At Goodman, ESG is integrated into our broader risk management and governance frameworks. ESG is a priority for us, and our stakeholders, and we oversee our response at the highest level.
We seek finance from sustainable capital sources with low leverage, which helps us to remain active through market cycles. Our financial resilience allows us to make a tangible difference to the lives of vulnerable people through the Goodman Foundation.
Our workforce operates under a code of conduct and a comprehensive suite of governance policies. These are in place to articulate our standards and the expectations that come with being part of the Goodman team.
We engage regularly with stakeholders and disclose our ESG performance to maintain their trust. We communicate our ESG performance through multiple channels including the Global Real Estate Sustainability Benchmark (GRESB) which analyses and scores a range of ESG indicators and gives detailed insights to investors.
In 2021, Goodman participated in the GRESB for eight entities and achieved excellent results. Our Japanese Partnership was awarded Sector Leader in the industrial distribution warehouse category, the Goodman Australia Partnership was awarded joint Regional Sector Leader in the industrial distribution warehouse category, and the UK Partnership ranked first in the industrial non-listed development category.
Goodman Group achieved an ‘A’ rating from GRESB for the second consecutive year in the area of public ESG disclosures.
Material drivers of our strategy
|Sustainable operations and results|
|Sustainable capital structure|
|Stakeholder and community engagement|
|Target||Progress||UN SDG alignment|
|Retain investment grade credit rating||
Continued to meet financial targets to underpin capital sources and retain credit rating.
Maintained credit rating at BBB+ (S&P) and Baa1 (Moody’s).
|Adopt the TCFD guidelines for climate risk assessment and disclosure by 2022||
Adopted Task Force on Climate-related Financial Disclosures (TCFD) guidelines in 2020 and published our first TCFD statement one year ahead of target.
|4 Star Green Star GRESB rating average||
Submitted GRESB responses for eight Goodman entities with results due in late 2021.
Achieved strong results in the 2020 GRESB survey including:
|$50 million in social investment by the Goodman Foundation by 2030||The Goodman Foundation contributed more than $6.3 million to community and philanthropic causes, including $400,000 raised by our people and 5,360 pro-bono hours.|
Goodman’s Board is committed to delivering the Company’s business strategy in a sustainable way.
It has entrusted the Risk and Compliance Committee to oversee the Group’s risk management framework, which includes how we respond to material ESG matters and how we manage climate risk. Importantly, its oversight extends to how we are tracking on our targets to reduce emissions, increase renewable energy use and measure and ultimately lower the embodied carbon within our developments.
Our sustainability policy and associated strategy (available on the Goodman website) is managed by the Goodman Group Head of Sustainability, reviewed annually and approved by the Risk and Compliance Committee.
We give quarterly updates to the Risk and Compliance Committee, which provides strategic feedback on our performance and channels information to Goodman’s Board. The Board prioritises and monitors our progress towards our sustainability targets, which are incorporated into the performance assessment and remuneration structure for Goodman’s management teams.
The overall assessment of Goodman’s long-term incentive remuneration, in respect to vesting conditions of the September 2021 Performance Rights, will include the following specific sustainability targets for FY22. The FY22 targets form a subset of the full long-term objectives:
*Subject to government, local authority and network operator approvals, and meeting community or social issues
Goodman believes it is critical to maintain our reputation and integrity wherever we do business. Our code of conduct sets the standard of professional and ethical behaviour expected from all of those who represent us.
The code is endorsed by Goodman’s Boards and extends to all Goodman Directors and team members, including contractors and secondees, in the performance of their duties.
We have zero tolerance for bribery and corruption, including facilitation payments. All employees complete ethical behaviour training, which includes anti-bribery and corruption.
The code of conduct has eight guiding principles to preserve Goodman’s reputation of doing the right thing by our customers and team members. The principles are:
|01. Act in a professional manner|
|02. Work as a team and respect others|
|03. Treat stakeholders fairly|
|04. Value honesty and integrity|
|05. Follow the law and our policies|
|06. Respect confidentiality and do not misuse information|
|07. Manage conflicts of interest|
|08. Strive to be a great team member|
These principles operate alongside Goodman’s values, policies and procedures.
Goodman has committed to establishing a sustainable sourcing framework in FY22. The framework will encompass our responsibility to protect human rights within our supply chain and to mitigate the risk of modern slavery, as well as other targets under our 2030 sustainability strategy.
We are expanding our procurement policies to support the new framework and working to integrate it with our global teams. Our aim is to create awareness and to engage with suppliers that operate with similar values. Increasingly, we expect our procurement decisions to reward likeminded organisations that also prioritise social, environmental and human rights factors.
We expect our suppliers to abide by the minimum standards in the supplier code of conduct and communicate these within their own operations and supply chain. This includes complying with all Goodman standards concerning safety, environment, human rights, modern slavery, labour practices and anti-bribery and corruption.
We recognise that our suppliers operate in a variety of legal frameworks and cultural environments. However, we believe that sharing our sustainable sourcing framework with our supply chain will enhance understanding of our objectives and lead to broader positive change.
Goodman acknowledges that modern slavery is a global risk. It is a serious form of exploitation present in global supply chains through labour rights abuses including forced labour, debt bondage and child labour.
An estimated 18% of modern slavery victims are in the property and construction industry, while 22% of forced labour is in the manufacture and production of raw materials – key suppliers to the property and construction industry.
Goodman faces a risk of involvement in modern slavery in our supply chains where coercion, threats or deception may be used to exploit victims and deprive people of their freedoms, rights and access to safe and fairly compensated employment. We are committed to good business ethics across our operations and supply chain, which includes nearly 12,000 suppliers; and we are working with them to mitigate these risks.
Goodman participates in several large ESG performance benchmarking programs. These include GRESB, the MSCI ESG Index and the Sustainalytics benchmark.
GRESB is a leading sustainability assessment specifically designed for real estate. Since we started participating in 2012, Goodman has continually improved its scores and increased the number of participating entities. Through GRESB, we give our stakeholders valuable comparative information about our sustainability performance and how we are tracking against our targets.
This year, Goodman achieved some excellent results within its peer groups, including:
Goodman Japan Core Partnership achieved 5 Stars and Sector Leader for the fourth consecutive year
Goodman Australia Partnership achieved joint overall Regional Sector Leader
|Goodman UK Partnership was ranked in First in the Development benchmark|
|Goodman Group maintained its ‘A’ rating for its public ESG disclosure.|
In March 2021, Goodman received a Sustainalytics ESG Risk Rating of 10.7. We were assessed by Sustainalytics to be at low risk of experiencing material financial impacts from ESG factors, which was a strong result.
Our approach to sustainability and ESG management supports Goodman’s broader business strategy and financial stability. We measure our financial sustainability and strength through our credit ratings of BBB+ (S&P) and Baa1 (Moody’s). These ratings reflect our sustainable operations and results, prudent capital structure and responsible investments.
Low financial leverage, a strong balance sheet, access to capital markets and available liquidity are important to Goodman. They are particularly valuable in today’s economic climate and mean we can continue to operate successfully through differing business cycles.
Through our managed Partnerships, Goodman Group has long-standing relationships with some of the world’s largest pension and sovereign wealth groups. As many of these partners operate with their own innovative and dynamic ESG policies, these relationships have supported Goodman’s investment teams to adopt sustainability principles in our development and management activities, resulting in sustained improvements in our external ESG benchmarks.