1. Organisational Beliefs
We exist to provide innovative solutions to significantly increase the supply of Affordable, Sustainable and Suitable housing choices to all Australians.
We see an Australia where institutional capital is successfully invested at scale in solutions that enable all people, especially those without housing choices to have access to Affordable, Sustainable and Suitable homes.
We are a vehicle for innovation in response to Australia’s unacceptable housing crisis.We originate, facilitate, invest and manage capital into housing solutions. We deliver value for investors and homes for Australians.
2. Purpose and Objective of the Policy
This Environmental, Social and Governance Policy (‘the Policy’) sets out the approach taken by SHP to embed our approach to Environmental, Social and Governance (ESG) factors in all our actions.The Policy outlines the guiding principles for the role of SHP in using our core activities to support a healthy economy, environment and society. We hold ourselves accountable for acting on these issues and regularly report progress to our Stakeholders
3. Governance Framework
The Policy supports SHP’s Risk Management Policy and is a Board owned Policy. This Policy is intended to complement other SHP policies and guidelines including:
• Risk Management Policy
• Corporate Social Responsibility Policy
• Modern Slavery Policy
• Supplier Code of Conduct
Developed in consultation with Stakeholders.
This Policy assists investors to analyse the management of ESG risks within a part of their portfolio. It assists superannuation fund investors to discharge their legal obligations under the Superannuation Industry (Supervision) Act 1993 (“SIS Act”).
In addition to the requirements set out in the SIS Act, our partnering superannuation funds are also required to consider the Australian Prudential Regulation Authority’s (‘APRA’) approach to non-financial risks, including climate change risks.
4. Policy Responsibility ad Accountability
• SHP Board will be responsible for approving this policy.
• CEO will be accountable for adherence to the Policy.
• Company Secretary will be responsible for maintenance of the Policy.
• The SHP team is responsible for the operational requirements of the policy.
The Policy will be reviewed at a minimum every three years or in response to legislative or regulatory changes. It may be reviewed more frequently if the SHP Board deems it necessary.
5. Philosophy and Responsibility
We recognise that sustainability issues encompass some of the greatest challenges the world faces today. As an organisation, we commit to taking meaningful steps in our areas of influence to address and progress these challenges.
The implications of climate change, pollution, social inequality, gender inequality and weak institutions influence the pursuit of equitable prosperity.These are effectively framed by the United Nations Sustainable Development Goals (SDGs). We endorse the ambitions of the United Nations SDGs as a global blueprint for delivering a healthy economy, environment and society.
Our materiality analysis helps us to identify the ESG topics that have the potential to impact the long-term viability of our organisation and matter most to our Stakeholders.
The following 3 topic areas are considered our highest priority:
True sense of place
These align with the indicators of the following 6 SDGs:
SDG 3 Good health and Well-being
Target 3c Substantially increase health financing and the recruitment, development, training and retention of the health workforce in developing countries, especially in least developed countries and small island developing States
SDG 5 Gender Equality
Target 5a Undertake reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance and natural resources, in accordance with national laws.
SDG 7 Affordable and Clean Energy
Target 7.1 By 2030, ensure universal access to affordable, reliable and modern energy services.
Target 7.2 By 2030, increase substantially the share of renewable energy in the global energy mix.
SDG 8 Decent Work and Economic Growth
Target 8.1 Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries.
Target 8.2 Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors.T
arget 8.3 Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
Target 8.5 By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
SDG 9 Industry Innovation and Infrastructure
Target 9.1 Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
SDG 11 Sustainable Cities and Communities
Target 11.1 By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums
Target 11.3 By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated and sustainable human settlement planning and management in all countries
Target 11.6 By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management
Our Theory of Change begins with the core problem that too many Australians do not have housing that is appropriate for them.
Our Impact will be a meaningful contribution to the supply of appropriate housing
Allowing for People to thrive
To develop a true sense of Place
And to live in a healthy Planet
The below sets out the way we use key terms:
We take a broad view of our stakeholder group. For SHP our stakeholders include:
• End users of the housing provided. These may include specific targeted groups (“dedicated cohort”) or members of the general population. Their ‘stake’ in SHP is the housing product.
• Employees. Our team at SHP. Their ‘stake’ in SHP is the employment arrangements, income, safety, pride and purpose.
• Investors. Our partners providing institutional capital. Their ‘stake’ in SHP are the financial returns, management of risk, and related social outcomes.
• Suppliers. Every piece of our supply chain and that of our development partner. Their ‘stake’ in SHP are the revenues and safety.
• Housing partners. Community Housing Associations and Providers, Developers, Operators and Managers and the related ecosystem. Their ‘stake’ in SHP is the product, quality and safety.
• Communities. The people surrounding our end product and around where we work. Their ‘stake’ in SHP is the fair economic development, amenity, and safety.
• Governments. Local, State and Federal Governments. Their ‘stake’ in SHP is economic development, supply of the product and social returns
We use the term Supply Chain to mean the network of third parties between SHP and the end users that aid the production. The supply chain includes the flow of goods, materials and information.
We use the term value chain to describe the network that provide the full range of activities to deliver our mission. This includes all our Stakeholders and their processes.
We use the term Operations to describe our corporate activities and presence. Our SHP offices where our team mostly undertakes their activities but wherever and however they carry out those core activities –these are our operations.
We use the term Affordable Housing to describe housing that:• Is targeted at a specific cohort (i.e., very low, low, and/or moderate income households).
• Is affordable to the target cohort such that they do not experience housing stress (i.e., rent less than 30% of household income).
• Is made available with reference to income eligibility thresholds.
• Is flexible so as not to discourage tenants from seeking higher earning employment.
We use the term Sustainable Housing to describe the approach to the provision of housing that is:
• Built using processes and materials that reduce our environmental impact
• Designed using environmentally sensitive design principles to limit the environmental impact of their use
• Considerate of the activities of the people using the end product and how the housing can help them have a positive impact on their environment
• Designed and built to prolong the asset life and reduce depreciation • Has minimal impact on or enhances the natural surroundings
We use the term Suitable Housing to encompass the elements of housing that make it possible for people to thrive, this includes:
• Housing that is well located nearby existing infrastructure and employment opportunities or enablers
• Housing choices that offer security of tenure
• Housing and built form designs that offer safety of place
• Housing and built form designs that are high quality
• Housing and built form designs that promote community connectedness
The below sets out our interpretation of the ESG risks we must manage to achieve our goals.
• Reducing Greenhouse gas emissions and energy use in our operations and supply chain.
• Adapting to long-term changes in the Earth’s climate and its physical impacts on our business and our value chain,
• Reducing environmental impacts of waste across development operations.
• Helping clients reduce the environmental impacts of waste on an ongoing basis. Managing water use and abstraction sustainably across the value chain.
Pollution and disposal of waste products
• The impact that a company and its operations have on the local environment
• Sustainable land use and bio-diversity
We recognize the subsequent indirect impacts of climate change on social inequality and disruption
The effectiveness of a company within our sphere of influence in maintaining its ‘license to operate’ how well a company interacts and manages its relationship with the community and civil society
• Cultural heritage management
• Management of fair labour relations
• The extent to which we, and any company within our sphere of influence effectively manages and provides transparency on the safety of its workforce
• Adherence to international conventions (such as those specified by the International Labour Organisation, the UN Declaration of Human Rights, and the OECD Guidelines for Multinationals)
• Modern slavery/forced labour in company operations and supply chains
• Diversity, including gender diversity at senior levels within companies and on governing boards
• Diversity, including gender diversity within stakeholders served
• The structure and composition of the board of directors and the fitness and propriety of directors of our company and partner companies
• The structure and quantum of remuneration for directors and executives
• The provision of adequate transparency about the company’s operations, and a governance structure that demonstrates appropriate accountabilities
• The attitude and actions taken by a company to ensure that its officers are not involved in bribery or corrupt practices
• The policies and procedures held by a company to ensure transparency on the expected business practices
7. Ambition and Beliefs for our Areas of Influence
We maintain an Impact Management Plan that details our management and measurement approach to our areas of influence. Our ambition statements and our beliefs for these ESG areas are as follows:
7.1 Climate Change
We recognise that the climate emergency is the defining issue of our era. We also appreciate that as an organisation, supplier of capital for new housing, and leader in the affordable housing marketplace, we have a significant impact on the environment.
We are committed to reducing our environmental impact and seeking to operate sustainably for the benefit of our Stakeholders.
Our Climate Plan outlines our commitment to reducing our environmental impact. We are proactively rising to the climate challenge and working towards making a significant contribution in decarbonising the housing sector through our partners and our leadership; aiming for all assets under management to be net zero by 2042. There are significant areas of risk and uncertainty which may impact on our plans, including external enablers (including technology availability, policy support, market support for lower carbon products, raw materials availability and energy availability), and actions of thirdparties. In light of the long-time horizon involved, and the inherent uncertainty in possible policy, market and technological developments in the future, this is an area we expect to continuously develop and evolve in future years.
SHP’s operations are certified carbon neutral and we maintain a commitment to reducing the amount of carbon we offset in respect of our operations.
Our Climate Plan has four areas of action:
Data is at the heart of understanding our environmental performance. As our organisation grows it becomes more complex. Quality environmental data needs to be gathered and understood in order to make good environmental decisions.Stakeholders also require aggregated data to understand the broader impact.We will examine emerging technology to understand our carbon emissions, in particular to build a full picture of all of those that fall within Scope 3 – defined as carbon usage that we influence but cannot directly control generated through our business activities but by others. Over time we will build a clear view of other environmental performance indicators such as our impact on air pollution or biodiversity.
We consider the ways people can help us to improve our impact on the environment. Working closely with our supply chains and housing partners is a way that we can share knowledge and advance ambitions.Providing the capital for large scale energy efficient developments helps to reduce SHP’s carbon footprint but it also helps to reduce the end user’s environmental impact. An energy efficient home is one that is affordable to heat and cool and promotes good health and wellbeing. Ensuring we fund well designed community spaces is of equal benefit to both our end users and biodiversity and reducing air pollution has health benefits for society as a whole. Providing the capital for well-located buildings close to employment opportunities or enablers and therefore reduce commute times for end users promotes wellbeing and aids in transport related carbon reduction.
• Supply Chain
Our network of third-party suppliers touches everything we do as an organisation. The environmental credentials of the suppliers we use and the products we buy is important, but we are also seeking suppliers who can provide innovative solutions. We consider the entire lifecycle of what we fund, we value procurement processes that identify suppliers who are offering innovative ways to reduce our environmental impact. We want the suppliers in the SHP supply chain to share our climate ambition.
We consider the need to fund Sustainable Housing solutions that will work for the whole lifecycle of the properties, from how the homes are built, through to how they are maintained and how we provide stewardship to make sure they meet the vision of SHP.
Continually improving the environmental performance of our funded assets is crucial to the Climate Plan, our partners are a critical link to all aspects of sustainable asset management. Delivering new homes across a range of sites allows SHP to embed the environmental performance from the beginning. We aim to reduce the carbon embodied in the construction process. We aim to provide assets that run efficiently with minimal environmental impact. We aim to be good stewards and continually assess opportunities to further reduce our impact.
Monitoring and evaluation are critical to effective environmental decision making.
We commit to target-based reporting of environmental performance of our assets and continuous improvement of our environmental decision making.
7.2. Social Outcomes
We recognise that the achievement of our mission will do more for people and society than simply increase the supply of housing. Housing is a fundamental human right that allows for people to thrive. A home is not just a physical shelter, a home provides for a level of psychological wellbeing. We think about our social impact through an outcome lens and have established a unique measurement framework to support our Theory of Change. While we know the number of houses we fund and deliver is important, we want to count how much it means for people to be housed. Social impact is all about people. We progress social impact through our operations and through our core business. Our operational team’s commitment to corporate social responsibility is detailed the SHP Corporate Social Responsibility Policy. We are committed to progressing positive impacts on people, their wellbeing and quality of living. We believe this area of outcome management is not well established in Australia, we recognise our leadership in this space can help others and we commit to open measurement to enable the housing ecosystem to target positive change.
Our Impact Management Plan has four areas that matter most to people:
People’s wellbeing is significantly improved if they can live close to their employment opportunities (prevalence of jobs) or employment enablers (prevalence of social infrastructure like early childhood education).In Australia, many of our essential workers cannot afford to live in well serviced urban environments with appropriate proximity to their workplaces1. According to the latest Household, Income and Labour Dynamics in Australia (HILDA) survey, workers in capital cities spend an average of 66 minutes commuting to and from work each day. Vic Health evidence suggests that time spent sedentary is consistently associated with premature mortality. “Perceived stress during or immediately after commuting increases with commute time, lack of predictability or control associated with commuting, and crowding during the commute journey. Commuting is also linked with negative health outcomes not directly related to the commute itself, such as short sleeping times and low self-reported health.” Time spent on a commute means less time available for health-promoting activity negatively impacting people’s ability to thrive.
We think people should have greater housing opportunities and choose locations that matter to them.
People’s wellbeing is intertwined with their financial resilience.A household can be described as being in ‘housing stress’ if more than 30% of the household income is being spent on housing costs. The costs associated with the provision of housing will for many people be the largest ongoing expense they will occur.The impact of housing stress is more acute in low-income groups.“Stressed renters and buyers may face the need to make trade-offs in relation to housing quality and location. This can impact on health and family wellbeing through increased commuting, social polarisation and pressures on household budgets” (Yates & Milligan, 2007). One Australian study found that people in rental accommodation were more likely than homeowners to report fair/poor health and visit the doctor more often, but the cause-and-effect relationship is unclear (AHURI, 2002). Cummins, Woerner, Tomyn, Gibson and Knapp (2006) also found that worrying over not being able to make mortgage or rental payments contributes to significant damage to wellbeing. More generally, the wellbeing of renters was well below the normal wellbeing range, particularly for older renters (46-55 years) and sole parents.3The supply of affordable housing at scale is a critical factor to ensure less people experience housing stress and the indirect health impacts that result from this.
We refer to security in two ways:
• Security of tenure. In a study by AHURI (2006) security of tenure was found to result in less residential mobility, which in turn meant residents felt more in control, more settled and less stressed. As a result, they had more "mental room" to focus on things such as relationships or their children's education.
• Feeling Safe. Homes should offer a protective, safe and intimate refuge, they should also offer a community, place to socialise and build a collective sense of safety. The outcomes of security can be built into the design of the offering and the management of the asset. We will work with our partners to achieve this.
Good quality spaces and finishes add to the ontological feeling of security and pride.“One large-scale, cross-sectional, European housing and health study by the World Health Organization has indicated a relationship between depression/anxiety and living in a dwelling that: has insufficient protection against external aggressions, e.g., cold, draughts, noise; has little space for solitude or freedom; lacks light and/or an external view; does not facilitate socialisation; and is prone to vandalism. Low socioeconomic status, fear of losing dwelling, an inability to move due to financial constraints, and a bad image of the neighbourhood also contributed to anxiety and depression (Bonnefoy et al. 2004).”
Studies have shown that there is an intrinsic link between the built environment and mental health. SHP focuses on funding quality housing solutions that aids social interaction through community spaces, mental wellbeing through air and light, and promotes a sense of pride in the dwelling to break the stigma of affordable housing.
Our unique approach to measurement is captured in the Impact Management Plan which takes these areas of focus and produces outcome measures
SHP improves wellbeing across its dedicated cohort.
- Who is housed?
- What is the affordability %?
- How is the cohort wellbeing changing?
Sense of Place
SHP funds quality infrastructure in enabling environments.
What is the turnover #?
What is the Greenstar rating?
How do residents rare the housing suitability?
SHP leads on corporate citizenship in the context of a climate crisis.
How much capital is mobilised per year?
How is the footprint of SHP assets changing?
What is the climate resilience of SHP assets?
7.3. Governance Standards
The role and purpose of organisations can only be achieved through strong processes and intentional inclusive oversight. We have no tolerance for poor corporate governance in our organisation or our supply chain. Research on governance factors has shown time and again that companies with poor governance practices are prone to mismanagement and risk their ability to grow value sustainably over time. We prioritise partners who can demonstrate a leading approach or position in the following 4 criteria:
1. Corporate governance
a. Board structure
b. Experience and tenure of Board and C Suite
c. Executive compensation transparency and practices
d. Commitment to a living wage
2. Codes of business conduct
a. Codes of corporate conduct transparency and practice
b. Safety first integration, policy and practice
c. Use of contract labour
d. Ability for workers to organise
e. Reporting on breaches
3. Supply chain management
a. Transparency on suppliers
b. Modern Slavery approach and policy
c. Supplier code of conduct
d. ESG integration in supply chain
e. Transparent data
a. Gender balance in leadership and workforce
b. Equal compensation practices and reporting
c. Policies promoting gender equality
d. Commitment, transparency and accountability
e. Considerations of diversity beyond gender
We have a particular focus on how our supply chain partners address safety of workers. Safety incidents come at significant personal cost to employees and financial costs to employers. For employers, these incidents bring a loss of productivity and operational performance while exposing the company to potential compensation claims. Companies, and those who enable the companies,risk losing their social licence to operate if such incidents are systemic as a result of poor governance.
We take a threshold approach to some matters of corporate governance, like safety. On others, we use our leadership and position in the supply chain to influence for improvements.
7.4. Gender Lens Approach
The provision of innovative, institutional and scalable housing solutions has a gendered outcome, so we know it needs a gender lens approach from the outset.
Single elderly women (over 60) in Australia make up the lowest income earning group in the HILDA data6, they are at greatest risk of persistent poverty. Between 2011 and 2016, the number of older women experiencing homelessness grew 31 percent. T
o provide more housing choices to Australians we will be intentional about shifting the persistent statistics for some cohorts, especially women.
We commit to working with organisations to design a gender lens approach to the execution of our mission, vision and purpose. This is detailed in our Gender Lens Framework available end 2023.
8. Principle Adverse Impact Management
We recognise that nearly all types of economic activity have the potential to effect various sustainability outcomes. We aim to manage the risk connected to potential adverse sustainability impacts in the following ways:
1. Monitoring and evaluating the PAI indicators on our Impact Management Plan.
a. The SHP team monitor the selected PAI Indicators in the Impact Management Plan on an ongoing basis. Outlying data on specific indicators will be subject to further analysis and potential action
2. Stewardship activities
a. SHP uses our emerging leadership in the area of affordable housing supply to engage with Stakeholder and Supply Chain participants, build long term sustainable relationships and be effective stewards of assets.
To mitigate adverse impacts, we will take an engagement approach where possible.
8.1. Prioritising Principle Adverse Impact
The focus SDGs are the starting point for SHP’s prioritisation of mitigation of adverse impacts. Our ambition in relation to climate change, human rights, health and wellbeing are paramount.
At an asset level, principle adverse impacts are prioritised given the focus SDG objectives, provided that all minimum standards are met
.A Principle Adverse Impact Statement will form a part of our public reporting from 2024 onwards when data is available. This will be subject to annual review.
9. Impact Measurement
After detailed review and analysis, the following global and Australian industry frameworks and standards are the most appropriate to align with to verify and validate SHP’s ESG impact.
Reporting will be undertaken as soon as twelve months of underlying data is available.
• Green Star – rates environmental performance of SHP-funded housing
• TCFD – informs SHP assessment and disclosure of climate-related risks when underlying data is available
• UN PRI – public declaration and reporting of SHP’s commitment to responsible investment
• Climate Active – certifies SHP as a Climate Neutral organisation
• SBTi (Science Based Targets) – informs SHP approach to decarbonisation
• The Standard – informs method for SHP accounting of Scope 3 greenhouse gas emissions (built on GHG Protocol)
• The Collective Social Impact Framework – ‘The Framework’ connects SHP climate actions with social impact
• GRESB – Global ESG impact benchmarking of real estate assets
• IFRS – informs SHP assessment and disclosure of sustainability-related risks (including climate)
• CDP – informs SHP’s reporting of environmental impact