Integrated
Report

2019

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Sustainability overview

Detailed in our sustainability report, found at www.attacq.co.za

Our approach

Underpinning all our environment, social and governance initiatives is the sincere commitment to be a responsible corporate citizen, to do the right thing in the interests of the broader South African society and our natural environment. This commitment is embodied in our corporate values (integrity, accountability, creativity, collaboration and sustainability), with our progress and challenges reviewed by the transformation, social and ethics (TSE) committee of the board as well as our executive committee (exco).

In this section, we summarise salient features of the review period for each resource, and our progress towards targets. In line with our sustainability vision (to be truly efficient, resilient and smart) and strategy, our goal is a net positive impact across the resources that creates optimal value for all our stakeholders. Please refer to our first standalone sustainability report on our website for details.

Natural resources

Key board and committee decisions

  NOTED   CONSIDERED   APPROVED   RESOLVED
 
  • We are included in the FTSE/JSE Responsible Investment Top 30 Index with an average rating of 4.1 out of a possible 5.0
  • The role of head of sustainability is incorporated as part of the development team to instil sustainability as part of the team's DNA
  • We have defined our sustainability strategy
  • Management have action plans in place to address the current water challenges
 
  • Approvals for PV system installations and generators
 
  • Implementing a ±R12 million PV system on the roof of Garden Route Mall, our seventh PY system in our South African portfolio
  • Spending ±R28 million on generators, focusing on alternative supply of electricity and reducing our carbon footprint

Performance highlights and lowlights

  HIGHLIGHTS       LOWLIGHTS
 
  • Reviewed and strengthened our climate-change statement and corresponding strategies for the portfolio
  • Threefold capacity increase in our installed photovoltaic (PV) systems over the past three years to 6 852kWp.
       

Taking a broader view, key elements in our approach to natural resources as well as progress in mitigating the attendant risks and opportunities are summarised below.

  Element   Risk   Opportunity   Progress  
 

Waste

 

Increase in waste

 

Increased recycling and improved separation into waste streams on both a building and precinct level, resulting in a reduction in waste to landfill

 

Recycling increased to over 55.0% of waste generated

 
 

Water

 

Security of supply

 

Reduce our water intensity and costs through lower consumption strategies, increased recycling and water efficiencies

 

All our properties can operate for two days in a water outage

Our water intensity (litres per square metre) has dropped steadily over the past three years, meeting or exceeding the sector benchmark (MCSI) average

 
 

Energy

 

Supply constraints (outages and load shedding)

 

Reduce consumption and cost through energy efficiency and alternative energy options where feasible

 

Our energy efficiency is measured by intensity: we currently outperform the MCSI average for the retail, office and industrial components of our portfolio

Mall of Africa can operate for two days during a power outage

Installation of generators have been approved at Eikestad Mall, MooiRivier Mall and Garden Route Mall

Our PV systems are now generating 9 857MWh of electricity annually

 
 

Transport

 

Constrained access to Waterfall

 

Work with road, rail and rapid rail authorities to increase infrastructure supporting the node

Optimise internal facilities for parking, pedestrian traffic and alternative transport options

 

Long-term project, involving multiple external parties

 
 

Technology

 

Obsolescence of existing technology

 

Use leading technology to enable a truly smart city

 

Long-term project aimed at an integrated, multifaceted information system, supporting decisions in real time

 

Our green certification strategy

We are targeting a minimum of four-star GBCSA (by design and as built) certification on every new development in Waterfall City (excluding Waterfall Logistics Hub and LP21).

We will accommodate tenants' specific requests if they prefer the USGBC's LEED (design and construction) certification. When using the USGBC LEED certification, we target a minimum of silver (design and construction). Where applicable or requested by tenants, GBCSA or LEED certification can be undertaken for interior and operational certifications.

We are in the process of certifying our existing buildings by using the GBCSA Existing Building Performance rating tool. We are focusing on our completed buildings in Waterfall City and we are targeting the highest possible rating.

At present, 20.8% of our South African portfolio is green certified.

Human resources

Key board and committee decisions

  NOTED   CONSIDERED   APPROVED   RESOLVED
 
  • Employee turnover
  • Low percentage vesting of LTI performance conditions
  • Study assistance to employees
 
  • Succession planning for executives and other key roles
 
  • The code of ethics for staff was approved
  • Malus and claw back provision included as part of senior management's remuneration
  • Board diversity policy - board gender and race targets set at 30.0%
  • Salary increases, bonuses and new LTI shares
  • To close the salary gap between CEO and the lowest earning staff members

Performance highlights and lowlights

  HIGHLIGHTS       LOWLIGHTS
 
  • Launch of our first annual wellness awareness programme
  • Contributing to school fees for the children of qualifying employees
  • Voluntary employee turnover of 9.1%.
     
  • Recruiting and retaining skills in designated groups in real estate sector remains a challenge
  • Capacity constraints until suitable candidates are recruited.

Our employees are our most valuable assets. While that is true for most companies, in the increasingly competitive real estate sector, the high calibre of our people is a key differentiator.

Key elements in our approach to human resources as well as progress in mitigating the attendant risks and opportunities are summarised below.

  ELEMENT   RISK   OPPORTUNITY   PROGRESS  
 
  • Promoting transformation in South Africa
 
  • Consequences of legislative non-compliance
 
  • Being acknowledged as a preferred employer and supplier
 
  • 60.0% of our workforce is African, Coloured or Indian. At management level, this is 25.7%
 
 
  • Attract, motivate and retain high-calibre individuals
 
  • Competitors poaching well-trained and experienced staff members
 
  • Personal development ensures a robust succession pipeline
 
  • Workforce increased 10.3% to 150 employees
  • We spent over R900 000 on internal training and provide bursaries for external courses
  • Attractive benefits include annual wellness programme, and subsidising school fees for children of qualifying employees
 
 
  • Limit employee turnover
 
  • Losing institutional knowledge can affect value creation
 
  • Institutional knowledge is a competitive advantage
 
  • Voluntary employee turnover of 9.1%
 

Social and relationship resources

Key board and committee decisions

  NOTED   CONSIDERED   APPROVED
 
  • The focus of Attacq Foundation changed to early childhood education
  • In total 681 direct beneficiaries reached by investing R6.4 million and 402 employee hours
 
  • Funds required to be transferred to the Attacq Foundation
  • Increased focus on skills development in support of transformation
  • Community activism actions
 
  • Updated stakeholder engagement policy in terms of King IV

Performance highlights and lowlights

  HIGHLIGHTS       LOWLIGHTS
 
  • In total 681 direct beneficiaries reached by investing R6.4 million and 402 employee hours (2018: 2 337 beneficiaries, R6.8 million and 309 employee hours respectively)
  • To date, 415 jobs created through the Attacq Property Point initiative.
     
  • B-BBEE level 3 after converting to a REIT and being measured against new property sector codes. See sustainability report on Our strategy.

Our vision is to be a socially responsible citizen that contributes positively to uplifting the communities in which we operate. For more information refer to our sustainability report on Risks and opportunities.

Key elements in our approach to social and relationship resources as well as progress in mitigating the attendant risks and opportunities are summarised below.

  Element   Risk   Opportunity   Progress  
  Tenant general satisfaction score  

Loss of tenants

  Building long-term relationships  

7.5/10.0.

The next general survey is currently in progress

 
  B-BBEE level  

Non-compliance

National transformation

 

Being a preferred partner

 

B-BBEE level 3 on converting to REIT

 
  Enterprise and supplier development  

Non-compliance

National transformation

 

Broadening the economic mainstream

 

Achieving our enterprise and supplier targets year on year

 
  Socioeconomic development  

Non-compliance

Sustainable communities

 

Enhancing quality of life expands the national economically active population

 

402 hours volunteered by our employees

681 direct beneficiaries

R6.4 million investment by us

 

In addition, over 150 unemployed youth are benefiting from learnerships through the Attacq Foundation, while small businesses benefit from initiatives under the Attacq Property Point programme.

Intellectual resources

Key board and committee decisions

  NOTED   CONSIDERED   APPROVED
 
  • Property management teams have implemented the application, MyBuildings
  • Mall of Africa was voted the 'coolest' mall for the second year running by Sunday Times' GEN NEXT survey
  • 2018 MSCI awards for the top-performing portfolio in the office and industrial sectors
  • Received the SAPOA award for best industrial development for Cummins South Africa regional office
 
  • Infrastructure required for the backbone to support technology advancement
  • Resilience against hackers
 
  • Sustainability as an additional company value
  • Refreshing the Attacq brand and Attacq brand story

Performance highlights and lowlights

  HIGHLIGHTS       LOWLIGHTS
 
  • Received the South African Property Owners Association (SAPOA) award for best industrial development for Cummins South Africa regional office, the fifth consecutive year of winning a prestigious SAPOA award for a Waterfall development
  • Mall of Africa voted 'coolest' mall in South Africa in Sunday Times' GEN NEXT survey for the second consecutive year
  • Included in the FTSE/JSE Responsible Investment Index for the third consecutive year and in the Top 30 Index for the first time this year
  • 2018 MSCI awards for the top-performing portfolio in the office (fourth consecutive year) and industrial (third consecutive year) sector based on three-year annualised total return.
     
  • Internal business process not agile enough for the changing environments in which we operate.

In a competitive market, intellectual capital is a decided advantage. Accordingly, we are cultivating a culture of thoughtful employees - people who are able to understand the local and global operating context and to develop innovative solutions for our precincts. We also need to understand and manage the potential impact of disruptive technology on our business model.