy which is (or will be) generated by a renewable asset.

Over the past four years, we have focused on increasing the role that solar energy and battery storage technologies play in reducing emissions in our Retail portfolio.

Program benefits We have witnessed many benefits of our program including:

In 2018, recognising that solar is not a core capability, we sought out leading industry experts and formed active partnerships to deliver solar energy to our Retail customers. We installed our first solar array at Singleton Square in NSW, and the following year we completed an investigation on a renewable energy solution across the Retail portfolio.

Emission reductions provide a positive impact to our communities and their environment;
Fixed lower energy costs remove the volatility of the energy spot market to provide a stable financial position for our investors and stakeholders;
Lower cost of energy enables us to offer discounts to embedded network retail customers; and

In 2020, strategic partnerships enabled us to generate 18 GWh per annum of solar energy across 14 of our assets, helping us to manage energy costs and create clean energy. In 2021, a further 14GWh of solar was generated through another 14 centres.

Solar PPA & Battery systems enable us to remove grid reliance.

The result is an innovative approach to solar that has seen us negotiating a solar power purchasing agreement[1 ] (PPA) with our partners, Clean Peak Energy and Solgen Energy Group in conjunction with Macquarie Group. This has enabled the design, regulatory approval, installation and ongoing operation and maintenance of solar energy systems on our centre roofs.

Key learnings from our solar program

Over the last 4 years, we’ve also acquired new knowledge, accessed better technology and discovered more effective ways of operating, including:

The solar panels used now are 20% more efficient compared with those used early in the project and can provide larger consumption for the same roof space;

These partnerships have enabled rapid deployment of solar energy and battery storage at our shopping centres and secured stable energy pricing for around 40 percent of each site’s electricity demand over the next decade. Our Retail portfolio also benefits from rooftop rental income and a reduced cost of energy purchased at an agreed rate.

Our planning better accounts for the varying legislation requirements of States and Territories in approving both solar and battery installations;
Working with the network operators upfront on connection designs has been critical to avoiding most of the delays experienced in network connections;

We are also strategically managing our energy through the procurement of fixed term energy contracting and through progressive procurement. These procurement initiatives are being completed in alignment with other sectors within Charter Hall. In addition, each Retail centre is currently providing embedded power to tenants, capturing Scope 3 emissions for our climate target.

We’ve found that early consultation with network operators is crucial, as HV sites can require additional design conditions and can be expensive to connect to;
Due diligence on roof condition and switchboard infrastructure is critical; and
Removing solar panels is expensive, so gaining early understanding and planning for future property usage and development can save considerable costs.

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From top:

Gateway Plaza, Leopold Vic

Bribie Island Shopping Centre, Bongaree Qld

Singleton Square, Singleton NSW

Introduction

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Environment

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Data

Charter Hall Group

Social

Responding to our key material issues

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Introduction

Targets Sustainability Governance Economic Environment overview

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Charter Hall Group

Sustainability Report 2021

Social Responding to our key material issues

Social

Responding to our key material issues

Community and social inclusion

For Charter Hall, community and social inclusion involves supporting and contributing to the prosperity of local communities, promoting social inclusion of vulnerable groups; and creating opportunities for the economic uplift of young Australians, those with disability, indigenous peoples, and others in need.

Throughout the year, we continued to help build inclusive and sustainable communities for our customers, tenants and those connected to our assets. Our commitment to creating safe, open and inclusive environments aligns with several of the UN Sustainable Development Goals. Highlights this year include:

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Social investment

We have invested in more than 100 organisations and given back to communities most in need. We use the Pledge 1% framework to measure our social investment in communities. Our commitment is to donate one per cent of our people’s time, provide one per cent of space in our buildings for community activities, and donate one per cent of profits to community partners driving social improvement.

This year, that one percent added up to 1,200 hours of volunteer time (35% of our people participated in a year impacted by COVID-19 restrictions), 41,000sqm of space for community activities and $739,000 in donations. More details can be found here.

Social enterprise partnerships

With the onset of COVID-19, we have been focused on creating meaningful, long-term employment for young people. This demographic has been identified as the most vulnerable to unemployment and underemployment resulting from the pandemic. This year, we partnered with four State-based social enterprises to create 1,200 meaningful employment opportunities. These innovative programs included Dismantle, White Box, Green Collect and Kick Start. More information on these programs is found here.

Social procurement

This year, for the first time, we have been working with our supply chain to create social value. Our initiatives included a contract with Two Good Co to supply our Office properties with end of trip facilities. Our support of this organisation has created jobs for survivors of domestic violence and supplies for shelters in Australia.

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Mental health

We formed a community partnership with Healthy Heads in Trucks and Sheds (HHTS) to promote prevention and understanding of mental health issues in the road transportation and logistics industries. The Foundation aims to build a safe, healthy and thriving environment for truck drivers, distribution centre and warehouse employees, and other road transport industry members.

Reconciliation Action Plan (RAP)

In FY21, we developed our inaugural RAP as one of several initiatives to support indigenous communities. Our RAP is currently under review by Reconciliation Australia, for launch in early FY22.

Homelessness

We continued our platinum sponsorship of the Property Industry Foundation (PIF), which provides national support to homeless and under privileged youth.

The money raised through PIF goes towards building housing for disadvantaged young people and supporting over 20 children’s charities, many of which we also support through our developments.

Further to our sponsorship, we are actively involved on their NSW Board, and participate in PIF led industry events and volunteering opportunities.

During FY21, PIF has placed over 600 young people in safe and secure accommodation thanks to the support the property sector. PIF also have 30 more bedrooms in development to support young Australians in need.

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Disaster relief

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Alongside our focus on community partnerships and longer-term engagement, we recognise that certain emergencies benefit most from rapid injections of financial support. Such was the case this past year with several “ disasters. UNICEF Australia launched the India COVID-19 Crisis Appeal to provide assistance to those affected by the pandemic in the sub-continent. We donated $20,000. We also donated $50,000 to GIVIT to support ‘grass roots’ community groups to rebuild following floods. GIVIT is an online giving platform connecting corporates and individuals to charities. The GIVIT Disaster and Emergency Recovery Service is in place in the ACT, NSW, Qld and Vic to help those impacted by cyclones, floods and fire.

We are very pleased to work with a company like Charter Hall, which has a demonstrated commitment to improving the health and well-being of its employees and customers across sector, and working together to further build awareness of this incredibly important cause.”

Other community programs

We worked with retail outlets and charities to support a range of environment and social welfare programs, details of which can be found here.

Our aim looking forward is to:

Continue to provide 1% of our profits, space and people’s time to community partners for positive social impact;
Increase our employee volunteering to 6,000 hours in the community by FY25;

Naomi Frauenfelder Chief Executive Officer, HHTS

Build 1,200 meaningful employment outcomes for young people across Australia by 2030;
Acknowledge traditional landowners across our portfolio; and
Grow participation of schools for NAIDOC week campaign.

Introduction

Targets Sustainability Governance Economic Environment overview

Social

Data

Charter Hall Group

Sustainability Report 2021

Social Responding to our key material issues

Customer engagement and satisfaction

Our properties serve multiple functions for our customers. They can be a place to work, to meet, to socialise, to shop and sometimes just a place to relax.

Strong relationships with our customers have always been a strategic focus for us. We continue to look for new ways to support them and actively partner with them to provide inventive solutions to meet their exact needs. We see these businesses as more than tenants. Our relationships are a true partnership, intended to better meet their property needs and driving increased tenant retention. The success of our approach shows in the high level of repeat customers – 76% of our tenant customers lease more than one tenancy from us.

This year, we undertook a full range of customercentric initiatives across our portfolios:

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Office

We continued to roll out our smart technology blueprint across our Office portfolio and further develop our award-winning tenant experience app, Charli - the largest workplace app of its type in Australia with 15,000 users. This app connects office communities with our building services programs.

We delivered virtual health and wellness programs to tenants via the Charli app through COVID-19 lockdown periods via podcasts, webinars, and forums.

We launched ‘ReCharge by Charter Hall’, our workplace community wellness program that includes lifestyle amenities such as premium end-of trip facilities and a series of health and well-being seminars, events and services.

We partnered with our tenants and with community stakeholders to ensure a smooth and seamless transition back to work across the Office portfolio. This included a communications and operational program focused on safety, health, hygiene, technology, touchless services and building management.

Every asset in our Office portfolio includes a 12-month customer engagement program, designed in partnership with our tenants, to help drive customer satisfaction and further create community through collaborative initiatives with others in the building and the surrounding community.

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Industrial & Logistics

We provided programs across our Industrial & Logistics portfolio to support the health and wellbeing of our customers’ employees and to provide them with exceptional amenities. This includes:

The formation of a partnership with Healthy Heads in Trucks and Sheds (HHTS) in FY21 - see more details on page 33. The overarching aim of this partnership is to build a psychologically safe, healthy and thriving working environment for our tenants’ employees - the truck drivers, distribution centre and warehouse employees, and other road transport industry members; and
Ongoing support for Kick Start cafés to deliver a business model that is sustainable and replicable across our development projects and stabilised assets. Kick Start is an initiative of the PAYCE Foundation that provides great hospitality services to our tenants’ employees, while at the same time building hospitality skills for at risk youth looking to gain employment. Since the inception of our partnership with Kick Start in 2019, 12 trainees have graduated from the program.

In addition, we continued supporting Women in Industrial (WiN), an industry initiative for women in the industrial property sector. WiN aims to promote the sector as a career path for women, increase female participation in the sector, provide networking opportunities; and actively promote the achievements of women.

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Retail

In all, 16 local community initiatives were delivered in FY21 across our retail centres.

In partnership with Cara, one of South Australia’s leading disability service providers and Woolworths, Big W and Tony & Marks, Brickworks Marketplace re-introduced ‘Quiet Hour’ in June 2021. This initiative creates an inclusive shopping experience for those who have sensory-based disabilities.

In response to the devastating WA bushfires and effect on native animals, $4,000 was donated to Native Animal Rescue via the ‘Home Tweet Home’ initiative.

$12,000 in gifts and in-kind donations were made to support women impacted by domestic violence.

Looking ahead, in the coming year we are planning to:

Grow awareness of HHTS across our tenant customer portfolio;
Create opportunities and amenity that focus on well-being initiatives in our developments;
Expand our Kick Start partnership; and
Implement the Commercial Code of Conduct relating to rent relief in all impacted states.

Introduction

Targets Sustainability Governance Economic Environment overview

Social

Data

Charter Hall Group

Sustainability Report 2021 Social Responding to our key material issues

Employee engagement and satisfaction

A key part of our business ethos and strategy is creating a culture and working environment which enables employees to feel fulfilled in their roles and give their best.

Our approach includes values-driven leadership, accountability and transparency, recognition, flexible workplaces, learning and development, privacy, and health, safety and well-being. This year, those things have proven to be more important than ever.

Investing in and enabling learning and development (L&D)

is not just about getting better business outcomes in terms of creating efficiencies and enhancing customer outcomes. It feeds directly into employee engagement and satisfaction, improves employee retention and reduces absenteeism. It also enables us to tap into our peoples’ intrinsic desire to be their best. We have an implicit understanding with all our employees that building their capabilities and supporting professional growth is as important to our success as it is to theirs.

However, there’s always room for improvement. Our annual employee survey is used to measure our culture and engagement, to provide us with a deeper level of insight into the structures, systems and capabilities that influence the way we work with each other and our customers. These insights are reported and monitored annually to the Board, as well as cascaded into the business via our Executives and their divisional leadership teams. Key areas for improvement, as well as opportunities to leverage, are built into annual manager and employee performance measures such as leadership, culture and collaboration. Divisional action plans track progress against key culture and engagement measures.

Aiming to excel

We are committed to lifelong learning to support our people to grow and develop. This commitment is driven from the very top – a standing item in our regular board and Executive Committee meetings.

Our Executive Committee and senior leaders are accountable for embedding a culture of lifelong learning through performance measures related to leadership, culture and collaboration. L&D progress and outcomes are captured through our Human Resource Information System, Workday, with real time reporting for managers and our People Team. Through this we are able to gauge how effectively our people are moving forward.

In our recent Culture Survey (June 2021) our people told us that they felt supported and cared for by their managers and teams; that we provided support during times of uncertainty and that we kept each other motivated and moving forward. Overall, these results reflected a workplace that cares about its people, customers and communities.

In 2020, we launched our ‘Learning’ platform, an integrated, personalised learning tool for everyone to develop current and future skills and capabilities aligned to their development goals and career aspirations. This past year our L&D efforts specifically focused on developing future capability and the skills to thrive as our business evolves. We also continued to embed a culture of continuous learning with a blended, technology-based learning approach.

Strong engagement

In the past year we achieved the following in relation to employee engagement:

100% of our people received performance and career development reviews;
We achieved an engagement score of 90% with a 95% response rate;
95% of our people recommend us as a good place to work;

Looking ahead we are planning to maintain or enhance our 90% employee engagement level in FY22.

We were recognised in AFR BOSS awards as one of 2021’s Best Places to Work;
We were awarded the WGEA Employer of Choice for Gender Equality and recognised as an industry leader for initiatives around gender equality;
We continued to grow our network of allies and LGBT+ employees nationally to feel empowered to bring their best and whole selves to work, and moved up in the Australian Workplace Equality Index;
We celebrated First Nations cultures with naming, design and placemaking; and
As part of the Australian Network on Disability, we offered awareness modules for employees and undergraduate employment opportunities.

Health, safety and well-being

Maintaining the highest standards for health

and safety for employees, contractors, customers and suppliers, as well as the wider public that interacts with the business, is a fundamental responsibility of any organisation.

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It is incumbent upon businesses such as ours to implement effective occupational health and safety management systems, to identify and mitigate workrelated hazards and to provide health and safety training.

“

By design, the WELL Portfolio program collaborates with organisations that are on the leading edge of the movement to advance health and well-being at scale. We are so pleased to see the program’s scalable nature effectively supports Charter Hall’s vision to evolve its culture of health by transforming portfolio-wide assets through health and wellbeing strategies that benefit 40,000 people.”

We prioritise mental health and well-being and do everything we can to ensure our work environment remains flexible and accommodating for all our people. Our wellbeing strategy is predicated on individual needs, so we provide a range of well-being initiatives for our people.

Obviously, the biggest health and well-being issue confronting our business and most other organisations in Australia has been the seemingly unrelenting impact of COVID-19. Our responses have been around implementing measures and supporting our customers, communities and people to work safely in our buildings. This includes providing internal health services for our people that address their physical and emotional well-being.

Rachel Hodgdon

President and CEO, IWB

For our people, we:

Looking ahead,

Black Dog Institute ‘Managing for Team Well-being’ sessions, focusing on skills to identify and address mental health challenges;

Revised our Work Health & Safety Management System (WHSMS) to better align with our values and increased business scope. Training is currently underway for all our employees; and

for our people we are planning to:

Our Banksia Project ‘Connection Room’ program, where our people could join a safe space to share personal stories and tips on coping strategies;
Implement new incident management software to ensure consistent data capture across the Group; and;
Recorded a lost time injury and lost time injury frequency rate of zero, and a total recordable injury frequency rate of 1.11.
‘Financial Well-being’ sessions on wealth creation and protection;
Train our employees on our new WHS Management System and Framework; and develop a Training Needs Analysis and Training Register.
‘Managing for Team Productivity’ and ‘Well-being for Kids’ resources and activities;

For our customers, we:

Supported our tenants during the current pandemic with rent relief, hygiene initiatives, adaptation of digital engagement and support with returning to the workplace;
We updated our Domestic Violence and Mental Health approach to allow for alternate work locations, more flexible hours, and safe site access;
We implemented new technologies to support safe return to our offices; and
Achieved a WELL Portfolio rating across more than 900,000sqm of office space, benefiting >38,000 tenant customers; and

In terms of our

We supported our employees in NSW and Vic through prolonged lockdowns with 10 days personal leave for home-schooling.

customers, we are planning to:

Achieved a 4.48 Star NABERS Indoor rating for the Office portfolio. This relates to the health and comfort of indoor environments for our tenants.
Improve the WELL Portfolio rating across the Office portfolio and expand into acquisitions (WELL is an independent rating system).

Our people are the best barometer of our success in well-being, and they provided the following feedback:

83% of our employees agreed we promote a healthy work environment, 18% above the Australian norm.

Equipping people to adapt

In terms of nurturing well-being, providing our people with the resources and tools they need to approach each day with confidence and safely adapt to new working conditions has been crucial in helping those we care about better navigate uncertainty. This year, we organised the following:

There was a 35% uptake of home-schooling leave in response to COVID-19; and
76% of our employees were favourable on our wellbeing approach, 14% above the Australian norm.

Introduction Targets Sustainability Governance Economic Environment overview

Social

Data

Charter Hall Group

Sustainability Report 2021 Social

Wesley Place: regeneration though active partnership

Wesley Place has become a new cultural landmark for Melbourne. Designed to transform the way people work, connect, and socialise, this commercial precinct aims to merge business with lifestyle.

Consisting of one Premium and two A-Grade commercial towers at 130, 140 and 150 Lonsdale Street, each tower offers diverse spaces and cutting-edge technologies to deliver a multitude of experiences and an authentic sense of place.

An innovative partnership with the Uniting Church

The project was undertaken in partnership with the Uniting Church. It included the restoration of five heritage buildings on the site (including the Wesley Church). In addition, we delivered a range of social and economic outcomes for the Church, including establishing a longterm maintenance fund for the Church and surrounding heritage buildings; providing the charity arm of the Church with a rent-free space in the Tower; and availing the Church of three levels of office accommodation at 20% below market rents and with a fully integrated fit out.

The approach to the development has enabled Wesley Place to retain its position as a historical and cultural sanctuary in the heart of Melbourne. Four of the five restored heritage buildings have been repurposed for amenity and wellness use.

We also created a heritage trail around the site, with an audio trail that covers Wesley Place’s great historical, architectural, and social significance. During the construction phase of Wesley Place, we established a community reference group to connect the project team with neighbouring residents, business owners, City Council, and community members. These sessions provided a forum for community members to be involved in the development approach.

The Wesley Place team also engaged a mix of Indigenous and local artists for eight art installations located around the precinct, creating a unique home for public art around the precinct.

A busy program of events

In FY21, Wesley Place hosted a series of community events, including a ‘Summer Series’ in the public realm which was designed to activate and invigorate the precinct through live music, lawn games, relaxation and healthy treats. The series ran for three consecutive weeks, each with a different theme.

We also partnered with City of Melbourne for Wesley Place to become one of only three CBD locations for their Melbourne Knowledge Week program. Knowledge Week is a weeklong, annual event which celebrates the ambitious innovators and problem solvers and allows our community to look into the future. The

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Our approach has enabled Wesley Place to retain its position as a historical and cultural sanctuary in the heart of Melbourne. Four of the five restored heritage buildings have been repurposed for amenity and wellness use.

technology-infused and sustainable event provided a place where the public could gather to hear from speakers on a range of topics. It also included sculptures and art, seminars, and a market stall.

To acknowledge World Environment Day on 5 June, part of Wesley Place was transformed into a ‘Woodlands’ space featuring native trees and activations that showcased the commitment that Wesley Place, Charter Hall and our tenant customers have made to sustainability and the environment. In line with Wesley Place’s ethos, the event promoted sustainability, technology, ethics, futurism, health and wellbeing, entrepreneurship, innovation, creativity and design.

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Wesley Place, Melbourne Vic Images Credit: City of Melbourne – Melbourne Knowledge Week 2021

Other activities over FY21

A Christmas charity drive for charities aligned with our tenant customers.
A flower auction where the flowers within the foyer are auctioned off each week, and the money is gifted to a different charity each month.
Sales from the vending machines within the EOT facilities are passed on to a different charity each quarter.
Hosting 360 Year 7 students in March 2021 for a service and site tour. They had lunch within the green space, then toured the site and the heritage trail.

Wesley Place was an ideal venue for these activities as its planning, design, construction, and utilisation reflects much about Charter Hall’s ethos as to how ESG considerations should be embedded in such developments.

For us, Wesley Place is an expression of what we value and how we want to see future developments evolve - places that become focal points for culture, community, and social benefit.

Introduction

Targets Sustainability Governance overview

Economic Environment

Social

Data

Charter Hall Group

Sustainability Report 2021 Social

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Caring for our people in a challenging year

In addition to our existing wellness program, we implemented a range of initiatives to address the physical and mental health of our people during periods of isolation and in the transition back to their offices.

Wellness, positivity, resilience and support have been front and centre in enabling our people to better cope with the unique and unprecedented challenges presented by the pandemic and its consequences.

When people were able to re-enter our workspaces, we provided guidance, in line with the State and national health advice, on returning to the workplace. For example, we shared live streamed videos that took our people on a virtual tour around our office to ‘show’ how our space had evolved with social distancing and square metre restrictions.

Our support measures included:

Delivering an internal communications campaign to engage our people in ways that worked best for them;
Creating a new intranet where employees self-access leadership articles, technology ‘how to’ guides, physical and mental well-being resources;

We recognised it was important to help those who were struggling remotely, experiencing domestic violence, mental health challenges, or who just who didn’t feel they were performing ‘at their best’ by themselves at home.

We undertook several surveys during this time to better understand how we could support them with transitioning to home, staying well and productive at home, and transitioning back to the office. This ensured our approach was always responsive to what our people needed.

Expanding our video conferencing and team sharing capabilities to host ‘fireside chat’ Q&A sessions with our Executive and CEO;
Facilitating an early return to the office with a structured ‘buddy’ plan for those suffering from acute mental health challenges following isolation;
Providing an allowance for our people to set up their home working space;
Launching a targeted VIC Lockdown well-being calendar – which included virtual trivia sessions, virtual yoga, home delivered breakfast, and virtual cocktail-making classes;

Together, these actions enabled us to return in July 2021 at 75% of our capacity, well before many other businesses.

Enabling our Victorian team to access 10 days of extra personal leave when the second lockdown was announced; and
Curating virtual experiences for school age children while their parents were working from home. These included storytelling, still life drawing sessions and cooking classes.

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Dancing for Country

For NAIDOC Week 2021, our Retail business, in partnership with author Maree Yoelu (McCarthy), created a 12-page children’s storybook.

Maree is a Wadjigany woman, from the western Wagait region in the Northern Territory. The concept for the story specifically speaks to the 2021 NAIDOC Week’s theme of ‘Heal Country’, and is titled ‘Dancing for Country’.

had been chosen to be part of the Dancing for Country story book.

Our Dancing for Country partnership is just one example of the many initiatives that have been taking place across our business over recent years to celebrate and embrace First Nations’ cultural knowledge and understanding of Country.

In total, 14 of our shopping centres reached out to students across 60 local schools, including Indigenous schools within the community, to design the illustrations to feature in the storybook. The artworks were displayed in-centre, and we received over 10,000 votes from our communities for their favourite designs.

This year we worked on our reconciliation strategy to guide the development of our Stage One: Reflect Reconciliation Action Plan (RAP), a strategic document that will drive our contribution to reconciliation both internally and in the communities we operate. Our RAP has been conditionally endorsed by Reconciliation Australia and will launch in early FY22. ‘Dancing for Country’ is available for everyone to enjoy here.

We also held a series of ‘Dancing for Country’ events to celebrate NAIDOC Week and the launch of the storybook. At our Brickworks Marketplace, near the beautiful River Torrens, we held a NAIDOC Dancing for Country awards presentation and Smoking Ceremony. Students from six local school were thrilled to find out their illustrations

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Data Contact us

Charter Hall Group

Non financial data

This year we consolidated our sustainability data into a comprehensive ESG Databook. We then extracted key trend data to present here as an overview of our performance against key metrics for the year to 30 June 2021. More detailed information from the Databook is available here.

Introduction

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Data

Charter Hall Group

Sustainability Report 2021

Non financial data Environmental data

21-25 Nile Street, Port Adelaide SA 6.0 Star NABERS Energy 5.5 Star NABERS Water

Environmental data

Emissions

We report our Scope 1 and 2 emissions according to our operational control boundary under the National Greenhouse and Energy Reporting (NGER) Act. Scope 1 emissions are inclusive of diesel, gas and refrigerant reportable under NGER. Scope 2 emissions are from the consumption of purchased electricity. Emission factors for Scope 1 and 2 emissions are sourced from the NGER Measurement Determination. Consumption data for electricity and gas is sourced from invoices, and where invoices are missing, we accrue based on previous years consumption. Diesel data is sourced from top up volumes and refrigerant is based on total volume, with emissions calculated using the default leakage rate.

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Emissions (Scope 1 & 2) tCo2-e Area (sqm)
120,000 2,500,000
100,000
2,000,000
80,000
1,500,000
60,000
1,000,000
40,000
500,000
20,000
- -
FY17 FY18 FY19 FY20 FY21
Office Retail Industrial Diversified Area
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For FY21 the total Scope 1 emissions are 11,421tCO[2] -e, and total Scope 2 emissions are 82,449tCO[2] -e. This is a

Over the past 5 years, Scope 1 and 2 Emissions has increased by 16.3[%] driven by the 43% expansion in the portfolio footprint.

5.5[%] reduction against last year, largely due to reduction in electricity consumption.

For more details see the Databook.

Electricity

We report total electricity consumption inclusive of electricity from the grid, on-site renewables and electricity consumption from cogeneration and trigeneration. The Retail Power Purchase Agreement generates renewable electricity on our assets, however this is supplied to the grid and the renewable electricity is not recognised in our accounting methodology.

We manage an embedded network in a number of our retail shopping centres and offices in Queensland and Western Australia. The consumption associated with these networks is not included.

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Electricity (GWh) Area (sqm)
140 2,500,000
120
2,000,000
100
80 1,500,000
60
1,000,000
40
500,000
20
- -
FY17 FY18 FY19 FY20 FY21
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Office Retail Industrial Diversified Area
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Since FY17 there has been a

This year there was an

8[%] decrease in electricity consumption compared to last year driven by:

17.6[%] increase in electricity consumption, driven by a 43% expansion in the portfolio footprint.

Reduced occupancy in offices due to COVID-19;

Utilising the Market Based Methodology, we recognise that

Cooler summer conditions and improved air quality in 20/21 resulted in less electricity consumption to operate air conditioning; and

21[%] of our portfolio was supplied with renewable electricity, During FY21 all of the electricity supplied to the Industrial & Logistics portfolio in our operational control was sourced from off-site renewable electricity.

Roll out of building analytics (CIM) contributing to improved control of mechanical plant. This reduced consumption in the Office portfolio.

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Electricity generation

Total on-site electricity production was:

		Total kWh
	Solar electricity production Cogeneration/ trigeneration	404,003 1,152,662
	Total	1,556,665

We only report on electricity generation in our operational control, and excludes the electricity generation on our Retail assets that form part of a PPA, cogeneration system at 990 La Trobe, Melbourne which operated by others, and electricity generation from solar that is operated by our tenants.

For more details see the Databook.

Introduction

Targets Sustainability Governance Economic Environment overview

Social

Data

Charter Hall Group

Sustainability Report 2021

Non financial data Environmental data

Water

Charter Hall collates water consumption for all our Office, Retail, Diversified and Industrial & Logistics portfolio. The consumption data is sourced from invoices, and where there are data gaps consumption in accrued based on the previous year. Our total potable water consumption was 2,497,377kL, an increase of 13% against last year. For the Retail, Diversified and Office portfolio the total potable water consumption was 1,089,672kL.

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Water (kL) Area (sqm)
1,400,000 2,500,000
1,200,000
2,000,000
1,000,000
1,500,000
800,000
600,000
1,000,000
400,000
500,000
200,000
- -
FY17 FY18 FY19 FY20 FY21
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Office Retail Diversified Area
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This year there was a

A cooler and wetter summer in 20/21 meant less demand on potable water for irrigation in Retail centres and for cooling in Office buildings.

17[%] decrease in potable water consumption compared to FY20, driven by:

Since FY17, there has been a

Lower occupancy in offices, with 30% average vacancy rate due to COVID-19 stipulations;

1[%] reduction in potable water consumption, despite a 43% increase in floor area.

Customers spending less time in shopping centres due to COVID-19; and

In FY20, we commenced reporting on water consumption of our Industrial & Logistics portfolio. Charter Hall does not have operational control over tenant water usage and therefore does not actively monitor water consumption. The increase in water consumption is due to an increase in footprint of the portfolio.

Waste

Waste data is collected at Retail and Office assets. Where possible, we weigh the bins collected to obtain accurate measure of waste. Where it is not possible, we estimate waste quantities based on the number of bins collected.

Within Office we have rolled out organics at 62% of sites and Simply Cups to recycle coffee cups at 35% of sites. 10 and 12 Shelley Street, Sydney achieved greater than 95% of waste diversion from landfill. We are taking these learnings into account in our roll-out of waste initiatives at other locations.

Within Retail, we have implemented anaerobic digestion at three properties with large food courts. We have partnered with our tenant customers on food donations and we are currently exploring other opportunities to increase diversion of organics from landfill.

There has been a reduction in overall waste volumes during FY21 due to lower occupancy in Office buildings and a higher proportion of takeaway customers at Retail properties due to COVID-19. We have also observed a negative effect on diversion rates linked to COVID-19 in the Office portfolio, through changes in cleaning management regimes and tenant behaviour.

Waste by disposal method (tonnes)

	Retail FY19 FY20 FY21	Ofce FY19 FY20 FY21
Landfll	4,778 4,847 4,991	3,069 3,529 2,675
Waste to energy1	1,250 1,849 1,395
Incineration		37
Recycling & reuse	1,919 2,451 2,635	1,459 1,450 1,214
Recovery2	1,664	5
Total	7,947 9,147 10,686	4,528 4,979 3,931
Total diverted from Landfll	24% 27% 40%	32% 29% 31%
For more details see theDatabook.

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990 La Trobe Street, Docklands, Melbourne Vic 6.0 Star NABERS Energy 6.0 Star NABERS Water

Asset ratings and certifications

We align our building performance against national and international standards. Our certifications against NABERS Energy, NABERS Water, NABERS IE, Green Star Design and As Built and WELL are provided per asset in the Databook.

Corporate emissions

Our corporate workplaces consumed 338MWh of electricity during FY21, with 6% reduction directly linked to lower occupancy due to COVID-19.

Emissions from air travel was 159tCO[2] -e this year, a decrease of 80% from last year, due to reduced corporate travel related to COVID-19 restrictions.

	FY19 FY20 FY21 Electricity (kWh) 386,196 360,010 338,552 Scope 2 tCO2-e 316 292 276 Scope 3 tCO2-e (Air travel) 1,282 778 159

Industrial water

Industrial water
	FY20	FY21
Water (kL)	886,111	1,407,705
Coverage (sqm)	2,609,036	3,081,191
% of Sector	46.5%	46.8%

Waste to Energy refers to incineration with energy recovery, and is not considered to be recycled or reused.
Recovery includes cooking oil and grease trap waste which is treated for reuse or composted.

Data

Introduction

Targets Sustainability Governance overview

Economic Environment

Social

Charter Hall Group

Sustainability Report 2021

Non financial data Social data

Social data

Despite the uncertainty in the external environment, we maintained our performance outcomes in relation to our employees in FY21, and were proud to retain our workforce with no redundancy losses as a consequence of COVID-19. Our diversity and inclusion measures have been sustained and we saw an increase in the uptake of parental leave across both genders, with 35% of our parental leavers being male (compared to 14% in FY20). We continued our focus on recruiting female talent into the business, representing 65% of all new hires in FY21 (compared to 56% in FY20).

Our people have shown extraordinary resilience through this challenging year, and we have continued to look for ways to improve wellbeing and build a culture that our people are proud of.

While this work is ongoing, we have achieved some significant milestones in FY21. This included 90% employee engagement with a 95% participation rate, awarded an Employer of Choice for Gender Equality citation by the Workplace Gender Equality Agency (WGEA), ranked as a finalist in the AFR Best Places to Work, and being one of the first organisations globally to achieve a WELL Portfolio Score from the International WELL Building Institute (IWBI) for our work on enhancing wellness in buildings for our employees and tenant customers.

All data as at 30 June 2021 - numbers same as Board reporting, no contingent workers, casuals or board members included in normal numbers (only permanent and fixed term contractors unless otherwise indicated).

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FY21 numbers include both Executive and Non-Executive Directors in order to align with that disclosed in Charter Hall’s Corporate Governance Statement. FY20 and FY19 numbers only include Non-Executive Directors.

Gender diversity

Board composition by gender (NED)	FY18 Number Rate	FY18 Number Rate	FY19 Number	Rate	Rate	FY20 Number Rate	FY20 Number Rate	FY21 1 Number Rate	FY21 1 Number Rate
Male Female	3 60% 2 40%		4 2	67% 33%		4 67% 2 33%		5 71% 2 29%
Total	5 100%		6	100%		6 100%		7 100%

Remuneration ratio by gender2	FY18 Female Male		FY19 Female	Male		FY20 Female Male		FY21 Female Male
Executive Senior Management Management Senior Professional Professional Support	0.76 1.00 0.81 1.00 0.88 1.00 1.03 1.00 0.90 1.00 0.85 1.00		0.65 0.79 0.87 1.01 0.87 0.86	1.00 1.00 1.00 1.00 1.00 1.00		0.63 1.00 0.73 1.00 0.81 1.00 1.00 1.00 0.89 1.00 0.87 1.00		0.72 1.00 0.74 1.00 0.81 1.00 0.98 1.00 0.91 1.00 0.87 1.00

Headcount by job band andgender	Senior Management	Management			Senior Professional		Professional		Support
Male Female Prefer not to say	36 70.6% 15 29.4% 0 0.0%	48 70.6% 20 29.4% 0 0.0%			76 53.5% 66 46.5% 0 0.0%		79 33.5% 156 66.1% 1 0.4%		11 16.9% 54 83.1% 0 0.0%
Headcount by gender3 FY19 FY20 FY21 Male 247 257 250 Female 298 310 311 Prefer not to say 1 1 1 Total 546 568 562				Employee recordable injury by type FY18 FY19 FY20 FY21 OH&S
				Absenteeism rate 1.49% 1.23% 1.30% 1.42%10
				Fatalities4 0 0 0 0
				Medical treatment injuries5 1 6 5 1
				Lost time injuries6 1 1 1 0
				Employee recordable injuryrate7 2.7 7.2 6.4 1.1
				Employee lost time injury rate8,9 1.3 1.2 1.1 0

Average of full time fixed remuneration only. Excludes employees who prefer not to say to maintain confidentiality.
Includes only full–time and part–time permanent and fixed–term contract employees.
Employees includes only full-time and part-time permanent employees and fixed-term contract employees. It excludes contractors.

For more details see the Databook.

Medical treatment injuries refer to work-related incidents that require medical treatment beyond the first aid capability or authority of an industrial paramedic. They include injuries resulting in restricted duties (light duties) but no lost time.
Lost time injuries refer to work-related incidents that resulted in a fatality, permanent disability or time lost from work of one day/shift or more.
Employee recordable injury frequency rate (TRIFR) includes medical treatment and lost time incidents. It excludes first aid cases and other non-work-related incidents.
Employee lost time injury frequency rate (LTIFR) includes lost time incidents as defined above.
Based on 1,000,000 hours worked, including overtime.
In FY21 Charter Hall enabled employees to access personal leave for homeschooling when in lockdown.

Data

Introduction

Targets Sustainability Governance Economic Environment overview

Social

Charter Hall Group

Sustainability Report 2021

Non financial data Social data

Employee breakdown by contract type &gender	FY19 Total Male Female Prefer not to say	FY20 Total Male Female Prefer not to say	FY21 Total Male Female Prefer not to say
Perm Full Time	447 225 221 1	487 238 248 1	498 238 259 1
Perm Part Time	48 4 44 0	46 3 43 0	33 4 29 0
Fixed Term Full Time	49 18 31 0	32 15 17 0	27 8 19 0
Fixed Term Part Time	2 0 2 0	3 1 2 0	4 0 4 0
Total	546 247 298 1	568 257 310 1	562 250 311 1

Employee breakdown by

contract type and gender:

– Employee breakdown reported in terms of number of employees by gender within each contract type.

Contract type consists of:

Permanent full–time
Permanent part–time

Metric boundary:

Includes only full–time and part–time permanent and fixed–term contract employees.

Fixed–term full–time
Fixed–term part–time.

Employee category	Gender	Percentage of Employees receiving regular performance and career development reviews %
Senior Management	Male Female	100% 100%
Management	Male Female	100% 100%
Senior Professional	Male Female	100% 100%
Professional or Experienced Support; Support	Male Female	100% 100%

The above table includes performance and career development reviews completed for permanent employees and a select number of fixed term employees where they have short-term incentives in place. Given that performance reviews are finalised in June of the reporting period, the FY21 performance reviews completion rate only includes eligible employees that were still employed as at 30 June 2021. The performance review completion rate metric also excludes the following: employees that are still within their 3–6 month probationary period as at 30 June 2021; employees who have transitioned to a new role within the organisation within the FY21 period.

Percentage of employees receiving regular (annual) performance and career development reviews, by gender and employee category. Percentage reported in terms of proportion of total employees by gender and employee category receiving annual performance and career development reviews.

Job bands consist of:

Senior Management comprises Managing Director, Executive Committee and Heads of Divisions
Management comprises Senior Managers
Senior Professional comprises Managers,
Senior Professionals and Experienced Professionals.

Professional comprises:

Mid–level Professionals, Team Leaders and Senior Support Staff
Professional and Experienced Support Staff
Support comprises Support Staff.

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Introduction

Targets Sustainability Governance Economic Environment overview

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Charter Hall Group

Sustainability Report 2021 Non financial data

Non financial data

Deloitte Touche Tohmatsu ABN 74 490 121 060 Grosvenor Place 225 George Street Sydney NSW 2000 PO Box N250 Grosvenor Place Sydney NSW 1220 Australia Tel: +61 2 9322 7000 Fax: +61 2 9322 7001 www.deloitte.com.au

Independent Limited Assurance Report to the Directors and Management of Charter Hall Limited

Conclusion

We have undertaken a limited assurance engagement on Charter Hall Limited’s ‘Subject Matter Information’ disclosed in 2021 the Charter Hall Limited Sustainability Report and the Databook detailed below for the year ended 30 June 2021.

Based on the procedures performed and the evidence obtained, nothing has come to our attention that causes us to believe that, the ‘Subject Matter Information’ is not prepared, in all material respects, in accordance with the ‘Reporting Criteria’ as shown below for the year ended 30 June 2021.

Subject Matter Information and Reporting Criteria

The ‘Subject Matter Information’ and Reporting Criteria for our limited assurance engagement for the year ended 30 June 2021 is as follows:

Sustainability Performance Indicators (‘Subject Matter Information’)

Reporting Criteria

Total Scope 1 and Scope 2 Greenhouse Gas emissions (tCO2e) – location National Greenhouse and based, page 30, 39 and 40 of the Sustainability Report and tab ‘Emissions’ Energy Reporting Act 2007, of the Databook National Greenhouse and Total Electricity (kWh), Onsite Renewables (kWh), Offsite Renewables Energy Reporting (kWh), Cogeneration (kWh) and Natural Gas (GJ), page 39 and 40 of the (Measurement) Sustainability Report and tab ‘Electricity’ and ‘Gas’ of the Databook Determination 2008 and related guidance, collectively referred as ‘NGER Total energy production (kWh), page 39 of the Sustainability Report and legislation’ tab ‘Electricity’ of the Databook GRI 305-1 2016 GRI 305-2 2016 GRI 302-1 2016

Total Scope 2 Greenhouse Gas emissions (tCO2e) – Market based, page 30 of the Sustainability Report and tab ‘Emissions’ of the Databook

Greenhouse Gas Protocol (‘GHG protocol’) Global Reporting Initiative’s Standard (‘GRI Standard’) 303-5 2018

Water consumption (kL) (operational control and industrial assets), page 40 of the Sustainability Report and tab ‘Water’ of the Databook 303-5 2018 Waste by disposal method - Office and Retail (tonnes); Waste diversion from landfill - Office and Retail (%), page 10 and 40 of the Sustainability Report Total Employee Recordable Injury Rate and Employee Lost Time Injury GRI 403-9 2018 Rate, page 41 of the Sustainability Report and tab ‘People’ of the Databook Board composition by Gender, page 41 of the Sustainability Report and tab GRI 405-1 2016 ‘People’ of the Databook Ratio of Remuneration by Gender, page 41 of the Sustainability Report and GRI 405-2 2016 tab ‘People’ of the Databook Workforce breakdown by Job band, Age and Gender, page 41 of the GRI 405-1 2016 Sustainability Report and tab ‘People’ of the Databook Percentage of women in the Workforce and Senior management, page 41 GRI 405-1 2016 of the Sustainability Report and tab ‘People’ of the Databook

GRI Standard 306 2020

Sustainability Performance Indicators Reporting Criteria (‘Subject Matter Information’) Employee breakdown by Contract type and Gender, page 42 of the GRI 102-8 2016 Sustainability Report and tab ‘People’ of the Databook Percentage of employees receiving regular (annual) performance and career development reviews, by Gender and Employee category, page 42 GRI 404-3 2016 of the Sustainability Report and tab ‘People’ of the Databook

Basis for Conclusion

We conducted our limited assurance engagement in accordance with Australian Standard on Assurance Engagements ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information (“ASAE 3000”), issued by the Australian Auditing and Assurance Standards Board.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Management’s Responsibilities

Management is responsible for:

a) ensuring that the ‘Subject Matter Information’ is prepared in accordance with the ‘Reporting Criteria’;
b) confirming the measurement or evaluation of the underlying ‘Subject Matter Information’ against the ‘Reporting Criteria’, including that all relevant matters are reflected in the ‘Subject Matter Information’;
c) designing, establishing and maintaining an effective system of internal control over its operations and financial reporting, including, without limitation, systems designed to assure achievement of its control objectives and its compliance with applicable laws and regulations; and
d) the electronic presentation of the ‘Subject Matter Information’ and our limited assurance report on the website.

Our Independence and Quality Control

We have complied with the independence and other relevant ethical requirements relating to assurance engagements, and applied Auditing Standard ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, Other Assurance Engagements and Related Services Engagements in undertaking this assurance engagement.

Assurance Practitioner’s Responsibilities

Our responsibility is to express a limited assurance conclusion on the Charter Hall Limited’s ‘Subject Matter Information’ as evaluated against the ‘Reporting Criteria’ based on the procedures we have performed and the evidence we have obtained. ASAE 3000 requires that we plan and perform our procedures to obtain limited assurance about whether, anything has come to our attention that causes us to believe that the ‘Subject Matter Information’ is not properly prepared, in all material respects, in accordance with the ‘Reporting Criteria’.

A limited assurance engagement in accordance with ASAE 3000 involves identifying areas where a material misstatement of the ‘Subject Matter Information’ is likely to arise, addressing the areas identified and considering the process used to prepare the ‘Subject Matter Information’. A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks.

The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. Accordingly, we do not express a reasonable assurance opinion about whether the ‘Subject Matter Information’ has been properly prepared, in all material respects, in accordance with the ‘Reporting Criteria’.

Inquiries with Subject Matter data owners and sustainability report responsible management to understand and assess the approach for collating, calculating and reporting the respective ‘Subject Matter Information’ across the reporting period ended 30 June 2021
Inspection of documents as part of the walk throughs of key systems and processes for collating, calculating and reporting the respective ‘Subject Matter Information’ for the 2021 Charter Hall Limited Sustainability Report
Selection on a sample basis items to test from the selected sustainability performance indicators and agree to relevant supporting documentation
Analytical reviews over material data streams to identify any material anomalies for the ’Subject Matter Information’ and investigate further where required
Agreeing overall data sets for the ’Subject Matter Information’ to the final data contained in the 2021 Charter Hall Limited Sustainability Report.

Inherent Limitations

Because of the inherent limitations of an assurance engagement, together with the inherent limitations of any system of internal control there is an unavoidable risk that it is possible that fraud, error, or noncompliance with laws and regulations, where there has been concealment through collusion, forgery and other illegal acts may occur and not be detected, even though the engagement is properly planned and performed in accordance with Standards on Assurance Engagements.

Restricted use

The applicable criteria used for this engagement was designed for a specific purpose of assisting the directors and management in reporting the ‘Subject Matter Information’ presented in the 2021 Charter Hall Limited Sustainability Report, as a result, the ‘Subject Matter Information’ may not be suitable for another purpose.

This report has been prepared for use by directors and management for the purpose reporting on the subject matter information presented in the 2021 Charter Hall Limited Sustainability Report.

We disclaim any assumption of responsibility for any reliance on this report to any person other than the directors and management or for any purpose other than that for which it was prepared .

DELOITTE TOUCHE TOHMATSU

PR Dobson Partner Sydney, 23 September 2021

Our procedures included:

Introduction

Targets Sustainability Governance Economic Environment overview

Social

Data

Charter Hall Group

Contact us

All enquiries can be directed to:

Charter Hall Group GPO Box 2704 Sydney NSW 2001

Tel +61 2 8651 9000 Fax +61 2 9221 4655

E-mail [email protected] Web charterhall.com.au

Charter Hall also has offices in Melbourne, Brisbane, Perth, Adelaide and retail centres nationally.

charterhall.com.au/sustainability

Important information

Certain market and industry data used in connection with this Report may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. Neither Charter Hall Group nor its representatives have independently verified any such market or industry data provided by third parties or industry or general publications. Unless otherwise specified, statements in this Report are made only as at its date and it remains subject to change without notice. This Report contains certain “forward-looking statements. The words “forecast”, “estimate”, “likely”, “anticipate”, “believe”, “expect”, “project”, “opinion”, “predict”, “outlook”, “guidance”, “intend”, “should”, “could”, “may”, “target”, “plan”, “project”, “consider”, “forecast”, “aim”, “will” and similar expressions are intended to identify such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. While due care and attention has been used in the preparation of any forward-looking statements, any such statements in this Report are based on assumptions and contingencies subject to change without notice, as are statements about market and industry trends, projections, guidance and estimates.

Contact us

Introduction

Targets Sustainability Governance Economic Environment overview

Social

Data

AI assistant

CHARTER HALL GROUP — Environmental & Social Information 2021

64645_rns_2021-09-26_fd2154be-7481-4568-aa07-ca38f9ddd08b.pdf

Sustainability Report 2021

About this report

Acknowledgment of Country

Contents

Introduction

Alignment with sustainability best practice and reporting frameworks

Managing Director & Group CEO message

We continue to work with our

people, customers, investors and communities to generate opportunities that create mutual success.

Performance in the face of unprecedented challenges

Meaningful action on climate change

A responsible approach is good business

The importance of partnership

Inputs welcome

About Charter Hall

FUM by equity source

Scale

ESG integrated into investment decisions

Purpose

Strategy

Access

Values

Capabilities

Stakeholders

Property portfolio

Funds management portfolio

Listed entities

Unlisted funds

WA

$4.2bn

Qld

$8.5bn

NSW & ACT

$22.7bn

SA

$2.4bn

Vic

Tas

$0.6bn

FY21 Highlights

2030 Net Zero

renewables by 2025

Employer of Choice for Gender Equality

Environment

We became a signatory to the WGBC Net Zero Carbon Commitment

Carbon and climate change

We achieved a 19[%]

reduction in our carbon

emission intensity (Scope 1 and 2)

60 King William St, Adelaide

Climate Active Certified

We commenced

Climate Change and

Adaptation Plans (CCAP)

Social

Creating inclusive spaces and engaging customer experiences

Employee

We achieved

We achieved

Governance

Integrating sustainability into decision making

Policies

Board

ARCC

Executive Committee

ESG teams

ESG Committee

Charter Hall Board

Sustainability framework

Environment

Climate resilience

Strong communities

Governance Responsible business

Charter Hall Materiality Matrix

Key sustainability issues in FY20/21

3

1

CHARTER HALL GROUP Environmental & Social Information 2021