Climate Change Data

Environmental Metrics

ESG Focus Areas

• Governance
• Green Star
• Climate Change
• Carbon Management and Energy Efficiency
• Community Benefit
• Resource Use (Water)
• Resources (Waste and Materials)
• Biodiversity Conservation
• Pollution Control
• Temporary Site Facilities
• Sustainable Procurement

Environmental Achievements

• Achieved a predicted operational potable water demand reduction of 20% below a reference station
• 95% recycling or reuse of inert and non-hazardous construction and demolition recyclable waste (excluding spoil)
• 100% beneficial reuse of reusable spoil
• Reduced greenhouse gas emissions from the Contractor’s Activities by at least 20% from the project baseline greenhouse gas footprint

Social Achievements

• Delivered five initiatives that provide tangible benefit to the local community during the construction period
• Delivered five initiatives that provide tangible benefits to the broader community beyond the construction period

Governance Achievements

• Developed and implemented a Sustainability Management Plan
• Targeted a Minimum 5 Star Green Star rating under the Green Star Design and As-Built Sydney Metro v1.1 tool

Climate Goals & Targets

Environmental Challenges

• Limited capacity to use non-potable water supplies in North Sydney due to lack of municipal recycled water system and small site area
• Challenges in collecting stormwater and using recycled water during delivery

Mitigation Strategies

• Investigated recycled water opportunities, although unlikely to make up a significant component of water use
• Minimised potable water use in concrete batching through engagement with concrete suppliers and recycling of water in concrete production

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Sustainable Procurement Plan
• Heat Mapping of Work Packages
• Subcontractor Interviews
• Sustainability Training for Suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Flooding

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Green Building Council of Australia Green Star

Certifications: ISO 14001:2015 (Steel suppliers), Australian Certification Authority for Reinforcing and Structural Steels (Steel suppliers), National Structural Steelwork Compliance Scheme (Steel suppliers)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Value
• Green Building

Environmental Achievements

• Reduced greenhouse gas emissions (quantified savings vary by project, see report for details)
• Reduced energy consumption by 60,838 MWh p.a. (24% saving)
• Avoided 24,779 tonnes CO2-eq p.a. (21% saving)
• Reduced water consumption by 336 ML p.a. (40% saving)

Social Achievements

• Target to create A$250 million of measured social value by 2025

Governance Achievements

• Established and maintained control procedures aligned with ICMA Green Bond Principles
• KPMG assurance over elements of the report

Climate Goals & Targets

Environmental Challenges

• Variability in data quality and completeness across projects
• Inconsistent or incomplete information from some projects

Mitigation Strategies

• Conservative assumptions used in calculations where data was inconsistent or incomplete
• Data quality scoring system implemented to assess reliability of information

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Commitment to maintaining a responsible supply chain

Climate-Related Risks & Opportunities

Physical Risks

Not disclosed

Transition Risks

Not disclosed

Opportunities

Not disclosed

Reporting Standards

Frameworks Used: ICMA Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines

Certifications: Green Star, LEED, BREEAM, Green Mark, ENERGY STAR, WELL Building, Fitwel, Active, Beautiful, Clean Waters

Third-party Assurance: KPMG

UN Sustainable Development Goals

Not disclosed

Not disclosed

Sustainable Products & Innovation

Not disclosed

Awards & Recognition

Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Using biodiesel blends (B5/B20) on projects in Australia.
• Lendlease Europe eliminating all fossil fuels across its construction projects with the help of a new Alternative Fuels Policy using HVO renewable diesel, hydrogen fuel cells, renewables, and electrified plant.

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Limited availability of electric equipment and machinery in Australia.
• High upfront costs of electric construction equipment and machinery.
• Limited supply chain understanding of decarbonisation urgency.
• Limited requests from clients to decarbonise construction activities.
• Electricity grid constraints.
• Renewable diesel not currently commercially available in Australia.
• Renewable diesel must meet quality standards required by Australian Fuel Standards and OEMs.

Mitigation Strategies

• Advocacy for electric construction machinery and equipment.
• Development of financial options to reduce upfront costs.
• Construction industry and supply chain engagement.
• Client adoption of carbon reduction targets.
• Upgrading grid infrastructure.
• Investment in refineries and associated biological feedstocks.
• Introduction of low carbon fuels policy.
• Federal government to engage with refineries and review the fuel quality standards.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Financial
• Our Customers
• Our People
• Sustainability

Environmental Achievements

• 18% Reduction in gross Scope 1 and 2 emissions against FY22
• 63% Global electricity use from renewable sources, up from 42% in FY22 and targeting 100% renewables by 2030
• Secured US$4m in funding support from the New York State Energy Research and Development Authority for the geothermal heat exchange system at 1 Java Street

Social Achievements

• $186m of social value created, which equates to 74.4% of our $250m by 2025 target
• Created more than 100 apprenticeships in Manchester Town Hall Restoration, UK
• St Mary's Skilling & Employment Hub has placed more than 4,500 people in jobs since 2005

Governance Achievements

• Continued to refine remuneration policies to align with market practice
• Continued the program of Board refreshment by actively reviewing Board composition against the skills matrix. Appointed Margaret Lui to the Board effective December 2022.
• Released on the ASX a presentation of the Board Committee areas of focus for FY23 to engage with a wide audience on matters discussed during Chair-led investor meetings.

Climate Goals & Targets

Environmental Challenges

• Difficult market environment
• Provisions relating to activities from prior periods
• Industry-wide retrospective action taken by the UK Government to extend the warranty period for completed residential buildings to 30 years
• Global supply chain disruption
• Inflation and rising interest rates
• Limited availability of renewable diesel
• Eliminating Scope 3 emissions

Mitigation Strategies

• Cost reduction initiatives to improve efficiency and securityholder returns
• Disciplined cost reduction approach
• Operational changes to focus resources behind activities which generate the highest sustainable returns
• Decision to no longer undertake certain types of work, for example residential build to sell, and remain selective in our customer portfolio
• Working directly with manufacturers and implementing agreements with strategic partners to manage supply chain risk
• Introducing the first renewable diesel to Australia and onto our project sites
• Developing the Lendlease Scope 3 Emissions Protocol V.1
• Engaging with potential partners to support our ability to access high quality carbon offsets

Supply Chain Management

Responsible Procurement

• Maintaining deep relationships with our suppliers to proactively manage risk
• Establishing the right trading partnerships to introduce low embodied carbon materials
• Building a more connected supply chain via the use of digital technologies

Climate-Related Risks & Opportunities

Physical Risks

• Impact of climate change on assets, communities, and cities
• Availability and cost of labour
• Increased speed of change in climate related impacts
• Local companies and products preferred over global ones
• Shifting consumer preferences towards lower impact living

Transition Risks

• Access and cost of capital
• Availability of international products, materials, and resources
• Cost to comply with sustainability/ climate legislation and regulation
• Increased cost of carbon
• Changing preferences away from new build development
• Demand for decarbonisation of supply chain
• Increased scrutiny of actions vs branding resulting in industry leadership in decarbonisation valued
• Expectation of R&D investment for decarbonisation

Opportunities

• Industry leadership in decarbonisation valued
• Shifting social license to operate expectations resulting in industry leadership in decarbonisation valued

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, TCFD

Certifications: GRESB, WELL

Sustainable Products & Innovation

• All-electric buildings
• Geothermal heat exchange system

Awards & Recognition

• Three Lendlease funds ranked in the global top 10 in the 2022 GRESB Assessment
• Five #1 ranked regional funds in GRESB
• Five International WELL Building Institute 2022 Awards
• Barangaroo International Towers named Australia’s most sustainable commercial property collection