[+] Box-Ticking Over For Property Industry ESG

Getting ESG right is a complex process but that doesn’t mean we should use it merely as a box-ticking exercise. That was the message from panellists at The Urban Developer’s Urbanity 23 on the Gold Coast last week, who said there were huge challenges in all three areas but also major opportunities. “[The] environmental component is what we’d be most familiar with, it’s 90 per cent of the conversation,” Frasers Property Australia’s sustainability manager, Rory Martin, told conference delegates of the environmental, social and governance framework. “The sleeping giant is the social sustainability part, which plays out a lot more locally and a lot more granular, but what is interesting is the emergence of the governance part—how do we standardise the approach to managing the risks and opportunities with how you interact with the environment and those around you?” Carrot or the stick Many areas of the property industry, especially construction, have been resistant to engage with these issues, Kapitol Group director Andrew Deveson said. “It’s really easy to talk about all the great stuff [we’re doing as an industry]... [but] in the construction sector there are people who don’t even think about it. We’re a wasteful industry and that’s not something I say with pride. “In reality [the drive for better ESG] comes from clients and government policies. It’s a big challenge and a bit of it that comes from Green Star, NABERS and government regulations that we have to adapt to.” ▲ Andrew Deveson of Kapitol Group on stage at Urbanity 2023 alongside The Urban Developer journalist Ralph Nicholson. This has led to what the panel called a “carrot or stick” approach. “If you want to take the stick approach,” Fraser’s Rory Martin said, “you’re going to see the disclosure requirements change across the ASX [and other markets] in the coming years…where you will have to disclose how much carbon your operations are emitting, whether it’s handbags or homes. “You will have to talk about how your P&amp;L and your valuations are going to be impacted across different scenarios. Investors want that information. Lenders want that information. And organisations are now being proactively screened by investors on these metrics, and regulators want it. “Some respond better to the stick, others to a carrot.” Government and financial impetus Clearly, moving the focus from energy efficiency towards embodied carbon is something that federal and state governments are investing in. From October, for instance, NSW’s Sustainable Buildings State Environmental Planning Policy will require developers to start measuring the embodied carbon in their designs. Quantity surveyors at Slattery are already pre-empting compliance requirements and customer needs in the ESG space, and expect this area of work to only grow. “We advise on cost and we see embodied carbon as a cost on developers and developments generally, so we measure that and we set a carbon budget at the beginning of the project,” chief executive Sarah Slattery said. “That’s now moving into wider ESG looking at indigenous procurement, supply chains [and] modern slavery. “In the property industry historically, it’s been more of a box-ticking exercise and qualitative, now it’s moving to quantitative, which is exciting.” ▲ Sarah Slattery is the chief executive of quantity surveyor company Slattery. Then of course there is the financial impetus. “We’ve been doing the ‘E’ [of ESG] for a long time in terms of NABERS and Green Star, and there’s a focus now on upfront embodied carbon which is a no-brainer for our clients,” she said. “They’re being financed by institutions and investors, which demand measurement of embodied carbon and are trying to do net zero, so the E is definitely important and equates more tangibly to money when companies are trying to offset or reuse a building, which saves a lot of embodied carbon.” Founder of Alecon Queensland and director at construction waste recycling business RINO Todd Pepper said the industry was slowly adapting to new ways of working. “We have a whole bunch of redundant buildings which are past their useful life, and the most carbon-efficient building is an existing building.” New technology to support ESG targets RINO is working on getting rid of construction waste, the biggest area of waste in the property industry by far. “Construction and demolition waste is the most voluminous type of waste and also the most recoverable. But until 2019 [when the Queensland government] first introduced the landfill levy, it was a non-existent process. “After the landfill levy, people started to think. They take more time with it but also find ways to hide it ... in December 2021 the government committed to doubling that landfill levy, which now makes it an economic [imperative] for us to increase that rate of recovery.” ▲ Todd Pepper, founder of Alecon Queensland and director at RINO, at Urbanity 23. But the sector as a whole has been slow to invest in or take up new technologies that could aid on their ESG journey. “[At RINO] we’ve gone from recycling 500,000 tonnes of construction waste and sending 100,000 to 150,000 tonnes to landfill to 1.5 million tonnes where we can recover 90 per cent of that material and create a product that meets the same performance standards as virgin material. “The intent is there. Everyone has a boardroom policy on how they want to deal with those materials … but there hasn’t been the investment in technology until now.” To add to the ‘carrot’ motivation for ESG compliance, Kapitol Group’s Andrew Deveson suggested that it was not just a short-term response to the problem but would also help to future-proof businesses and the industry itself. “Our future workforce is a young workforce, they’re not going to want to work at a place, which is part of the problem, especially environmentally and socially. “The mindset we’re trying to move away from is ‘we just need to comply’ because compliance is good and important, it drives us along and pushes us through the cost issue—because all of this costs—but the big thing we’re focusing on is greenwashing. It’s a real cultural challenge.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Box-Ticking Over For Property Industry ESG

Get the full story.

Density Takes Centre Stage in Perth’s Great Urban Reset

Unloved Buildings Untapped Opportunity in Australia’s Cost Crunch

Death to the Basement: Cost, Time, Demand Drive Underground Parking Rethink

Marina Mirage Pivotal Moment for Gold Coast’s Luxury Future: Fraser

Inside Utopia: Emirates’ Wolgan Valley Reborn as Ritz-Carlton Lodge

The Iran Conflict & Its Impact on Construction 2026

Explained: Brisbane's Proposed LMR Zoning 2026

What Lies Beneath: What developers need to know about basements and groundwater in NSW 2026

Sydney Developer Outlook Lunch Series | Panel | Jessica Kelley, Ben Finger & Pierre Sleiman

James Place Reveals Double Towers for Newcastle Debut

Mettle Tapped for Spring Hill Office-to-Apartment Project

Density Takes Centre Stage in Perth’s Great Urban Reset

The Living Company Breaks Ground on Sydney’s $664m Timberyards Precinct

Hotel Developer Summit

The Urban Developer Awards for Industry Excellence