Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Social Sustainability
• Governance

Environmental Achievements

• Achieved a national average PUE of 1.3 (compared to industry average of 1.7)
• S1 Sydney achieved a NABERS 5-Star rating for energy efficiency
• M1 Melbourne maintained its NABERS 5-Star rating
• Maintained 100% carbon neutrality for corporate operations
• M1 data centre's 400kW rooftop solar array produced 814MWh of renewable energy, offsetting over 871 tonnes of CO2
• P1 Perth obtained ISO 14001 Environmental Management System certification
• Reduced Scope 1 emissions significantly from the previous reporting period

Social Achievements

• Significant decrease in voluntary turnover rate from 20.1% in FY19 to 14.1% in FY20
• 81% engagement rate in FY20 employee survey with positive feedback on social connection, diversity and inclusion, and company confidence
• Implemented programs to improve mental health and wellbeing, including health checks, awareness weeks, and access to counselling
• Developed a parental leave program exceeding regulatory obligations and industry averages (20 weeks paid leave for primary caregivers)
• Commenced work to mitigate modern slavery risks in line with the Modern Slavery Act 2018 (Cth)

Governance Achievements

• Independent review of Risk Management Framework
• Revised Risk Appetite Statement endorsed by the Board
• Integration of climate change and environmental risks and opportunities into Risk Management Framework
• Maintained a majority independent Board consistent with ASX Corporate Governance Council recommendations

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its impact on business operations and stakeholder engagement
• Managing the environmental impact of increasing IT power requirements
• Minimising waste sent to landfill
• Attracting female talent to Operations/Technology roles

Mitigation Strategies

• Established a COVID-19 Management Committee to manage responses
• Implemented social distancing and other health guidelines
• Implemented a comprehensive COVID-19 plan
• Continuous tuning of MEP for maximum efficiency
• Improved internal procedures and staff training in relation to preventing environmental incidents
• Implemented waste reduction activities (recycling, reuse)
• Launched ‘NEXTWOMEN’ forum to support women
• Conducted diversity and inclusion benchmarking
• Provided face-to-face inclusive leadership and unconscious bias training

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, heatwaves

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI Standards - Core option

Certifications: ISO 14001, ISO 9001, ISO 27001, NABERS 5-Star (M1 and S1)

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Water Management
• Waste Management
• Workplace Health and Safety
• Diversity and Inclusion
• Community Involvement
• Supply Chain Management
• Human Rights
• Modern Slavery

Environmental Achievements

• Achieved a national average PUE of 1.4 (industry average approximately 1.7)
• M1 and S1 maintained NABERS 5-Star ratings for energy efficiency
• Achieved 100% carbon neutrality for corporate operations under Climate Active
• Launched NEXTneutral, a carbon neutral colocation program for customers
• Installed a solar array on M1 facility, producing 792MWh of renewable energy
• Commenced installation of a solar array on S1 facility
• Introduced a formal e-waste management and recycling program
• Achieved 91 tonnes (34%) waste recycling rate

Social Achievements

• Established NEXTDC’s ‘Live to Give’ CSR program
• Partnered with The Smith Family, Pledge 1%, and various charities
• Offered one paid Volunteer Day per employee (increased to three in FY22)
• Maintained voluntary employee turnover rate at 14%
• Achieved 78% employee engagement rate in annual survey
• Established Mental Health First Aid Policy and Officers
• Implemented ‘The Way We Work’ strategy for flexible working

Governance Achievements

• Achieved ISO 45001 certification for Workplace Health and Safety Management Systems
• Published first Modern Slavery Statement
• Became a signatory to the 40:40 Vision for gender balance
• Maintained a majority independent Board
• All NEXTDC facilities are now certified to ISO 14001 and ISO 45001

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Resource scarcity
• Commodity price volatility
• Weather anomalies
• COVID-19 pandemic
• Meeting increasing customer expectations on energy and emissions performance
• Potential for unplanned downtime due to extreme weather events

Mitigation Strategies

• Robust risk management framework
• COVID-19 management plan and business continuity plan
• Flexible working arrangements
• Investment in renewable energy
• Continuous improvement in energy efficiency
• Multiple contingencies for potential points of failure
• NEXTneutral program for carbon neutrality
• Proactive water management

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Compliance with Modern Slavery Act 2018 (Cth)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (power outages, communication disruptions, water supply disruptions)

Transition Risks

• Changes in climate policies, emissions costs, renewable energy policies, building regulations

Opportunities

• Offering energy-efficient data center services
• Expanding market share by exceeding stakeholder expectations on sustainability

Reporting Standards

Frameworks Used: GRI Standards - Core option, TCFD framework (climate change section)

Certifications: ISO 14001, ISO 45001, NABERS 5-Star (M1 and S1), Uptime Institute Tier III and IV Gold Operational Sustainability

Sustainable Products & Innovation

• NEXTneutral carbon neutral colocation solution

Awards & Recognition

• Sustainability Company of the Year (Australian Business Awards)
• Australia's Most Reliable Data Centre Provider

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Water Management
• Waste Management
• Workplace Health and Safety
• Diversity and Inclusion
• Community Involvement
• Supply Chain Sustainability
• Data Security and Privacy
• Modern Slavery

Environmental Achievements

• Achieved a national average PUE below 1.38
• M1 Melbourne maintained its NABERS 5-Star rating for energy efficiency
• 100% carbon neutral corporate operations under Climate Active
• 188% increase in customers onboarded in NEXTneutral program
• Sydney S3 and Melbourne M3 achieved UI Tier IV Certification of Design
• 417 MWh renewable energy produced by M1 Melbourne rooftop solar array
• 56.41% waste diversion rate in June 2022 (with one facility achieving 90.41%)

Social Achievements

• Reduced Operational Total Recordable Injury Frequency Rate (TRIFR) from 5.7 to zero
• Reduced Capital Works project TRIFR by 33% from 15.0 to 10.0
• Trained over 26 employees as Mental Health First Aid Officers
• Engaged Sonder to provide 24/7 access to medical, mental health, and safety support
• 84% participation rate and 72% engagement rate in annual employee survey
• Extended parental leave policy to include stillbirth, infant death, adoption, and surrogacy
• Introduced 'Unconscious Bias' workshops for all staff
• Partnered with Empowered Women in Trades to encourage women in tech careers

Governance Achievements

• Maintained a majority independent Board
• Complied with ASX Corporate Governance Council recommendations
• Achieved DTA Certified Strategic (Enclave) status
• Published second Modern Slavery Statement
• Improved climate reporting in line with TCFD recommendations

Climate Goals & Targets

Environmental Challenges

• Meeting stakeholder expectations on climate change disclosures
• Managing potential impacts of evolving climate policies and regulations
• Balancing decarbonisation costs with operational efficiency
• Meeting customer expectations on energy and emissions performance
• Managing risks from extreme weather events
• Attracting and retaining talent in a competitive labor market

Mitigation Strategies

• Publicly disclosed ESG reports and engaged with investors
• Maintained oversight of emerging regulations and pursued renewable energy contracts
• Focused on optimal energy efficiency and technological advancements
• Offered NEXTneutral carbon neutral colocation solution
• Implemented robust business continuity and disaster recovery plans
• Invested in employee development and wellbeing programs

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Sustainability considerations in contract awarding
• Environmental Management Plans from contractors

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting power, communication lines, and water supply

Transition Risks

• Evolving climate policies, changes in electricity and diesel pricing

Opportunities

• Increased demand for energy-efficient data center services
• Technological advancements in decarbonisation

Reporting Standards

Frameworks Used: GRI Standards - Core option, TCFD

Certifications: ISO 14001, ISO 45001, ISO 9001, ISO 27001, Climate Active, NABERS 5-Star (M1, S1)

Sustainable Products & Innovation

• NEXTneutral carbon neutral colocation solution
• Liquid immersion cooling solutions

Awards & Recognition

• Australian Data Centre Services Provider of the Year Award (Frost & Sullivan)

Environmental Metrics

ESG Focus Areas

• Energy and climate change
• Natural resource management
• Health, safety and wellbeing
• Diversity, equity and inclusion
• Employee attraction, development and retention
• Privacy management
• Social impact
• Governance, profitability and ethical conduct
• Sustainable supply chain
• Customer relationship

Environmental Achievements

• Achieved a Power Usage Effectiveness (PUE) score of 1.42 in FY24.
• S1 Sydney facility achieved Zero Waste certification.
• More than 90% diversion rate at four facilities.
• Undertook embodied carbon assessment for new builds.
• Maintained NABERS 5-Star ratings at M1 Melbourne and S1 Sydney, and 4.5-Star at P1 Perth.

Social Achievements

• Launched inaugural “People at Work” survey, resulting in “minimal concern” quadrant.
• Launched first graduate program.
• Onboarded 13 Mental Health First Aid Officers.
• Achieved zero Lost-Time Injury Frequency Rate (LTIFR) and zero Total Recordable Injury Frequency Rate (TRIFR) for data centre operations.
• Decreased TRIFR and LTIFR in construction.

Governance Achievements

• Appointed Head of Energy and Head of Sustainability.
• Established cross-functional ESG Council.
• Issued first independent Climate and Nature Report.
• Initiated efforts to align with the TNFD framework and the UN SDGs.
• Refined NEXTDC’s ESG Strategy, including a detailed roadmap towards achieving a net zero future.

Climate Goals & Targets

Environmental Challenges

• Balancing growth with minimizing energy usage and carbon emissions.
• Challenges in the Power Purchase Agreement (PPA) market, including renewable energy supply variability, high costs, and long-term financial commitments.

Mitigation Strategies

• Continuous review of data and methodology for continuous optimization.
• Finalizing roadmap and net zero energy strategy.
• Implementation of advanced cooling systems (like direct-to-chip liquid cooling).
• Collaboration with governments, academia, and industry to fund research into sustainable data centre technologies.

Supply Chain Management

Supplier Audits: Two audits conducted in FY24; more scheduled for FY25.

Responsible Procurement

• Supplier Code of Conduct
• ESG criteria integrated into prequalification and supplier agreements
• Prioritising expenditure with social enterprises

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding
• Heatwaves

Transition Risks

• Regulatory changes
• Market shifts
• Energy price and trends

Opportunities

• Development of energy-efficient products and services
• Renewable energy integration

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD, TNFD

Certifications: ISO 9001, ISO 27001, ISO 14001, ISO 45001, Climate Active, NABERS, TRUE

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3
• Goal 5
• Goal 7
• Goal 9
• Goal 12
• Goal 13

Alignment of material issues and ESG framework with selected SDGs; initiatives detailed throughout the report.

Sustainable Products & Innovation

• NEXTneutral carbon-neutral colocation program

Awards & Recognition

• FTSE4Good Index inclusion