PCT Climate Related Disclosures 2024
Precinct Auckland Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Generator, 30 Waring Taylor Street, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
NZX announcement – 18 October 2024
PCT Climate Related Disclosures 2024
Precinct Properties Group (NZX: PCT) has today published its Climate Related Disclosures for
the reporting period ended 30 June 2024.
This report presents Precinct's first Climate Statement for the FY24 reporting period in
accordance with Aotearoa New Zealand Climate Standards issued by the External
Reporting Board (XRB).
PCT’s 2024 Climate Related Disclosures are available on Precinct’s website at:
https://www.precinct.co.nz/environmental-social-governance/climate-environment
Ends
For further information, please contact:
Scott Pritchard
Chief Executive Officer
Mobile: +64 21 431 581
Email: scott.pritchard@precinct.co.nz
George Crawford
Deputy Chief Executive Officer
Mobile: +64 21 384 014
Email: george.crawford@precinct.co.nz
Richard Hilder
Chief Financial Officer
Mobile: +64 29 969 4770
Email: richard.hilder@precinct.co.nz
Precinct Auckland Head Office Wellington Office
E hello@precinct.co.nz Level 12, 188 Quay Street, Auckland 1010 T 0800 400 599 Generator, 30 Waring Taylor Street, Wellington T 0800 400 599
W www.precinct.co.nz PO Box 5140, Auckland 1141, New Zealand F +64 9 927 1655 PO Box 2, Wellington 6140, New Zealand F +64 4 494 2267
About Precinct
Listed on the NZX Main Board under the ticker code PCT and ranked in the NZX top 30, Precinct
is the largest owner, manager and developer of premium city centre real estate in Auckland
and Wellington. Precinct is predominantly invested in office buildings and also includes
investment in Generator, Commercial Bay retail and a multi-unit residential development
business. As at 30 June 2024, Precinct's directly-held portfolio (on-completion value) totalled
$3.3 billion and Precinct had a further $1.6 billion of capital partnering assets under
management: $1.1 billion of these were assets in which Precinct holds a minority interest; with
the balance being managed on behalf of third party partners. For information visit:
www.precinct.co.nz
On 1 July 2023, Precinct effected a restructuring to create a stapled group structure. A stapled
group comprises two listed parent companies whose shares are held by the same shareholders
in equal proportions. The shares in each parent company can only be transferred or dealt with
together.
Shareholders in Precinct Properties Group (“Precinct”) hold an equal number of shares in
Precinct NZ and Precinct Investments Limited and these shares can only be dealt with
together. The stapled issuers are described as “Precinct Properties NZ Ltd & Precinct Properties
Investments Ltd (NS)” on NZX systems and the ticker code for the stapled shares remains PCT.
---
2024
Climate
Related
Disclosures
precinct.co.nz
Contents
Introduction04
Statement of Compliance06
Governance08
Strategy14
Risk Management30
Metrics and Targets34
Appendices41
Glossary51
Directory52
Climate Related Disclosures03
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
03
Introduction
Precinct Properties Group04
This report presents Precinct's first Climate
Statement for the FY24 reporting period
in accordance with Aotearoa New Zealand
Climate Standards issued by the External
Reporting Board (XRB):
•NZ CS 1: Climate-related Disclosures
•NZ CS 2: Adoption of Aotearoa New Zealand
Climate Standards
•NZ CS 3: General Requirements for Climate-
related Disclosures
As a business, Precinct is committed to creating a
more sustainable environment. This means identifying
and assessing the risks and opportunities presented by
climate change. We recognise our role as a long-term
owner, manager and developer of real estate, as well
as an employer. We are taking a thoughtful approach
to climate change action, as well as disclosure. Precinct
is fully supportive of a low-carbon future for Aotearoa
New Zealand.
Climate change is important to Precinct as a real estate
organisation due to its potential impact on property
values, insurance costs, and risk management. As
temperatures rise and extreme weather events potentially
become more frequent and severe, properties in general
face increased vulnerability to damage from floods,
storm events, wildfires, and other natural disasters. Our
organisation takes this into consideration, alongside
transition risks and climate change opportunities, when
assessing investment risks and making strategic decisions
about property development and management. We
understand and utilise current advice about the various
ways we can address climate change to enhance the
long-term sustainability and profitability of our business.
This report is approved on behalf of Precinct Properties
New Zealand Limited and Precinct Properties Investments
Limited on 17th October 2024.
Anne Urlwin
Independent Director
and Chair
Nicola Greer
Independent Director
and Chair of the
Environmental, Social &
Governance Committee
About Precinct
Listed on the NZX Main Board under the ticker
code PCT and ranked in the NZX top 30, Precinct
is the largest owner, manager and developer of
premium city centre real estate in Auckland and
Wellington. Precinct is predominantly invested in
office buildings and also includes investment in
Generator, Commercial Bay retail and a multi-
unit residential development business. As at
30 June 2024, Precinct's directly-held portfolio
(on-completion value) totalled $3.3 billion and
Precinct had a further $1.6 billion of capital
partnering assets under management: $1.1 billion
of these were assets in which Precinct holds
a minority interest; with the balance being
managed on behalf of third party partners.
For information visit: www.precinct.co.nz
Disclaimer
This report sets out Precinct’s current understanding of,
and response to, climate-related risks and opportunities
as they impact Precinct as at 17th October 2024, and
the current and anticipated impacts of climate change,
which may evolve over time. Climate change is an
evolving challenge, with high levels of uncertainty.
By its nature, this report contains forward looking
statements, including climate scenarios, targets,
assumptions, climate projections, forecasts, statements
of future intentions, estimates and judgements. Forward
looking statements involve assumptions, forecasts and
projections about Precinct’s present and future strategies
and the environment in which Precinct will operate in
the future, which are inherently uncertain and subject
to limitations. While Precinct has taken all reasonable
care in making these forward-looking statements, these
statements, together with the risks and opportunities
described in this report, and our strategies to achieve
our targets, may not eventuate or may be more or less
significant than anticipated. There are many factors that
could cause actual results, performance or achievement
of climate-related metrics and targets to differ materially
from that described, many of which are outside of
Precinct’s control, including economic and technological
viability, as well as climatic, government, consumer, and
market factors.
Nothing in this report should be interpreted as legal,
financial, tax, earnings or other advice or guidance.
Climate Related Disclosures
05
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Statement of
Compliance
Precinct Properties Group06
Precinct Properties New Zealand Limited (PPNZ) and
Precinct Properties Investments Limited (PPIL) (together,
Precinct) are both climate reporting entities (CREs) under
the Financial Markets Conduct Act 2013 (FMCA).
PPNZ and PPIL have been granted an exemption from
the FMCA, the Financial Markets Conduct (Climate
Statements – Precinct Properties Group) Exemption Notice
2024 (Exemption Notice), which permits PPNZ and PPIL,
subject to conditions set out in the exemption notice,
to prepare climate statements in respect of Precinct,
while they remain stapled (in place of separate climate
statements for each company).
These climate-related disclosures comply with the
Aotearoa New Zealand Climate Standards (NZ CS 1, 2,
and 3) issued by the External Reporting Board, subject to
the Exemption Notice.
In preparing this report, Precinct has elected to use the
following exemptions as referenced in NZ CS 2:
Adoption Provision 1 - Current Financial Impacts
•Paragraph 12(b) of NZ CS 1 Climate-related
Disclosures requires the following disclosure: the
current financial impacts of its physical and transition
impacts identified in paragraph 12(a).
•Paragraph 12(c) of NZ CS 1: if the entity is unable to
disclose quantitative information for paragraph 12(b),
an explanation of why that is the case.
Adoption Provision 2 - Anticipated Financial Impacts
•Paragraph 15(b) of NZ CS 1 Climate-related
Disclosures requires the following disclosure: the
anticipated financial impacts of climate-related risks
and opportunities reasonably expected by the entity.
•Paragraph 15(c) of NZ CS 1: a description of the
time horizons over which the anticipated financial
impacts of climate-related risks and opportunities
could reasonably be expected to occur.
•Paragraph 15(d) of NZ CS 1: if the entity is unable to
disclose quantitative information for paragraph 15(b),
an explanation of why that is the case.
Adoption Provision 3 – Transition Planning
•Paragraphs 16(b) and 16(c) of NZ CS 1 require the
following disclosure: the transition plan aspects of
its strategy, including how its business model and
strategy might change to address its climate-related
risks and opportunities; and the extent to which
transition plan aspects of its strategy are aligned with
its internal capital deployment and funding decision-
making processes.
•Precinct has elected to use the Provision 3 exemptions
for this first year of reporting on the basis that, while
key aspects related to transitioning the business have
been introduced in line with identified climate-related
risks and opportunities, these are not yet exhaustive in
consideration of all available areas identified. Precinct
looks forward to progressing this work for the FY25
climate statement. See the Strategy section for further
information on our progress to date.
Adoption Provision 4 – Scope 3 GHG emissions
•Paragraph 22(a)(iii) of NZ CS 1 requires the following
disclosure: greenhouse gas (GHG) emissions: gross
emissions in metric tonnes of carbon dioxide
equivalent (CO2e) classified as scope 3.
•Precinct has adopted the exemptions allowed for in
Provision 4 for this first year of reporting on the basis
that, while Scope 3 is reported for FY24, the coverage
for all Scope 3 reporting categories is not yet
comprehensive. The unreported Scope 3 categories
are identified in the Metrics & Targets section of this
report. Precinct looks forward to progressing this work
ahead of the first mandatory assurance required for
our FY25 climate statement.
Adoption provision 6 - Comparatives for metrics
•Paragraph 40 of NZ CS 3 requires the following
disclosure: For each metric disclosed in the current
reporting period an entity must disclose comparative
information for the immediately preceding two
reporting periods.
Adoption provision 7 - Analysis of trends
•Paragraph 42 of NZ CS 3 requires the following
disclosure: An entity must disclose an analysis of
the main trends evident from a comparison of each
metric from previous reporting periods to the current
reporting period.
Refer to Appendix 1 for a list of external parties and
a description of the services provided in preparation of
this report.
Climate Related Disclosures
07
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Governance
Precinct Properties Group08
This section outlines the role of Precinct’s Board of Directors in
overseeing climate-related risks and opportunities and the role
of Precinct Management in assessing and managing climate-
related risks and opportunities.
Climate Related Disclosures09
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Governance
Board of Directors
The governance body responsible for oversight of
climate-related risks and opportunities at Precinct is our
Board of Directors. Full Director bios can be found on
Precinct's website.
Precinct’s Board of Directors established an ESG
Committee in May 2021 to assist with implementing and
monitoring the Company’s strategic objectives in relation
to ESG issues and other key risks (including sustainability
and climate-related risks) having regard to Precinct’s
circumstances and portfolio of businesses. However, the
Board retains ultimate oversight of climate-related risks
and opportunities. The Board evaluates the performance
and work of the ESG Committee together with the Chair
of the ESG Committee. As part of this process, the Board
undertakes an annual review of the ESG Committee’s
objectives and activities in terms of its responsibilities as
set out in the ESG Committee Charter.
Upon the recommendation of the People and
Performance Committee, the Board approves Precinct’s
people-focussed policies and processes to support
Precinct to deliver on its long-term strategies and goals.
This includes evaluating the competencies required of
Directors and setting performance-based metrics that
link executive remuneration to Precinct’s climate-related
targets as part of the annual remuneration process and
short-term incentive framework.
The Board of Directors is informed on climate-related
risks and opportunities by Management on a quarterly
basis through a standing climate-related section in
Board reporting with further in-depth updates provided
during bi-annual ESG Committee meetings. In these bi-
annual ESG Committee reports, Management provides
the Board of Directors with an update on progress against
established material risks and opportunities which are
addressed accordingly. The Board also considers climate
risks and opportunities on an ad-hoc (out of cycle) basis
as needs arise, for example in relation to any acquisition
as part of the Board sign-off process on due diligence
and feasibility, and in decisions to divest properties. A
table setting out the number of Board and Management
engagements during FY24 is set out in Appendix 5.
As part of its annual business planning, the Board
integrates climate-related risks and opportunities into
its development of Precinct’s overall ESG strategy,
framework and initiatives.
The Board of Directors also has oversight over Precinct’s
performance against its metrics and targets. The
introduction of new, or adjustment of existing, significant
and strategic climate-related metrics and targets is
discussed and agreed by the Board, having received the
recommendation of the ESG Committee. Once agreed,
Precinct’s performance against its climate-related metrics
and targets is discussed as a standing item within the
ESG Committee reporting.
Board of Directors skills and competencies
Precinct’s current Directors' skills matrix can be found
in Precinct’s 2024 Annual Report available on Precinct's
website. The Directors' skills matrix reflects the director
attributes which the Board considers are required
to oversee Precinct’s strategic business objectives.
Sustainability, which includes climate-related matters, is
one of the ten capabilities against which directors assess
their current skills.
During the year, Anne Urlwin, Chair of the Board,
participated in the New Zealand Institute of Directors’
Advanced Climate Governance Programme and Nicola
Greer, Chair of the ESG Committee, completed the
New Zealand Institute of Directors’ Climate Change
Governance Essentials Course.
Management informs the Board of Directors of
recommended climate-related training and education
within ESG Committee meetings.
Precinct Properties Group
10
ESG Committee
The ESG Committee assists the Board's oversight of
climate-related risks and opportunities and is comprised
of four independent directors. During FY24 the ESG
Committee held two committee meetings, each followed
by an ESG Committee report to the Board. Precinct’s
CEO, Deputy CEO, CFO, Head of Sustainability and other
key representatives across the business also attended
the meetings to set objectives, review Precinct’s Climate
Risk register, track updates and discuss and approve
current and future strategic initiatives which help manage
Precinct’s impacts on the economy, environment and
people. The ESG Committee can seek independent
professional advice and invite expert third parties to
attend meetings to ensure appropriate climate-related
skills and competencies are available to the Board.
The Committee is guided by the ESG Committee Charter
(available in Precinct's Corporate Governance Manual
on Precinct's website), which requires the Committee to,
among other things:
•review and recommend for Board approval the
climate-related strategy, framework and initiatives;
•oversee the implementation of Precinct’s
Sustainability Policy and practices;
•oversee the identification, preparation and review
of climate related risks and opportunities ahead
of incorporating into the Audit & Risk Committee
risk register;
•assess and recommend to the Board any changes
to Precinct’s climate change risk management
framework and processes; and
•assist in the review of other key internal policies
to support effective consideration of climate-
related issues.
The ESG Committee recommends climate-related metrics
and targets to the Board. The Board approves metrics
and targets, except those that are operational in
nature, which do not require Board approval. Once
approved, the Board delegates responsibility for
monitoring performance against climate-related targets
to the ESG Committee, the ESG sub-committees
and Management. The ESG Committee also reviewed
and recommended the Board approve the climate
scenarios in the Strategy section of this report. Following
the recommendation of the ESG Committee, the Board
approved the climate scenarios. As outlined in the ESG
Committee Charter, the Chair of the ESG Committee is
required to report back to the Board no less than twice
a year on key points of discussion at ESG Committee
meetings, including the progress toward strategic
climate-related targets and the efficacy of associated
performance metrics, and present the recommendations
of the ESG Committee at the next scheduled meeting of
the Board.
Audit and Risk Committee
The Audit and Risk Committee assists the Board
in overseeing Precinct’s climate-related risks. The
Committee oversees Precinct’s risk register and reviews
it at least annually with Management to track existing
risks and the emergence of new risks. Key climate-related
risks are included in Precinct's risk register and reported
to the Board along with an evaluation of the strategic
ramifications of the risks.
Following the recommendation of the ESG Committee, the
Audit and Risk Committee’s role with respect to oversight
of the CRD process includes:
•reviewing draft climate related
disclosure documentation;
•ensuring due process is followed in order to achieve
compliance with FMCA/NZCS1-3 requirements;
•engaging external providers to provide verification
and/or assurance as required; and
•recommending that the Board approve the CRD.
The Audit and Risk Committee meets every quarter (FY24:
four meetings) and reports back to the Board in respect
to financial reporting, compliance and risk management
which includes climate-related risks.
Climate Related Disclosures
11
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Governance
Executive and Senior Management
Led by Precinct’s Chief Executive Officer, Precinct’s
Executive team is collectively responsible for the execution
and delivery of Precinct’s sustainability strategy, including
managing climate-related risks and opportunities.
Management’s role in assessing and managing climate-
related risks and opportunities is to ensure the impacts of
transition and physical risks to the business are reported
and integrated into key workstreams. Management
updates the Board on a regular basis through the ESG
Committee and the Audit and Risk Committee.
Precinct's Chief Financial Officer oversees Precinct’s
sustainability strategy and, together with the Executive
and Senior Management, is primarily informed about
climate-related risks and opportunities through updates
from the Head of Sustainability through the bi-
monthly ESG Business Performance Committee (BPC).
Performance against climate-related metrics and targets
along with updates on Precinct's management of
climate-related risks and opportunities are presented
based on key workstreams of four internal ESG sub-
committees which are detailed below. Precinct’s Head of
Sustainability reports directly to Precinct’s Chief Financial
Officer and is responsible for managing and assessing
Precinct’s climate-related risks and opportunities. Precinct
has a dedicated ESG Analyst and seeks advice from
specialist external sustainability consultants as and
when required.
The full Executive Team and bios can be found on
Precinct's website.
ESG BPC and ESG Sub-Committees
Precinct’s ESG BPC informs the Executive, Senior
Management and the ESG sub-committees on climate-
related initiatives, risks and opportunities. The Head of
Sustainability provides updates on progress from the
ESG sub-committees at the ESG BPC. Precinct’s ESG sub-
committees are responsible for assessing, actioning and
driving climate-related issues (including climate-related
risks and opportunities), reviewing performance against
climate-related metrics and targets and incorporating
Precinct’s long-term sustainability strategy into business
activities. The ESG sub-committees comprise four key
focus areas as outlined below and include representatives
from various parts of our business:
•Building Developments (meet bi-monthly);
•Building Operations (meet monthly);
•Corporate, Legal & Marketing (meet monthly); and
•Finance & Acquisitions (meet bi-annually).
Precinct Properties Group
12
Climate Related Disclosures13
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
13
Strategy
Precinct Properties Group14
This section describes
the scenario analysis
undertaken by Precinct,
the climate-related risks
and opportunities we have
identified, as well as the
current and anticipated
impacts of climate change,
and how our business is
taking action to position itself
towards a low-emissions,
climate-resilient future.
Precinct recognises sustainability (including
managing climate change risks and
opportunities) is an important part of our
business activities and our sustainability
strategy has been designed in parallel with
Precinct's broader business strategy.
Our business model is designed to generate,
and regenerate, sustainable value.
We have defined sustainability at Precinct as
enabling sustainable and successful business,
improving our operational performance and
incorporating sustainable design across our
portfolio of properties.
Our sustainable value is fuelled by Precinct's
principles of success:
• focus on strategic locations;
• maintain and grow client occupier relationships;
• invest in quality assets and environments;
• maintain a long-term view;
• leverage Precinct’s people and its platform; and
• identify, cultivate, and maintain strong long
term capital partnerships.
Precinct has maintained our focus on climate
change as one of the core components of our
materiality assessment initially completed in 2019
and validated annually by a desktop review.
Precinct’s ‘double materiality’ approach
As proposed by the XRB (NZ CS3 [38]), Precinct has
adopted a broad approach to assessing and acting on
current climate-related impacts across our operations.
Precinct has summarised our approach to identifying and
managing climate risks by assessing both:
•Impacts on us – in considering how our business will
be affected by climate change, we have pursued
detailed analysis across our portfolio to understand
the extent of physical and transition risks and
opportunities expected to occur under the three
climate-related scenarios detailed in this section.
•Impacts by us - by analysing our Scope 1, 2 and
full value chain Scope 3 emissions, we are able to
better understand the impact our business has on
contributing to our changing climate. This also assists
us to prioritise our efforts to make a difference in our
supply chain alongside our industry peers and more
broadly across industry.
This approach is sometimes referred to as ‘double
materiality’, and refers to an approach to assessing
climate impacts including both the impacts a company
faces due to the effects of climate change, as well as
the impacts that the company’s activities may have on
climate change. Applying that concept to Precinct, we
understand that our business will be affected by climate
change and we also understand that our actions as a
member of the real estate industry contribute to climate
change and therefore its impacts.
Climate Related Disclosures
15
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Strategy
Climate scenario analysis
To understand the resilience of Precinct’s business model
and response to climate-related risks and opportunities,
we have relied on internal resources and working groups
as well as external advice to develop our climate
scenarios. These climate scenarios were developed and
reviewed by the ESG Committee and were approved by
the Board on the ESG Committee’s recommendation.
Climate-related risks and opportunities are integrated
as part of Precinct's strategy processes. However, the
climate scenario analysis is currently a standalone
process. Precinct will look to integrate this as part of our
annual strategy and business planning moving forward.
To support the establishment of a consistent baseline
for the property industry in New Zealand, Precinct
participated in workshops organised by the New Zealand
Green Building Council. These workshops, facilitated by
engineering firm Beca, aimed to develop three climate
scenarios for the Construction and Property sector. The
resulting scenarios were published in May 2023 by the
New Zealand Green Building Council in its report,
Climate
Scenarios for the Construction and Property Sector:
Ngā Horopaki Āhuarangi mō te Rāngai Hanganga me
ngā Whare.
A summary of the sources of data used to prepare
these climate scenarios are set out in Appendix 2. The
full NZGBC report, which includes a detailed description
of the scenario development process, data sources,
and further information regarding the assumptions and
data behind each scenario (including for example
sequestration from afforestation and nature-based
solutions), is available here.
Like many of our peers in the Construction and
Property sector, Precinct has adopted the narrative, key
assumptions, and conditions outlined in these climate
scenarios. We believe these scenarios are well-suited
for assessing the resilience of our business model and
strategy, as they were developed specifically for our
sector with guidance from the New Zealand Green
Building Council, and aligned with the working draft of
the XRB’s guidance, Scenario Analysis: Getting Started at
the Sector Level (2022).
We consider the scenarios represent a plausible
and challenging description of how the future may
develop based on a coherent and internally consistent
set of assumptions about key driving forces and
relationships impacting the Construction and Property
sector, covering both physical and transition risks
alongside anticipated opportunities.
However, Precinct acknowledges that while these
scenarios provide a consistent baseline, individual
property companies are responsible for interpreting and
applying them as best suited to their specific operations.
Accordingly, Precinct has conducted its own assessment
of the sector scenarios to identify areas material to
our business. Through this process, we have identified
key risks and opportunities relevant to our operations.
In addition to utilising the scenarios prepared by the
NZGBC, Precinct has undertaken our own modelling
and conducted workshops using the Construction and
Property Sector Scenarios as set out in further detail in the
Risk Management section of this report. Inputs to our own
modelling have utilised the same anticipated scenarios
and time horizons to ensure consistency.
Precinct defines time horizons based on the life cycle of its
assets. Generally, the overall economic life of a building
structure is between 50 - 60 years. Consistent with the
NZGBC sector specific scenarios, the table below outlines
the time horizons used by Precinct in our approach to
scenario analysis:
Time HorizonPeriodDescription
Short-termPresent
- 2030
Short-term risks are those
that may impact near-term
financial results including
income, operating costs
and increased repairs
and maintenance.
Medium-
term
2031 -
2050
Medium-term risks include
climate related impacts that
may impact our financial
results from 2030 onward.
These impacts may require
Precinct to adjust core
elements of its strategy.
Long-term2051 -
2100
Precinct’s assets generally have
a 50-year life cycle, therefore
buildings in planning, under
development and approaching
completion will be subject to
these long-term conditions and
the risks that may impact
the financial viability and long-
term strategy of Precinct.
Precinct Properties Group16
An orderly transition to a decarbonised society by 2050, resulting in a Net Zero grid with near-zero emissions,
would significantly impact both the economy and energy sector. International energy-intensive industries would
be attracted, boosting industrial activity. However, electricity prices would rise due to increased pressure on the
grid, and there would be shortfalls in generation capacity as demand for electricity grows. It is expected that
assets located in central CBD locations will be prioritised for service restoration. Additionally, the cost of carbon
would increase to $250 per tonne of CO2-equivalent, reflecting the higher cost of emitting carbon in this new
landscape. In addition to transitioning to a Net Zero grid by 2050, society will experience a range of impacts due
to increased rainfall intensity (6%) and the necessary medium-term capital expenditure for fossil fuel removal and
energy efficiency retrofits driven by short-term carbon disclosures. Contractors will shift their focus to refurbishments
rather than new builds due to the high carbon intensity of new construction projects. There will be a significant rise
in investment in Carbon Capture and Storage (CCS) technology as one of the primary decarbonisation tools for
hard-to-abate fossil fuel use. Short-term pressures from investors and customers to meet the 1.5-degree reduction
target will lead to financial penalties from lenders, including restricted access to capital, government funding
limitations, and adjusted interest rates. Sustainable and decarbonised buildings will be prioritised for premium
occupiers subject to their own net zero and climate-related targets. Additionally, the number of hot days will
increase by 40%, and a reduction in urban sprawl to decarbonise infrastructure will result in more inner-city
high-rise residential developments. Properties in floodplains or areas with unstable ground conditions will face
rising insurance premiums above inflation and a retreat by 2050. There will be public and private support for
workers in high-intensity industries and professions. New Zealand’s population is expected to grow to 6.13 million by
2050, with 23.3% of the population being elderly. In consideration of carbon sequestration from afforestation and
nature-based solutions, a coordinated effort between government, businesses and communities to preserve and
enhance ecosystems would take place led by government incentives, targeted projects and a well considered land
use strategy. These strategies would likely incorporate native planting and regeneration projects.
Climate Related Disclosures
17
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Strategy
A disorderly transition to a decarbonised society would result in severe consequences for both the environment and
the economy. The increase in the severity of weather events, coupled with a decline in public and private adaptation
measures, would lead to declining property values and rising insurance premiums. Delays in action during the 2020s
would cause a surge of capital to flood the market around 2030, incentivising rapid innovation. Assets that fail to
decarbonise on schedule would be offloaded in large quantities due to abrupt short-term regulations. The carbon
price would spike to $250 per ton of CO2-e by 2050, leading to significant gaps in equality and industry compliance.
Electricity prices would experience sharp increases due to the need for fossil fuel peak demand generation, resulting
in considerable generation capacity shortfalls as the grid transitions to higher electricity end-use demand over
a shorter time horizon. Budget constraints for energy security related infrastructure will lead to capital spend
concentrated in CBD areas with assets located in central CBD locations also prioritised for service restoration. Hard-
to-abate construction materials would not decarbonise using CCS technology until the medium term, causing high
prices and supply shortages for low-carbon materials. In 2030, the government would issue mandatory low-carbon
building regulations to an unprepared industry, drastically raising construction and retrofit costs overnight. Rapid
decarbonisation requirements from 2030 would exacerbate inequality and cause community disharmony. Massive
supply chain disruptions would force New Zealand organisations to participate more in the global market. However,
the global market may not see New Zealand as a viable trading partner where higher volumes of decarbonised
products would be more lucrative in larger markets. Additionally, there would be increased investment in road-
based infrastructure, followed by a rapid shift in transport regulations to decarbonise transport by 2030. In a
disorderly scenario, carbon sequestration from afforestation and nature-based solutions would unfold through
fragmented and inconsistent efforts, with limited coordination between government, businesses, and communities.
Government incentives and land use strategies would be unclear or poorly implemented, leading to ad-hoc projects
that often prioritise short-term gains over long-term ecosystem preservation.
Precinct Properties Group
18
A ‘hot house’ transition to a decarbonised society would lead to an increase in the severity of weather events and
a decline in both public and private adaptation measures. Extreme wind speeds (increasing by 5-10%), rainfall
intensity (increasing by 8.6%), and a 100% increase in hot days would become more common. Global delays
in decarbonisation efforts would cause disjointed capital supply, hindering market funding for decarbonisation.
Government support would be redirected to critical infrastructure and services, leaving other assets increasingly
stranded from 2030. The carbon price would remain low at $35 per ton of CO2-e by 2050, providing little incentive
for significant carbon emission reductions from major users. Sharp increases and price shocks in electricity prices
would occur to accommodate fossil fuel peak demand generation, with considerable shortfalls in generation
capacity exacerbated by severe weather impacts on energy supply. Budget constraints for energy security related
infrastructure will lead to highly reactive capital spend concentrated in CBD areas with critical assets located in
central CBD locations prioritised for service restoration. Procuring decarbonised materials on the global market
would be nearly impossible for New Zealand, as larger markets would be prioritised first.
In a hot house scenario, carbon sequestration from afforestation and nature-based solutions would be largely
sidelined as the focus shifts to short-term economic survival and crisis management in the face of escalating
climate impacts. Government, businesses, and communities would be reactive rather than proactive, with little
attention to long-term land use strategies or environmental stewardship, and native planting would be neglected in
favor of immediate, unsustainable exploitation of resources.
The three scenarios (Orderly, Disorderly and Hot House) outlined above in this section have used assumptions
made based on Climate Scenarios for the Construction and Property Sector: Ngā Horopaki Āhuarangi mō te Rāngai
Hanganga me ngā Whare.
Climate Related Disclosures
19
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Strategy
Climate-related impacts
In line with Precinct’s approach to identifying climate-related risks and opportunities, the following table outlines both
current and anticipated climate-related risks as detailed in our risk register and the time horizons over which we expect
each risk to impact what proportion of our portfolio. These impacts encompass a broad range of risks and opportunities
affecting the property sector and have been identified as having direct relevance to Precinct’s business strategy and
management. During the reporting period, no material impacts occurred with respect to Precinct’s business (as defined by
our risk assessment threshold). Despite this, we have continued to progress a number of actions and mitigations related to
each risk (as outlined below), and have advanced our efforts to leverage opportunities. As we continue to review and update
our risk register, our understanding of current risks will evolve and be reflected in each annual Climate Statement. Precinct’s
climate-related risks and opportunities, along with reasonably anticipated impacts, are summarised below:
RiskDescriptionShortMediumLong
Description of Current and Anticipated impacts on Precinct
C = Current Impacts / A = Anticipated Impacts
Precinct's mitigation and actions
C = Current Actions / A = Currently anticipated or planned
Transition
MarketMarket risks involve the effects of transitioning to a low-carbon
economy, impacting both the supply and demand for various
products and services. In the real estate sector, these risks include
a growing preference for green buildings, as both occupiers and
investors increasingly favour decarbonised assets leaving 'brown' assets
stranded and devalued. Businesses occupying space in our assets are
also subject to screening by the market to ensure their products and
services are meeting market expectations. Additionally, the industry will
experience a rising cost of utility prices and insurance premiums.
Orderly
Disorderly
Hot house
•change in Client occupier preferences for sustainable and low
carbon buildings to occupy (C)
•change in general public preferences for trading with
businesses without sustainability credentials occupying our
spaces resulting in higher vacancy rates for the Portfolio (A)
•change in investor appetite to invest in alternative low carbon
industries in place of the property sector (A)
•decline in values for high carbon intensive buildings and those
with low resource efficiency ratings (A)
•higher operating costs (e.g. utilities) increase resulting in Client
occupiers unable to afford to lease space (A)
•target minimum third party certified Green Building ratings
in design, construction and operation (C)
•participate in globally endorsed real estate frameworks
that provide transparency on ESG performance (C)
•employ the use of industry benchmarks for energy
efficiency (C)
•pursue green finance products (C)
•enrol buildings in bespoke analytics platform to drive
improvements over time (A)
•engage with client occupiers in pursuing capital
improvements to existing facilities (A)
TechnologyTechnology risks arise from innovations linked to the transition to a
low-carbon economy, which may have financial impacts by influencing
competitiveness, production efficiency, or demand, potentially leading
to asset impairment or obsolescence. In the real estate sector, these
risks include the capacity of buildings and the broader network to
integrate decarbonised and resilience-based technologies, such as
shifting from fossil fuels to all-electric systems, on-site renewable energy
solutions, as well as adopting peak demand management and load-
shifting technology.
Orderly
Disorderly
Hot house
•significant investment in upgrading technology for low carbon
building systems, insulation, renewable energy and electric
vehicle charging station infrastructure impacting high out of
cycle capex (C)
•site based electricity, spatial and structural capacity limits
impacting the ability for existing buildings to switch from dual
gas and electric supply to full electrification (C)
•higher number of stranded buildings where the costs to
upgrade exceed feasibility during the development of a
business case (A)
•grid instability and network outages from transitioning energy
sources (A)
•develop assets in heavily-populated CBD locations where
energy resilience and service recovery is prioritised (C)
•design in low carbon technology solutions upfront during
development (C)
•pre-plan building upgrades to tie into the natural end of
lifecycle for equipment (C)
•strengthen onsite resilience with appropriate and robust
back up energy solutions to shift peak demand (A)
•leverage green finance options and alternative commercial
models to spread high capex spend over a longer term for
equipment requirements (A)
•proactive engagement with client occupiers to promote
low carbon solutions to material emissions sources (A)
ReputationReputational risks refers to the perception of an organisation's "social
license to operate" and can affect supplier prices, employee costs,
consumer demand, and shareholder value. In the real estate sector,
these risks include the potential for negative public perception
due to factors such as poor environmental performance, failure to
meet sustainability targets, inadequate climate resilience measures,
or association with developments that harm local communities or
ecosystems. Litigation claims can also arise as a result of perceived
action or inaction related to greenwashing and / or greenhushing.
Orderly
Disorderly
Hot house
•Shareholders, banks, Client occupiers and stakeholders
requiring high cost and high resource intensive third party
reporting for heightened transparency on climate-related
issues (A)
•Greenwashing threats against individual projects or business
specific activities based on voluntary public statements and
disclosure-based litigation leading to reduced trust and
market appeal (A)
•Key stakeholders may apply pressure if Precinct is perceived
as not moving quickly enough to decarbonise or address
environmental concerns resulting in potential impacts on
revenue, increased capital expenditure, and challenges
accessing capital (A)
•participate in locally, nationally and globally endorsed
ESG related programs and reporting with third party
verification (C)
•target minimum third party certified Green Building ratings
in design, construction and operation (C)
•engage in key stakeholder briefings and schedule regular
feedback sessions on progress related to climate-related
disclosures (A)
Precinct Properties Group20
The assessment of severity of each risk and opportunity across the portfolio has been qualified into the following:
Severity of Impact
1
Estimated percentage of the Portfolio affected (by value)OrderlyDisorderly
Hot
House
Low< 10.0%
Medium10.0%-20.0%
High20.0%-30.0%
Very high>= 30.0%
1
Takes into account financial risks & other risks such as reputational damage, consistent with Precinct's risk assessment
method. Per adoption provision 1, Financial impacts and explanation are not disclosed for this reporting cycle.
RiskDescriptionShortMediumLong
Description of Current and Anticipated impacts on Precinct
C = Current Impacts / A = Anticipated Impacts
Precinct's mitigation and actions
C = Current Actions / A = Currently anticipated or planned
Transition
MarketMarket risks involve the effects of transitioning to a low-carbon
economy, impacting both the supply and demand for various
products and services. In the real estate sector, these risks include
a growing preference for green buildings, as both occupiers and
investors increasingly favour decarbonised assets leaving 'brown' assets
stranded and devalued. Businesses occupying space in our assets are
also subject to screening by the market to ensure their products and
services are meeting market expectations. Additionally, the industry will
experience a rising cost of utility prices and insurance premiums.
Orderly
Disorderly
Hot house
•change in Client occupier preferences for sustainable and low
carbon buildings to occupy (C)
•change in general public preferences for trading with
businesses without sustainability credentials occupying our
spaces resulting in higher vacancy rates for the Portfolio (A)
•change in investor appetite to invest in alternative low carbon
industries in place of the property sector (A)
•decline in values for high carbon intensive buildings and those
with low resource efficiency ratings (A)
•higher operating costs (e.g. utilities) increase resulting in Client
occupiers unable to afford to lease space (A)
•target minimum third party certified Green Building ratings
in design, construction and operation (C)
•participate in globally endorsed real estate frameworks
that provide transparency on ESG performance (C)
•employ the use of industry benchmarks for energy
efficiency (C)
•pursue green finance products (C)
•enrol buildings in bespoke analytics platform to drive
improvements over time (A)
•engage with client occupiers in pursuing capital
improvements to existing facilities (A)
TechnologyTechnology risks arise from innovations linked to the transition to a
low-carbon economy, which may have financial impacts by influencing
competitiveness, production efficiency, or demand, potentially leading
to asset impairment or obsolescence. In the real estate sector, these
risks include the capacity of buildings and the broader network to
integrate decarbonised and resilience-based technologies, such as
shifting from fossil fuels to all-electric systems, on-site renewable energy
solutions, as well as adopting peak demand management and load-
shifting technology.
Orderly
Disorderly
Hot house
•significant investment in upgrading technology for low carbon
building systems, insulation, renewable energy and electric
vehicle charging station infrastructure impacting high out of
cycle capex (C)
•site based electricity, spatial and structural capacity limits
impacting the ability for existing buildings to switch from dual
gas and electric supply to full electrification (C)
•higher number of stranded buildings where the costs to
upgrade exceed feasibility during the development of a
business case (A)
•grid instability and network outages from transitioning energy
sources (A)
•develop assets in heavily-populated CBD locations where
energy resilience and service recovery is prioritised (C)
•design in low carbon technology solutions upfront during
development (C)
•pre-plan building upgrades to tie into the natural end of
lifecycle for equipment (C)
•strengthen onsite resilience with appropriate and robust
back up energy solutions to shift peak demand (A)
•leverage green finance options and alternative commercial
models to spread high capex spend over a longer term for
equipment requirements (A)
•proactive engagement with client occupiers to promote
low carbon solutions to material emissions sources (A)
ReputationReputational risks refers to the perception of an organisation's "social
license to operate" and can affect supplier prices, employee costs,
consumer demand, and shareholder value. In the real estate sector,
these risks include the potential for negative public perception
due to factors such as poor environmental performance, failure to
meet sustainability targets, inadequate climate resilience measures,
or association with developments that harm local communities or
ecosystems. Litigation claims can also arise as a result of perceived
action or inaction related to greenwashing and / or greenhushing.
Orderly
Disorderly
Hot house
•Shareholders, banks, Client occupiers and stakeholders
requiring high cost and high resource intensive third party
reporting for heightened transparency on climate-related
issues (A)
•Greenwashing threats against individual projects or business
specific activities based on voluntary public statements and
disclosure-based litigation leading to reduced trust and
market appeal (A)
•Key stakeholders may apply pressure if Precinct is perceived
as not moving quickly enough to decarbonise or address
environmental concerns resulting in potential impacts on
revenue, increased capital expenditure, and challenges
accessing capital (A)
•participate in locally, nationally and globally endorsed
ESG related programs and reporting with third party
verification (C)
•target minimum third party certified Green Building ratings
in design, construction and operation (C)
•engage in key stakeholder briefings and schedule regular
feedback sessions on progress related to climate-related
disclosures (A)
Climate Related Disclosures21
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Strategy
RiskDescriptionShortMediumLong
Description of Current and Anticipated impacts on Precinct
C = Current Impacts / A = Anticipated Impacts
Precinct's mitigation and actions
C = Current Actions / A = Currently anticipated or planned
Transition (continued)
Carbon
Price
The transition risk of carbon pricing refers to the economic,
financial, and operational risks that businesses face as
governments, influential stakeholders and regulatory bodies
implement policies to reduce greenhouse gas (GHG) emissions,
particularly through carbon pricing mechanisms. In the real
estate sector, these risks include increased operating costs due
to higher energy prices, the potential for reduced profitability if
carbon-intensive building materials or processes are penalised,
and the need for costly retrofitting or upgrades to meet emissions
reduction targets.
Orderly
Disorderly
Hot house
•increase to the cost of building materials and products
subject to carbon pricing mechanisms locally or
internationally (A)
•increase in reporting obligations for businesses in high
carbon intensity industries including property in future (A)
•increase in development cost due to carbon offset
commitments (A)
•risk of scrutiny on the selection of voluntary carbon offset
units in relation to the Precinct portfolio (A)
•pursue bulk purchase of high quality offset units (C)
•pursue minimum Green Star credits related to operational
and embodied carbon reduction and measurement (C)
•introduce environmental management practices that focus
on reducing carbon across operational assets (C)
•investigate local offset projects to support in partnership
with existing peers and key stakeholders (A)
•prioritise and develop long term engagement with suppliers
of low carbon building materials and products (A)
•actively promote carbon reduction importance and
initiatives to clients to increase their understanding and
ability to reduce climate change impacts (e.g. promoting
induction cooking, reduction of natural gas) (A)
RegulationRegulatory risks stem from current climate-related regulations,
including local and national directives affecting individual
properties, as well as the impact of mandatory climate reporting
requirements. This also includes anticipated changes to climate-
related regulations in New Zealand and globally that could
significantly influence the property industry. In addition, there
is an increased risk of scrutiny over greenwashing in climate
disclosures, as stakeholders demand greater transparency and
accuracy in reporting sustainability efforts, leading to potential
compliance challenges.
Orderly
Disorderly
Hot house
Current Regulation:
•Reporting obligations: Increasing requirements (e.g., NZ CS
1, 2 & 3, CRD/XRB, NZX, GRI) demand greater transparency,
especially around climate change costs, adding complexity
to compliance and long-term planning (C)
•Local regulations: Auckland Unitary Plan and Wellington
District Plan dictate development locations and identify
land vulnerable to natural hazards (A)
•National regulations: Resource Management Act (RMA)
and Building Act 2004 (Building Code) shape development,
with amendments potentially affecting project feasibility
and timelines (A)
Anticipated Regulation:
•A carbon border adjustment charge could be imposed
and applied to imported building materials (which are not
currently subject to the ETS) (A); and
•the ETS costs for domestically produced emissions intensive
building materials (such as steel and concrete) could
be increased due to a pull back in ETS free allocations
currently made available to those producers, resulting in an
increase in prices (A)
Current scope: Applies to a limited group of large emitters.
Anticipated risks: Potential expansion of ETS could bring
more companies, including ours, under its scope, increasing
compliance costs and operational adjustments.
•
include key regulation and reporting obligations in Precinct's
risk register (C)
•engage with industry and participate in consultation with
regard to current and anticipated regulation (C)
•schedule asset upgrades to tie in with natural end of
lifecycle for equipment ahead of any mandatory low carbon
upgrades (C)
•leverage green finance options to spread high capex spend
over a longer term for equipment requirements (A)
•explore alternative commercial models to support a higher
investment in upgrading technology (A)
Precinct Properties Group22
RiskDescriptionShortMediumLong
Description of Current and Anticipated impacts on Precinct
C = Current Impacts / A = Anticipated Impacts
Precinct's mitigation and actions
C = Current Actions / A = Currently anticipated or planned
Transition (continued)
Carbon
Price
The transition risk of carbon pricing refers to the economic,
financial, and operational risks that businesses face as
governments, influential stakeholders and regulatory bodies
implement policies to reduce greenhouse gas (GHG) emissions,
particularly through carbon pricing mechanisms. In the real
estate sector, these risks include increased operating costs due
to higher energy prices, the potential for reduced profitability if
carbon-intensive building materials or processes are penalised,
and the need for costly retrofitting or upgrades to meet emissions
reduction targets.
Orderly
Disorderly
Hot house
•increase to the cost of building materials and products
subject to carbon pricing mechanisms locally or
internationally (A)
•increase in reporting obligations for businesses in high
carbon intensity industries including property in future (A)
•increase in development cost due to carbon offset
commitments (A)
•risk of scrutiny on the selection of voluntary carbon offset
units in relation to the Precinct portfolio (A)
•pursue bulk purchase of high quality offset units (C)
•pursue minimum Green Star credits related to operational
and embodied carbon reduction and measurement (C)
•introduce environmental management practices that focus
on reducing carbon across operational assets (C)
•investigate local offset projects to support in partnership
with existing peers and key stakeholders (A)
•prioritise and develop long term engagement with suppliers
of low carbon building materials and products (A)
•actively promote carbon reduction importance and
initiatives to clients to increase their understanding and
ability to reduce climate change impacts (e.g. promoting
induction cooking, reduction of natural gas) (A)
RegulationRegulatory risks stem from current climate-related regulations,
including local and national directives affecting individual
properties, as well as the impact of mandatory climate reporting
requirements. This also includes anticipated changes to climate-
related regulations in New Zealand and globally that could
significantly influence the property industry. In addition, there
is an increased risk of scrutiny over greenwashing in climate
disclosures, as stakeholders demand greater transparency and
accuracy in reporting sustainability efforts, leading to potential
compliance challenges.
Orderly
Disorderly
Hot house
Current Regulation:
•Reporting obligations: Increasing requirements (e.g., NZ CS
1, 2 & 3, CRD/XRB, NZX, GRI) demand greater transparency,
especially around climate change costs, adding complexity
to compliance and long-term planning (C)
•Local regulations: Auckland Unitary Plan and Wellington
District Plan dictate development locations and identify
land vulnerable to natural hazards (A)
•National regulations: Resource Management Act (RMA)
and Building Act 2004 (Building Code) shape development,
with amendments potentially affecting project feasibility
and timelines (A)
Anticipated Regulation:
•A carbon border adjustment charge could be imposed
and applied to imported building materials (which are not
currently subject to the ETS) (A); and
•the ETS costs for domestically produced emissions intensive
building materials (such as steel and concrete) could
be increased due to a pull back in ETS free allocations
currently made available to those producers, resulting in an
increase in prices (A)
Current scope: Applies to a limited group of large emitters.
Anticipated risks: Potential expansion of ETS could bring
more companies, including ours, under its scope, increasing
compliance costs and operational adjustments.
•
include key regulation and reporting obligations in Precinct's
risk register (C)
•engage with industry and participate in consultation with
regard to current and anticipated regulation (C)
•schedule asset upgrades to tie in with natural end of
lifecycle for equipment ahead of any mandatory low carbon
upgrades (C)
•leverage green finance options to spread high capex spend
over a longer term for equipment requirements (A)
•explore alternative commercial models to support a higher
investment in upgrading technology (A)
Climate Related Disclosures23
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Strategy
RiskDescriptionShortMediumLongDescription of Current and Anticipated impacts on Precinct
C = Current Impacts / A = Anticipated Impacts
Precinct's mitigation and actions
C = Current Actions / A = Currently anticipated or planned
Physical
Temperature
Extremes
Extreme heat refers to chronic prolonged periods of high temperatures
that surpass historical norms, presenting significant risks to both the
built environment and natural systems. In the real estate sector,
these risks include increased energy demand for cooling, higher
operational and maintenance costs, accelerated wear and tear on
building materials, reduced occupant comfort, and potential health
risks for Client occupiers and employees. Extreme heat can also lead
to decreased property values in affected areas and disruptions to
construction timelines.
Orderly
Disorderly
Hot house
•recurring public transport network disruptions (e.g. train
cancellations) through extreme heat resulting in reduced
mobility to city centres impacting foot traffic in retail centres
and smaller office footprint for employees working from
home (A)
•existing building systems unable to cope with cooling load
and require out of cycle capex costs / disruption to service (A)
•clients and public general loss of productivity (A)
•green space unable to survive conditions require out of cycle
capex costs to replace (A)
•sizing building system equipment to accommodate
future projected temperature increases in development
and refurbishment projects (C)
•designing connected thoroughfares between buildings
to provide shelter during extreme heat days (C)
•prioritising drought tolerant / hardy native plant species
for outdoor vegetation (C)
CycloneCyclone acute risk refers to the increasing frequency, intensity, and
unpredictability of tropical cyclones that pose significant threats to
human life, infrastructure, economies, and ecosystems, especially in
coastal regions. In the real estate sector, cyclones can result in severe
physical damage to buildings, causing extensive repair costs and
heightened insurance premiums. Cyclone-related disruptions can delay
construction projects, reduce tenant demand in high-risk areas, and
increase operational costs due to the need for frequent maintenance
and infrastructure upgrades to meet new resilience standards.
Orderly
Disorderly
Hot house
•destruction of buildings including homes and businesses
resulting in financial loss from property damage and
decreasing asset values, tenant displacement loss of
revenue (A)
•retailers unable to source good quality fresh produce resulting
in increased costs for Client occupiers to retain their
businesses (A)
•interruption to utility supply and transportation leading to
disruptions in business operations, increase in operational
costs and transport delays (A)
•construction and refurbishment activities impacted through
supply chain disruptions leading to higher costs to complete
projects (A)
•cyclone risk screening for assets to determine building
elements vulnerable to cyclone impacts (C)
•back up power generation action plans if / when power
supply is disrupted (A)
•implementation of Client occupier engagement
for preparation around storm events including
recommended transport options (A)
•designing in resilience to development programs to
withstand storm events (A)
Pluvial
flooding
Pluvial risk refers to the acute threat of surface flooding caused
by intense, short-duration rainfall that overwhelms drainage systems,
independent of rivers or other bodies of water leading to localised
flooding impacting the built environment. For the real estate sector,
this presents the risk of water damage to buildings, particularly in
basements or lower floors, and increased wear on infrastructure. Pluvial
flooding can disrupt access to properties, increase maintenance costs,
and require costly upgrades to drainage and flood barrier systems.
Orderly
Disorderly
Hot house
•damage to infrastructure leading to accessibility issues,
higher maintenance and repair costs and a decline in
property values (A)
•interruption to utility supply and transportation leading to
disruptions in business operations, increase in operational
costs and transport delays (A)
•flooding of construction and refurbishment sites leading
to project delays, increased costs for delivery, contractual
penalties and reputational damage (A)
•increasing insurance costs for areas with repeated impacts
resulting in higher operating costs, difficulty in securing
insurance and decreased property values (A)
•pluvial risk screening for assets to determine vulnerable
access points for acute flooding (C)
•Implementation of flood barriers for at risk sites (A)
•implementation of Client occupier engagement for
preparation around storm events (A)
•designing in resilience to development programs to
remedy pluvial flooding when it occurs (A)
Coastal
Inundation
Coastal inundation risk refers to the acute threat of flooding along
coastlines due to a combination of rising sea levels, storm surges, and
extreme weather events, exacerbated by climate change. This poses
significant risks to the built environment, infrastructure, ecosystems, and
economies, particularly in low-lying coastal areas. For real estate this
can result in chronic flooding, land erosion, and permanent loss of
property, leading to significant financial losses.
Orderly
Disorderly
Hot house
•contamination to water supply through drainage and sewer
issues leading to health and safety concerns, reputational
damage, legal liability compliance and operational costs for
the public interacting with properties (A)
•reduced visitor numbers to retail and hospitality businesses
resulting in decreased revenue for Client occupiers, longer-
term vacancy challenges and reduced property values (A)
•impacts to vulnerable communities leading to a reduction
in economic activity and displacement of regular occupants
and visitors to the city centre (A)
•site acquisition screening to ensure full impacts of future
scenarios understood (C)
•implementation of climate adaptation planning for new
(C) and existing (A) assets to highlight and manage
critical coastal inundation risks
•early stage planning around flood barriers and physical
resilience measures across affected properties (A)
Precinct Properties Group24
RiskDescriptionShortMediumLongDescription of Current and Anticipated impacts on Precinct
C = Current Impacts / A = Anticipated Impacts
Precinct's mitigation and actions
C = Current Actions / A = Currently anticipated or planned
Physical
Temperature
Extremes
Extreme heat refers to chronic prolonged periods of high temperatures
that surpass historical norms, presenting significant risks to both the
built environment and natural systems. In the real estate sector,
these risks include increased energy demand for cooling, higher
operational and maintenance costs, accelerated wear and tear on
building materials, reduced occupant comfort, and potential health
risks for Client occupiers and employees. Extreme heat can also lead
to decreased property values in affected areas and disruptions to
construction timelines.
Orderly
Disorderly
Hot house
•recurring public transport network disruptions (e.g. train
cancellations) through extreme heat resulting in reduced
mobility to city centres impacting foot traffic in retail centres
and smaller office footprint for employees working from
home (A)
•existing building systems unable to cope with cooling load
and require out of cycle capex costs / disruption to service (A)
•clients and public general loss of productivity (A)
•green space unable to survive conditions require out of cycle
capex costs to replace (A)
•sizing building system equipment to accommodate
future projected temperature increases in development
and refurbishment projects (C)
•designing connected thoroughfares between buildings
to provide shelter during extreme heat days (C)
•prioritising drought tolerant / hardy native plant species
for outdoor vegetation (C)
CycloneCyclone acute risk refers to the increasing frequency, intensity, and
unpredictability of tropical cyclones that pose significant threats to
human life, infrastructure, economies, and ecosystems, especially in
coastal regions. In the real estate sector, cyclones can result in severe
physical damage to buildings, causing extensive repair costs and
heightened insurance premiums. Cyclone-related disruptions can delay
construction projects, reduce tenant demand in high-risk areas, and
increase operational costs due to the need for frequent maintenance
and infrastructure upgrades to meet new resilience standards.
Orderly
Disorderly
Hot house
•destruction of buildings including homes and businesses
resulting in financial loss from property damage and
decreasing asset values, tenant displacement loss of
revenue (A)
•retailers unable to source good quality fresh produce resulting
in increased costs for Client occupiers to retain their
businesses (A)
•interruption to utility supply and transportation leading to
disruptions in business operations, increase in operational
costs and transport delays (A)
•construction and refurbishment activities impacted through
supply chain disruptions leading to higher costs to complete
projects (A)
•cyclone risk screening for assets to determine building
elements vulnerable to cyclone impacts (C)
•back up power generation action plans if / when power
supply is disrupted (A)
•implementation of Client occupier engagement
for preparation around storm events including
recommended transport options (A)
•designing in resilience to development programs to
withstand storm events (A)
Pluvial
flooding
Pluvial risk refers to the acute threat of surface flooding caused
by intense, short-duration rainfall that overwhelms drainage systems,
independent of rivers or other bodies of water leading to localised
flooding impacting the built environment. For the real estate sector,
this presents the risk of water damage to buildings, particularly in
basements or lower floors, and increased wear on infrastructure. Pluvial
flooding can disrupt access to properties, increase maintenance costs,
and require costly upgrades to drainage and flood barrier systems.
Orderly
Disorderly
Hot house
•damage to infrastructure leading to accessibility issues,
higher maintenance and repair costs and a decline in
property values (A)
•interruption to utility supply and transportation leading to
disruptions in business operations, increase in operational
costs and transport delays (A)
•flooding of construction and refurbishment sites leading
to project delays, increased costs for delivery, contractual
penalties and reputational damage (A)
•increasing insurance costs for areas with repeated impacts
resulting in higher operating costs, difficulty in securing
insurance and decreased property values (A)
•pluvial risk screening for assets to determine vulnerable
access points for acute flooding (C)
•Implementation of flood barriers for at risk sites (A)
•implementation of Client occupier engagement for
preparation around storm events (A)
•designing in resilience to development programs to
remedy pluvial flooding when it occurs (A)
Coastal
Inundation
Coastal inundation risk refers to the acute threat of flooding along
coastlines due to a combination of rising sea levels, storm surges, and
extreme weather events, exacerbated by climate change. This poses
significant risks to the built environment, infrastructure, ecosystems, and
economies, particularly in low-lying coastal areas. For real estate this
can result in chronic flooding, land erosion, and permanent loss of
property, leading to significant financial losses.
Orderly
Disorderly
Hot house
•contamination to water supply through drainage and sewer
issues leading to health and safety concerns, reputational
damage, legal liability compliance and operational costs for
the public interacting with properties (A)
•reduced visitor numbers to retail and hospitality businesses
resulting in decreased revenue for Client occupiers, longer-
term vacancy challenges and reduced property values (A)
•impacts to vulnerable communities leading to a reduction
in economic activity and displacement of regular occupants
and visitors to the city centre (A)
•site acquisition screening to ensure full impacts of future
scenarios understood (C)
•implementation of climate adaptation planning for new
(C) and existing (A) assets to highlight and manage
critical coastal inundation risks
•early stage planning around flood barriers and physical
resilience measures across affected properties (A)
Climate Related Disclosures25
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Strategy
OpportunityDescriptionShortMediumLongDescription of Current and Anticipated Opportunity for Precinct
C = Current Opportunity / A = Anticipated Opportunity
Precinct's mitigation and actions
C = Current Actions / A = Currently anticipated or planned
Transition -
Market
Recognising the evolving priorities and investment profiles of key
stakeholders, Precinct has identified an opportunity to pursue industry-
leading initiatives that appeal to proactive and sustainability-focused
clients and investors. This approach aims to align with the values
of like-minded partners, enhancing Precinct’s attractiveness and
competitiveness in the market.
Orderly
Disorderly
Hot house
•Investor and Client occupier comfort in knowing SBTi aligned
organisations have their GHG emissions data peer reviewed
and audited on a regular basis (A)
•Investor comfort in knowing annual updates to the GRESB
survey reflect global sentiment related to ESG and responsible
management of real estate assets and funds (A)
•clear and targeted emissions reduction and ESG parameters
using a sector specific framework for the real estate
industry (A)
•voluntarily pursue minimum Green Building Ratings and
net carbon zero certification to meet and exceed market
expectations for climate performance and verification (C)
•continue to partake in sustainable finance opportunities
including Green Loans and Bonds (C)
•measure and offset embodied carbon for all new
developments in line with the Net Zero Buildings
Commitment, acknowledging its significant impact on our
carbon emissions inventory (C)
•retain formal Net Zero targets with the World Green
Building Council Net Zero Buildings Commitment and
prepare to formalise targets with the Science-Based
Targets initiative (SBTi) (C)
•report against the Global Real Estate Sustainability
Benchmark (GRESB) survey to align with peer and investor
expectations for climate risk reporting (C)
Transition -
Technology
Precinct has identified a key transition technology opportunity by
developing energy-efficient, low-carbon assets. This shift not only
reduces carbon emissions but also aligns with future energy trends,
positioning Precinct to meet the growing demand for sustainable and
resilient properties.
Orderly
Disorderly
Hot house
•ability to engage in and leverage sustainable finance
options (C)
•reduce material operational emissions significantly through
the reduction of natural gas usage attracting high quality
Clients (A)
•attract changing investor and Client occupier preferences in
their adoption of net zero targets (A)
•feasibility studies for sites using natural gas to convert to
electric (C)
•embed all electric design parameters into new
development projects (A)
Transition -
Reputation
Based on the commitment to procure large quantities of carbon offsets,
prioritise the exploration of supporting a local voluntary carbon project.
Orderly
Disorderly
Hot house
•Invest in the local economy to support decarbonisation
projects to the benefit of key stakeholders including JV
partners and Clients wishing to source high quality offsets (A)
•provide a proof of concept for future voluntary carbon
initiatives in Aotearoa New Zealand to ensure economies of
scale to reduce costs over time (A)
•ensure transparency of offset units and a strong chain of
custody to mitigate greenwashing concerns (A)
•establish long-term offset purchase agreements to provide
certainty to the market related to ongoing commitment (A)
•prepare expected unit amounts to procure over a long term
time horizon (C)
•feasibility studies for carbon offset options available in the
voluntary market (A)
•engage with the broader market to understand the
limitations of the current market for long term service
agreements (A)
Physical -
Pluvial
Flooding
As physical climate risks become more impactful across the built
environment, the acquisition of at risk properties for repositioning is
being targeted where mitigation efforts can be undertaken to de-risk
the asset.
Orderly
Disorderly
Hot house
•through our experience in adaptive reuse projects to date,
acquire stranded assets that would be otherwise deemed
unsuitable as a green asset (A)
•proactively support industry in adopting climate mitigation
efforts around design interventions to manage risks (A)
•increase resilience of our Clients and communities in proximity
to our developments through education where there is risk of
pluvial flooding, to ensure risks are understood and managed
collectively (A)
•voluntarily prepare Climate Adaptation Plans at early
design stages for new developments and refurbishment
projects (C)
•maintain annual Climanomics subscription to ensure
proactive assessment of current assets and future
locations for climate-related risks (C)
•conduct in depth site-based physical risk assessments
where critical areas are identified (C)
•commit to sharing Information from these assessments
with project teams to ensure appropriate mitigation
measures are implemented or investment decisions are
reevaluated based on the identified risks (C)
Precinct Properties Group26
OpportunityDescriptionShortMediumLongDescription of Current and Anticipated Opportunity for Precinct
C = Current Opportunity / A = Anticipated Opportunity
Precinct's mitigation and actions
C = Current Actions / A = Currently anticipated or planned
Transition -
Market
Recognising the evolving priorities and investment profiles of key
stakeholders, Precinct has identified an opportunity to pursue industry-
leading initiatives that appeal to proactive and sustainability-focused
clients and investors. This approach aims to align with the values
of like-minded partners, enhancing Precinct’s attractiveness and
competitiveness in the market.
Orderly
Disorderly
Hot house
•Investor and Client occupier comfort in knowing SBTi aligned
organisations have their GHG emissions data peer reviewed
and audited on a regular basis (A)
•Investor comfort in knowing annual updates to the GRESB
survey reflect global sentiment related to ESG and responsible
management of real estate assets and funds (A)
•clear and targeted emissions reduction and ESG parameters
using a sector specific framework for the real estate
industry (A)
•voluntarily pursue minimum Green Building Ratings and
net carbon zero certification to meet and exceed market
expectations for climate performance and verification (C)
•continue to partake in sustainable finance opportunities
including Green Loans and Bonds (C)
•measure and offset embodied carbon for all new
developments in line with the Net Zero Buildings
Commitment, acknowledging its significant impact on our
carbon emissions inventory (C)
•retain formal Net Zero targets with the World Green
Building Council Net Zero Buildings Commitment and
prepare to formalise targets with the Science-Based
Targets initiative (SBTi) (C)
•report against the Global Real Estate Sustainability
Benchmark (GRESB) survey to align with peer and investor
expectations for climate risk reporting (C)
Transition -
Technology
Precinct has identified a key transition technology opportunity by
developing energy-efficient, low-carbon assets. This shift not only
reduces carbon emissions but also aligns with future energy trends,
positioning Precinct to meet the growing demand for sustainable and
resilient properties.
Orderly
Disorderly
Hot house
•ability to engage in and leverage sustainable finance
options (C)
•reduce material operational emissions significantly through
the reduction of natural gas usage attracting high quality
Clients (A)
•attract changing investor and Client occupier preferences in
their adoption of net zero targets (A)
•feasibility studies for sites using natural gas to convert to
electric (C)
•embed all electric design parameters into new
development projects (A)
Transition -
Reputation
Based on the commitment to procure large quantities of carbon offsets,
prioritise the exploration of supporting a local voluntary carbon project.
Orderly
Disorderly
Hot house
•Invest in the local economy to support decarbonisation
projects to the benefit of key stakeholders including JV
partners and Clients wishing to source high quality offsets (A)
•provide a proof of concept for future voluntary carbon
initiatives in Aotearoa New Zealand to ensure economies of
scale to reduce costs over time (A)
•ensure transparency of offset units and a strong chain of
custody to mitigate greenwashing concerns (A)
•establish long-term offset purchase agreements to provide
certainty to the market related to ongoing commitment (A)
•prepare expected unit amounts to procure over a long term
time horizon (C)
•feasibility studies for carbon offset options available in the
voluntary market (A)
•engage with the broader market to understand the
limitations of the current market for long term service
agreements (A)
Physical -
Pluvial
Flooding
As physical climate risks become more impactful across the built
environment, the acquisition of at risk properties for repositioning is
being targeted where mitigation efforts can be undertaken to de-risk
the asset.
Orderly
Disorderly
Hot house
•through our experience in adaptive reuse projects to date,
acquire stranded assets that would be otherwise deemed
unsuitable as a green asset (A)
•proactively support industry in adopting climate mitigation
efforts around design interventions to manage risks (A)
•increase resilience of our Clients and communities in proximity
to our developments through education where there is risk of
pluvial flooding, to ensure risks are understood and managed
collectively (A)
•voluntarily prepare Climate Adaptation Plans at early
design stages for new developments and refurbishment
projects (C)
•maintain annual Climanomics subscription to ensure
proactive assessment of current assets and future
locations for climate-related risks (C)
•conduct in depth site-based physical risk assessments
where critical areas are identified (C)
•commit to sharing Information from these assessments
with project teams to ensure appropriate mitigation
measures are implemented or investment decisions are
reevaluated based on the identified risks (C)
Climate Related Disclosures27
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Strategy
Transition Planning
Precinct has made progress on transition planning in alignment with our strategy to develop, own, and manage high-quality,
sustainable, and resilient assets. Our time-bound goal of achieving and maintaining Net Zero by 2030, in line with the World
Green Building Council’s Net Zero Building Commitment, guides our pragmatic and focused transition strategy. This strategy
addresses the impacts of a changing climate across our portfolio.
We track performance against our target, metrics and KPI's through our internal ESG dashboard and submit datasets to
external parties for validation. Feedback from the industry informs our approach to strengthening reporting and aligning
with industry expectations regarding our decarbonisation ambitions.
In determining focus areas for our anticipated future targeted transition planning, including the alignment of current capital
deployment, Precinct takes into account climate-related risks and opportunities as represented in our risk register when
assessing a business case and making investment decisions and funding group initiatives.
The following are current considerations:
Transition focus areaCurrent and anticipated initiatives in focus area
Anticipated Physical Risks
Addressing any recurring physical risks
identified across the Auckland and Wellington
geographical areas.
•Pursuing climate adaptation modelling and planning for new and
existing assets.
•Incorporating design interventions in development projects where
high and extreme risks across modelled scenarios are identified.
Carbon Intensive Business Activities
Maintaining focus on and reducing high-impact
areas of carbon intensity through annual full
value chain reporting and targeted activities
related to impact areas.
•Phasing out the use of fossil fuels across the Portfolio where feasible.
•Deploying on-site and off-site renewable energy solutions
where feasible.
•Researching procurement of low carbon products and services.
•Undertaking operational waste management audits.
Certification to Industry Best Practice
Ensuring prescriptive elements of our
public commitments that require long-term
planning and action are incorporated in
business activities.
•Strategically greening our portfolio through formal Green
Building certifications.
•Improving energy efficiency outcomes through upgrading
building services equipment and benchmarking performance
against NABERSNZ.
•Managing the impacts of high Global Warming Potential refrigerants
and developing long-term plans to phase out their use across the
portfolio where feasible.
*Precinct has applied NZCS 2 adoption provision 3 which provides an exemption in the first reporting period from the requirements to disclose the transition plan aspects of an entity’s strategy, including how its business
model, and strategy might change to address its climate-related risks and opportunities, and the extent to which the transition plan aspects of its strategy are aligned with its internal capital deployment and funding
decision-making processes
Precinct Properties Group
28
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
29
Risk
Management
Precinct Properties Group30
This section describes
Precinct’s processes for
identifying, assessing and
managing climate-related
risks and how this is
integrated into Precinct’s risk
management processes.
Precinct’s processes for identifying,
assessing and managing climate-
related risks are integrated into our
overall risk management process and
recorded in Precinct’s Risk Register. This
process is facilitated by the Audit and
Risk Committee and overseen by the
ESG Committee.
The Committee is guided by the ESG Committee
Charter (available in Precinct's Corporate
Governance Manual on Precinct's website), which
requires the Committee to, among other things:
•Review and recommend for Board approval
the ESG strategy, framework and initiatives;
•Oversee the implementation of Precinct’s
Sustainability Policy and practices; and
•Oversee the preparation and review of
climate related risks and opportunities ahead
of incorporating into the Audit & Risk
Committee risk register.
Identifying Risks
The Audit and Risk Committee is tasked with reviewing
Precinct’s Risk Register, which includes climate-related
risks and captures identified climate-related risks that
may impact Precinct, at least annually.
New risks for inclusion on the Risk Register may be
identified by the ESG sub-committees, ESG Committee,
senior and executive management, or other staff at
Precinct. These potential new risks are submitted to the
Audit and Risk Committee for evaluation. The process of
identifying risks, as well as assessing their scope, size, and
impact, uses information from several external sources (as
relevant), including:
•The Global Real Estate Sustainability Benchmark
(GRESB) Climate Risk & Resilience Scorecard, which
provides location-specific intelligence on climate
change and environmental exposure.
•S&P Global Climanomics, climate risk analytics
platform to identify and measure climate risk across
Precinct’s assets.
•Guidance and commentary from industry
organisations including the New Zealand Green
Building Council (NZGBC)
•Discussions with stakeholders along the value chain,
including suppliers, client occupiers, contractors, and
councils (local government).
•Engagement with external engineering and
sustainability consultants, including in the
preparation of:
–Climate Adaptation Plans
during development;
–Climate Risk screening undertaken as part of
due diligence reporting for acquisitions; and
–Portfolio-wide climate risk modelling and site-
based visits.
Climate change is a unique risk category in particular
because no part of the value chain is immune from
its impacts. However, some parts are more vulnerable
than others. A key workstream for Precinct is to refine
the boundaries of our value chain for the purpose of
climate risk analysis and identify areas or relationships of
vulnerability. In FY24, to the best of our knowledge, no
parts of our value chain were excluded for the purpose of
our risk assessment.
Climate Related Disclosures
31
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Risk Management
Assessing Risks
When assessing the materiality threshold for the reporting
of climate-related risks, Precinct accounts for the
time horizon of the risk occurring; how likely the
risk is to occur; and whether the risk is physical or
transition. Quantification of these risks in respect of
Precinct’s physical assets is undertaken internally utilising
bespoke software and local datasets with advice sought
on occasion from external specialist advisers.
Materiality assessments of climate-related risks are
informed by Precinct’s overall approach to risk
management which considers financial and other risks,
such as reputational damage. Generally, materiality
of climate-related risks is assessed based on its
impact to the value of Precinct’s assets, considered
on both an asset-by-asset basis and a portfolio-wide
assessment. Precinct also considers the impact of
climate-related risks on insurance in terms of both
availability of cover and cost. The geographical location
of Precinct’s assets is taken into account when assessing
the likelihood of a risk materialising and its financial
impact, but a consistent materiality threshold applies
across Precinct’s assets regardless of location.
During FY24, climate-related risks were considered on a
six-monthly basis at each meeting of the ESG Committee
and included in the Audit & Risk Committee Risk
Register for review at its quarterly meetings. The Audit
and Risk Committee assisted the Board in overseeing
Precinct’s climate-related risks by reviewing Precinct’s
risk register each quarter with Management. Where a
risk is considered ‘actual’ in nature, it must be included
on Precinct’s Risk Register for regular evaluation by
the Board.
Precinct plans to continue to refine and strengthen our
approach to assessing climate-related risks. This includes
a focus on:
•reviewing the quantitative and qualitative thresholds
for elevating a potential risk to an actual risk;
•developing processes for assessing the potential
impacts of risks, including financial impacts;
•reviewing the time horizons and their duration
employed for risk assessment which align with the
NZGBC Construction and Property Sector Climate
Scenarios; and
•further integrating climate-related considerations into
Precinct’s general risk management framework.
We acknowledge that climate-related risk and impact
assessments inherently include significant uncertainty.
Precinct therefore monitors the range of tools and
methods in development that may become available to
improve our understanding of the scope, size, timing and
impact of various climate-related risks.
Managing Risks
Precinct's climate risk management approach is part of
our wider risk management process. Precinct includes
climate risk (physical risks and transition risks) as a
key business risk and assesses materiality and how
likely the risk is to occur. Climate risks are managed
and prioritised consistently alongside Precinct’s other
key business risks, and material climate-related risks are
included in the Risk Register, which ensures risks are
understood and managed.
An update is included in the Board papers on an ongoing
basis regarding risks appearing in the Risk Register,
including Precinct's identified climate risks.
Precinct Properties Group
32
Our approach to reviewing climate-related risks
The following process outlines Precinct’s approach to conducting annual reviews of climate-related risks. This involves both
qualitative and quantitative analyses to enable a comprehensive understanding and appropriate revision of the risks across
plausible scenarios relevant to Precinct’s operations. As part of this review, we assess current climate-related risks and
consider recommendations to mitigate and adapt to anticipated risks.
ProcessDescription
Review Identified Risks of Climate
Change in line with the
Intergovernmental Panel on Climate
Change (IPCC) reporting framework
Physical risks: Pluvial Flooding, Temperature Extremes, Coastal inundation
(including sea-level rise), Drought, Wildfire, Tropical Cyclone, Water Stress and
Fluvial Flooding
Transition risks: Carbon Pricing, Litigation / Regulation, Technology, Reputation
and Market
Physical and Transition Risk
Time Horizon
Short Term: present – 2030
Medium Term: 2031 - 2050
Long Term: 2050 - 2100
Screening of Precinct’s Portfolio
S&P Global Climanomics and GRESB reporting to assess specific risks across
Precinct’s portfolio against industry specific benchmark (NZGBC’s Climate
Scenarios for the Construction and Property Sector released in 2023).
Where significant risks are identified as
'high' or 'extreme'
During screening, if risks indicate a 'high' or 'extreme' value loss according
to Precinct's internal materiality assessment, further granular investigation is
undertaken against the risk. This activity serves to more accurately quantify
potential costs and impact.
An example of this during FY23 and FY24, Precinct engaged with external
specialists, Global Risk consultants, Aon to undertake a physical risk assessment
which included site visits and detailed modelling of Coastal inundation (including
sea-level rise) and Pluvial and Fluvial risk across Precinct’s portfolio. These aspects
were chosen based on high level screening indicating a 'high' value loss to
the portfolio. As a result of this exercise, Precinct's modelled risks were reduced
considerably following this review. The outcome of this assessment is represented
in the Physical risks section of our climate impacts table.
Quantify physical and transitional
risks identified
Further assessment and modelling is undertaken to quantify potential costs
and impact.
During FY23 and FY24, Precinct completed a risk quantification assessment with
Aon to:
•Quantify physical risks to each property in relation to Coastal inundation
(including sea-level rise) and Pluvial and Fluvial risk indicated by modelling
•Implement recommendations to the business strategy to adapt to future risks
Precinct is continuing to refine the quantification of risks as we work towards
disclosures for FY25.
Mitigate and adapt to future risks
through transition planning
Integrate key actions identified from material risks into Precinct's core
business strategy.
Climate Related Disclosures33
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Metrics and
Targets
Precinct Properties Group34
Our FY24 Carbon Emissions
Below is a snapshot of our carbon emissions across Scope 1 (direct emissions from owned or controlled sources), Scope 2
(indirect emissions from purchased electricity), and Scope 3 (other indirect emissions occurring across our value chain). In
addition, we have included a detailed breakdown of these figures against FY23 to highlight our commitment to transparently
tracking our efforts with a focus of reducing our overall carbon footprint in line with the GHG Protocol.
Metric tonnes of carbon
dioxide equivalent
(t CO2-e)
Precinct's
GHG emissions
(GHG Protocol)Scope
ISO 14064-1:2018
EquivalentFY24FY23
Scope 1Category 1: Stationary Combustion (Natural Gas)Category 12,3901,517
Category 1: Stationary Combustion (Diesel)Category 131
Category 1: Leakage of Refrigerants (Refrigerants)Category 1333
Scope 2Category 2: Imported Electricity (location-based method)
1
Category 21,3881,376
Category 2: Imported Electricity (market-based method)
1
Category 2140
Total Scope 1 & 2 Emissions (location-based method)3,7852,927
Scope 3
2
Category 1: Purchased Goods & Services - Potable Water SupplyCategory 4107
Category 1: Purchased Goods & Services - Other
3
Category 44,156-
Category 2: Embodied Carbon from New Developments
3
Category 412,974-
Category 3: T&D Losses from Electricity & GasCategory 4193212
Category 5: Operational WasteCategory 4909728
Category 5: Construction & Demolition Waste
3
Category 4582-
Category 6: Business TravelCategory 3179229
Category 7: Employee CommuteCategory 396186
Category 8: Upstream Leased AssetsCategory 426313
Category 13: Downstream Leased AssetsCategory 51,8022,410
1Location-based method references Scope 2 electricity emissions associated with standard emissions factors. Market-based method references
the voluntary purchase of Renewable Energy Certificates (RECs) supplied from Meridian.
2Precinct has elected to disclose FY24 Scope 3 emissions in categories where data is available to enable quantification. Where data is not
available, Adoption Provision 4 is applied for the remaining material Scope 3 items in our full value chain as summarised below.
3Not reported in FY23 based on lack of available datasets.
Climate Related Disclosures35
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Metrics and Targets
Precinct Toitū Net Carbon Zero Certification
Precinct is a Toitū net carbon zero certified organisation.
The Toitū carbon certification is a voluntary programme
that Precinct participates in as part of our commitment
to climate action. This carbon certification programme
requires adherence to a set of standards and rules on
an annual basis. In accordance with the certification
programme, Precinct measures (and seeks to reduce)
its greenhouse gas (GHG) emissions according to ISO
14064-1: 2018 standards.
In addition, as part of the FY24 carbon emissions
reporting cycle, Precinct engaged with a pilot program
with Toitū to apply the temporary NZ SAE 1 standard
(the standard that will be mandatory from FY25) to
understand changes from previous assurance cycles.
However, for this voluntary reporting period, Toitū's
assurance report was finalised using assurance standard
ISO 14064-3 which can be found in Appendix 3 of
this report.
Precinct has been measuring our carbon emissions with
Toitū Envirocare across the last 8 years of operational
data (FY17 onwards). Toitū Carbon Certification is a
voluntary programme that helps organisations measure,
manage, and reduce their GHG emissions. It is the only
certification in New Zealand that is accredited to certify
to international standards (ISO 14064-1:2018) and offers
three certification levels: carbonreduce, net carbon zero,
and climate positive.
Achieving certification is an annual requirement
where an organisation must demonstrate meeting
the certification rules and provide a third-party,
independent and credible way to communicate
environmental efforts to stakeholders. Current and prior
year statements on Toitū carbon certification can
be found here: https://www.toitu.co.nz/our-members/
members/precinct-properties-new-zealand-limited
Consolidation Approach
We utilise the 'operational control' approach to
consolidating emissions (as defined by the Greenhouse
Gas Protocol). Organisational boundaries were set with
reference to the methodology described in the GHG
Protocol and ISO 14064-1:2018 standards.
Excluded Emissions Sources - Scope 3 (in accordance
and noted within the Toitū net carbon zero program)
Precinct have excluded the following Scope 3 Emissions
Categories based on lack of available datasets:
•Category 2: Embodied Carbon from CAPEX projects
(not fitout related);
•Category 3: Development Related Fuel &
Energy Consumption;
•Category 4: Upstream Transportation and Distribution
(excludes those reported in Category 2: Embodied
Carbon from New Developments);
•Category 5: Waste from Fitout Projects;
•Category 13: Embodied Carbon from Fitout
Projects; and
•Category 15: Investments.
Precinct have excluded the following Scope 3 Emissions
Categories as not relevant to business operations during
the reporting period:
•Category 9: Downstream Transportation
& Distribution;
•Category 10: Processing of Sold Products;
•Category 11: Use of Sold Products;
•Category 12: End of life treatment of Sold
Products; and
•Category 14: Franchises.
Source of Emissions Factors and the Global Warming
Potential Rates
A calculation methodology has been used for quantifying
the emissions inventory based on the following calculation
approach, unless otherwise stated below: Emissions =
activity data x emissions factor
The source of emissions factors used include:
•Ministry for the Environment - Measuring emissions: A
guide for organisations: 2024 detailed guide.
•Intergovernmental Panel on Climate Change’s
(IPCC’s) Global Warming Potential indicator over a
100-year time horizon (GWP100)
•BRANZ’s CO2NSTRUCT Database
•Auckland Council - Consumption emissions
modelling (knowledgeauckland.org.nz)
Precinct Properties Group
36
Organisational Boundaries for
Emissions Reporting
PPNZ and PPIL are listed companies on the NZX who
share the same board of directors and whose shares are
‘stapled’ together, meaning they can’t be transferred or
dealt with separately. PPNZ holds Precinct’s interests in
Limited Partnerships that it has entered into with third
parties as well as all of the shares of Precinct Properties
Holdings Limited, which in turn holds all of the Precinct-
owned properties.
PPIL owns Precinct’s operating businesses, including
Generator, Precinct Properties 1 Queen Street Limited
(which owns the Intercontinental Hotel at 1 Queen
Street), Commercial Bay Hospitality, Precinct Properties
Residential Holdings Limited (which in turn holds 50%
of Precinct Properties Residential Limited) and the
management company, Precinct Properties Management
Limited (PPML). Under the terms of a management
agreement, PPML has been contracted to manage all of
the PPNZ property assets as well as the properties owned
by the relevant Limited Partnerships.
Precinct's Organisational Boundary for emissions
included in our reporting:
We have included emissions associated with Precinct's
activities where Precinct is the:
•Occupier of Commercial office space including
Business Operator, Developer and Manager of a co-
working business
•Building Owner of Commercial, Retail, Hotel and
Education buildings owned in whole or part with joint
venture partners
•Property & Facilities Manager of Commercial, Retail,
Hotel and Education buildings owned in whole or part
with joint venture partners
•Property & Facilities Manager of Commercial buildings
externally owned by others
•Building Developer of Residential, Commercial, Retail,
Education and Hotel buildings owned in whole or part
with joint venture partners
•Business Owner of Hospitality venues and Hotel
Precinct's Organisational Boundary for emissions
excluded from our reporting:
We have excluded emissions associated with Precinct's
activities where Precinct is the:
•Development Manager of Residential projects not
owned by Precinct
•Financier of Residential projects not owned
by Precinct
Auckland sites within our organisational boundary
Wellington sites within our organisational boundary
Climate Related Disclosures37
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Metrics and Targets
Targets
Precinct has elected to set targets that align with those supported by leading sector organisation, the World Green Building
Council and New Zealand Green Building Council, and includes providing transparent reporting on our climate-related
performance. Details of our approach as well as the definition of these targets in detail can be found on our website.
During FY22, Precinct began progressing towards, and in early FY23 formally adopted, the World Green Building Council’s
Net Zero Carbon Buildings Commitment for 2030. We believe this is the most effective way to support the property industry’s
goal of limiting global warming to 1.5 degrees. This target is specifically designed for the real estate sector, focusing
primarily on reducing operational energy use and upfront carbon emissions. Through our GHG emissions reporting, we
know that these areas represent over 90% of our portfolio’s environmental impact. In addition, and included within our
Targets table, are key elements of this Net Zero Commitment related to our progress in achieving Green Star and NABERSNZ
ratings coverage.
Precinct’s climate-related targets are summarised in the table below.
TargetCommitment DescriptionTarget TypeInterim
Target
Time
Horizon
Industry BodyPerformance against target
Net Zero
Emissions
Target
1
To achieve net zero
operational
2
GHG
emissions for all
buildings under direct
operational control
by 2030
Absolute
reduction
target – 2017
baseline year
NA2030World Green
Building Council
Net Zero
Buildings
Commitment
Net Zero
Emissions (Absolute)
Toitū net carbon zero
certified organisation
since FY19
3
Green Star
Target
4
>60% of the Portfolio
by value to achieve
a minimum 5 star
‘NZ Excellence’ As-
Built rating
Absolute targetNA2030New Zealand
Green Building
Council (NZGBC)
45%
NABERSNZ
Target
5
100% of the Portfolio
to achieve a minimum
4 star NABERSNZ Base
Building rating
Absolute targetNA2030New Zealand
Green Building
Council (NZGBC)
54%
1In addition to our WGBC Net Zero Buildings Commitment referenced above, during the reporting period Precinct committed to and began
working towards having a formal Science-Based Net Zero approach endorsed.
2Please see the WGBC website for a full explanation of the WGBC Net Zero Buildings commitment.
3The Toitu Net Zero Emissions certification covers Precinct’s operational emissions as defined by Toitu, which, together with the definition of
'mandatory boundaries' for measurement and offsetting are located on Toitū's website. In addition to this boundary, Precinct voluntarily
purchases and retires offset units for upfront carbon emissions from new developments and major refurbishments in line with our
WGBC commitment.
4Since January 2022, conditional requirements have been introduced for all projects pursuing a Green Star rating to demonstrate a minimum
reduction in upfront carbon emissions, minimum efficiency levels for anticipated operational energy use and ecological protection. The
achievement of a Green Star rating for projects registered from January 2022 implies the achievement of a minimum reduction in upfront
carbon emissions, minimum energy efficient design and ecological protection as defined by the Green Star Design & As-Built New Zealand v1.1
& v1.1.1 standards.
5NABERSNZ Energy Base Building ratings range from 0 to 6 stars, based on the achievement of minimum energy efficiency benchmarks. These
benchmarks are tailored to each building and take into account various factors, including the percentage of leased space, building use types,
and hours of operation, which can vary from year to year and building to building. Based on this, an absolute target has been set for portfolio
coverage to ensure consistency when reporting this target annually. This target is applied to directly owned assets.
Precinct Properties Group38
Offset units
Our commitment to the World Green Building Council Net Zero Buildings Commitment by 2030 reflects our focus on
achieving our prescriptive targets as well as retaining our net zero operational footprint through to 2030. To achieve these
objectives, Precinct voluntarily purchases verified offset units to account for residual Scope 1, 2 and select Scope 3 emissions
per Toitū net carbon zero and our WGBC reporting obligations. High quality offset units are purchased by Precinct directly
and retired through Toitū to ensure independent verification on the selection of the units. In assessing eligible offset units
voluntarily procured directly by organisations, Toitū only accept projects based on their robust three-level approach to due
diligence. This due diligence approach was taken in relation to Precinct's direct purchase of offset units applied to the FY24
certification. Further details related to this eligibility criteria can be found here. For previous cycles, Precinct has purchased
offset units directly through Toitū. The offset type, volume and project details applied to each certification year through this
program are documented publicly on
Toitu's website.
Other Climate-related metrics
The key metrics and key performance indicators (KPIs) that Precinct currently uses to measure and manage our climate-
related risks and opportunities are set out below. These metrics and KPIs enable Precinct to embed key criteria within our
climate reporting to ensure Precinct's approach to understanding and managing risks and opportunities is relevant to our
business strategy and industry.
Metric
DescriptionFY24
GHG
Emissions Intensity
Emissions intensity of Precinct's net carbon zero reporting boundary assured
by Toitū, including Scope 1 and 2 emissions alongside revenue.
15.26 tCO2-e/$m
Scope 1+2/revenue
Transition RisksPercentage of Precinct assets vulnerable due to anticipated market,
technology, reputation, carbon price and regulation.
Refer to Transition risk
impacts in Strategy
section of this report
Physical RisksPercentage of Precinct assets vulnerable due to temperature extremes,
cyclone, pluvial flooding and coastal inundation (including sea-level rise).
Refer to Physical risk
impacts in Strategy
section of this report
Climate-related
Opportunities
Green Star: >60% of the Portfolio by value to achieve a minimum 5-star 'NZ
Excellence' As-Built rating by 2030
NABERSNZ: 100% of the Portfolio to achieve a minimum 4 star NABERSNZ
Base Building rating by 2030 (directly owned)
45%
54%
Capital
Deployment
Corporate reporting and professional services spend related to Climate
related risks and opportunities.
$282k
Management of activities across the existing operational portfolio related to
climate-related risks and opportunities.
$314k
Gross capital investment across development projects deployed toward
Green buildings. This includes One Queen Street (Deloitte Centre), 256
Queen Street, Downtown Car Park, Freyberg Building, 61 Molesworth Street
and Bowen House.
$178.3m
Internal
Emissions Price
Precinct applies an internal emissions price as a default when accounting
for the impact of carbon across the business (e.g. within development
budgets for offsetting upon project completion). This internal emissions price
is reviewed annually to reflect changes in the voluntary carbon market.
$40/tCO2-e
RemunerationPrecinct's Executive and Senior Management team (comprising 29 people) are eligible to participate
in Precinct's short-term incentive bonus scheme, which is reviewed annually. One of the key objectives
for determining eligibility for payment under the short-term incentive scheme for FY24 was achieving
operating performance in line with business plan objectives, including Precinct's FY24 ESG objectives.
For FY24, the operating performance objective had a weighting of 25% of the total short-term
incentive scheme.
Climate Related Disclosures39
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Key Performance Indicators and industry metrics used by Precinct to measure and manage climate-related risks and
opportunities during FY24 is set out below.
KPI / Industry MetricsDescriptionFY24
Climate risk screening for all
new acquisitions
Precinct undertakes due diligence screening of new site
acquisitions to understand current and anticipated climate-
related risks.
From FY25, 100% of new acquisitions to complete early stage due
diligence as part of the transaction process.
45% of sites (by
acquisition value)
acquired in FY24
subject to climate
risk screening
Climate adaptation plans
for development projects
Inclusion of an early stage Climate Adaptation Plan to guide new
development and refurbishment projects to incorporate physical
climate risk mitigation at the early design stage through to
project completion.
From FY25, 100% of development projects to incorporate a site
specific Climate Adaptation Plan as part of project delivery.
73% of development and
refurbishment projects
by value (completed
during FY24)
Proportion of existing
assets subject to Climate
Risk Screening
Precinct undertakes annual climate screening via portfolio
analysis of climate-related physical and transitional risks. This
screening takes into account asset location, value and addresses
at least three scenarios relevant to Precinct.
From FY24, 100% of existing assets subject to annual Climate
Risk Screening.
100% of existing assets
during FY24
Global Real Estate
Sustainability Benchmark
(GRESB) Score
GRESB is an internationally recognised benchmark assessing
Environmental, Social and Governance (ESG) performance of
real assets for listed property companies, private property funds,
developers and investors that invest directly in real estate.
Precinct completes an annual submission to GRESB regarding its
sustainability practices, which includes responses to questions
regarding our climate adaptation measures. In the 2024
survey, GRESB have included questions related to an entities
climate reporting and Precinct view participation in this as an
effective tool for peer review and industry benchmarking of
climate reporting.
Precinct aims to achieve a GRESB Score in the top quartile
of participants.
86/100
4 star
Precinct Properties Group40
Appendices
Climate Related Disclosures41
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
Appendix 1
In preparing these Climate-Related Disclosures, Precinct has engaged the following specialist advisers:
Service ProviderDescription of Services
Toitū EnvirocareAuditor for Carbon Inventory in accordance with ISO 14064-3 for FY24
AONPhysical Risk Assessment for the Auckland and Wellington Portfolio (as described in the Risk Management
section of this statement)
ProximaReview of Precinct’s FY23 interim Climate Related Disclosures.
ClimanomicsClimanomics by S&P Global is a risk analytics platform that calculates the financial impact of climate
risk on physical assets or real estate investments and aggregates up to the portfolio level. Analysis spans
across eight decades for four emissions scenarios. Precinct upload all properties within this platform for
ongoing reviews against the latest climate data.
Chapman TrippReview of Precinct’s 2024 CRD including compliance against NZ Climate Standard CS 1 (excluding
GHG disclosures).
Precinct Properties Group42
Appendix 2
Sources of dataSee Appendix D of ‘Climate Scenarios for the Construction and Property Sector’ available here which
notes the following sources of data:
•IPCC 2021. Summary for Policy Makers. In: The Physical Science Basis. Contribution of Working Group
I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change.
•Climate Change Projections for New Zealand: Atmosphere Projections Based on Simulations from the
IPCC Fifth Assessment, 2nd Edition.
•NGFS emissions modelling available on the NGFS IIASA Scenario Explorer.
•Tatauranga Aotearoa / StatsNZ 2020. National population projections: 2020(base)–2073.
•Te Tai Pari o Aotearoa / NZ Sea Rise 2022. Maps: For Public.
•MBIE’s Building for Climate Change programme intentions.
•He Pou a Rangi / Climate Change Commission 2021. Scenarios dataset for the Commission's 2021
Draft Advice for Consultation (output from ENZ model).
•Climate Change Commission’s Electricity Market Modelling Datasets 2021. New Zealand Green
Building Council.
•NGFS Climate Impact Explorer.
•NGFS IIASA Scenario Explorer.
In addition, Precinct also reviewed the following sources for further insight into framing the narratives
related to nature within the scenarios chosen:
•Nature-based solutions can play a role offsetting emissions in the short term but technology-based
solutions are critical to achieve long-term decarbonization targets | S&P Global (spglobal.com)
•MBIE Aotearoa New Zealand's first emissions reduction plan - 'Working with Nature'
•Afforestation can help to tackle climate change. Here's how |World Economic Forum (weforum.org)
•Q&A: Can ‘nature-based solutions’ help address climate change? -Carbon Brief
•Carbon sequestration potential of plantation forests in New Zealand - no single tree species is
universally best, Serajis Salekin1*, Yvette L. Dickinson1 , Mark Bloomberg2 and Dean F. Meason1
- SpringerLink
Climate Related Disclosures
43
Contents
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Statement
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Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
To the intended users
Organisation subject to audit:
Toitū Carbon Programme:
Audit Criteria:
Responsible Party: Precinct Properties New Zealand Limited
Intended users: Management team
Registered address: Level 12, 188 Quay Street, Auckland, 1010, New Zealand
Inventory period: 1/7/2023 - 30/6/2024
Inventory report:
Responsible Party's Responsibilities
Verifiers' Responsibilities
IMR_2324_Precinct Properties_Net CZ_Org.pdf
Wehavereviewedthe greenhousegasemissions inventoryreport(“the inventoryreport”)andpages35to37and Appendix4 ofthe
Climate Related Disclosures for the above named Responsible Party for the stated inventory period.
The Management of the Responsible Party is responsible for the preparation of the GHG statement in accordance with ISO 14064-
1:2018 and the requirements of the stated Toitū carbon programme. This responsibility includes the design, implementation and
maintenance of internal controls relevant to the preparation of a GHG statement that is free from material misstatement.
Our responsibility as verifiers is to express a verification opinion to the agreed level of assurance on the GHG statement, based on the
evidence we have obtained and in accordance with the audit criteria. We conducted our verification engagement as agreed in the audit
letter, which define the scope, objectives, criteria and level of assurance of the verification.
The International Standard ISO 14064-3:2019 requires that we comply with ethical requirements and plan and perform the verification
to obtain the agreed level of assurance that the GHG emissions, removals and storage in the GHG statement are free from material
misstatement.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the ISO 14064-
3:2019 Standards will always detect a material misstatement when it exists. The procedures performed on a limited level of assurance
vary in nature and timing from, and are less in extent compared to reasonable assurance, which is a high level of assurance.
Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers, taken on the basis
of the information we audited.
GHG quantification is subject to inherent uncertainty because of incomplete scientific knowledge used to determine emissions factors
and the values needed to combine emissions of different gases.
INDEPENDENT AUDIT OPINION
Toitū n et carbonzero programme certification
Precinct Properties New Zealand Limited
Toitū net carbonzero organisation certification
ISO 14064-1:2018
Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard , GHG
Protocol: Scope 2 Guidance
ISO 14064-3:2019
Aotearoa New Zealand Climate Standards (NZ CSs)
Audit & Certification Technical requirements 3.0
Audit Opinion v3.0
©Enviro-Mark Solutions Limited 2021
Page 1
Appendix 3
Precinct Properties Group44
Basis of verification opinion
Verification
Verification strategy
Basis for modified verification opinion
Verification level of assurance
ISO CATEGORY
LOCATION BASED tCO
2
e
MARKET BASED tCO₂eLEVEL OF ASSURANCE
Category 1 2,396.702,396.70Reasonable
Category 2 1,387.6513.97Reasonable
Category 3 (mandatory)176.37176.37Limited
Category 3 (additional)99.1899.18Limited
Category 4 (mandatory)732.60732.60Limited
Category 4 (additional)18,354.8518,354.85Limited
Category 5 1,801.931,801.93Limited
TOTAL NET EMISSIONS24,949.2723,575.60
Our responsibility is to express an assurance opinion on the GHG statement based on the evidence we have obtained. We conducted
our assurance engagement as agreed in the Contract which defines the scope, objectives, criteria and level of assurance of the
verification.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We have undertaken a verification engagement relating to the Greenhouse Gas Emissions Inventory Report (the ‘Inventory
Report’)/Emissions Inventory and Management Report of the organisation listed at the top of this statement and described in the
emissions inventory report for the period stated above.
The Inventory Report provides information about the greenhouse gas emissions of the organisation for the defined measurement
period and is based on historical information. This information is stated in accordance with the requirements of International Standard
ISO 14064-1 Greenhouse gases – Part 1: Specification with guidance at the organisation level for quantification and reporting of
greenhouse gas emissions and removals (‘ISO 14064-1:2018’) and the requirements of the stated Enviro-Mark Solutions Limited
(trading as Toitū Envirocare) programme.
Our verification strategy used a combined data and controls testing approach. Evidence-gathering procedures included but were not
limited to:
—activities to inspect the completeness of the inventory;
—interviews of site personnel to confirm operational behaviour and standard operating procedures;
—reconciliation with sampling of electricity and natural gas reports and invoices to confirm accuracy of source data into calculations;
—reconciliation of construction waste reports to confirm accuracy of source data into calculations;
—criteria review with sampling of specialist LCA reports;
—detailed retracing of purchased good and service emissions.
The data examined during the verification were historical in nature.
The following qualifications have been raised in relation to the verification opinion:
Category4 emissionsources forpurchasedgoods&servicesareheavily assumptions based, using dollar spend data andanindustry
averageto estimateemissions. Approximately14%ofthe purchasedgoods&services expenseisnotincluded in the calculationof
emissionsasindividualexpenseaccountsbelow$1million havebeenexcludedfromthe calculation.It isnotpossibletoconduct any
alternative proceduresto estimateemissionsfromtheseexcludedexpenses.Any changetothe assumptions could significantly impact
the measurement of these emissions.
Audit Opinion v3.0
©Enviro-Mark Solutions Limited 2021
Page 2
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Governance
Strategy
Risk Management
Metrics and Targets
Appendices
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45
Responsible party's greenhouse gas assertion (certification claim)
Verification conclusion
Additional information relevent to the intended users
Other information
VERIFIED BYAUTHORISED BY
Name:
Ying ZhaoBilly Ziemann
Position: Verifier, Toitū EnvirocareCertifier, Toitū Envirocare
Signature:
Date verification audit: 8 August 2024
Date opinion expressed: 27 September 2024 17 October 2024
Without qualifying our opinion expressed above, we wish to draw the attention of the intended users to the following :
Wehavereviewedthemetricsandtargetssetout on pages38to40ofthe climaterelateddisclosures andassessed thesefor
consistency against the disclosure requirementsoftheAotearoaNewZealand Climate Standards.Wedonotexpressanopiniononthe
accuracyandcompletenessofthesedisclosuresaswehavenotassessedthemunder the requirementsofNZSAE1:Assurance
Engagements over Greenhouse Gas Emissions Disclosures.
The responsible party is responsibleforthe provisionofOtherInformationtomeetProgrammerequirements. TheOtherInformation
mayinclude emissionsmanagementand reduction plan and purchaseofcarboncredits, butdoes notinclude the informationwe
verified, and our auditor’s opinion thereon.
Our opiniononthe informationweverifieddoes not covertheOtherInformationin the ClimateRelatedDisclosureson pages1 to34,
38to43,and Appendix5,theGlossaryandDirectory,andwedonotexpressanyform ofaudit opinionorassuranceconclusion
thereon.Our responsibility istoreadandreviewtheOtherInformationand consider it intermsoftheprogrammerequirements.In
doingso,weconsiderwhethertheOtherInformationis materially inconsistent with the informationweverifiedor ourknowledge
obtained during the verification.
EMISSIONS - REASONABLE ASSURANCE
We have obtained all the information and explanations we have required. In our opinion, the emissions, removals and storage defined
in the inventory report, in all material respects:
• comply with ISO 14064-1:2018 and the requirements of the stated Toitū Envirocare Toitū carbon programme; and
• provide a true and fair view of the emissions inventory of the Responsible Party for the stated inventory period.
EMISSIONS - LIMITED ASSURANCE
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to
believe that the emissions, removals and storage defined in the inventory report:
• do not comply with ISO 14064-1:2018 and the requirements of the stated Toitū Envirocare Toitū carbon programme; and
• do not provide a true and fair view of the emissions inventory of the Responsible Party for the stated inventory period.
Toitūnetcarbonzeroorganisationcertified: PrecinctProperties NewZealand Limited includingGenerator,IntercontinentalHotel,Poni,
GhostDonkey and excludingDevelopmentAssets.Toitūnetcarbonzerocertified meansmeasuring emissionstoISO14064-1:2018and
Toitūrequirements; managing and reducing againstToitūrequirements; and compensating remaining emissions followingToitū
requirements and covering a minimum of the total Toitū boundary.
Audit Opinion v3.0
©Enviro-Mark Solutions Limited 2021
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Appendix 3
Precinct Properties Group46
Appendix 4
Greenhouse Gas Emissions - Methods, Assumptions and
Estimation Uncertainty
SymbolMeaning
✔ ✔ ✔High quality
✔ ✔Medium quality
✔Low quality
GHG
Protocol Category
Activity DataData SourceData QualityMethodology, Uncertainties & Assumptions
Scope 1
Stationary
Consumption
Diesel
Supplier Data -
Actual Usage
✔ ✔ ✔
Quantity in litres - high quality as records
directly from contractor
Natural Gas
Supplier Data -
Actual Usage
✔ ✔ ✔
Quantity in kWh - high quality as records
directly from utility. Precinct note that
during the period the gas contract
changed from Vector to Genesis, resulting
in quantified yet irregular reporting to
what is expected from properties using
natural gas.
Scope 1 Process
Emissions
Refrigerants
Supplier Data-
Actual Usage
✔ ✔ ✔
Quantity in kg - high quality data as
records directly from contractor
Scope 2
Imported
Electricity
Electricity
Supplier Data -
Actual Usage
✔ ✔ ✔
Quantity in kWh - high quality data as
records directly from utility and supported
by embedded network provider.
Scope 3- Cat 1
Purchased
Goods and
Services
Spend Based:
Purchased
Goods and
services
Calculated using internal
methodology (total NZD
spent per good/service
multiplying by a Toitu
provided emissions factor)
to calculate the emissions.
✔
Quantity in NZD - high quality data
from internal finance team, however
spend based calculations are inherently
less accurate compared to other
methodologies. Hence a higher margin of
error has been applied.
Potable Water
Supply
Supplier Data - Actual
Usage for the majority
of sites and apportioned
for select properties
without records
✔ ✔
Quantity in litres - high quality data with
low margin for error for properties with
utility records with consumption details.
Properties apportioned with average data
from across the Portfolio.
Scope 3- Cat 2
Embodied
Carbon from
New
Developments
Embodied
Carbon
Consultant modelling –
Industry metrics
✔ ✔
Quantity in t-CO2-e - medium
quality data from industry benchmarks
and emissions factors accepted by
NZGBC. Best practice approach for
embodied carbon calculations used for
development projects.
Scope 3- Cat 3
Fuel & Energy
Related
Activities
T&D losses from
Electricity
Supplier Data - Actual
usage - Calculated as a
portion of our imported
electricity consumption.
✔ ✔ ✔
Quantity in kWh - high quality data
for T&D losses as records directly from
utility and supported by embedded
network provider.
T&D losses from
Gas
Supplier Data - Actual
usage - Calculated using
Toitu Calculator based on
gas consumption.
✔ ✔ ✔
Quantity in kWh - high quality data for
T&D losses as records directly from utility.
Climate Related Disclosures47
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Governance
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Risk Management
Metrics and Targets
Appendices
Directory
47
Appendix 4
GHG
Protocol Category
Activity DataData SourceData QualityMethodology, Uncertainties & Assumptions
Scope 3- Cat 5
Waste
Generated
from
Operations
Auckland
Waste
Supplier Data - Actual
usage (rubbish direct).
✔ ✔ ✔
Quantity in kg - High quality as only minor
internal recalculations were applied to
waste contractor reports.
Wellington
Waste
Estimated usage using
internal methodology,
where the actual usage
from Auckland sites is
applied on a sqm basis to
Wellington sites, based on
the asset type (office vs
retail assets) to produce a
total annual estimate.
✔
Quantity in kg - Low quality data as
the figures are apportioned from other
Auckland sites with actual data, which
may differ significantly from actual usage.
Generator
Waste
Estimated usage using
internal methodology,
where the actual usage
from other Auckland sites
is applied on a sqm
basis to Generator waste
sites. This was then
divided equally across all
months within the period,
to give an estimated
monthly consumption.
✔
Quantity in kg - Low quality data as
the figures are apportioned from other
Auckland sites with actual data, which
may differ significantly from actual usage.
Construction
waste
Supplier Data -
Actual Usage
✔ ✔ ✔
Quantity in tonnes - high quality data as
direct from development site contractors.
Figure reported represents waste figure for
the project as a lump sum.
Scope 3- Cat 6
Business Travel
Business Travel
- Air, Hotels,
Rental Car
Internal Data - Actual
Usage (records of receipts
showing proof of travel
related purchases, i.e.
flights, hotel stays, etc.)
✔ ✔ ✔
Quantity in km - high quality data
due to accurate receipts/evidence direct
from travel booking platform and
financial records
Business Travel
- Taxi, Uber, Rail
Internal Data - Actual
Usage (records of receipts
showing proof of travel
related purchases, i.e.
flights, hotel stays, etc.)
✔ ✔ ✔
Quantity in km - high quality data due to
accurate receipts/evidence
Scope 3- Cat 7
Employee
Commute
Employee
Commute
Calculated using internal
methodology, based off
an internal survey that
considers the total
distance travelled by each
transport mode.
✔ ✔
Quantity in km - medium quality data
reliability. A staff survey was completed
and this represented only 71% of
employees. 29% of staff commuting was
estimated based on averages.
Scope 3- Cat 8
Upstream
Leased Assets
Electricity
Consumption in
Britomart &
Stanbeth (base
building)
Supplier Data - Actual
Usage (External Landlord
supplied NABERSNZ
Energy reports)
✔ ✔ ✔
Quantity in kWh - high quality data due
to the verification that goes into producing
the NABERSNZ reports.
Precinct Properties Group48
GHG
Protocol Category
Activity DataData SourceData QualityMethodology, Uncertainties & Assumptions
Gas
Consumption in
Britomart &
Stanbeth (base
building)
Supplier Data - Actual
Usage (External Landlord
supplied NABERSNZ
Energy reports)
✔ ✔ ✔
Quantity in kWh - high quality data due
to the verification that goes into producing
the NABERSNZ reports.
Diesel
Consumption in
Britomart &
Stanbeth (base
building)
Supplier Data - Actual
Usage (External Landlord
supplied NABERSNZ
Energy reports)
✔ ✔ ✔
Quantity in litres - high quality data due
to the verification that goes into producing
the NABERSNZ reports.
Generator
Water
consumption in
Britomart &
Stanbeth (base
building)
Supplier Data - Actual
Usage - External Landlord
supplied records
✔ ✔
Quantity in litres - medium quality data
due to landlord data supplied without
citing water bills.
Scope 3- Cat 13
Downstream
Leased Assets
Tenant
Electricity and
Gas Usage
Supplier Data -
Actual Usage
✔ ✔ ✔
Quantity in kWh - Recharge data
has a high level of accuracy, but
may occasionally differ from actual
consumption compared to individual
tenant consumption.
Climate Related Disclosures49
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49
Appendix 5
Key Board and Management engagements on climate-
related risks and opportunities in the preparation of these
Climate-Related Disclosures were as follows:
DateGovernance BodyRelevant Content to CRD
13 November 2023
ESG
Committee Meeting
Review Physical Risk Assessment
Review CRD process
External Presentation by Proxima on NZ CS 1 gap analysis
14 November 2023Board MeetingUpdate to Board from ESG Committee
8 May 2024
ESG
Committee Meeting
Review and recommend endorsement of CRD preparation process to Audit
& Risk Committee
8 May 2024
Audit & Risk
Committee Meeting
Endorse and recommend approval of CRD preparation process to Board
8 May 2024Board MeetingApproval of CRD preparation process
27 August 2024
ESG Committee
Meeting (out of cycle)
Legal liability presentation from Chapman Tripp
Review of Greenhouse Gas assurance by Toitu Envirocare
20 September 2024
ESG Committee
Meeting (out of cycle)
Review Director feedback associated with draft Climate-
Related Disclosures
ESG Committee endorse approval of the Climate-Related Disclosure
Statement to Audit & Risk Committee
20 September 2024
Audit & Risk
Committee (out
of cycle)
Audit & Risk Committee recommend approval of the Climate-Related
Disclosure Statements to the Board
17 October 2024
Board Meeting
(out of cycle)
Board approval of Climate-Related Disclosure Statements
Precinct Properties Group50
Glossary
$ and cents
New Zealand currency
Balance date
30 June 2024
Boards
the Boards of Directors of Precinct and
Precinct Investments
BPC
Business Performance Committee established internally
for Management to receive updates and monitor
performance of relevant business units
CCS
Carbon capture and storage
CEO
Chief Executive Officer
CFO
Chief Financial Officer
Chair
the Chair of the Boards
CRD
Climate-Related Disclosures
Energy Intensity
An energy intensity figure measures the amount of energy
consumed per unit of output, typically expressed in terms
of energy used per square meter of a building or per
unit of product produced, reflecting the efficiency of
energy use.
Emissions Intensity
An emissions intensity figure quantifies the amount of
greenhouse gas emissions produced per unit of output,
often expressed as emissions per square meter of a
building or per unit of product manufactured, indicating
the carbon footprint associated with that output.
ESG
Environmental, Social & Governance. For the purposes of
these climate-related disclosures, references to ESG or
Environmental, Social & Governance relate only to climate
change unless the context specifically and expressly
provides otherwise.
GHG
Greenhouse Gas
GHG Protocol
Corporate Accounting and Reporting Standard and
Greenhouse Gas Protocol: Corporate Value Chain (Scope
3) Accounting and Reporting Standard.
Green Star
Green Star is a voluntary sustainability rating system for
buildings, fitouts and communities. Administered by the
NZGBC the system provides a rating of up to six stars
based on a building’s key sustainability credentials.
NZGBC
New Zealand Green Building Council
Precinct
Precinct Properties New Zealand Limited
Precinct Investments
Precinct Properties Investments Limited
SBTi
Science-Based Targets initiative
Stabilised Portfolio
includes the properties or estates within the portfolio
that are developed and able to be leased, ie not under
active development
sqm
square metres
tCO2-e
Tonnes of Carbon Dioxide Equivalent
Toitū
Toitū Envirocare, is a provider of carbon management
and neutral certifications for New Zealand businesses. Its
certification programmes ensure that companies benefit
from international best practices, applied science, and
effective tools.
The organisation is a subsidiary of Crown Research
Institute, Manaaki Whenua – Landcare Research.
Upfront carbon emissions
Upfront carbon emissions refer to the GHG emissions
that are released during the extraction, manufacturing,
and transportation of building materials, as well as
during the construction and installation processes of
a building. These emissions occur before a building
becomes operational and are a significant part of the
embodied carbon in a building.
Climate Related Disclosures
51
Contents
Introduction
Statement
of Compliance
Governance
Strategy
Risk Management
Metrics and Targets
Appendices
Directory
51
Directory
Precinct Properties New Zealand Limited
Registered Office of Precinct
Level 12,
188 Quay Street
Auckland, 1010
New Zealand
T: +64-9-927-1647
E: hello@precinct.co.nz
W: www.precinct.co.nz
Directors of Precinct at 30 June 2024
Anne Urlwin – Chair, Independent Director
Nicola Greer – Independent Director
Christopher Judd – Independent Director
Chris Meads – Independent Director
Mark Tume – Independent Director
Graeme Wong – Independent Director
Officers of Precinct
Scott Pritchard, Chief Executive Officer
George Crawford, Deputy Chief Executive Officer
Richard Hilder, Chief Financial Officer
Manager
Precinct Properties Management Limited
Level 12,
188 Quay Street
Auckland, 1010
New Zealand
Precinct Properties Group52
precinct.co.nz
2024 Climate Related Disclosures
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.