Climate Related Disclosures FY24
VITAL HEALTHCARE PROPERTY TRUST vhpt.co.nz
Managed by Northwest Healthcare
Properties Management Limited
Page 1 of 1
MARKET RELEASE
29 October 2024
CLIMATE RELATED DISCLOSURES FY24
Northwest Healthcare Properties Management Limited as manager of Vital Healthcare Property
Trust (Vital) has today published the first Climate Related Disclosure in relation to Vital for the
reporting period ended 30 June 2024 under the Aotearoa New Zealand Climate Standards.
– ENDS –
ENQUIRIES
Aaron Hockly
Fund Manager, Vital Healthcare Property Trust
Tel 09 973 7301, Email aaron.hockly@nwhreit.com
Michael Groth
Chief Financial Officer, Northwest Healthcare Properties Management Limited
Tel +61 409 936 104, Email michael.groth@nwhreit.com
About Vital (NZX code VHP):
Vital Healthcare Property Trust is an NZX-listed fund that invests in high-quality healthcare
properties in New Zealand and Australia including private hospitals (~83%* of portfolio value) and
ambulatory care facilities (~17%* of portfolio value).
Vital is the leading specialist listed landlord of healthcare property in Australasia.
Vital is managed by Northwest Healthcare Properties Management Limited, a subsidiary of
Toronto Stock Exchange listed Northwest Healthcare Properties REIT, a global owner and
manager of healthcare property.
For more information, visit our website: www.vhpt.co.nz
__________________________________
* All figures are indicative, as at 30 June 2024
---
Climate Related
Disclosure 2024
Continuing to enhance our resilience
Tēnā koutou,
Northwest Healthcare Properties Management Limited (the Manager),
being the manager of Vital Healthcare Property Trust (Vital), is a climate
reporting entity under the Financial Markets Conduct Act 2013 and the
Financial Reporting Act 2013. The Manager is proud to present this Climate
Statement in relation to Vital for the 12 months ended 30 June 2024 (FY24),
our first under the Aotearoa New Zealand Climate Standards (NZ CS)
1
.
Purpose of this Climate Statement
This Climate Statement provides three plausible but
challenging potential futures across short, medium
and long-term horizons based on relevant industry
scenarios. These plausible scenarios are not presented
as expectations of what will happen but what could
happen to assist Vital’s stakeholders to better understand
Vital’s strategy and investments.
ESG achievements to date
Vital and the wider Northwest group have made
significant advances in sustainability / ESG over recent
years. These efforts include:
• Vital being ranked 1st for listed healthcare real estate
globally by GRESB
2
in 2023.
• Vital’s portfolio being enhanced over FY24 including
through the sale of assets with poorer environmental
credentials and the reinvestment of sales proceeds
into developing new buildings with improved
environmental credentials.
• Significant work having been undertaken to
understand our greenhouse gas emissions profile.
Future focus
Our climate-related disclosure obligations will increase
for FY25 as certain first-time adoption provisions relied
on in FY24 will no longer apply. We also expect that
our climate-related disclosure will continue to evolve in
future reporting periods as the quality and completeness
of our data and methodologies, and our governance
processes for managing climate risks and opportunities,
matures.
Focussing on climate-related performance metrics
is a key part of Vital’s strategy. Among other things,
improving Vital's portfolio and being recognised as
a sector leader in ESG are expected to enhance the
returns of Vital's assets and therefore contribute to
Vital’s mission to deliver stable and growing total Unit
Holder returns. We also intend to utilise information
collected to focus on ways of reducing and/or
offsetting greenhouse gas emissions.
Work undertaken in preparing this Climate Statement
has also contributed to the formulation and
implementation of our environmental strategy. However,
we acknowledge that we, like many of our peers,
remain at the start of this journey.
1
This Climate Statement has been prepared in accordance with Climate Standard 1 (Climate-related Disclosures) (NZ CS 1), Climate Standard
2 (Adoption of Aotearoa New Zealand Climate Standards) (NZ CS 2) and Climate Standard 3 (General Requirements for Climate-related
Disclosures) (NZ CS 3).
2
GRESB is an international and independent standards organisation which reviews over 2,000 entities in 75 countries representing over
US$7 trillion in investments.
Introduction
Nā māua noa, nā
Dr Michael Stanford
Independent Director & Chair of the Audit Committee
Graham Stuart
Independent Chair
Contents
All values in this report are in NZ dollars
unless stated otherwise.
This Climate Statement was approved by the board of directors of the Manager (Board) on 25 October 2024.
Introduction 3
Governance 6
Strategy 8
Risk Management 19
Metrics and Targets 20
Glossary & Acronyms 24
Appendices 25
Vital is managed by Northwest
Healthcare Properties Management
Limited, a subsidiary of a publicly
listed healthcare property group,
Northwest Healthcare Properties
REIT (Northwest), based in Toronto,
Canada, with global assets of
approximately NZ$11.2 billion under
management and ~290 staff across
eight countries.
Northwest is an experienced manager, owner, developer
and investor of healthcare property particularly in Australasia
with approximately A$5.6 billion of healthcare assets, an
approximate A$2.9 billion development pipeline and ~ 58
staff across offices in Auckland, Melbourne and Sydney.
The Manager’s primary responsibilities include the day-
to-day administration of Vital’s portfolio management,
sourcing new opportunities and conducting due diligence
on potential acquisitions. The Manager is also responsible
for providing specialist property management, project
management, development management and leasing
services to Vital.
A diagram illustrating how Vital fits into the wider Northwest
group is on the right hand side of this page.
Vital’s Manager
Vital is the only specialist owner of
healthcare property listed on the
NZX with a portfolio of hospitals
and ambulatory care facilities across
Australia and New Zealand valued at
approximately $3.2 billion.
Vital owns healthcare property to deliver a long-term income
stream for its investors.
About Vital
To be Australia and New Zealand’s leading listed
healthcare property fund.
Vision
To deliver stable and growing total Unit Holder returns
including an attractive risk-adjusted income distribution,
majority sourced from healthcare real estate.
Mission
Guide to reading this Climate Statement
Disclaimer
This Climate Statement includes forward-looking statements and metrics
and other disclosures about the future, which are inherently uncertain. It also
includes disclosures that are based on incomplete or estimated data and
related judgements, opinions and assumptions. Those disclosures are subject
to known and unknown risks, uncertainties and other factors, many of which
are beyond the Manager’s or Vital’s control.
Climate change is an evolving challenge, with high levels of uncertainty,
particularly over long-term horizons. Risks and opportunities described in
this Climate Statement, and the Manager’s strategies to achieve its targets,
may not eventuate or may be more or less significant than anticipated. There
are many factors that could cause Vital’s actual results, performance or
achievement of climate-related metrics, including targets, to differ materially
from that described.
Readers are therefore cautioned not to place reliance on such statements in
light of the uncertainty in climate metrics and modelling.
Any forward-looking statements included in this Climate Statement are based
on the Manager’s current views and expectations and are current only as at
the date of this Climate Statement. The Manager and Vital do not:
• represent that those statements and opinions will not change or will remain
correct after publishing this Climate Statement;
• undertake to revise or update those statements and opinions if events or
circumstances change or unanticipated events happen after publishing this
Climate Statement, other than as required by law; or
• give any representation, guarantee, warranty or assurance about its future
business performance or that the outcomes expressed or implied in a
forward-looking statement made in this Climate Statement, including its
performance against climate-related targets, will occur.
The Manager expects that some forward-looking statements made in this
Climate Statement may be amended and updated in future documents as the
quality and completeness of its data and methodologies continue to evolve
and improve.
To the maximum extent permitted by law, the Manager and Vital do not
accept responsibility for the accuracy or completeness of any forward-looking
statements or any liability whatsoever (including for negligence) for any loss
howsoever arising from any use of this Climate Statement or reliance on
anything contained in it or omitted from it.
Assurance
Although several external parties contributed to the preparation of this Climate
Statement, including reviews by Vital's auditor and the Manager's legal
adviser, the only component which has received external assurance is the
GHG inventory (refer to page 24 for details).
Joint Venture
8 countries
200 properties
~A$5.6bn AUM
~A$2.9bn development pipeline
58 staff based across four offices in
Melbourne, Sydney and Auckland
61 properties
~A$10.2bn ~NZ$11.2bn AUM
C$9.3bn
~A$2.9bn AUM
further A$2.5bn available
25 properties in Australia
Canada, the United States, Brazil, Germany,
the Netherlands, the United Kingdom, Australia
and New Zealand
8 committed projects all of which
are under construction
4,496 hospital beds and
1,104 mental health beds
A wholesale fund jointly with a
sovereign wealth fund being 70%
and Northwest 30%
Listed on the New Zealand
Stock Exchange (NZX: VHP)
Northwest ownership interest 28%
~A$2.9bn AUM
~NZ$3.2bn
Market Capitalisation
~A$1.10bn ~NZ$1.21bn
22 in Australia (~A$2.0bn)
and 14 in New Zealand (~NZ$1.0bn)
36 properties
AUSTRALIA AND NEW ZEALAND
Northwest
Quarterly Data Update
as at 30 June 2024
Total A/NZ AUM includes NZ$251.65m of contracted but not yet settled divestments for Vital
Vital AUM excludes NZ$251.65m of contracted but not yet settled divestmentsv
Visit the A/NZ regional Newsroom
Connect with us on LinkedIn
Listed on the Toronto
Stock Exchange (TSX: NWH)
Over 290 staff based across ten offices
Total A/NZ AUM includes NZ$251.65m of contracted but not yet settled divestments for Vital
Vital AUM excludes NZ$251.65m of contracted but not yet settled divestments
Use of adoption provisions (exemptions)
NZ CS 2 permits the Manager to elect to use one or more of the adoption
provisions in NZ CS 2 for its first reporting period. The Manager has elected to
use the following adoption provisions:
• Adoption provision 1, which exempts the Manager from disclosing the
current financial impacts of the physical and transition impacts identified and
from disclosing an explanation of why the Manager is unable to disclose this
information (if applicable);
• Adoption provision 2, which exempts the Manager from disclosing the
anticipated financial impacts of climate-related risks and opportunities
reasonably expected by the Manager and from disclosing an explanation
of why the Manager is unable to disclose this information (if applicable). It
also exempts the Manager from disclosing a description of the time horizons
over which the anticipated financial impacts of climate-related risks and
opportunities could reasonably be expected to occur;
• Adoption provision 3, which exempts the Manager from disclosing 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 the transition plan aspects of its strategy are aligned
with its internal capital deployment and funding decision-making processes;
• Adoption provision 5, which exempts the Manager from disclosing
comparative metrics for Scope 3 GHG emissions;
• Adoption provision 6, which exempts the Manager from disclosing, for each
metric disclosed in the current reporting period, comparative information for
the immediately preceding two reporting periods; and
• Adoption provision 7, which exempts the Manager from disclosing an
analysis of the main trends evident from a comparison of each metric from
previous reporting periods to the current reporting period.
For readability, the order of disclosures in this Climate Statement differs from the
order in NZCS1.
Currency and date
All numbers are in New Zealand dollars as at 30 June 2024 (Vital’s last balance
date) unless otherwise stated.
Statement of Compliance
With the adoption provisions we have noted above being applied, this Climate
Statement complies with the NZ CS.
Scope
As Vital’s portfolio of assets is trans-Tasman, our climate-related disclosure
encompasses assets in both countries.
CLIMATE RELATED DISCLOSURE 2024
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VITAL HEALTHCARE PROPERTY TRUST
AU DIT
COMMITTEE
OPERATIONAL
RISK COMMITTEE
CLIMATE WORKING GROUP
SUSTAINABILITY TEAM
Disclosure objective
To enable primary users to understand both the role an entity’s governance body plays in overseeing climate-related
risks and climate-related opportunities, and the role management plays in assessing and managing those climate-related
risks and opportunities.
Governance
Role of the Board
The Board has overall responsibility for the oversight of climate-
related risks and opportunities for Vital.
The Board oversees risks and opportunities associated with climate
factors and the preparation of climate statements and ensures
that the Manager’s records and documents (including financial
reports, climate statements and climate-related records) are true,
correct and conform to required reporting standards. The Board
also approves and guides the management of climate-related risks
and opportunities presented by the Operational Risk Committee
(ORC) and the Climate Working Group (CWG) via members
of Vital’s leadership team (including Vital's Fund Manager, CFO
and Regional General Counsel), including the approval of
environmental targets which directly affect business operations.
Vital’s commitment to achieving a minimum 5 Star Green Star
rating on all new major developments is a Board approved target
and a prominent consideration during the evaluation process for
acquisitions and developments.
The Board has visibility of progress against this target through the
board reporting processes described below.
The Board has had visibility of progress against Vital’s net zero
2050 target and the metrics disclosed in this Climate Statement
Board training
The Board and the Audit Committee each has four scheduled
meetings per annum. The Board also has at least two climate-
specific board training and / or discussion sessions per annum
which in FY24 comprised:
1. a workshop on Climate Related Disclosure; and
2. a training session on the climate change-related claim in
Smith v Fonterra and others encompassing implications for
corporate governance and directors’ duties.
Board composition and experience
The Manager’s Board comprises five highly qualified directors based in Auckland (two directors), Toronto, Sydney and Melbourne, three of
whom are independent. The current directors and links to their biographies can be accessed here.
as part of their review and approval of this Climate Statement and
through associated Board update papers and presentations.
Climate-related risks and opportunities are reported to the Board
and, where applicable the Audit Committee through standing
quarterly board reports (notably standard sections of the Fund
Manager, Portfolio and Development reports with other reports on
an ad hoc / exceptions basis).
Role of the Audit Committee
The Board has established an Audit Committee to assist the Board
discharge its responsibilities, including in relation to climate-related
disclosures. The Audit Committee is responsible for reviewing the
climate-related disclosure and advising the Board whether, in
the Committee’s view, that disclosure complies with applicable
standards and legislative requirements and, if appropriate,
recommending approval of the climate-related disclosure by
the Board. The Committee is also responsible for ensuring that
appropriate controls and assurances are implemented for
the preparation, review, verification and approval of climate-
related disclosure.
The Audit Committee is informed of climate-related risks and
opportunities in the context of climate-related disclosures including
through reports from the CFO and external auditors.
The Board is expected to have appropriate experience and
skills across multiple competencies including sustainability and
climate-related matters, and Directors are expected to contribute
to all elements of Vital’s strategy and Risk Framework. The Board
exercises its responsibilities collectively and no one Director
assumes responsibility for any singular matter.
A skills matrix has been established to evaluate the Board’s skills,
competencies and experience, which is subject to no less than
annual review. The skills matrix includes a self-assessment of each
Director’s awareness and understanding of climate change and
ESG / sustainability.
The current version of this matrix is shown below.
Skills & Experience
1
Graham StuartAngela BullCraig MitchellMichael StanfordMike Brady
Accounting / Finance
/ Economics
•
O
•
OO
Commercial Real Estate /
Asset Management / Valuation
•••
OO
Corporate Governance
•••••
Legal / RegulatoryO
•
OO
•
Healthcare Operator
•
Sustainability / ESG including
Climate Related Matters
OOOOO
•
O
HIGHLY SKILLED / EXPERIENCEDMODERATE SKILLS / EXPERIENCE
• Heads of ANZ
• Fund Manager
• CFO
• Financial Controller
• Regional General Counsel
• Sustainability Associates
• Development Managers
Quarterly agenda plus at least
2 climate specific sessions per
annum
Oversees, reviews and approves Vital’s strategy and risk
management framework, including Vital’s sustainability strategy,
climate related disclosures and environmental targets.
OVERSEE
Informs the Board of climate related risks and
opportunities that have been managed by the CWG.
INFORM
Assesses, monitors and reviews climate
related risks and opportunities.
MANAGE
Identifies and analyses climate
related risks and opportunities.
IDENTIFY
Macarthur Health Precinct, NSW
(Artist’s Impression)
Buranda Health Hub, QLD
(Artist’s Impression)
1
Director experience is considered on an expansive basis and may not necessarily relate or be relevant to a particular jurisdiction. For example, a director may be noted as
having legal / regulatory skills and experience but this does not necessarily mean it is for New Zealand.
V ITAL
BOARD
CLIMATE RELATED DISCLOSURE 2024
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VITAL HEALTHCARE PROPERTY TRUST
Healthy Planet
Actively progress net zero by 2050 commitment
including science-aligned interim targets, through
capital allocation to deliver new properties, adapt existing
properties and inform our approach to acquisitions and
disposals, to be:
• Energy-efficient, built and operate with lower-
emissions, and be powered by 100% renewable
energy for all new developments and any purchased
electricity by Vital
• Resilient to climate impacts with portfolio wide
management and mitigation plans in place
• Verified by third party certifications for all developments
and existing assets where possible
Lead (Sector Transformation)Compete (Positioning Beyond Minimum Norm)
Thriving Partners
Move sustainability engagement with operating
partners from passive one-way engagement to strategic
collaboration, achieving top quartile, NPS performance
that prioritise tenants:
• Improving asset efficiencies and reducing Vital’s scope 3
emissions
• Activating renewable energy strategies across 20%
of tenant-controlled assets by 2030
• Executing green clauses across all new leases, renewals
and development deeds reflective of Vital’s ESG strategy
Business model and sustainability strategy
Sustainability forms a key component of all aspects of Vital’s Board approved strategy to achieve
our Vision to be Australia and New Zealand's leading listed healthcare property fund, consistent
with our Mission Statement to deliver stable and growing total Unit Holder returns including an
attractive risk-adjusted income distribution, majority sourced from healthcare real estate. Key
sustainability aspects of Vital’s 5 year strategy have been extracted and summarised in the table
below to give readers of this Climate Statement a sense of the Manager’s focus. The ambitions
described in the table below have not been formally adopted by the Manager as “targets” or
“metrics” for the purposes of the NZ CS and this Climate Statement.
Disclosure objective
To enable primary users to understand how climate change is currently impacting an entity and how it may do so in the future.
This includes the scenario analysis an entity has undertaken, the climate-related risks and opportunities an entity has identified,
the anticipated impacts and financial impacts of these, and how an entity will position itself as the global and domestic
economy transitions towards a low-emissions, climate-resilient future.
Strategy
Role of management
The Board has delegated identification, monitoring and
management of key risks and opportunities including climate-
related matters, to the ORC. The ORC provides updates and
recommendations to the Board in relation to climate-related risks
via members of Vital’s leadership team as noted above. The ORC
is comprised of senior members of the Manager’s leadership team,
representing the capital transactions, development, finance, funds
management and legal teams. The ORC meets monthly to consider
a variety of risks, including climate-related risks, informed by the Risk
Framework.
The ORC has delegated day-to-day management of climate-
related risks and opportunities to the CWG, which comprises
key members of Vital’s senior management team (including Vital’s
Fund Manager and Co-Head of Northwest’s ANZ Region) and
Northwest’s full regional Sustainability Team. The CWG meets
quarterly and a register of climate impacts is a standing agenda
item including any asset-level climate impacts reported by property
managers, an overview of anticipated climate impacts generated
from S&P Global Climanomics and any emerging transition
risks identified from the Sustainability Team or Regional General
Counsel. If risks are deemed material, the CWG may request further
action or escalate to the ORC.
The CWG and the Sustainability Team ensure that the ORC is fully
informed of material climate-related risks identified by the CWG
and Sustainability Team. The Board is updated on activities or
reports of the CWG via its members who are part of Vital’s senior
management team.
Climate-related risks are also considered by management as part
of the Manager’s investment process as properties are proposed
to be acquired, sold and / or developed by Vital. Climate-related
opportunities are considered by management through business
proposals and broader short-term capital deployment planning.
These matters are reported to and considered by the Board through
the management committees and processes described above.
Climate-related risks and opportunities are a key component of
Vital’s Board approved 5-year strategy (as further described in
the Strategy section below), are a standing item on acquisition,
disposal and development checklists and are a standard reporting
item to the Board when seeking consent for an acquisition, disposal
or development.
Vital only invests in healthcare real estate (primarily hospital, out-
patient, aged care and research facilities) and is landlord to many
of Australia and New Zealand’s leading private hospital operators.
Healthcare is a defensive sector with expenditure largely
government or insurer funded or non-discretionary. As a result,
Vital’s income is less impacted by economic or business cycles
than other classes of investment property.
Ageing and growing populations in both Australia and New
Zealand coupled with rising life expectancy and ongoing
improvements in science, technology and care continue to lead
to increased demand for healthcare. Increased demand supports
Vital’s investments.
Key characteristics of Vital’s business model include:
• A market-leading weighted average lease term (known
as WALE or WALT).
• Embedded revenue growth under indexed leases.
• Strong, established tenant / operators and high occupancy rate.
• Defensive operating fundamentals based on cure
healthcare focus.
Inclusive Company
Build for our current team members as well as our future
employees through developing and delivering a peer
comparable ‘people strategy’ that:
• Creates a culture that demonstrates Northwest’s
values and promotes sustainability to encourage long-
term thinking
• Prioritises diversity, inclusiveness, and equity through
action and transparent disclosures
• Builds capacity through professional development,
training, and leadership opportunities
• Ensures workplace safety and wellbeing through
tracking, transparent disclosures and zero injury targets
Keep Pace (Industry Norm)Keep Pace (Industry Norm)
Strong Communities
Investing in the communities we serve and influencing the
sustainability practices of our supply chain through:
• Protecting human rights and sourcing sustainably, aligned
with our modern slavery requirements
• Promoting cultural awareness through Reconciliation
Action Plan (RAP) deliverables and development of
a Māori engagement strategy
• Supporting the community through volunteering and
charitable giving
Macarthur Health Precinct, NSW(Artist’s Impression)
CLIMATE RELATED DISCLOSURE 2024
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VITAL HEALTHCARE PROPERTY TRUST
Specifically in relation to climate change, among other
things, the Manager:
1. Considers climate change risks and opportunities as part of
all acquisitions and developments (refer to the Governance
section above for details about how this occurs);
2. Has a programme in place to upgrade the efficiency of its
property portfolio informed through the completion of portfolio
wide Energy Audits and subsequent capital planning; and
3. Has divested a number of assets in part because they have
lower environmental credentials including greater potential risk
from climate change impacts.
FY24 climate-related impacts
The Manager monitors the impacts of climate-related events on
Vital's assets, developments and operations. Climate-related events,
including the various risks identified through the scenario analysis
described below, could impact the business continuity of Vital’s
tenants which, in turn, could impact Vital’s rental income.
During FY24, two assets in Queensland were affected by heavy
rainfall that occurred during the Boxing Day Storms in December
2023. Damage was considered “minor” with repairs managed by
onsite facility managers.
Vital's assets did not experience any physical impacts from Cyclone
Gabrielle during FY23.
Scenario analysis
Vital’s role in developing sector specific climate scenarios
Vital played a key role in helping develop two sector-wide reports for climate scenarios for public use.
Climate Scenarios for the Construction & Property Sector
Firstly, Vital was a member of the working group responsible for
producing Climate Scenarios for the Construction & Property
Sector (Construction and Property Sector Scenarios). Over
an 8-month period, workshops were held to identify key drivers
relevant to the whole real estate industry, engage in discussions
on various climate scenarios, align with global climate modelling
tools, and ultimately present three distinct climate scenarios.
Climate Change Scenarios for the Health Sector
Secondly, Vital provided funding, and Vital’s Sustainability
Associate, Abbey Pickering, participated in the
Technical Working Group and Vital’s Fund Manager,
Aaron Hockly, served on the Leadership Group, which
developed and delivered Climate Change Scenarios
for the Health Sector (Health Sector Scenarios).
In line with NZ CS 1 guidelines, both the Construction and Property Sector Scenarios and the Health Sector Scenarios considered a 1.5°C
and 3°C+ climate scenario and a third scenario of below 2°C.
As Vital owns, manages and develops healthcare property, the climate scenarios in both reports have direct relevance to Vital’s
current and future operations.
Vital is not currently materially impacted by
the transition to a low-emissions economy or
any identified transition risks. Refer to page 16
for details on the anticipated impacts of Vital's
transition risks in the future.
Wakefield Hospital, Wellington
Macarthur Health Precinct (Stage 1), NSW
CLIMATE RELATED DISCLOSURE 2024
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VITAL HEALTHCARE PROPERTY TRUST
Vital’s entity level climate scenarios
The Manager reviewed both the Construction & Property Sector and the
Health Sector scenarios. Workshops involving the Sustainability Team,
Property Managers and the CWG were held to identify any variations in
key drivers between Vital’s business and the scenarios above. The workshops
concluded that these scenarios are relevant to Vital's business and strategy,
both in New Zealand and Australia albeit with some areas having more
or less emphasis due to the specific nature of Vital (i.e. being a specialist
owner of only healthcare property and not being a healthcare operator).
This scenario analysis at a sector level, adjusted for Vital specifically, enabled
the CWG to generate a comprehensive list of climate-related risks and
opportunities, along with their associated current and anticipated direct and
indirect business impacts.
No parts of Vital's value chain were specifically excluded from this risk
identification process although Vital has not undertaken a formal value chain
mapping exercise.
The scenario analysis was a standalone process to prepare this Climate
Statement, however it will help inform Vital’s future wider strategy. Climate
adaption remains a priority as part of Vital's sustainability strategy and will be
continuously refined. The process undertaken is illustrated in the chart below
1
.
1 Engage stakeholders
External stakeholders – NZGBC, Beca, Health New Zealand - Te
Whatu Ora, Tonkin & Taylor (all via sector-wide working groups)
and WSP New Zealand Limited who were commissioned to perform
a gap analysis against the strategy disclosures under NZ CS 1 and
to facilitate capabilities-building workshops on financial impacts and
transition planning.
Internal stakeholders – Members of the CWG, the Sustainability Team
and representatives from each business division of the Manager.
2 Define the problem
Internal question – “how could climate change plausibly affect
Vital’s current business operations and long-term strategy to provide
real estate solutions to the healthcare industry, what should we do
and when?”
3 Identify driving forces and critical uncertainties
The consolidated sector driving forces applicable and material to Vital are listed below. For more information on the critical uncertainties
associated with key driving forces please refer to the Construction and Property Sector Scenarios document (see link page 10).
4 Select temperature outcomes and emissions pathways
2
1
Adapted from External Reporting Board’s “Staff Guidance Entity Scenario Development”, September 2023.
Construction & Property:Health:
• Increasing frequency and severity of extreme weather
events
• Availability of low carbon materials to meet regulations
and/or market demand
• Regulatory changes (including resilience, low carbon and
circular economy regulations)
• Pressures on centralized infrastructure/aging infrastructure
• Price of carbon (and impact on cost of materials)
• Cultural
• Environment
• Financial/Economic
• Policy
• Social/structural
• Technology
Scenario 1
Net Zero by 2050
(1.5 ̊C) – SSP1 -1.9
1
| RCP2.6
Scenario 2
Delayed Transition
(<2 ̊C) – SSP1 -2.6 | RCP2.6
Scenario 3
Hot House World
(3 ̊C+) – SSP3 -7.0 | RCP8.5
5 Draft narratives
Sector scenario narratives on plausible outcomes are prepared for
each of the temperature scenarios consolidated at an entity level for
applicability. The narratives are listed in the section below.
6 Assess strategic resilience
Risks and opportunities arising from the narratives are evaluated
utilising climate science forecasting (derived from IPCC AR5 and
AR6 where applicable) including impacts to Vital’s assets and
developments. This assessment follows the narratives below.
0
30000
20000
10000
-10000
40000
50000
60000
70000
80000
1990
Global Carbon Emissions (Mt CO
2
)
199520002005201020152020202520302035204020452050205520602070208020902100
Further detail on the steps
shown above is set out below.
Climate adaption remains
a priority as part of Vital’s
sustainability strategy and will
be continuously refined.
1
Engage stakeholders
and prime an effective
working group
Ascot Central, Auckland
2
The SSP-RCP scenarios incorporate assumptions about future socioeconomic developments, such as population growth, economic trends, and technological advancements. The
SSP-RCP scenarios assume a certain level of global cooperation and implementation of climate policies. (NZ Ministry for the Environment)
The temperature outcomes for scenarios 1 and 3 are defined under NZ CS 1 and scenario 2
is consistent with the Construction & Property and Health Sector Scenarios.
2
Define the problem
5
Draft Narratives
4
Select temperature
outcomes and
emissions pathways
3
Identify driving
forces and critical
uncertainties
The graphs above show the projected global GHG emissions
trajectory for each of these scenarios. These graphs are illustrative
only and do not represent predictions or expectations of the
future, including in relation to Vital’s future GHG emissions.
Vital’s three specified climate scenarios are based on the same
underlying assumptions and data sets as the Health Sector and
Construction & Property Sector scenarios but adapted to use
only relevant data sets for Vital. The Manager has not conducted
any additional or separate modelling for its climate scenarios.
Refer to the sector specific climate scenario documents (linked on
page 10) for information on the data used to construct the sector
specific scenarios and associated assumptions and limitations.
6
Assess strategic
resilience
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Vital’s Climate Scenario Narratives
This section provides narratives for the three scenarios listed above
which have been developed for and by Vital. These scenarios
refer to possible future states to test the resilience of Vital’s current
business model and strategy, and help identify potential climate-
related risks and opportunities. The scenarios are hypothetical and
do not represent predictions or expectations of the future. Instead,
they provide plausible potential outcomes under three different
temperature scenarios. All wording in these narratives come from
the Construction & Property and Health Sector Scenarios noted on
page 10 (limited to areas relevant for Vital) with Australian material
added from their National Climate Risk Assessment reports.
Scenario 1 – Net Zero by 2050
Labelled an ‘Orderly’ scenario where the world succeeds in
limiting global temperature increases to 1.5°C above pre-
industrial (1850-1900) temperatures by 2100. Global emissions
decline steadily to achieve net zero CO
2
emissions globally by
2050. The energy grid shifts rapidly away from fossil fuel use, with
the New Zealand energy grid reaching 100% renewable by
2050 and Australia following close behind. Alternative fuels are
used as a backup, and renewables are utilised onsite instead of
fossil fuels.
Throughout the 2020s and 2030s, the cost and lead-times for low
carbon materials and products rise, but by 2040, they become
more cost and time effective than traditional materials. This shift
prompts significant growth in the construction sector as carbon-
supporting infrastructure is replaced with greener alternatives.
Regulatory changes enforce government procurement policies
targeting recycled materials and circular economy principles, along
with stringent energy and carbon caps for new buildings. Existing
buildings must disclose energy and carbon performance and
transition away from fossil fuels while scaling up energy efficiency
practices. New buildings prioritise low-carbon techniques, incurring
higher construction costs but yielding long-term operational savings
and improved resilience.
Failure to meet emissions targets results in financial penalties,
driving entities to pursue emissions reduction strategies. Market
awareness of climate change risks prompts demand for low carbon
buildings, with tenants seeking energy-efficient options.
Globally aligned efforts manage climate-related refugees, with
New Zealand and Australia experiencing modest net immigration.
Severe climate events persist into 2050 but stabilise by 2100,
prompting initial increased insurance premiums and retreat from
floodplains, coastal areas and wildfire-prone areas. Reliance on
offsets decreases as emissions decline, with strategic partnerships
between public and private sectors advancing climate policy.
Climate change friendly financing (e.g. climate linked loans)
increases to develop resilient infrastructure funded by the
superannuation age gradually rising to 70 by 2100. Domestic
migration shifts from high-risk areas and urban density increases
as the impacts from sea level rise push people away from coastal
areas. Renewable energy uptake grows, driven by high emission
pricing and appealing government incentives for self-production
(e.g. solar). Despite initial increased costs to landlords of healthcare
and aged care services, appetite from tenants for efficient and
resilient buildings allow costs to be passed down.
Scenario 3 – Hot House World
Climate policy development stalls, with no further effective climate
policies enacted. Global emissions continue to grow until 2080, which
leads to a greater than 3°C increase of global temperature above
pre-industrial levels by 2100. Exploitation of fossil fuel resources and
the continuation of energy intensive lifestyles continues to increase
around the world.
The lack of decisive policy action hinders carbon reduction efforts,
redirecting focus towards climate adaptation in the property and
construction sector. New Zealand and Australia face severe climate
impacts, leading to no further efforts to decarbonise their respective
energy grids, while Australia remains reliant on fossil fuels due to
political and economic considerations. Acute weather events escalate,
increasing frequency of rainfall intensity and cyclone conditions creates
ongoing challenges for property owners with efforts and time focused
on clean up and business interruption costs.
Continuous damage to energy producing infrastructure necessitates
building energy efficiency improvements to reduce energy demand
outside of self-generation. Demand rises for resilient healthcare
buildings in the private sector, prompting increased access to capital
and investment opportunities for companies with strong and actionable
climate adaptation plans.
The New Zealand and Australian governments prioritise post-disaster
recovery over emissions reduction, missing international targets and
straining the economy. Private funding for health services increases, but
research capacity declines, worsening social and economic crises.
Climate-related impacts elevate global household costs, driving
migration to New Zealand and within both Australia and New
Zealand from more adversely climate-affected regions. Additionally,
the rising sea levels reshape the geographic distribution of settlements
across New Zealand and Australia, with movement away from
inundated coastal areas. Population growth strains infrastructure,
reshaping settlement patterns away from coastal / acute weather prone
or wildfire-prone areas. Economic disparities widen as property prices
surge in safer areas.
Changes in behaviour are observed among New Zealanders and
Australians, particularly in adjusting to hotter summers, with outdoor
activities and work hours adapted to avoid the peak heat between
10:00-16:00 (and longer hours in Western Australia, Queensland
and the Northern Territory). Increasing number of hot days challenges
construction completion schedules.
Concerns arise regarding the water supply to health facilities. While
health facilities are prioritised, onsite storage is not equipped with the
capacity needed to supplement reductions in the main water supply.
Amidst fluctuating electricity prices tied to climate conditions, energy
providers eliminate fixed-term contracts, and expose commercial and
healthcare entities to market rate fluctuations.
Scenario 2 – Delayed Transition
The world fails to implement the changes required to limit global
temperature increases to 1.5°C above pre-industrial levels by
2100. Global emissions continue to rise during the 2020s as
historical social, economic and technological trends continue.
However, the increasing frequency of climate-related physical
events, and concerns about meeting Paris Agreement goals drives
a sudden shift in global policy around 2030, when abrupt and
stringent decarbonisation policies are enacted. The private building
sector accelerates efforts to achieve interim greenhouse gas
reduction targets with pressure from investors for detailed adaption
plans.
Rapid but disordered policy, technology, and behaviour changes
characterise New Zealand and Australia’s response to climate
issues. New Zealand leads in decarbonisation efforts, aiming
for full energy grid decarbonisation by 2050, while Australia
transitions slower due to political and economic factors. Despite
stringent policies enacted in 2030, the transition faces hurdles,
such as reliance on fossil fuels in existing buildings. Pressure from
investors and tenants for resilient buildings increases as physical
climate impacts accelerate, affecting financial viability of existing
buildings that do not decarbonise at industry pace.
Regulatory changes in 2030 demand immediate shifts in energy
and carbon requirements, leading to disruptions in the building
sector. Early movers benefit from future-proofed assets, while late
movers face challenges with stranded assets. Electricity price
hikes affect operational costs for healthcare, while low-carbon
building techniques mitigate long-term operational expenses.
Opportunities to invest in emerging technologies such as onsite
batteries or carbon capture solutions creates distinction between
industry leaders and those trying to keep pace.
By 2050, severe climate events persist, although global
temperature increases stabilise below 2°C. However, sea level
rise impacts are yet to fully manifest, necessitating further adaptation
towards 2100.
Property owners face escalating insurance premiums in areas
with consistent impacts from increased rainfall intensity, sea level
rise and wildfires with a reduction in the availability of insurance
by 2040.
Population growth, especially in older age brackets, strains healthcare
and aged care services which is exacerbated by increased health
issues due to climate change. Climate change impacts prompt
population shifts, particularly away from vulnerable coastal / acute
weather prone and wildfire-prone areas. Health services are only
located in high density areas and follow population shifts.
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Anticipated impacts
of climate risks and
opportunities
Following completion of the climate scenario process,
material climate-related risks and opportunities were
identified for Vital. These are set out in the tables.
Climate-related risks and opportunities can be categorised
as “physical” and “transition” (refer to the glossary on page
24 for details). There are interdependencies between these
categories, and the impacts of risks and opportunities can be
both physical and transition.
These risks are not independent of each other and are not
listed in order of materiality. The scenarios and time horizons
where the risks are expected to be most acutely felt are
identified in the table. However, risks may also be relevant to
other scenarios and time horizons.
Selected time horizons
Short term 2024-2030: consistent with the earliest
expiry dates of material leases within Vital’s portfolio and
where material changes related to OPEX are likely to start
becoming evident.
Medium term 2030-2050: when the majority of Vital’s
leases (by rent) expire.
Long term 2050-2100: consistent with estimated building
lifecycles and where relevant development decisions are
expected to become more materially impacted.
The time horizons above are consistent with the Construction
& Property and Healthcare Sector Scenarios and apply
to Vital's scenario analysis set out above and the climate-
related risks and opportunities identified through Vital's
scenario analysis.
Risks
Scenarios
most impacted
Time
Horizon:
Anticipated impacts on specific properties and developments Potential impacts on Vital as an entity
Rainfall
Intensity
Hot House WorldM
Properties likely to suffer more regular damage as the frequency of high
rainfall events increases. This will potentially lead to some or all of the
following: limit tenant use of buildings, reduce tenant profitability, reduce
rent collection, increase operating costs and increase maintenance
capex as plant, equipment and potentially parts of buildings require
more regular repairs and / or replacement.
Stranded Asset: Extreme weather events such as rainfall
intensity, cyclones, temperature rises and drought-like
conditions will become more frequent over time. An existing
asset in the portfolio could become ‘stranded’ (i.e. unviable
to be operated by either tenant or landlord). This could
impact Vital’s returns, asset values, access to capital and /
or access to insurance which could impact Vital’s current
strategy particularly around the location of assets Vital’s
owns and / or develops.
Acquisition and Divestment: An asset is acquired (or an
asset is not divested) because of its location, build quality to
climate change resilience or lease terms and conditions will
be materially adversely impacted (net cash yield and/or
valuation/IRR) by climate change.
Development: Vital has a large and longterm development
pipeline. An asset during or post construction may be
adversely impacted (net cash yield and/or valuation/IRR)
by climate change impacts such as increased intensity of
cyclone events, increasing number of hot days or increasing
rainfall intensity.
Asset Management: Vital’s portfolio traditionally has
long term lease duration (i.e. 20+ years ), the impacts of
chronic physical climate-related impacts expose Vital to
potentially unrecoverable costs including by way of rent
review mechanisms that are not linked to ‘climate change
inflation’ (i.e. restrictions on market reversions via caps /
collars or material time intervals between reversion events),
restrictions on the recoverability of expenses and/or the
ability to recover commercial returns on increased capital
expenditure / R&M required to maintain / build climate
change resilience.
Capital Management: Efficiently priced capital (debt
and equity) may not be available to Vital on acceptable
terms and conditions because of insufficient climate
change ambition and/or progress on climate resilience /
greenhouse gas emission reductions.
Cyclone
Events
Hot House WorldL
Property damage from high winds which may result from surrounding
infrastructure or vegetation. This will potentially lead to some or all of the
following: limit tenant use of buildings, reduce tenant profitability, reduce
rent collection, increase operating costs and increase maintenance
capex as plant, equipment and potentially parts of buildings require
more regular repairs and / or replacement.
Average
Temperature
Rise
Delayed Transition,
Hot House World
M-L
Reduced equipment lifecycle periods due to increased operation and
reliance on surrounding infrastructure (electricity grid connections). This
will increase maintenance capex and / or reduce tenant profitability.
Development delays times due to an increase in the number of hot days
will make developments more expensive and delay rent collection and
/ or tenant profitability.
Drought-like
conditions
Hot House WorldM
Decrease in available water supply affecting operations. This will
potentially lead to some or all of the following: limit tenant use of
buildings, reduce tenant profitability, reduce rent collection, increase
operating costs and increase maintenance capex.
Availability of water intensive construction materials change such as
concrete which could result in increased construction costs and / or
construction delays.
Reputation
Net Zero by 2050,
Delayed Transition,
Hot House World
M
Failure to comply with regulatory obligations or an inability to meet
communicated commitments may expose Vital to additional costs and /
or reduced access to capital.
Market
Conditions
Hot House WorldM-L
Failure to deliver action against sustainability initiatives may affect
investment opportunities and returns including through a. reduced pool
of viable tenants due to a lack of climate resilient assets. Failure to
deliver developments in line with business model and long term strategy.
Technology
Climate change is leading to the emergence of new products, services and markets, offering a chance to expedite decarbonization efforts
within the healthcare real estate sector and allowing Vital to capitalise on its market-leading position in the healthcare sector. This includes an
opportunity to innovate and invest in technologies that reduce carbon emissions while enhancing the efficiency of healthcare infrastructure in
a way that provides a competitive advantage.
Development Considerations
Climate change necessitates development of a long-term strategy for sustainable development. By incorporating environmentally friendly
practices and technologies, organizations can mitigate their impact on the environment and adapt to changing climate conditions. This
approach not only promotes asset resilience but could also provide Vital with an on-going competitive advantage.
Contribute to public health population
With climate change posing significant challenges to public health, there is an opportunity for providers of specialized healthcare facilities
to make a positive impact. Vital can continue to partner with healthcare providers contributing to improved public health outcomes and
addressing the evolving healthcare needs of the population in the face of climate-related risks.
Access to capital
Relatively early focus on the resilience of Vital’s portfolio and carbon targets could provide Vital with improved access to capital (debt and
equity) as investors and financiers look to fund assets which are more climate resilient and entities which have issued and meet appropriate
climate goals due to a mixture of mandate requirements (e.g. low carbon funds), their own ESG commitments and / or expectations of
higher long-term value / lower risk.
Physical Risks
Transition Risks
Transition Opportunities
for Vital at an entity level
Macarthur Health Precinct (Stage 1), NSW
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The climate-related risks noted above were established using the following process:
1. Workshops were undertaken with various internal stakeholders
to assess the materiality, on a qualitative basis, for Vital of the
detailed list of physical and transitional risks identified through
the sector climate scenario analysis.
2. In addition to sector scenarios, these workshops drew on
material from:
• Existing asset risk assessments across areas like flood,
seismic and cyclone issues.
• S&P Global Climanomics analysis of the potential financial
impacts on completed properties as well as developments.
• Green Star rating tool (where relevant) for existing assets as
well as developments.
3. Feedback from these workshops resulted in identification by the
CWG of the six most material risks being:
• chronic increases in rainfall intensity;
• cyclone events;
• average temperature rise;
• drought-like conditions;
• reputation; and
• market conditions.
4. The above process included identifying direct and indirect
climate-related risks, physical risks and transition risks as well
as considering severity, likelihood, geographical location,
and local impact versus enterprise-wide risks across short,
medium and long-term risk horizons. Note that the application
of judgement is required for climate-related risks. Further,
quantitative assessments for climate risks have not yet been
completed by Vital.
5. These risks were provided to the ORC for review following
which they were incorporated into the Risk Framework.
6. The revised Risk Framework was reviewed by the CWG
before being submitted to the Board for approval.
7. Going forward, climate-related risks will continue to form part
of our Risk Framework and will be managed and assessed
through our group wide risk management processes, with
oversight from the ORC and Audit Committee.
Risks are generally ranked within the Risk Framework. Climate-
related risks have been recently incorporated into the Risk
Framework following the scenario analysis process described
above and in preparation of this Climate Statement. These risks
will be ranked and prioritised against other types of risks for
Vital as part of the wider risk process in 2025.
8. This process is expected to be repeated not less than annually.
In addition, the CWG will perform ad-hoc assessments
when material, relevant events or impacts emerge or relevant
research is released.
Progress towards Vital's
transition plan
As outlined above, the Manager has elected to use adoption
provision 3, which provides an exemption from disclosure
in the first reporting period of the transition plan aspects of
Vital’s strategy and the extent to which these are aligned with
its internal capital and funding decision-making processes.
Whilst we have not yet developed a transition plan for
Vital, we have implemented a number of initiatives to work
towards Vital’s sustainability strategy, as outlined below.
We anticipate communicating more information about our
transition plan in FY25.
Risk Framework
The Board has approved a risk appetite framework which informs the Manager’s
approach to identifying, managing and reporting risks (Risk Framework). The Risk
Framework has climate-related risk embedded in the overall risk categories, as well as
its own category. The Risk Framework is reviewed on a not-less than annual basis and is
approved by the Board.
Alignment with capital deployment
and funding processes
Our current understanding of Vital’s climate-related risks and
opportunities has informed our strategy planning, capital
deployment and funding decision-making processes. This
includes, for example, budgeting for capital expenditure,
acquisitions, divestments, and developments.
More specifically:
• Portfolio-wide building audits have provided insights into our
future capital expenditure requirements.
• We have enhanced our due diligence processes to consider
climate-related risks for all new acquisitions such as flooding.
This guides capital deployment decisions.
• Following a review of the existing portfolio based on
location and other climate-related risk factors, assets have
been chosen for divestment in part due to physical climate
hazards assessments which have identified key future risks
for particular assets. Other sustainability considerations, such
as Green Star certifications, have also been a factor in our
divestment decisions.
Disclosure objective
To enable primary users to understand how an entity’s climate-related risks are identified, assessed, and managed and
how those processes are integrated into existing risk management processes.
Risk Management
Macarthur Health Precinct (Stage 1) is registered as a 6 Star Green Star Design
& As-Built and will provide cancer care services for the surrounding community.
The development was originally registered as a 5 Star Green Star Design & As-Built, however, our team worked with the
builders and stakeholders to define the pathway to 6 Star Green Star. The building was subsequently registered as 6 Star
Green Star and now that it is complete the project team is going through the Green Building Council of Australia (GBCA)
certification process. Amongst many design features, the air tightness of the building has achieved outstanding results of 3.8L air
loss per minute compared to an industry standard of >20L air loss per minute for health buildings. This feature improves thermal
comfort for building occupants, reduces ongoing HVAC requirements and stabilising health outcomes for patients who may
have otherwise been affected by poorer air quality.
The high green credentials and expected environmental performance of this building was a key factor in the original investment
decision and also guided how the development was ultimately delivered i.e. targeting 6 Star Green Star rather than 5 Star
Green Star as originally proposed.
Playford Health Hub (Stage 2) , SA
Macarthur Health Precinct, NSW
(Artist's impression)
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Tools & methods used
Vital uses the following key tools and methods to identify the scope, size and impact of
climate-related risks:
• Vital has committed that all
future major developments will
be at least 5 Star Green Star.
• The Green Star rating tools for
Design & As Built and Buildings
includes Climate Change
Assessments and a Climate
Adaption Plan for each
registered development.
• S&P Climanomics is a science-
backed climate risk analytics
platform used to help identify
and measure climate risk
in assets, businesses, and
investment portfolios.
• The latest climate science
reports published by IPCC AR5
and AR6 help validate climate
science projections.
Disclosure objective
To enable primary users to understand how an entity measures and manages its climate-related risks and opportunities.
Metrics and targets also provide a basis upon which primary users can compare entities within a sector or industry.
Organisational Boundary and Consolidation Approach
The Manager has measured Vital’s GHG emissions in accordance
with the GHG Protocol Corporate Standard: 2004 and the GHG
Protocol Supply Chain (Scope 3) Standard: 2011 in respect of the
operational emissions of its organisation, utilising the operational
control consolidation method. Emissions factors have been derived
from a range of sources, with the goal of using the most specific
and relevant factor to the nature of the activity being quantified. We
generally utilise emissions factors (and global warming potential
rates (GWP) where applicable) from the sources listed below.
Further detail in relation to emissions sources used by Vital is set out
in Appendix C:
New Zealand Ministry for the Environment 2023 Measuring
Emissions: A guide for organisations
Department of Climate Change, Energy, the Environment and
Water 2023: Australian National Greenhouse Accounts Factors
Market Economics Limited prepared for Auckland Council
BRANZ CONSTRUCT V3.0 2023
The scope of the GHG emissions inventory includes all activities in
the operational boundaries of Vital, covering its operations as well
as the operations of the 21 properties Vital owns in Australia and the
14 properties in New Zealand.
Further information regarding our GHG emissions methodologies,
assumptions, exclusions, limitations and uncertainties relating to the
calculation of Vital’s GHG emissions can be found in Appendix C.
ScopeCategory Absolute (tCO
2
e), FY24% of Scope
1Direct Emissions150.20100%
2Purchased electricity – Location based219 . 61100%
3:1Purchased goods & services941.461.34%
3:2Capital goods36,466.6951.85%
3:3Fuel and energy related activities2 5 .170.04%
3:5 Waste generated in operations3,846.345.47%
3:6Business travel248.50.35%
3:7Employee commuting11 . 8 10.02%
3:13Downstream leased assets28,787.5140.93%
Total Direct150.20
Total Indirect70,547.09
Total Scope 1, 2, 370,697.29
GHG Emissions Intensities (FY24)
Total GHG emissions
70,697.29tCO
2
e
Gross floor area of assets
owned by Vital*
236,358m
2
GHG emissions per square metre
0.299tCO
2
e
Gross property income from
rentals (FY24)
$150,978,000
GHG emissions per
rental dollar
0.0005tCO
2
e
Metrics and Targets
Tennyson Centre , SA
Avive Clinic, VIC
GHG Emissions Reporting
Reporting Period
The reporting period covered by the GHG emissions inventory set out below
is FY24. This is the Manager’s first year reporting Vital’s GHG emissions for its
financial year (i.e. 1 July – 30 June), rather than its calendar year (i.e. 1 January –
31 December) as in previous reporting periods. As a result, FY24 will be the base
year for future comparison of Vital’s GHG emissions.
The table below sets out Vital’s Scope 1, Scope 2 and Scope 3 GHG emissions,
expressed in metric tonnes of carbon dioxide equivalent (tCO
2
e). Scope 1
emissions are from confirmed refrigerant gas top ups or default leakage rates
where confirmation is unavailable (100%) and Scope 2 emissions are from
purchased electricity consumption (100%) from Vital base build and common
areas and Northwest’s business units (offices). Scope 3 emissions are divided into
15 distinct categories under the GHG Protocol, of which seven categories have
been identified as applicable to Vital’s business and operations (as shown in the
table below) and four as material (threshold of 1%) to Vital.
*note that several developments reached practical completion during FY24 so are included in this number
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Exposure to climate-related risks and opportunities
We are still developing our approach and understanding of the
extent to which Vital’s assets and business activities are vulnerable
to climate-related risks and aligned to climate-related opportunities.
This may allow for more detailed reporting on these metrics in the
future. Due to the nature of the assessments required in connection
with these metrics, there are limitations and uncertainties involved
with calculating these metrics.
At present, due to the nature of Vital’s business as a specialist
owner of healthcare property, all of Vital’s business activities are
vulnerable to one or more physical or transition climate-related
risks identified in this Climate Statement to some extent. Each of the
material risks we have identified is being managed and monitored
through the risk management processes described in this Climate
Statement. The extent to which Vital’s business activities are exposed
to physical climate-related risks will vary depending on the nature,
scale and frequency of the relevant extreme weather events and the
geographic location.
In addition, our business as a whole has the potential to benefit
from the climate-related opportunities we have identified and, in
that respect all of our business is aligned with one or more of those
opportunities. However, those opportunities are uncertain and may
not be realised.
Industry-based metrics
There are no industry-based metrics that Vital currently measures
and manages climate-related risks and opportunities against,
other than the Green Star ratings and the other key performance
indicators described below, which are relatively common in the real
estate and healthcare industries.
Internal price on carbon
Vital does not currently utilise an internal emissions price,
however, this remains under consideration.
Management remuneration
The Manager, an external entity providing management services
to Vital, has several key responsibilities, including the day-to-
day administration of Vital’s portfolio management, sourcing
new opportunities and conducting due diligence on potential
acquisitions. The Manager also provides specialist property
management, project management, development management and
leasing services to Vital.
The Manager does not receive remuneration that is linked to
climate-related risks and opportunities or the outcome of climate-
related initiatives.
In relation to employees of the Manager who provide services in
relation to Vital, the Manager (as part of the Northwest group) uses
a regional corporate scorecard for the purposes of determining
management remuneration, which includes financial and non-
financial measures. Climate-related risks and opportunities do
not have a specific weighting within this scorecard, however
the achievement of sustainability and ESG initiatives (including
in relation to the publication of this Climate Statement and
achievement of the minimum 5 Star Green Star ratings and other
key performance indicators described above) are taken into
account in assessing the overall achievement of key performance
indicators in the scorecard.
Other Metrics and Key Performance Indicators
Other metrics and key performance indicators used by the Manager to manage and
measure climate-related risks and opportunities are set out below:
Other key performance indicators
External Benchmark Reporting Scores
Global Real Estate Sustainability Benchmark (GRESB)
In 2023, Vital was acknowledged as a GRESB
Sector Leader (the highest possible GRESB
assessment) for ESG in healthcare for listed
entities globally across performance,
management and developments. This
assessment includes a focus on GHG
emissions profile, reporting and management
as well as climate risk and adaptation. Vital
intends to seek to maintain or improve its score
and ranking in future years.
CDP
Vital’s CDP (formerly Carbon
Disclosure Project) score was
maintained at B- in 2023 (up from C
two years earlier). A B- score positions
Vital in the ‘Management’ category, indicating evidence of our
commitment to managing our environmental impact. CDP is
intended to rank the GHG emissions profile, reporting and
management by entities Vital intends to seek to maintain or
improve its score and ranking in future years. 2024 results are
expected to be released in early 2025.
Other Investor Ratings
Whilst not predominantly related to climate risks, the following ratings systems all factor in climate change in some way. Vital intends to seek
to maintain or improve its score and ranking in future years, which includes improving environmental performance generally.
ActivityCapital ExpenditureComments
Development costs
associated with projects
that achieved Green Star
certification
$100.8mTwo developments reached practical completion during the reporting
period FY24 that have been awarded Green Star design certifications,
with as-built certification anticipated in late 2024.
This capital expenditure relates to the development costs for these projects
generally, rather than expenditure that was dedicated to climate-related
risks and opportunities.
Equipment efficiency
upgrades
$1.05mThree chillers, as part of Vital’s ‘end of life’ replacement program, were
upgraded during the reporting period to remove the use of R410A
refrigerant gas and improve energy efficiency.
Capital Deployment
The table below shows the capital expenditure on climate-related initiatives for FY24.
Net zero by 2050 target
As part of the Northwest Group, Vital is committed to a long-
term, absolute emissions target of net zero emissions by 2050
from a FY24 baseline. This target is in line with the objective of the
"Paris Agreement" to limit global temperature increases to 1.5°C
above pre-industrial levels. Vital's 2050 target is not verified
or validated by any external third party. Vital's gross GHG
emissions for FY24 are set out on page 21. As noted above, this
is the Manager's first year reporting Vital's GHG emissions for its
financial year (rather than on a calendar year basis). Vital has
not utilised any offsets for the FY24 reporting period. Vital has
not yet determined the extent to which its achievement of its net
zero by 2050 target will or may rely on offsets. Vital does not
currently have any interim emissions targets.
In collaboration with carbon experts, we are continuing to
develop our decarbonisation strategy and our transition plan,
which will identify key actions, milestones and capital allocation
initiatives for Vital to transition towards a low-emissions, climate
resilient future and seek to achieve its net zero by 2050 target.
Green Star Ratings target
Vital is committed to achieving a minimum of 5 Star Green Star
rating for all new major developments. This target was approved
by the Board during FY24 (which is the base year for future
comparison).
1
As reported in Vital’s 2024 annual report, in FY24 Vital had nine
new future developments registered to attain these sustainable
infrastructure ratings. These developments are a combination of
projects in construction and potential developments in design
phase which may not turn into committed developments.
Vital will report on the progress of these ratings in the FY25
climate statement.
Green Star is Australasia's largest voluntary sustainability rating
system for non-residential buildings, fitouts and communities.
Green Star provides a rating of up to six stars based on a
building's key sustainability credentials.
Targets
1
The only new future major development in FY24 that was not registered to achieve a minimum 5 Star Green Star rating was the redevelopment of Boulcott Hospital
as this was planned and costed prior to the introduction of this target.
CompanyCurrent rating Last ratingAssessments
conducted
Difference in scores
A
(as at Dec 2023)
BBB
(as at Dec 2022)
AnnuallyUp 1 place
C-
(as at Dec 2023)
C-
(as at Dec 2022)
AnnuallyNo change
B- (
as at August 2023)
C+
(as at Nov 2022)
AnnuallyUp 2 places
4.1/5
(as at Aug 2024)
2.7
(as at 2021)
Ad-hoc1.4 point increase
16.1 Low Risk
(as at Apr 2024)
17.2 Low Risk
(as at Sept 2023)
Annually
-1 momentum (the lower
the score the better)
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GHG Inventory
Assurance
Glossary & Acronyms
Toitū Envirocare provided limited assurance for Vital’s
Greenhouse Gas Emissions Inventory across Australia and
New Zealand for the reporting period 01/07/2023 –
30/06/2024. A copy of the independent audit opinion is
included as Appendix B.
Glossary
Climate-related scenarios: A plausible and challenging
description of potential future developments, based on a coherent
and internally consistent set of assumptions about key driving forces
and relationships, covering both physical and transition risks in an
integrated manner. Climate-related scenarios are not intended
to be probabilistic or predictive, nor to identify the ‘most likely’
outcomes of climate change. Instead, they aim to help entities
develop their internal capacity to better understand and prepare for
the uncertain future impacts of climate change.
External Reporting Board (XRB): New Zealand’s External
Reporting Board, which establishes national reporting standards for
entities in the private, public, and not-for-profit sectors.
Intergovernmental Panel on Climate Change (IPCC): The United
Nations body responsible for assessing climate science and
providing governments at all levels with scientific information to
inform the development of climate policies.
Physical Risks: Risk posed to the company by potential physical
impacts of climate change. These risks can be “acute”, being an
event-drive including increased severity of extreme weather events,
or “chronic”, being longer-term shifts in climate patterns.
Representative Concentration Pathways (RCP): A greenhouse
gas concentration trajectory adopted by the IPCC. Four pathways
were utilized for climate modelling and research in the IPCC Fifth
Assessment Report (AR5) in 2014. These pathways outline various
climate change scenarios, each representing a potential future
depending on the level of greenhouse gas (GHG) emissions in the
coming years.
Transition risks: Risks associated with the transition to a low-
emissions, climate-resilient global and domestic economy, including
changes in policy, legal frameworks, technology, market conditions,
and reputation due to the mitigation and adaptation requirements
related to climate change.
Acronyms
CDP Carbon Disclosure Project
CO
2
e Carbon Dioxide Equivalent
CWG Climate Working Group
GHG Greenhouse Gas
GBCA Green Building Council of Australia
GRESB Global Real Estate Sustainability Benchmark
HVAC Heating, ventilation, and air conditioning
IPCC Intergovernmental Panel on Climate Change
NZGBC New Zealand Green Building Council
NZX New Zealand’s Stock Exchange
OPEX Operating expenses or expenditure
ORC Operational Risk Committee
SSP Shared Socio-economic Pathway
XRB External Reporting Board
Appendix A – Responses to climate standards
XRB Climate StandardsPage
6
Governance - To enable primary users to understand both the role an entity’s governance body plays in
overseeing climate-related risks and climate-related opportunities, and the role management plays in assessing
and managing those climate-related risks and opportunities.
6
7athe identity of the governance body responsible for oversight of climate-related risks and opportunities; 6
7bA description of the governance body’s oversight of climate-related risks and opportunities 6
7ca description of management’s role in assessing and managing climate-related risks and opportunities 6-8
8a
the processes and frequency by which the governance body is informed about climate-related risks and
opportunities;
6
8b
how the governance body ensures that the appropriate skills and competencies are available to provide oversight
of climate-related risks and opportunities;
6-7
8c
how the governance body considers climate-related risks and opportunities when developing and overseeing
implementation of the entity’s strategy;
6-7
8d
how the governance body sets, monitors progress against, and oversees achievement of metrics and targets for
managing climate-related risks and opportunities, including whether and if so how, related performance metrics
are incorporated into remuneration policies
7, 2 3
9a
how climate-related responsibilities are assigned to management-level positions or committees, and the process
and frequency by which management-level positions or committees engage with the governance body;
7-8
9bthe related organisational structure(s) showing where these management-level positions and committees lie; 6, 8
9c
the processes and frequency by which management is informed about, makes decisions on, and monitors,
climate-related risks and opportunities.
8
10
Strategy - To enable primary users to understand how climate change is currently impacting an entity and how it
may do so in the future. This includes the scenario analysis an entity has undertaken, the climate-related risks and
opportunities an entity has identified, the anticipated impacts and financial impacts of these, and how an entity will
position itself as the global and domestic economy transitions towards a low-emissions, climate-resilient future.
9
11 aa description of its current climate-related impacts 10
11 ba description of the scenario analysis it has undertaken 10
11 ca description of the climate-related risks and opportunities it has identified over the short, medium, and long term 16-17
11 da description of the anticipated impacts of climate-related risks and opportunities 16-17
11 e
a description of how it will position itself as the global and domestic economy transitions towards a low-emissions,
climate-resilient future state
16-17
12 aits current physical and transition impacts; 16-17
12 bthe current financial impacts of its physical and transition impacts identified in paragraph 12(a); -
12 c
if the entity is unable to disclose quantitative information for paragraph 12(b), an explanation of why that is the
case.
-
Grace Hospital, Bay of Plenty
Appendices
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XRB Climate StandardsPage
13
An entity must describe the scenario analysis it has undertaken to help identify its climate-related risks and
opportunities and better understand the resilience of its business model and strategy. This must include a
description of how an entity has analysed, at a minimum, a 1.5 degrees Celsius climate-related scenario, a 3
degrees Celsius or greater climate-related scenario, and a third climate-related scenario
10
14 a
how it defines short, medium and long term and how the definitions are linked to its strategic planning horizons
and capital deployment plans;
16-17
14 b
whether the climate-related risks and opportunities identified are physical or transition risks or opportunities,
including, where relevant, their sector and geography;
16-17
14 c
how climate-related risks and opportunities serve as an input to its internal capital deployment and funding
decision-making processes.
18
15 aThe anticipated impacts of climate-related risks and opportunities reasonably expected by the entity; 16-17
15 bthe anticipated financial impacts of climate-related risks and opportunities reasonably expected by an entity; -
15 c
a description of the time horizons over which the anticipated financial impacts of climate-related risks and
opportunities could reasonably be expected to occur;
16-17
15 d
if an entity is unable to disclose quantitative information for paragraph 15(b), an explanation of why that is the
case.
-
16 aa description of its current business model and strategy; 5, 9
16 b
the transition plan aspects of its strategy, including how its business model and strategy might change to address its
climate-related risks and opportunities;
-
16 c
the extent to which transition plan aspects of its strategy are aligned with its internal capital deployment and
funding decision-making processes.
-
17
Risk Management - To enable primary users to understand how an entity’s climate-related risks are identified,
assessed, and managed and how those processes are integrated into existing risk management processes.
19
18 aa description of its processes for identifying, assessing and managing climate-related risks 19
18 b
a description of how its processes for identifying, assessing, and managing climate-related risks are integrated
into its overall risk management processes.
19,20
19 a
the tools and methods used to identify, and to assess the scope, size, and impact of, its identified climate-related
risks;
20
19 b
the short-term, medium-term, and long-term time horizons considered, including specifying the duration of each of
these time horizons;
16-17
19 cwhether any parts of the value chain are excluded; 12
19 dthe frequency of assessment; 19
19 eits processes for prioritising climate-related risks relative to other types of risks. 19
20
Metrics and Targets - To enable primary users to understand how an entity measures and manages its climate-
related risks and opportunities. Metrics and targets also provide a basis upon which primary users can compare
entities within a sector or industry.
20-23
21 athe metrics that are relevant to all entities regardless of industry and business model 20-23
21 b
industry-based metrics relevant to its industry or business model used to measure and manage climate-related
risks and opportunities;
20-23
21 cany other key performance indicators used to measure and manage climate-related risks and opportunities; 22
21 dthe targets used to manage climate-related risks and opportunities, and performance against those targets 23
22a
greenhouse gas (GHG) emissions: gross emissions in metric tonnes of carbon dioxide equivalent (CO
2
e)
(i) scope 1;
(ii) scope 2 (calculated using the location-based method);
(iii) scope 3;
21
XRB Climate StandardsPage
22bGHG emissions intensity; 21
22ctransition risks: amount or percentage of assets or business activities vulnerable to transition risks; 22
22dphysical risks: amount or percentage of assets or business activities vulnerable to physical risks; 22
22e
climate-related opportunities: amount or percentage of assets, or business activities aligned with climate-related
opportunities;
22
22f
capital deployment: amount of capital expenditure, financing, or investment deployed toward climate-related risks
and opportunities;
23
22ginternal emissions price: price per metric tonne of CO
2
e used internally by an entity 23
22h
remuneration: management remuneration linked to climate-related risks and opportunities in the current period,
expressed as a percentage, weighting, description or amount of overall management remuneration
23
23a
An entity must include the following information when describing the targets used to manage climate-related risks
and opportunities, and performance against those targets
(a) the time frame over which the target applies;
23
23bany associated interim targets; 23
23cthe base year from which progress is measured; 23
23da description of performance against the targets; 23
23e
for each GHG emissions target:
(i) whether the target is an absolute target or intensity target;
(ii) the entity’s view as to how the target contributes to limiting global warming to 1.5 degrees Celsius;
(iii) the entity’s basis for the view expressed in 23(e)(ii), including any reliance on the opinion or methods
provided by third parties;
(iv) the extent to which the target relies on offsets, whether the offsets are verified or certified, and if so, under
which scheme or schemes.
23
24a
a statement describing the standard or standards that its GHG emissions have been measured in accordance
with;
20
24bthe GHG emissions consolidation approach used: equity share, financial control, or operational control; 20, 31
24c
the source of emission factors and the global warming potential (GWP) rates used or a reference to the GWP
source;
20,
32-36
24d
a summary of specific exclusions of sources, including facilities, operations or assets with a justification for their
exclusion.
31
25
Part 7A of the Financial Markets Conduct Act 2013 requires that the disclosure of an entity’s GHG emissions
as required by Aotearoa New Zealand Climate Standards are the subject of an assurance engagement. This
Standard requires that this assurance engagement is a limited assurance engagement at a minimum.
24
26
For the avoidance of doubt, the following information required by Aotearoa New Zealand Climate Standards is
subject to an assurance engagement:
(a) GHG emissions: gross emissions in metric tonnes of CO
2
e classified as (see paragraph 22(a)):
(i) scope 1;
(ii) scope 2 (calculated using the location-based method);
(iii) scope 3;
(b) additional requirements for the disclosure of GHG emissions (see paragraph 24);
(c) GHG emissions methods, assumptions and estimation uncertainty (see NZ CS 3 General Requirements for
Climate-related Disclosures paragraphs 52 to 54).
28-36
Shaded standards - Adoption provisions applicable
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Appendix B
TO THE INTENDED USERS
Audit Criteria:
Intended users:
RESPONSIBLE PARTY'S RESPONSIBILITIES
VERIFIERS' RESPONSIBILITIES
INDEPENDENT AUDIT OPINION
Toitū Verification
Organisation subject to audit:Vital Healthcare Property Trust
Greenhouse Gas Protocol: A Corporate Accounting and Standard (2004)
ISO 14064-3:2019
Audit & Certification Technical Requirements 3.0
Wehavereviewedthegreenhousegasemissionsinventory report (“the inventory report”)fortheabove namedResponsibleParty
for the stated inventory period.
Responsible Party:
Registered address:
FY24 GHG Inventory Report for Vital Healthcare Properties Trust (Northwest).pdfInventory report:
Inventory period:
Vital Healthcare Property Trust
• Our unitholders
• General public via o ur website
• CDP , GRESB a nd CRD assessors
•Internal policy makers
Level 17, HSBC Tower, 188 Quay Street, Auckland, 1010, New Zealand
01/07/2023 - 30/06/2024
The Management of the Responsible Party is responsible for the preparation of the GHG statement in accordance with GHG
Protocol: A Corporate Accounting and Reporting Standard . 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.
Ourresponsibilityasverifiersistoexpressa verification opinionto theagreed levelofassuranceontheGHGstatement,basedon
theevidencewehave obtained andinaccordancewith theauditcriteria.Weconductedourverificationengagementasagreedin
the audit letter, which define the scope, objectives, criteria and level of assurance of the verification.
TheInternational StandardISO14064-3:2019requires thatwecomplywith ethical requirementsandplanandperform the
verificationto obtain theagreed levelofassurancethat theGHGemissions,removalsandstorageintheGHGstatement are free
from material misstatement.
Reasonableassuranceis a highlevelofassurance,butis nota guarantee thatanauditcarriedoutinaccordancewith theISO14064-
3:2019Standardswillalwaysdetectamaterial misstatementwhenitexists.Theproceduresperformedonalimitedlevelof
assurancevaryinnatureandtimingfrom,andarelessinextentcomparedtoreasonableassurance,which isa highlevelof
assurance.Theproceduresperformedonalimitedlevelofassurancevaryinnatureandtimingfrom,andarelessinextent
comparedtoreasonableassurance,which isa highlevelofassurance.Misstatements aredifferencesor omissions of amounts or
disclosures,andcanarise from fraudorerror. Misstatements areconsideredmaterialif,individuallyorintheaggregate,theycould
reasonably be expected to influence the decisions of readers, taken on the basis of the information we audited.
GHGquantification issubjecttoinherentuncertaintybecauseofincomplete scientificknowledgeusedto determineemissions
factors and the values needed to combine emissions of different gases.
BASIS OF VERIFICATION OPINION
VERIFICATION
VERIFICATION STRATEGY
QUALIFICATIONS TO VERIFICATION OPINION
VERIFICATION LEVEL OF ASSURANCE
tCO
2
e
Location based
Scope 1150.20
Scope 2219.61
Scope 370,327.48
Total gross emissions70,697.29
RESPONSIBLE PARTY’S GREENHOUSE GAS ASSERTION (CERTIFICATION CLAIM)
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 Greenhouse Gas
Protocol: A Corporate Accounting and Reporting Standard.
Ourverificationstrategyuseda combineddataandcontrols testingapproach. Evidence-gathering procedures included butwerenot
limited to:
—activities to inspect the completeness of the inventory;
—interviews of site personnel to confirm operational behaviour and standard operating procedures;
—reconciliation of emisisons from capital projects and electricty from downstream leased assets;
—retracing of natural gas records to confirm accuracy of source data into calculations.
The data examined during the verification were historical in nature.
The following qualifications have been raised in relation to the verification opinion:
Level of Assurance
Limited
Limited
Limited
Vital Healthcare Property Trust has measured its greenhouse gas emissions in accordance with the GHG Protocol Corporate
Standard: 2004 and the GHG Protocol Supply Chain (Scope 3) Standard: 2011 in respect of the operational emissions of its
organisation.
Scope 3 emission sources for capital goods and purchased goods and services are heavily assumptions based, using dollar spend data
and industry averages to estimate emissions. Changes in assumptions could significantly impact the measurement of these
emissions.
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VERIFICATION CONCLUSION
ADDITIONAL INFORMATION RELEVANT TO INTENDED USERS
OTHER INFORMATION
Name:Name:
Position:
Signature:
Date:
Natalie CleeBilly Ziemann
EMISSIONS - LIMITED ASSURANCE
Basedontheprocedureswehaveperformedandtheevidencewehave obtained, nothing hascometoourattention thatcausesus
to believe that the emissions, removals and storage defined in the inventory report:
• do not comply with the GHG Protocol 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.
Without qualifying our opinion expressed above, we wish to draw the attention of the intended users to the following :
The disclosures required by the Aotearoa New Zealand Climate Standards 1-3 were not included in the scope of the Toitū audit. We
therefore did not assess consistency between these disclosures and the Greenhouse Gas inventory report which is the subject of this
report. We do not express an opinion on the accuracy and completeness of these disclosures.
Chapter 9 of the GHG Protocol Corporate Standard: 2004 requires that the scope 1 and 2 emissions are reported for each of the 6
greenhouse gases (CO2, CH4, N2O, HFCs, PFCs, SF6) separately. This disclosure has been included in table 10 of the inventory report at a
zero value.
The responsible party is responsible for the provision of Other Information to meet Programme requirements. The Other Information
may include climate related disclosures around Governance, Strategy and Risk management, emissions management, reduction
plan and purchase of carbon credits, but does not include the information we verified, and our auditor’s opinion thereon.
Our opinion on the information we verified does not cover the Other Information and we do not express any form of audit opinion
or assurance conclusion thereon. Our responsibility is to read and review the Other Information and consider it in terms of the
programme requirements. In doing so, we consider whether the Other Information is materially inconsistent with the information
we verified or our knowledge obtained during the verification.
Verified by: Authorised by:
Date opinion expressed: 9 September 202413 September 2024
Position: Verifier, Toitū EnvirocareCertifier, Toitū Envirocare
Signature:
Date verification audit: 30 July 2024
Appendix C
Greenhouse Gas Emissions – Additional Information
Reporting Period
Base year measurement period: 01/07/2023 to 30/06/2024
Measurement period of this report: 01/07/2023 to
30/06/2024.
The reporting period for the Climate Statement is consistent with
Vital’s financial reporting year and is in compliance with NZ CS
requirements. Previous GHG emissions inventories and associated
assurance reports have been calculated using a calendar year
2022 baseline period. Vital has since adopted a baseline period of
financial year 2024 (July 1 2023 – June 30 2024) in line with the
NZ CS.
Previous calendar year GHG inventories have been utilised to
complete industry benchmark reporting schemes such as GRESB
and CDP. Vital will continue to report GHG information on a
calendar year to these reporting schemes.
For the purposes of assurance of Vital’s GHG emissions inventory,
the restated FY2024 baseline year will be adopted.
Operational control approach
To calculate the GHG Inventory listed on page 21, Vital has taken
the operational control approach, as defined by the GHG Protocol,
which means that 100% of the GHG emissions from operations over
which Vital had control in FY2024 are accounted for in the GHG
Inventory.
All operations, subsidiaries, joint ventures, and investments that
were relevant in FY2024 were assessed and summarised into one
business unit.
As at 30 June 2024, Vital had 21 properties in Australia and 14 in
New Zealand, which are included in the GHG Inventory.
Scope and/or CategoryDescription
Sub-
Category
Relevance for Vital
Scope 3-C1
Purchased goods and
services
Extraction, production, and transportation of
goods and services purchased or acquired by
the reporting company in the reporting year, not
otherwise included in Categories 2 – 8
Raw materialsNo activities occurred
PackagingNo activities occurred
Finished GoodsNo activities occurred
Production
related services
No activities occurred
Scope 3-C8
Upstream leased assets
Operation of assets leased by the reporting company
(lessee) in the reporting year and not included in
Scope 1 and Scope 2 – reported by lessee
No activities occurred
Scope 3-C9
Downstream transportation
and distribution
Transportation and distribution of products sold
by the reporting company in the reporting year
between the reporting company’s operations and
the end consumer (if not paid for by the reporting
company), including retail and storage (in vehicles
and facilities not owned or controlled by the
reporting company)
No activities occurred
During the reporting period, Vital divested 11 assets in Australia, and
2 in New Zealand. As FY24 will be Vital’s baseline year for GHG
emissions reporting in line with its financial year reporting period,
any assets that were divested during the reporting period are not
included in the GHG Inventory.
Excluded business units
We have a satellite office in the Gold Coast, operated out of
a shared work environment by one employee, which has been
excluded from the GHG Inventory on the basis of materiality.
Property and land held for development as referenced within the
Vital Annual Report is not included within the GHG Inventory based
on the organisational boundary defined for this exercise using the
operational control approach.
Eleven assets that were divested within the FY24 reporting period
are not included in the baseline year figures.
Significant excluded emissions sources
Miscellaneous capital goods have been excluded from the
calculation of Scope 3 Category 2 GHG emissions due to a
complex mix of very small items, and a lack of specific emission
factors. The exclusion of these capital goods is not thought to be
material to the GHG Inventory.
The table below set outs the Scope 3 GHG emissions categories
where Vital has no emission producing activities within the relevant
category. As a result, no emissions have been excluded but these
categories or sub-categories are not relevant to Vital’s business.
Note that Scope 3 Category 4 “Transport for purchased goods
and services” is included in the purchase price and therefore
captured in categories 1 and C2.
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Scope and/or CategoryDescription
Sub-
Category
Relevance for Vital
Scope 3-C10
Processing of sold products
Processing of intermediate products sold in the
reporting year by downstream companies (e.g.,
manufacturers)
No activities occurred
Scope 3-C11
Use of sold products
End use of goods and services sold by the reporting
company in the reporting year
No activities occurred
Scope 3-C12
End-of life treatment of sold
products
Waste disposal and treatment of products sold by
the reporting company (in the reporting year) at the
end of their life
No activities occurred
Scope 3-C14
Franchises
Operation of franchises in the reporting year, not
included in Scope 1 and Scope 2 – reported by
franchisor
No activities occurred
Scope 3-C15
Investments
Operation of investments (including equity and debt
investments and project finance) in the reporting
year, not included in Scope 1 or Scope 2
No activities occurred
Scope and/
or Category
Description
Sub-
Category
Relevance
for Vital
Vital
Activities
& Data
Explanation of uncertainties,
assumptions and limitations
in relation to GHG emissions
data and evidence
Use of default
and average
emissions factors
Scope 1Applicable &
Material
Refrigerant
gas top ups
36% of direct refrigerant gas
emissions are estimated based
on default leakage rates due to
availability of data.
NZ-MfE2023
Australia-
DCCEEW23
Scope 2Applicable &
Material
Purchased
Electricity
9% of electricity is based on
average assumptions to address
third party data availability.
NZ-MfE2023
Australia-
DCCEEW23
Calculation methods
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
Emissions factors have been derived from a range of sources, with
the intent to use the most specific and relevant factor to the nature
of the activity being quantified. Emissions factors were used as
applicable within the reporting period and reflected the geography
of activity across New Zealand and Australia. GHG quantification
is subject to inherent uncertainty because of the variety of
knowledge and methodology used to establish emissions factors as
well as the below explanations of the level of estimation.
Due to the lack of available emissions factors in Australia, emissions
factors from New Zealand have been applied in the instances
where Australia emission factors were unable to be sourced.
A spend based model was used to calculate emissions from
Scope 3 Category 1 Purchased Goods and Services. This is
because product- or supplier-specific data is not available for most
purchased products or many capital goods emissions (Scope 3,
category 1). Instead, the Manager has adopted the spend-based
method to estimate emissions in this category, which multiplies the
economic value of product or service groups purchased by the
emissions per dollar of use. This approach has limitations, both with
regards to the activity data used and in relation to the emission
factors used.
The table below provides detail on emissions sources included in
the GHG emissions inventory, an overview of how activity data was
collected for each emissions source, and an explanation of any
uncertainties or assumptions made.
Data collection methodology and assumptions for included emission sources
Scope and/
or Category
Description
Sub-
Category
Relevance
for Vital
Vital
Activities
& Data
Explanation of uncertainties,
assumptions and limitations
in relation to GHG emissions
data and evidence
Use of default
and average
emissions factors
Scope 3-C1
Purchased
goods and
services
Extraction, production,
and transportation
of goods and
services purchased
or acquired by the
reporting company in
the reporting year, not
otherwise included in
Categories 2 – 8
Raw materialsNo activitiesN/A
PackagingNo activitiesN/A
Finished
Goods
No activitiesN/A
Production
related
services
No activitiesN/A
Non-
production
related goods
& services
Applicable &
Material
Due to lack of robust and
available Australian spend
based emissions factors, NZ
emissions factors are applied
after converting AUD to NZD
using Vital’s agreed spot rate as
at 31 Dec 2023 and 30 June
2024.
Individual emissions
factors have been
sourced and
applied based on
subcategory and
location.
Scope 3-C2
Capital
goods
Extraction, production,
and transportation
of capital goods
purchased or
acquired by the
reporting company in
the reporting year
N/AApplicable &
Material
Assets
Leasehold
improvements
IT equipment
& software
Office
furniture &
equipment
Construction
materials
Emissions relating to construction
materials have been isolated
to Development Projects that
reached Practical Completion
during the reporting period.
Information relating to the
construction materials and waste
sent to landfill for each of these
projects covers the entirety of the
project spanning several years.
Information varied between
site and against the asset
construction timeline.
For 1 site (Mt Eliza) no
information was available after
project completion (October
2023), a proxy was used via
literature review completed by
Thinkstep ANZ 2021.
Miscellaneous capital goods
have been excluded due to a
complex mix of very small items,
and a lack of specific emission
factors.
ICM Database -
Integrated Carbon
Metrics Embodied
Carbon Life Cycle
Inventory Database
(unsw.edu.au) (2019).
Where applicable
average material
specific emissions
factors have been
utilised from BRANZ
2023 or material
specific Environmental
Product Declarations
(EPD’s).
Scope 3-C3
Fuel- and
energy
related
activities
Extraction, production,
and transportation
of fuels and energy
purchased or
acquired by the
reporting company in
the reporting year, not
already accounted
for in Scope 1 or
Scope 2
N/AApplicable &
Material
T&D losses
for electricity.
Upstream
(WTT)
emissions for
electricity
9% of electricity is based on
average assumptions to address
third party data availability.
NZ-MfE2023
Australia-
DCCEEW23
CLIMATE RELATED DISCLOSURE 2024
|
3332
|
VITAL HEALTHCARE PROPERTY TRUST
Scope and/
or Category
Description
Sub-
Category
Relevance
for Vital
Vital
Activities
& Data
Explanation of uncertainties,
assumptions and limitations
in relation to GHG emissions
data and evidence
Use of default
and average
emissions factors
Scope 3-C4
Upstream
transportation
and
distribution
• Transportation/
distribution of
products purchased
in the reporting
year, between a
company’s tier 1
suppliers (not in
owned vehicles).
• Third-party
transportation/
distribution services
purchased by the
reporting company
(inbound logistics
and outbound
logistics).
• Third-party
transportation/
distribution
between
company’s own
facilities.
Inbound
transport
Applicable
& included in
C1 & C2
Transport of
purchased
products and
materials from
tier 1 supplier
to Northwest,
using freight
services paid
by Northwest
Refer to Category 1
and Category 2
Applicable
& included in
C1 & C2
Transport of
purchased
products and
materials from
tier 1 supplier
to Northwest,
included
in cost of
purchase
Refer to Category 1
and Category 2
Outbound and
inter-company
transport
Applicable
& included in
C1 & C2
Any other
transport
performed by
third parties
and paid for
by Northwest
Refer to Category 1
and Category 2
Scope 3-C5
Waste
generated in
operations
Disposal and
treatment of waste
generated in the
reporting company’s
operations in the
reporting year (in
facilities not owned
or controlled by the
reporting company)
Solid wasteApplicable &
Material
Landfill of
General
waste
Where landfill waste data could
not be obtained an assumed
average rate per square meter
of the asset type to the size of
the asset was applied on 22% of
total waste emissions.
NZ-MfE2023
Australia-
DCCEEW23
WastewaterApplicable &
Immaterial
Water supply19% of wastewater is estimated.NZ-MfE2023
Australia-
DCCEEW23
Scope 3-C6
Business
travel
Transportation of
employees for
business-related
activities during the
reporting year (in
vehicles not owned
or operated by the
reporting company)
N/AApplicable &
Immaterial
Air travel
The emissions factors
applied are split
between expense
claims and internal
travel bookings, for
internally booked travel
data is pre-verified.
For expense claims:
Individual emissions
factors have been
sourced and applied
based on subcategory
and location. For
mileage, kms were
calculated using the
payout per km rate
applied across expense
claims. An AU taxi
emissions factor was
unable to be sourced
so the NZ emissions
factor was applied for
AU taxi spend. Expense
claims excl GST so
GST was added on to
both spend amounts
(10% for AU and 15%
for NZ). While Uber
doesn’t charge GST in
NZ, we have applied
GST on all taxi/uber
charges.
Road travel
(private car
expense
claims, hire
cars, taxis)
Ferry travel
Optional &
Immaterial
Hotel stays
(optional
reporting)
Scope and/
or Category
Description
Sub-
Category
Relevance
for Vital
Vital
Activities
& Data
Explanation of uncertainties,
assumptions and limitations
in relation to GHG emissions
data and evidence
Use of default
and average
emissions factors
Scope 3-C7
Employee
commuting
Transportation of
employees between
their homes and their
worksites during the
reporting year (in
vehicles not owned
or operated by the
reporting company)
Employee
commuting
Applicable &
Immaterial
Vital does not itself employ
any employees. As Northwest
has two funds in Australia and
New Zealand of roughly the
same size, a ratio was used
to calculate Vital's share of
employees across offices in
Melbourne, Sydney, Gold Coast
and Auckland.
Due to lack of
information in
Australia, the NZ MfE
2023 emissions factor
have been applied
where applicable.
For ferry and tram
transport options,
only UK GOVT 2022
emissions factors
could be sourced and
applied.
Telecommuting
(optional
reporting)
Optional &
Immaterial
Due to lack of
information in
Australia, the NZ MfE
emissions factor has
been applied across
both NZ and AU
Scope 3-C8
Upstream
leased assets
Operation of assets
leased by the
reporting company
(lessee) in the
reporting year and
not included in Scope
1 and Scope 2 –
reported by lessee
N/ANo activitiesN/AN/A
Scope 3-C9
Downstream
transportation
and
distribution
Transportation
and distribution of
products sold by the
reporting company
in the reporting year
between the reporting
company’s operations
and the end consumer
(if not paid for by the
reporting company),
including retail and
storage (in vehicles
and facilities not
owned or controlled
by the reporting
company)
N/ANo activitiesN/AN/A
Scope 3-C10
Processing of
sold products
Processing of
intermediate products
sold in the reporting
year by downstream
companies (e.g.,
manufacturers)
N/ANo activitiesN/AN/A
Scope 3-C11
Use of sold
products
End use of goods and
services sold by the
reporting company in
the reporting year
N/ANo activitiesN/AN/A
Scope 3-C12
End-of life
treatment of
sold products
Waste disposal and
treatment of products
sold by the reporting
company (in the
reporting year) at the
end of their life
N/ANo activitiesDisposal
of product
packaging at
EOL
N/A
CLIMATE RELATED DISCLOSURE 2024
|
3534
|
VITAL HEALTHCARE PROPERTY TRUST
Scope and/
or Category
Description
Sub-
Category
Relevance
for Vital
Vital
Activities
& Data
Explanation of uncertainties,
assumptions and limitations
in relation to GHG emissions
data and evidence
Use of default
and average
emissions factors
Scope 3-C13
Downstream
leased assets
Operation of assets
owned by the
reporting company
(lessor) and leased
to other entities in the
reporting year, not
included in Scope
1 and Scope 2 –
reported by lessor
N/AApplicable &
Material
N/ATo address third-party data
availability 19% of emissions
from tenant electricity and 24%
of natural gas consumption
uses assumptions based on 2
years of historical data. 100% of
tenant refrigerant gas emissions
are estimated based on default
leakage rates.
NZ-MfE2022
Australia-
DCCEEW22
Scope 3-C14
Franchises
Operation of
franchises in the
reporting year, not
included in Scope
1 and Scope 2 –
reported by franchisor
N/ANo activitiesN/AN/A
Scope 3-C15
Investments
Operation of
investments (including
equity and debt
investments and
project finance) in the
reporting year, not
included in Scope 1
or Scope 2
N/ANot
Applicable
N/A
CLIMATE RELATED DISCLOSURE 2024
|
3736
|
VITAL HEALTHCARE PROPERTY TRUST
DISCLAIMER:
This document has been prepared by Northwest Healthcare Properties Management
Limited (the Manager) as manager of the Vital Healthcare Property Trust (the Trust).
This document provides general information only and is not intended as investment,
legal, tax, financial product or financial advice or recommendation to any person and
must not be relied on as such. You should obtain independent professional advice
prior to making any decision relating to your investment or financial needs.
All references to $ are to New Zealand dollars unless otherwise indicated.
This document may contain forward-looking statements. Forward-looking statements can include
words such as “expect”, “intend”, “plan”, “believe”, “continue” or similar words in connection
with discussions of future operating or financial performance or conditions. Any indications
of, or guidance or outlook on, future earnings or financial position or performance and future
distributions are also forward-looking statements. The forward-looking statements are based
on management’s and directors’ current expectations and assumptions regarding the Trust’s
business, assets and performance and other future conditions, circumstances and results. As with
any projection or forecast, forward-looking statements are inherently susceptible to uncertainty
and to any changes in circumstances. The Trust’s actual results may vary materially from those
expressed or implied in the forward-looking statements. The Manager, the Trust, and its or their
directors, employees and/or shareholders have no liability whatsoever to any person for any
loss arising from this document or any information supplied in connection with it. The Manager
and the Trust are under no obligation to update this document or the information contained
in it after it has been released. Past performance is no indication of future performance.
The information in this document is of general background and does not purport to
be complete. It should be read in conjunction with Vital’s market announcements
lodged with NZX, which are available at www.nzx.com/companies/VHP.
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.