The global shift towards environmental, social, and governance (ESG) standards has been gaining momentum, and the property industry is certainly no exception. Property investors and developers are under increasing pressure to adopt sustainable and responsible practices, as stakeholders demand greater transparency and action on ESG issues.
ISPT, a leading Australian property fund manager, says it is at the forefront of these trends with their commitment to ESG excellence.
“Within every function of ISPT’s business, ESG excellence is deeply embedded. Every investment decision made by ISPT takes into account not just the environmental aspects of ESG, but also social and governance considerations, with each element being front of mind and put into practice. No greater example exists than the reimagining of 500 Bourke,” a spokesperson said.
In this article, ISPT acting general manager of ESG Steven Peters discusses how ISPT’s vision for ESG impacts their reinvention of 500 Bourke in Melbourne and shares how the firm is responding to the market's expectations.
What have you noticed in the market regarding the demand for ESG standards?
We have noticed considerable growth in the level of awareness of ESG issues among our investors, customers, and community during the lpast few years, and particularly in the past 12 months or so. This relates to both the breadth and depth of understanding.
ESG is now a key decision-making factor for businesses. Many of our customers have their own ESG targets and objectives, and are seeking a property partner that aligns with their values in order to support the achievement of their own sustainability commitments.
In turn, this is driving the level of expectation to take action on issues of material importance to our stakeholders – in terms of how we manage ESG risks, but also in terms of delivering impact. It’s why ISPT operates with ESG at the forefront, ensuring that sustainability is ingrained within the asset.
How do ISPT’s ESG excellence commitments impact 500 Bourke now and in the future?
ISPT is investing $150 million into transforming, rather than demolishing 500 Bourke, making it one of the most sustainable commitments in our portfolio.
Our ESG commitment has led to several sustainable initiatives in the redevelopment of 500 Bourke. Notably, the decision to retain the existing structure instead of building a new one has resulted in savings of approximately 57,000 tonnes of embodied carbon.
As part of our ongoing commitment to sustainable waste management and resource recovery, we implemented a sustainable furniture scheme to save and rehome furniture and materials from the tenant fit-out.
Through this initiative, we were able to successfully redistribute more than 15,000 furniture items, 42,000sq m of ceiling tiles, white goods and blinds, which would have otherwise ended up in landfill.
We donated all sales proceeds, approximately $250,000, to the Property Industry Foundation to support the construction of townhouses in regional Victoria, providing shelter for vulnerable youths.
From day one of construction and onward, 500 Bourke has been carbon neutral and proudly using 100 per cent renewable energy for base building electricity.
We’re targeting a 6-star Green Star and 5.5 Star NABERS energy rating, and we’ve made a deliberate commitment to honour the building’s 40 plus year legacy while protecting and renewing the energy and resources within.
What do you believe the future of ESG will entail?
There are plenty of trends that are already taking off that prove ESG is only going to continue to become more pivotal and embedded in the industry.
For example, we are seeing a shift beyond scope one and scope two emissions to now include scope three, which involves taking action on tenant-related emissions, as well as both upfront construction and embodied emissions. This more thorough process is something ISPT prioritises when considering 500 Bourke, along with our other assets.
There is also a growing need for alignment with international sustainability reporting requirements and disclosures, such as climate-related financial risks and opportunities. Similarly, there has been an increased focus on transparency and expanding the scope of disclosures, including ESG impact metrics and reporting.
We’ve seen an extension of climate change risks and opportunities around biodiversity loss, as well as an expansion of responsible supply chain management, including human rights and modern slavery, to wider ESG factors such as social procurement.
ISPT also expects it will become far more common practice to embed circular economy principles into the full lifecycle of buildings. This encompasses design, build, operation, and end-of-life.
It really is an exciting time as the industry continues to undergo this significant shift, with the effects being felt across all sectors. Witnessing such a noticeable uplift in the market's standards and expectations is fantastic, and we can only expect the momentum to gain further ground. Bringing projects like 500 Bourke to life, which stay at the forefront of ESG demands, is a great opportunity to contribute to this positive change.
How has the market responded to 500 Bourke’s ESG lead reinvention?
I’m proud to say the response from the market has been incredibly strong. We’ve recently surpassed 40 per cent leased with great interest being expressed for the remaining opportunities to join the 500 Bourke community. Feedback from our leasing team supports that tenants have been drawn to the ESG credentials of the building.
The initial draw card is certainly the repurposing of the building and sustainable furniture scheme, but it was the ongoing sustainable initiatives that really position 500 Bourke as an appealing option. Working in a carbon-neutral building is hugely appealing to businesses, with ESG absolutely being a key driver for our tenant partners and leasing success.
To learn more, visit www.500bourkest.com.au.
The Urban Developer is proud to partner with ISPT to deliver this article to you. In doing so, we can continue to publish our daily news, information, insights and opinion to you, our valued readers.
