CR&S Report 2006 - Stockland

CR&S Report 2006 - Stockland

CR&S Report 2006 - Stockland


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StocklandCorporate Responsibilityand Sustainability Report30 June 20062006

ContentsIFC Stockland profile02 Vision, purpose, mission and values03 Highlights and priorities04 Message from the Chairman and Managing Director05 Approach to corporate responsibility and sustainability07 Marketplace11 People and workplace15 Environment21 Community25 Financial/Economic performanceAppendix27 Australian Building Greenhouse Ratings (ABGR)27 Memberships27 Awards28 Global Reporting Initiative (GRI) IndexCover: Prince Henry at Little Bay, NSW – location ofStockland’s residential development project incorporatinga range of pioneering sustainability initiatives.Stockland is one of Australia’slargest and most diversifiedproperty groups in both assetclass and location of assets.We own, develop and manageproperty across Australiaand have some interests inNew Zealand.Stockland was founded in1952 and initially specialised inresidential development beforediversifying into commercialand retail projects. It was listedon the ASX in 1957. Stocklandis now one of the top 50 ASXlisted public companies (ASX:SGP) with a market capitalisationin excess of $9 billion and totalassets of over $9.6 billion.Stockland is structured as astapled security; a combinationof a unit in a trust and a sharein a company. This allowsthe Group to undertake bothproperty investment (viaStockland Trust) and propertymanagement and development(via Stockland Corporation).This report covers our Australianoperations:• Shopping Centres Division• Commercial & IndustrialDivision• Development Division• Unlisted Property Funds.The company has achieved24 years of consecutive profitgrowth and consistent returnsfor security holders.Stockland Corporate Responsibility and Sustainability Report 2006

We aim to meet or exceedthe expectations of all ourstakeholders, delivering longterm value and sustainabilityto our business.01Stockland Corporate Responsibility and Sustainability Report 2006

Vision, purpose,mission and valuesOur valuesOpennessListen to and respect each other withopen and honest communication02Our visionTo create a world classdiversified property groupOur purposeTo deliver enduring value forour stakeholders throughinnovative, customerfocused property solutionsOur missionPeopleAttract, engage and retain the bestpeople as our most important assetCustomersStrive to exceed our customers’expectationsShareholdersProvide superior returns throughoutstanding performancePartnersCreate equitable rewardingpartnerships by sharing innovationand knowledgeCommunitiesCreate sustainable and vibrantcommunitiesEnvironmentTake care of the environmentServiceProvide outstanding service toour stakeholdersCommitmentStrive to achieve the higheststandards with passion andconvictionInnovationContinually challenge ourselvesto find smarter solutionsTeamworkWork together to add value throughthe diversity of our people and thesynergies of our businessesEmpowermentEncourage ownership, trust andindividual accountabilityEnjoymentShare a friendly, dynamic workplaceand celebrate our achievementstogetherStockland Corporate Responsibility and Sustainability Report 2006

Highlights and prioritiesDuring the past year we have undertaken manyinitiatives that demonstrate our commitment tocorporate responsibility and sustainability.03Highlights• Appointment of the StocklandBoard’s Corporate Responsibilityand Sustainability (CR&S)Committee.• A sustained high employeeengagement score 84 per cent.This is significantly higher thanthe Australian and global highperforming companies’ norms.• Completion of energy (AustralianBuilding Greenhouse Rating– ABGR) and water audits ofour commercial office portfolio.• Delivering sustainabilityinnovations across our residentialprojects such as geothermalcooling and grey water recyclingat Prince Henry, NSW andwater sensitive urban designat Mernda Villages, Vic.• Recognising more than80,000 young people participatingin club sports through ourShopping Centre Division’sStockland Spirit Awards program.• Joining the Australian Businessand Community Network(ABCN), collaborating with otherbusinesses in school partneringand mentoring programs.Priorities for next year• Refinement of environmentalmetrics and targets. This willenable auditing and assurance offuture CR&S Reports.• Build commitment toStockland’s values and corporateresponsibility and sustainabilityaims with our supply chain.• Progress the establishmentof an ISO 14001 accreditedenvironmental managementsystem.• Relocation to our newhead office, embodying ourcommitment to an engaging,healthy and sustainableworkplace for our peopleand improved environmentalperformance.• Inclusion of corporateresponsibility and sustainabilityin performance managementobjectives for all our employees.• Extend meaningful opportunitiesfor our people to give andvolunteer in our community.Stockland Corporate Responsibility and Sustainability Report 2006

04Message fromthe Chairman andManaging DirectorTo deliver long term sustainable value to oursecurity holders, corporate responsibilityand sustainability principles are beingintegrated into all parts of our organisation.We have great pleasure inpresenting Stockland’s firstCorporate Responsibility andSustainability Report. This documentis a companion to our Annual Report,and together they providestakeholders with an overview ofStockland’s economic, social andenvironmental performance.This report and the initiatives itdescribes give formal expressionto our commitment to corporateresponsibility and sustainability(CR&S). These two conceptsare closely linked. Corporateresponsibility means doing the rightthing by our stakeholders and theenvironment. Sustainability is whatour business achieves as a result.To deliver long term sustainablevalue to our security holders, CR&Sprinciples are being integrated intoall parts of our organisation. Weunderstand that the value assigned toStockland by the market goes beyondconventional financial measures.For us, sustainability meansmore than good environmentalstewardship. We take a widerview of sustainability. Our approachembraces our responsibilities toour employees, to our communities,to the marketplace and to theenvironment.Accordingly, we are buildingcapability within Stockland to adoptindustry-leading practices that webelieve will contribute to the longterm success of our business.And we have made good progressin 2006.In the past year, for example,Stockland has maintained a very highlevel of employee engagement, withscores well above the average forAustralian businesses. We have alsobeen recognised for a number ofour environmental initiativesand innovations.We acknowledge, however, theimportance of further capabilitybuilding to realise our CR&Saspirations.To this end, our Board has formeda CR&S Committee to guide ourstrategy and we have created thenew role of Group Manager, CR&S.This first report sets out our plansfor sustainability and our progress todate. It is an important first step.We are mindful of national andinternational models of best practicein CR&S and have chosen to use theGlobal Reporting Initiative to guidethe design of this report.In future years we plan to seekindependent assurance for ourCR&S report, just as we do for ourAnnual Report.Finally, we acknowledge thetremendous teamwork and effortthat has gone into embedding CR&Sprinciples across Stockland. Thisreport is the first of many that willreflect our commitment to bestpractice outcomes for the futurebenefit of the business and thecommunities we serve.Graham BradleyChairmanMatthew QuinnManaging DirectorGraham Bradley, Matthew Quinn.Stockland Corporate Responsibility and Sustainability Report 2006

Approach tocorporate responsibilityand sustainabilityWe have a company-wide commitmentto act as a responsible corporate citizen.05A sustainable future for ourbusiness is inextricably linked to thesustainability of the communities,economy and society in whichwe operate.We act in a way that is sustainable ineach of these spheres to deliver longterm total security holder returns.Our approach is underpinned by acompany-wide commitment to actas a responsible corporate citizenand to conduct our business ethicallyand in accordance with best practicecorporate governance principles.Our culture is based onaccountability and a willingness toconsider what we should do ratherthan what must we do, balancingcompeting interests and prioritiesin day-to-day business.In the past, some of our operatingdivisions have had a more developedsustainability approach than others,with focus more on environmentthan other dimensions. In part,this was driven by legislation andregulation relating to environmentalconsiderations. Stockland has beena supporter and an early adopter ofmany of these measures becausewe understood the potential gainsfor business and the community.For example, with the proposedintroduction of the NSW BuildingSustainability Index (BASIX)legislation in 2004, Stockland tookthe lead in building display homes,trialling the water and energysaving targets.Projects such as the first BASIXcompliantdisplay village atBridgewater in NSW and the firstWaterwise Display Village in Australiaat Settlers Hills, WA demonstrateStockland’s commitment toenvironmental sustainability. Theseexamples are just a small part of ouroverall commitment to corporateresponsibility.In recent years we have given moreformal expression to our corporateresponsibility and sustainabilitycommitments. We are now movingto a more consistent approachacross the entire group.Stockland uses the term “CorporateResponsibility and Sustainability”(CR&S) to describe our commitment.We do this to reinforce theintegrated approach we haveadopted to delivering long termsustainability for our business.There have been a number ofsignificant achievements during thereporting year:• Appointment of a GroupManager, CR&S.• Establishment of a CR&S BoardCommittee. The Committee’spurpose is to assist the Boardin overseeing Stockland’scommitment to operate itsbusinesses ethically, responsiblyand sustainably.• Development and adoptionin 2006 of a group-wideCR&S strategy.• Confirmation of the purpose ofStockland’s CR&S EmployeeCommittee, with representationfrom across the business, drivingspecific aspects of the CR&Sstrategy. The Committee meetsmonthly, facilitating an enterprisewideforum around our progress,challenges and opportunities.• CR&S objectives included in theperformance objectives of oursenior leadership team in FY06,expanded to all employeesin FY07.• Confirmation of our commitmentto public reporting of Stockland’senvironmental and socialperformance through thepublication of this report.Projects such as the firstBASIX-compliant display villageat Bridgewater, NSW and thefirst Waterwise Display Villagein Australia at Settlers Hills,WA demonstrate Stockland’scommitment to environmentalsustainability are just a smallpart of our overall commitmentto corporate responsibility.Bridgewater residential community,South Camden, NSW.Stockland Corporate Responsibility and Sustainability Report 2006

Approach tocorporate responsibilityand sustainabilitycontinued06Corporate responsibility and sustainability strategyOur CR&S aim is to meet or exceed the expectationsof all our stakeholders, delivering long term value andsustainability to our business.To achieve this we have identified fourthemes within our CR&S strategy:• Maintaining ethical and responsiblemarketplace practices.• Respecting and engaging withour people.• Taking care of the environmentin which we operate.• Strengthening our place within thecommunity.These themes have informed the approach ofbusinesses internationally and are reflected in thestructure of widely-used corporate responsibility indices.At Stockland, these themes guide our day to daybusiness and this CR&S report has been structured toprovide information related to each of these themes.This report also addresses the indicators of theGlobal Reporting Initiative (GRI), increasingly used insustainability reports by Australian and internationalbusiness. A summary of reporting on GRI indicators isincluded at the end of this report.We recognise that at times there will be conflictinginterests to be served within each of these themes.Where this occurs, our approach will focus on balancingthe competing priorities to best serve the needs of ourdiverse stakeholders.In the coming year we will be reviewing how weengage with our stakeholders. We will strive to developa consistent strategy for stakeholder identification andengagement. As part of this we will take steps towardsthe creation of an external Stakeholder ReferenceGroup to provide direct feedback to the company fromrepresentatives of peak stakeholder organisations.We will continue to develop our understanding of ourenvironmental impacts, and develop our capacityto monitor these and improve our performance.Members of Stockland’s Employee CR&S Committee.Stockland Corporate Responsibility and Sustainability Report 2006

Marketplace07We strongly believe that corporateresponsibility and sustainability areessential foundations for long termsecurity holder value.Stockland has an active and experienced Board andan expert management team.Our business is underpinned by strong financial disciplineand corporate responsibility.Our focus has always been on sustainable growth.Looking after our security holders’ interests is not justabout returning profit.Stockland Corporate Responsibility and Sustainability Report 2006

MarketplacecontinuedThe core of corporate responsibilityin the marketplace is the maintenanceof the highest standards of ethics andintegrity in business practice.08Management systemsCode of Conduct and EthicalBehaviourAll Stockland employees are boundby clear standards of behaviourwhen dealing with assets,intellectual property, gifts andcorporate entertainment. The Codeincludes procedures for dealingwith insider trading and conflictsof interest.All employees are expected tosupport Stockland’s commitmentto eradicating discrimination ofany kind.Breaches of the Code are treatedseriously.Whistleblower PolicyIn line with our Code of Conduct andEthical Behaviour, employees areencouraged to report any improperconduct they encounter to theirline manager, the Group Manager,Health, Safety and Environment,their Divisional Human ResourcesManager or the WhistleblowerProtection Officer (WPO).The WPO’s role is to safeguard theinterests of the whistleblower, andto make sure the whistleblower iskept informed how the complaintis proceeding. An employee whoreports improper conduct in goodfaith and without having beeninvolved in the improper conduct willnot be personally disadvantaged asa result. All disclosures made underthis policy are treated as confidential.Occupational Health andSafety PolicyStockland has an OccupationalHealth and Safety (OHS) Policy,which states our commitmentto ensuring the safety and welfareof employees, contractors, visitors,customers, tenants, and the widercommunity. Our OHS procedures,are available to all employees.These define health and safetyrequirements and provide practicalguidelines for effective managementof safety related issues.Privacy PolicyThe personal information ofStockland’s employees andcustomers is protected inline with the Privacy Act 1988(Commonwealth). Stockland ensuresthat all personal information isrelevant, accurate, stored securely,has restricted access and is used fora proper purpose. A Privacy Officeris responsible for implementing thepolicy and for addressing any queriesor complaints.Political Donations PolicyOur political donations policy isdesigned to ensure that any politicaldonations made by the Group servethe interests of our security holderswith full transparency.Political donations may be made,but only on a bi-partisan basis withinstrict annual limits set by the Boardand are generally made by supportingthe business forums of the majorpolitical parties.Stockland Corporate Responsibility and Sustainability Report 2006

Priorities for the coming yearAreas to be addressed in thecoming year include:• Development of aSustainable Supply ChainManagement Policy to alignour commitment to CR&Swith our actions in selecting,influencing and interactingwith our supply chain.• Proactive participation inCR&S ratings and indicesto publicly measureperformance and learn fromthe process.Case studyEthical communicationwith customersThe Development Division marketsits land, houses and residentialcommunities in a highly ethicalmanner. To ensure a consistentapproach and high performancestandards, the Stockland Sales& Customer Relationship Toolkitwas developed. This is used by eachof our regulated selling agents acrossthe country.Every sales agent, whether hiredinternally or contracted externallyfrom a third party, is expected tofollow the Stockland sales andcustomer philosophy, coveringall processes for interacting withprospective customers.Marketing material for all Stocklanddivisions goes through an extensivelegal checklist prior to being madepublic. In the case of a “promotionaloffer”, all marketing material is sentto legal counsel for approval prior topublishing. This ensures the integrityof all Stockland’s marketing.North Lakes sales suite.09Stockland Corporate Responsibility and Sustainability Report 2006

Marketplacecontinued10Case studyCustomer relationship managementIn mid 2005, Stocklandembarked on a majornew strategy to transformthe company into a morecustomer focused business.This project strengthens thecore competencies of acquiring,developing and owning propertythrough maximising customerloyalty, repeat business andreferred business.Through a customer datamanagement system using marketsegmentation, Stockland will beable to tailor product to better meetcustomer needs.Through collaboration across thecompany, we will have anenterprise-wide view of themarketing calendar. This will lead tomore targeted communication, sothat customers are contacted at theright time with relevant informationand their privacy is respected.This customer interaction extendsbeyond marketing material toinclude educational material andfeedback to enable customers toshare their views. This enablesStockland to more effectively servecommunity interests over a longperiod.While currently focused oncustomer relationships, theproject benefits also flow to otherstakeholder groups.Stockland Corporate Responsibility and Sustainability Report 2006

People andworkplaceDiversity, engagement, leadership andinnovation are core to our businessand are valued by customers andother stakeholders.11Our goal is to attract and retain talented people who sharea passion for our industry. It is also about valuing diversityby tapping into the unique capabilities of all employees andusing this knowledge to address rapidly changing businessenvironments and markets.Stockland Corporate Responsibility and Sustainability Report 2006

People and workplacecontinuedEmployee engagement(employee survey) %People leader index(employee survey) %Gender and age profile oftotal workforceStockland workforce1001001,0001280604080604080060040019%48% 52%200200200010% 19%21%8%11%5% 5%1% 1%200520062005200660TotalFull-time – 892 (91%)Part-time – 56 (6%)Casual – 32 (3%)Total – 980Full-time equivalent (FTE) – 958Culture and valuesStockland recognises that ourpeople and the workplace we createdetermines how successful we will be.Our people strategy aims to supportour employees to develop their talentsand achieve in an environment that issafe, diverse and values-based.Health and safetyWe recognise the importance ofoccupational health and safety in ourindustry.In order to measure our progresstowards our safety goals, we reportmonthly to our Board on a range ofmeasures including lost time injuryfrequency rate, significant incidents,safety training attendance and safetycompliance levels.Succession and talent managementSuccession plans are now in placefor the three most senior levels ofmanagement. This ensures we areable to efficiently access the talentthat our business needs as it evolves.Key to the success of our successionplan is a talent management strategythat ensures our highest performingemployees are retained anddeveloped.OrientationAll new employees attend theStockland Orientation Program tolearn about Stockland and how wework. Over this two day programemployees meet our ManagingDirector and learn about the businessfrom each of our Divisional CEOs.Other business representativespresent on Stockland’s policies andactivities, including CR&S. Emphasisthroughout the program is placed oncommunicating our vision, purpose,mission and values. The programalso incorporates a tour to a rangeof Stockland sites, showcasing ourpeople and our property assets,development projects and activities.Employee engagementA great deal of research nowindicates a direct link between highlyengaged employees and shareholdervalue. Employee engagement is thedegree to which workers identifywith, are motivated by and arewilling to expend extra effort fortheir employer.In March and April 2006, we undertookour second Employee EngagementSurvey conducted by global firmIndependent Survey Research (ISR).This year, Stockland had an overallemployee engagement scoreof 84 per cent. This is significantlyabove the Australian and global highperforming norms.Reward and performanceOur remuneration strategydemonstrates a clear link betweenperformance and reward.To further enhance the linkbetween individual contribution andbusiness results, new performancemanagement systems andprocesses have been implementedfor all employees.DiversityStockland has developed a DiversityStrategy to optimise performance,effectively manage risk and promoteinnovation to reflect the diverse mixof the customers and communitiesthat it operates in. A business thatcan adapt to its environment willconsistently deliver successfulbusiness outcomes.The key strategic themes are:• Embedding diversity into theStockland culture.• Creating a more flexible workingenvironment.Stockland Corporate Responsibility and Sustainability Report 2006

Women in managementWomen make up 28% of managementin Stockland (including the categoriesExecutive, Leadership Team, SeniorManagement and Management)100755025067% 33%10%90%WomenMen20%80%67% 33%ExecutiveManagementLeadershipTeamSeniorManagementManagement53%47%83%17%Professional/TechnicalEmployee48% 52%TotalHealth and safetyNumber of incidents403020100ExtremeHighModerateLowTotalreportedAge profile of workforceThe median age of Stocklandemployees is 34 yearsEmployee turnoverRegretted turnover: 16% (annualised)Training per employeeAnnualised training days peremployee: 3.12Training spend as % of payroll: 2.1%Absentee ratesLost productivity: 1.3%(Time lost to illness as % of payroll)LTIFR(Lost Time Injury Frequency Rate)Lost time injuries per million hoursworked: 6.2Case studyPeter Daly International FellowshipThe Peter Daly International Fellowship recognises emergingleaders at Stockland, providing an employee with theopportunity and financial support to travel overseas toundertake a study project of their choice.The winner of the inaugural PeterDaly International Fellowship, chosenby former Stockland ChairmanPeter Daly and Managing DirectorMatthew Quinn, was Claudia Lam,National Design Manager, ShoppingCentre Division.Claudia was chosen from 20nominations across the businessto research sustainable buildinginitiatives in retail design anddevelopment.The project commenced withan international conference onsustainable development and greenbuilding technologies in Beijing inApril 2006.13• Increasing the diversity mix ofthe workforce.The strategy is delivered througha range of initiatives:• Exceeding legal obligations toenable work/life balance such asan enhanced parental leave policyand flexible work practices.• Consulting employees andproviding training to promotean inclusive culture respectfulof different opinions, viewsand backgrounds. This includesWorkplace Relations training formanagers, inclusion of a diversitycensus in the employeesurvey, and the introductionof networking meetings forsenior women.• Introducing employee benefitsand programs such as “ManageYour Work/Life Balance” tosupport employees’ work-lifeneeds.Learning and developmentscheduleStockland encourages furthereducation and training forall employees regardless ofclassification or location. We offera wide range of in-house trainingdesigned to meet the technical,personal, business and managementneeds of our employees.At any one time around 1 in 10employees are undertaking relevanteducational studies with accreditedexternal providers. While individualcases vary, employees can expectaround 50% of their program to befinancially supported by Stockland,and have access to exam andstudy leave.ScholarshipsThe Peter Daly InternationalFellowship, created in honourof Stockland’s former ManagingDirector and Chairman, supportsa talented Stockland employee inundertaking a study tour or projectthat cannot be readily undertakenin Australia.Claudia Lam.Claudia then travelled to the USto research sustainable shoppingcentre design initiatives, meetingwith industry leaders in retailbusiness, development and design.On Claudia’s return she describedher experience as a steep personaland professional learning curvethat expanded her knowledgeof sustainability concepts on aglobal scale.The Fellowship has generatedgreat excitement amongstStockland colleagues. Claudia’sexperience has ignited awarenessand interest in sustainability andthe impact on retail projectsamongst the wider Stockland team.Stockland Corporate Responsibility and Sustainability Report 2006

People and workplacecontinuedCase studyStrengthening our leadership14The Ervin Graf Scholarship, createdin honour of Stockland’s founder,is offered to second year Bachelorof Business (Property) students atthe University of Western Sydney.It rewards outstanding performancewith paid work experience atStockland and a cash award tohelp the successful students fundtheir studies.Scholarship recipients are mentoredwithin Stockland and normally offeredfull-time employment.A number of scholarships have alsobeen developed with universitystudents in particular disciplinesin Sydney, Melbourne, Brisbaneand Perth as part of the GraduateDevelopment and Tomorrow’sLeaders initiative.Priorities for the coming year• Refine the alignment ofreward and performance,including the completion ofan enhanced performancemanagement processincorporating CR&S objectivesfor all employees.• Continue to enhance peoplecapabilities to deliver thebusiness strategy, through ourLeadership and ManagementDevelopment Programs.• Continue to foster aworkplace that attracts,retains and motivatestalented individuals includingthe development of careerpaths for major job families.In the past 12 months, Stockland’sHuman Resources functionhas moved beyond providingsupport services to initiating anddriving strategic organisationaldevelopment.Strengthening senior leadership hasbeen a particular focus for enhancedorganisational effectiveness.We recognise that to nurture andretain developing leaders it isnecessary to provide support andtraining at key transition points inan individual’s career, i.e. from teamplayer to team leader; from teamleader to functional leader and fromfunctional leader to senior manager.Stockland leadership attributesAn important step to furtherstrengthen our leadership capabilitywas to agree on a set of attributesthat will foster success.Individual assessment resultsprovided senior leaders with directfeedback on their leadership andStockland was able to obtain asnapshot of enterprise-wide needs.Leadership Development moduleswere created to strengthen keyleadership attributes.For our middle managers, wehave also designed and deliveredseveral Management Developmentprograms to around 150 seniormanagers. These have centred oncore management capabilities.Career development, successionplanning and talent managementStockland provides employeeswith learning and developmentopportunities. This is an importantpoint of difference and a necessaryinvestment to build the capabilitiesrequired for the future.Along with our desire to liftcareer development opportunitiesacross the organisation, we arealso mindful that there is a talentshortage in the property sectorwhich creates a heightened needto identify, build and retain existingtalent.We have identified our toptalent based on an assessmentof performance and potential,providing “stretch” opportunitiesto accelerate their growth.We also introduced a rigoroussuccession planning process for allExecutive and General Managers.The success of these initiativeswill be judged by the strength anddepth of our leadership pipeline.To that end, each year Stocklandconducts an employee opinionsurvey that includes benchmarkingagainst leading Australian andinternational companies. For 2006,Stockland employee opinions ofsenior leadership were very positive(77 per cent were favourable in theirratings) and were significantly abovethe Australian norm.** International Survey Research,2006 Stockland Employee Survey.Stockland Corporate Responsibility and Sustainability Report 2006

EnvironmentWe are committed to integratingecologically sustainable practices intoour projects and the management ofour assets.15As a major diversified property business and Australia’slargest residential developer, Stockland has long beenfocused on environmental sustainability. We understand andembrace the importance of sustainable project delivery andreporting and work alongside government and within theindustry to develop tools and strategies.Stockland Corporate Responsibility and Sustainability Report 2006

16EnvironmentcontinuedStockland has long been focusedon environmental sustainability.Environmental sustainabilityWe recognise that we havea responsibility to reduce theenvironmental footprint of the assetswe manage, and in our commercialoffice, industrial, shoppingcentre, apartment and residentialcommunity development projects.We work with a range of industrytools to measure our impact andto improve our performance.Environmental Management PolicyIn recent years, Stockland hasundertaken a number of initiativesto reduce the adverse impactsof its business activities on theenvironment, by adopting bestpractice sustainability designsand practices.To ensure a consistent approachto best environmental practiceacross all its business units, wehave developed an EnvironmentalManagement Policy that definesour commitment to protecting theenvironment, conserving resourcesand eliminating or minimisingadverse environmental impactsand risks.We are also committed toestablishing an EnvironmentalManagement System in line withthe requirements of the AS/NZSISO 14001:2004 standard.In 2007, we will establish the majorframework of the environmentalmanagement system andcommence setting up a number ofour environmental key performanceindicators that will enable usto measure our environmentalperformance in a systematicmanner, with a view to continualimprovement.Environmental principlesOver the past year, Stockland’sEmployee Corporate Responsibilityand Sustainability Committee hasestablished a set of principles toguide our approach to asset anddevelopment management acrossall divisions. These principles arebeing progressively rolled out acrossthe organisation. They will lead toa consistent framework by whichwe will review, measure andimprove our performance. Already,these principles are consideredas part of due diligence for landacquisition and form the basisof our Shopping Centre Division’sSustainability Blueprint.These principles are:• ManagementTo instigate sustainabilitymanagement plans, initiativesand reporting, which improve andbalance economic, environmentaland social performance across allassets and projects.• WaterReduce potable water demand,minimise waste water generationand manage stormwater qualityand flow.• Waste minimisationReduce waste going to landfill, andminimise the emission of pollutants.• EcologyEncourage the minimisation ofecological impact, and optimiseecological benefits.• Indoor comfort and environmentqualityPromote and provide healthy andcomfortable indoor environments.• Materials selectionEncourage the recycling and reuse ofmaterials and promote the selectionof materials with reduced embodiedenergy and those materials whichhave a reduced impact on resourcedepletion.• TransportPromote the utilisation of moreefficient modes of transportand thereby reduce reliance onmotor vehicles.• Community engagement andfacilities provisionEngage with stakeholders on allprojects and assets.• EnergyReduce greenhouse gas emissions(energy consumption) of projectsand assets.Stockland Corporate Responsibility and Sustainability Report 2006

Environmental practicesStockland is committed toaddressing ecologically sustainablepractices in our projects. In ourDevelopment Division, ourNational Sustainability Managerhas responsibility for developingcapability to deliver moresustainable communities andapartments.Much has already been achieved.Projects such as Mernda Villages,Vic and Vertu, WA are addressingthe principles of water sensitiveurban design. Better management ofstormwater volumes and improvedwater quality returned to naturalsystems, combine to add to theattractiveness of public space.Addressing biodiversity in ourprojects is a key consideration.Where possible we go beyondcompliance, enhancing thebiodiversity quality of open spacesand adjacent land. At projects suchas Wallarah, NSW and Newhaven,WA we have undertaken extensivetree surveys to assist with mappinghousing footprints and to ensurethe best trees are retained in publicopen spaces. The Forster shoppingcentre redevelopment has partneredwith local schools in a communitytree planting program.Our Residential Communities teamin WA has worked with the WaterCorporation to deliver Australia’stwo first Waterwise Display Villagesat Settlers Hills and The Sanctuary.In partnership with Clean UpAustralia, Stockland became thefirst national shopping centre groupto sell reusable shopping bags,supporting retail tenants in theshared goal of reducing plasticbag consumption.Working with others towardsenvironmental sustainabilityWe have worked with peak industrygroups and authorities to provideinput into current and futureprograms designed to addressenvironmental impacts.NABERS (National Australian BuiltEnvironment Rating System)NABERS is a performance-basedrating system for existing buildings.The system incorporates theAustralian Building GreenhouseRating (ABGR) that ratesgreenhouse emissions (energyconsumption). In April 2006,NABERS Office Water was launchedto measure the water consumptionof an office building. Stockland wasinvolved in providing data to enablebenchmarking and participated in thetechnical advisory group to developthe tool.The Commercial & Industrial Divisionfinalised rating its office portfoliousing this tool and we are now oneof the first property groups to havea water rated office portfolio. TheShopping Centre Division has alsoassisted the NSW Governmentin developing an ABGR tool forshopping centres.Shopping Centre GreenStarDesign ToolOur Shopping Centre Divisionsponsored and has participatedin the GBCA’s (Green BuildingCouncil of Australia) TechnicalWorking Group assisting with theestablishment of the ShoppingCentre GreenStar Design Tool. Thistool guides the development ofshopping centres to enhance theirenvironmental performance acrossa wide range of environmentalindicators.NSW Building Sustainability Index(BASIX)BASIX is a sustainability tooldeveloped by the NSW Governmentto set greenhouse gas emissionsand lower water consumptiontargets for all new NSW dwellings.The Index was launched inJuly 2004, and Stockland’sDevelopment Division was the firstdeveloper to build BASIX-compliantdwellings at its Bridgewater DisplayVillage, South Camden. Stockland,in joint venture with Landcom, hasalso been the first to develop a fullycompliant residential communityat Macarthur Gardens. We haveactively worked with the BASIXdevelopment team providing dataand feedback to aid the refinementand usability of the tool.Other residential sustainabilitytoolsDevelopment Division hascontributed to the creation of otherexisting and emerging sustainabilityindices and tools, engaging withstate government agenciesnationally. We have also providedfeedback on the emerging nationalthermal comfort tool, AccuRate.WorkplaceWe recognise we can influencethe environmental impact of ourworkplace practices. In 2003, weintroduced recycled content paper.Over the past two years we havecommunicated the importance of“being green” in the workplace,encouraging our employees tobe mindful of reducing waterand energy consumption, andintroducing a waste recyclingprogram. We also participate inPlanet Ark’s consumable program,recycling our printer, fax and tonercartridges. Prior to our head officerelocation, we have earmarked thedonation of computer hardware toWorkventures, for redistribution toschools and families in need.Priorities for the coming year• Improving and ratingthe performance of ourcommercial office portfolioby implementing initiativesand using the NABERS Officesuite of tools, including ABGRand NABERS Office Water.• Trialling the Green BuildingCouncil’s GreenStar shoppingcentre tool.• Working towards anEnvironment ManagementSystem that is eligible forISO 14001 accreditation.• Implementing a commonapproach across divisionsas part of developing ourEnvironmental ManagementSystem.• Our new head office is toembody principles of CR&S,most notably throughproviding an engaging andhealthy workplace for ourpeople and demonstratingimproved environmentalperformance.17Stockland Corporate Responsibility and Sustainability Report 2006

EnvironmentcontinuedThe Commercial & Industrial Division (C&I) has set its specific sustainability goalto be a leader in the commercial office and industrial property sectors by implementingsustainable business practices.18Case studyReducing the ecological footprint ofour commercial office portfolioIncreasingly the communityexpects that resource use will beminimised and in a competitiveleasing environment our customerswill be placing greater emphasis onsustainable building performance.A vital step towards achieving ourgoal has been the commencementof monthly sustainability reportsfor our commercial office buildings.These reports track formal andinformal sustainability ratings acrossour office portfolio. They providedata on electricity, water, and gasconsumption and diversion of wastefrom landfill. They also includetargets for improvement in futureperformance.Initiatives are now in place toimprove our performance.C&I is working with the technologycompany EP&T to determine howelectricity and water consumptioncan be reduced. A program ofimprovement including metering,sub-metering and monitoring,equipment adjustment andassessment has been implementedacross the commercial office portfolio.Energy savingWe have set a target of 24 per centin reduction, from our FY05 baseline,of electricity consumption by endFY08. This target is a reduction ofover 10,000 tonnes of carbon dioxideemissions or equal to taking morethan 2,200 cars off the road per year.Greenhouse ratingsDuring 2006, C&I obtained AustralianBuilding Greenhouse Ratings(ABGR) across the commercialoffice property portfolio, with theexception of properties about tobe sold or refurbished. The ABGRscheme is nationally administeredby government to help buildingowners and tenants across Australiabenchmark their greenhouseperformance.The average rating for the C&Iportfolio is 2.6. We have establishedan average rating target of 3.6 tobe achieved in 2007 for the existingoffice portfolio and have committedto a minimum of 4.5 for newcommercial office developments.Water consumptionC&I has been working with theNSW Department of Energy, Utilitiesand Sustainability (DEUS) to beone of the first companies to gaincertification of an office portfoliousing the National Australian BuiltEnvironment Rating (NABERS)Office water rating tool.Water usage to February 2006 hasbeen tracking 13 per cent below2005 against our target (end FY06)reduction of 5 per cent.Having completed the roll-outof waterless urinals across ourcommercial office portfolio weexpect savings in water to besignificantly boosted to 30 per cent,or 110,000 kilolitres per annum. Thisis equivalent to 110 Olympic sizedswimming pools saved each year.Waste to landfill reductionIn NSW, contracted wastemanagement, including a recyclingprogram, is in place and the targetof more 50 per cent diversionfrom landfill (as compared to ourFY05 baseline) has been achieved.With the national extension ofthis program our Queenslandand Victorian properties are ontrack to achieve this target by theend of FY07.As there is currently no accreditedindustry tool for measuringdiversion of waste to landfill, C&Iis collaborating with the NSWDepartment of Environment andConservation, to assist with thedevelopment of a recognisedmeasurement tool for the industryin relation to waste and recycling.A co-operative approachWhile setting targets andimplementation of managementsystems are crucial to theachievement of C&I’s sustainabilitygoal, it is important not to overlookthe importance of gaining thesupport and co-operation of tenants,suppliers and service providers.In the coming year, C&I willfocus on working with partners toraise awareness and commitmentto sustainable practices andleverage the knowledge to begained from Stockland’s headoffice relocation project.Stockland Corporate Responsibility and Sustainability Report 2006

Stockland’s environmental footprintTotal greenhouse gas (GHG) emissionsEmissions sourcePurchased electricityOn-site gas consumptionAir travelCar fleetPaper consumptionElectricityTotal purchased electricityGHG emissions141,176 tonnes138,670 tonnes1,136 tonnes783 tonnes433 tonnes154 tonnes137,040,9580 kWh138,670 tonnes*Per cent of each AreaTotal GHGportfolio type represented Intensity (tonnesDivision represented† (m 2 ) Total (kWh) (kWh/m 2 ) (CO 2)Commercial 77% 408,265 NLA 64,785,385 159 65,555OfficeIndustrial 5% 58,082 GLA 4,698,906 81 4,755Office Parks 33% 12,468 NLA 1,780,171 143 1,801Shopping Centres 85% 728,295 GLA 65,776,496 90^ 66,558Shopping Centres 309,556 GLA 65,776,496 212^(less majors)Total 137,040,958 138,670* WRI/WBCSD GHG Protocol Initiative (April 2006). Indirect CO 2 Emissions from theConsumption of Purchased Electricity, Heat, and/or Steam Calculation worksheets. Version 1.1.† These figures capture electricity purchased by Stockland as reported July 2006 by Stockland’smajor electricity retailers. These figures do not capture assets wholly or partly where data isnot available. Typically this is the case where significant tenants purchase electricity directly,for example industrial sites.^ Intensity for shopping centres is given for both total GLA and GLA less majors, as mostmajors purchase electricity directly.GasTotal on-site gas consumption22,071,546 MJArea represented (NLA) 154,287 m 2Intensity143 MJ/m 2 (NLA)GHG emissions1,136 tonnes** GHG Protocol Initiative (July 2005). Calculation Tool for Direct Emissions from StationaryCombustion. Version 2.0.Air TravelTotal air travel6,441,882 kmAir travel6,724 km per employeeDomestic5,905,467 kmInternational536,415 kmGHG emissions783.4 tonnes** WRI-WBCSD GHG Protocol (June 2003) Mobile Combustion CO 2EmissionsCalculation Tool. Version 1.2 – Emissions based on fuel use.Car fleetTotal vehicle fuel purchasedTotal petrolTotal dieselTotal fuel per vehicleGHG emissions179,944 litres167,988 litres11,955 litres2,534 litres433 tonnes** WRI-WBCSD GHG Protocol Initiative (June 2003) Mobile Combustion CO 2EmissionsCalculation Tool. Version 1.2 – Emissions based on fuel use. Calculation based onStockland fleet of 71 vehicles.PaperTotal paper consumption61.6 tonnesPaper consumption64kg per employeeTotal recycled content44.3 tonnesTotal virgin stock17.3 tonnesGHG emissions154 tonnes** Australian Greenhouse Office (2005), AGO Factors and Methods Workbook.Department of the Environment and Heritage.WaterPer cent of each Areaportfolio type represented IntensityDivision represented (m 2 ) Total (kL) (kL/m 2 )Commercial 66% 347,915 NLA 423,429 1.2Office(FY06)Shopping Centres 85% 728,295 GLA 811,134 1.11(CY05)WasteIn August 2005, we commenced tracking of diversion of waste from landfill in ourcommercial office portfolio in NSW. From August 2005 to March 2006 (our mostrecent data), data from our waste contractor indicates that we have consistentlydiverted more than 50% of waste (as measured by weight) from landfill.19Stockland Corporate Responsibility and Sustainability Report 2006

20EnvironmentcontinuedCase studyPrince Henry at Little BayIn 2004, Stockland was pleased to join with Landcom,the New South Wales Government land developer, onthe redevelopment of the former Prince Henry Hospitalsite in Sydney. Stockland is working co-operativelywith Landcom and its development partners todeliver an integrated coastal community showcasingenvironmentally sustainable design excellence.The site is at Little Bay, a scenicand historic part of Sydney’seastern coastline. It comprises84 hectares of which 34 hectareswill be redeveloped for residential,commercial and community uses.Stockland is currently developingresidential and mixed use lotsat Prince Henry embodying fiveprinciples of smart residentialdesign:Enviro smartWe use a residential comfortindex that takes into accountthermal comfort, air quality, airmovement and the use of naturallight in dwelling design. Louvresolar shading for windows withoutoverhead balconies control directsunlight and heat and secure crossflowventilation. These initiativeswill help reduce the need for airconditioningand artificial lighting,decreasing energy consumption byaround 25 per cent.Techno smartPrince Henry is one of the firstmaster-planned communities inAustralia to employ smart wiring andmetering. Lighting, temperature andsecurity systems will be centralisedin many of the dwellings. Whenthese are combined with a facility tomonitor energy use, householderscan improve energy savings.Energy smartSolar power will help light apartmentbuilding common areas and drive awater pumping system to irrigatePrince Henry’s public park. This willresult in a combined environmentalsaving of approximately 85 tonnes ofcarbon dioxide emissions each year.Water smartAcross the redevelopment site,a range of water innovations will aimto reduce overall water consumptionby 45 per cent. The use of waterefficient fittings and appliances,recycled water and harvestedrainwater will all contribute toreduced fresh water consumption.Stockland is a pioneer in multiunitresidential water recycling atPrince Henry by installing in ourlarger buildings an innovative greywater treatment and reuse system.The system will be used for toiletflushing, private landscape irrigationand in car wash bays.Build smartDesign, construction and choice ofbuilding materials greatly affect anapartment’s energy efficiency andalso its ability to keep unwantednoise out. Along with the energyuse reduction initiatives, ourbuildings incorporate the latestdesigns to maximise noiseinsulation between apartments.Beyond the development phase,we will also assist homebuyers tocontinue to maximise the waterand energy efficiencies in theirnew homes. We have negotiatedeco-packages with retailers thatwill lower the purchase price tohouseholders of water and energyefficient refrigerators and washingmachines. We will also providehome owners with information toassist them make minimal use ofair conditioning and lighting.Geothermal air conditioning trialConsistent with our desire toshowcase emerging environmentaltechnologies within the PrinceHenry development, we havetaken the opportunity in one ofour apartment buildings to installa geothermal heat pump airconditioning system.In this system, the constantunderground temperature of theearth is utilised for heating andcooling. Energy is exchanged viaa pipe loop system between theapartment and the earth.Matron Dickson Building, Prince Henry at Little Bay.Stockland Corporate Responsibility and Sustainability Report 2006

CommunityInvesting in the community where wedo business is integral to our long termsustainability.21Our properties create and change communities throughtheir existence, operation and redevelopment. We embracethis community-building facet of our business and activelyexplore ways in which communities can be enhanced throughour involvement.Stockland Corporate Responsibility and Sustainability Report 2006

22CommunitycontinuedInvesting in the community includestaking account of our direct impacton the local communities whereour properties are located andcontributing positively to broadercommunity interests.Community sponsorshipsBreakdown of community sponsorshipsCommunity engagementWe understand that ourdevelopment projects have animpact on existing and futurecommunities. To take account ofthis, we have built communityengagement and consultation intoour planning processes. We drawfrom previous experience, bothpositive and negative.We aim to engage our stakeholdersthroughout the developmentprocess. Key stakeholders includelocal residents, community andenvironmental groups andrelevant authorities, particularlylocal government. We recognisethe importance of undertaking astakeholder needs analysis at theoutset of projects and the need forengagement plans to be regularlyupdated as interests and concernschange. Engaging with retailersand local residents from the starthas created a shared vision forour current shopping centreprojects at Wendouree, Vic andRockhampton, Qld.At our Waterway Gardensdevelopment, Townsville, NorthQueensland we have worked withThuringowa Council to establish aPartnership Agreement documentingour shared commitment to deliversustainability objectives over the lifeof this residential, shopping centreand commercial project.Community developmentOur Shopping Centre Divisionengages our stakeholders in boththe development and operationalphases of our centres. We believethere are great mutual benefits infostering harmonious relationshipsbetween our people developingand operating our shopping centresand the surrounding community.We recognise that we act as animportant hub for communityinteraction and local events.In developing residential projectswe acknowledge that we havea responsibility for creating newand contributing to existing,communities. In WA residentialcommunities, including SettlersHills and The Boardwalk, our projectteams and community specialistshave worked with communities toestablish residents’ associations.The emphasis is on buildingcapability, so these groupsbecome self-sustaining communityorganisations, able to managecommunity affairs.Community involvementStockland makes significantcontributions to the broadercommunity. We ensure that ourcommunity programs align withour corporate objectives.This year we surveyed ouremployees to gauge interestin contributing to the broadercommunity. Most employees wouldlike Stockland to establish a formalgiving program, and most indicatedinterest in volunteering. For bothgiving and volunteering programs,employees suggested projectsassociated with children andthe environment.Stockland Spirit AwardsStockland Shopping Centre Divisionis committed to contributing tothe local communities served bya Stockland Shopping Centre.In May 2005, the Divisioncommenced the Stockland SpiritAwards to recognise and rewardjunior sporting clubs.Commercial Sponsorship – 24%Local Community Events – 18%Local Education and Youth – 22%Community Sport – 36%Stockland Corporate Responsibility and Sustainability Report 2006

Clubs are given certificates forcoaches to award to team membersand players who have giventheir best or who deserve someencouragement. Certificates areredeemable for prizes collectedfrom centre retailers. Redeemedcertificates are then entered intodraws for significant monthly andannual prizes.Prizes are co-sponsored by centreretailers, providing the jointopportunity for centres andtenants to contribute to theirlocal community.Over the past year, 600 clubshave registered 5,500 teamswith over 80,000 players.Over 100,000 certificates havebeen awarded.Wallarah Peninsula.Case studyCommunity engagement:Wallarah Peninsula developmentStockland’s development at Murrays Beach, Wallarah Peninsula,NSW was seven years in the planning. Wallarah Peninsula,situated between the ocean and Lake Macquarie about150 kilometres north of Sydney, spans 2,500 hectares.In the 1980s, early plans by formerowners were vigorously opposedby the local community. Stocklandacquired the site in 2004 and workedactively with Lake Macquarie CityCouncil, the State Governmentand community representatives topreserve existing environmentalfeatures, flora and fauna, andvisual aspect.Stockland established an officein the nearest town, Swansea.This local presence meant thatthose working on the developmentwere able to engage with thelocal community and understandlocal concerns. Equally, it providedthe local community with readyaccess to the project staff and theopportunity to interact directlywith them.Local interest groups were invited tonominate one or two representativesto join a Community ReferenceForum. Meaningful and constructivedialogue was fostered.The strength of the negotiation withthe community was underpinned bythe detailed studies of the ecologicalfeatures of the site, particularly itsflora and fauna.After extensive consultation,some significant changes to thedevelopment plans were made.More than 160 hectares of land inthe coastal sector originally slatedfor residential building was given tothe government in 2001 and is nowa dedicated national park.Looking back at the Wallarahconsultation process, the ProjectDirector attributes its success to thefollowing key factors:• making sure what was promisedwas delivered;• ensuring that the technicalinformation gathered wasexemplary;• having the necessary resources,capabilities and experience todevote to the process; and• establishing and maintainingan involved local presence inthe community.23Stockland Corporate Responsibility and Sustainability Report 2006

CommunitycontinuedOur Managing Director,Matthew Quinn, has teamedup with Bob Dunne, Principal ofFairfield High School. Locatedin South West Sydney, it fallswithin the NSW Department ofEducation Priority Schools Fundingfor schools with a significant rangeof challenges. The area is also ofparticular relevance to Stockland asit has properties such as WetherillPark Shopping Centre and theYennora Distribution Centre.24Case studyStrengthening our place in the community– Stockland’s membership of the AustralianBusiness and Community NetworkStockland has also invitedemployees to participate inthe Growing Opportunities andLearning Skills (GOALS) Year 9students mentoring program.The program was piloted in 2005(prior to Stockland joining ABCN)with impressive results:• absenteeism fell by 50%;• before the program 18% ofstudents were leaving at theend of Year 10 but by the endof the program all wanted tocontinue to the end of Year 12;Clean Up AustraliaClean Up Australia Day, ourcountry’s biggest environmentalcommunity event, is now in its17th year. As a national supporterof Clean Up Australia Day,our Shopping Centre Divisionparticipated in various CleanUp Australia Day activities inMarch 2006.Our Shopping Centre Divisionregistered 16 clean up sitesthroughout Australia with over70 Stockland employees nationallyparticipating in various Clean UpAustralia activities.Clean Up Australia Chairmanand Founder, Ian Kiernan AO,said “Clean Up Australia Day isa fantastic example of how theindividual actions of many can effectgreat change in communities aroundAustralia. Thanks to the staff ofStockland Shopping Centres acrossthe country for their continuedsupport in making this country acleaner place for all to enjoy.”Priorities for thecoming year• Building a consistentapproach to communityengagement across ourprojects.• Development of a robustcommunity involvementstrategy including thealignment of sponsorshipswith business aims.• Creating a plan for employeevolunteering and employeegiving.In 2006, Stockland joined20 other companies in theAustralian Business andCommunity Network (ABCN).ABCN was founded in 2004to consider how businesscould more effectively engagewith the community.The group decided to initially focuson the education sector due toits role in developing the futureworkforce and its importance inbuilding sustainable communities.After extensive consultation, it wasagreed that engaging and providingsupport to primary and secondaryschools and teachers would be themost effective.Stockland’s initial participation wasthrough the Partners in Learning(PIL) collaboration. Through PIL,principals from public high schoolsin areas of high need are matchedwith business leaders. They worktogether as partners on leadershipand management issues.• 36% who had planned to attendTAFE now wished to attenduniversity; and• 28% said that they now talkmore to their parents/carers.Nine Stockland people have nowjoined over 100 volunteers fromother ABCN member companies inmentoring over 90 Year 9 studentsfrom five Priority Funded SouthWest Sydney secondary schools.We anticipate that our ABCNparticipation will continue tobroaden and deepen over thecoming year.Stockland Corporate Responsibility and Sustainability Report 2006

Financial/EconomicperformanceGross revenue increasedby 34.9%$ billion2.5Operating profit increasedby 10.1%$ million600Net tangible assets per securityincreased by 13.5%$5.004.50Total assets increasedby 14.3%$ billion122.05004.00104003.5081.53.003002.5061.002002.001.504250.51001.0020.500000200220032004200520062002200320042005200620022003200420052006200220032004200520062006 – $2.3 billion2005 – $1.7 billion2004 – $1.4 billion2003 – $0.9 billion2002 – $0.8 billion2006 – $553.7 million2005 – $502.7 million2004 – $455.5 million2003 – $284.8 million2002 – $249.8 million2006 – $4.542005 – $4.002004 – $3.762003 – $3.802002 – $3.152006 – $9.6 billion2005 – $8.4 billion2004 – $7.2 billion2003 – $5.9 billion2002 – $3.3 billionHighlights• Record operating profit of$553.7 million, a 10.1 per centincrease on the previous year.*• Excellent returns for securityholders:– Earnings per security up6.1 per cent to 41.5 cents.*– Dividend and distributionper security up 6.4 per centto 41.4 cents.• Strong investment propertyrevaluations of $640.3 milliondeliver an 11.1 per centincrease on book value.• 16 new residential projectswere launched across Australia.• Strategic acquisitions inthe shopping centre andcommercial and industrialbusinesses.• Unlisted property fundsplatform continues to grow,with over $540 million ofassets now under management.• Low gearing providessignificant balance sheetcapacity.* Operating profit represents the underlyingoperating results excluding propertyrevaluations, capital gains and losseson the sale of investment properties,unrealised gains and losses on financialinstruments and security holders’finance costs.Stockland Corporate Responsibility and Sustainability Report 2006

Financial/Economic performancecontinuedEarnings per security increasedby 6.1%**Before significant itemsDistribution and dividend forfull year up 10.6%Distribution and dividend persecurity up 6.4%cents45$ million600cents456004040355003550030400304002525262015300200201530020010105100510000002002200320042005200620022003200420052006200220032004200520062006 – 41.5 cents2005 – 39.1 cents2004 – 37.8 cents2003 – 33.5 cents2002 – 30.8 cents2006 – $559.2 million2005 – $505.4 million2004 – $446.3 million2003 – $272.8 million2002 – $241.3 million2006 – 41.4 cents2005 – 38.9 cents2004 – 37.0 cents2003 – 32.1 cents2002 – 29.7 centsNote: FY02-FY04 is calculated under Australian Generally Accepted Accounting Principles (AGAAP), FY05-FY06is calculated under Australian equivalents to International Financial Reporting Standards (AIFRS).Stockland Corporate Responsibility and Sustainability Report 2006

AppendixAustralian Building Greenhouse Ratings (ABGR)Commercial Office and Office Parks PortfoliosPropertyABGR Rating7 Macquarie Place, Sydney^ 3.0135 King Street, Sydney^ 2.0601 Pacific Highway, St Leonards 1.5175 Castlereagh Street, Sydney 3.5234 Sussex Street, Sydney 2.5110 Walker Street, North Sydney 3.5118 Pacific Highway, St Leonards 2.5Piccadilly Court, Sydney 3.5Northpoint, 100 Miller Street, North Sydney 1.577 Pacific Highway, North Sydney 1.5Waterfront Place, Brisbane 2.52 Cavill Avenue, Ashfield 3.54 – 6 Cavill Avenue, Ashfield 2.5Todd Building, Canberra 3.0Cox Building, Canberra 3.5Drakeford Building, Canberra 3.068 Northbourne Avenue, Canberra 2.5Edmund Barton Building, Canberra 1.5Trace Building, Canberra 2.075 George Street, Parramatta 1.5Chesser House, Adelaide^ 3.0Colonial Centre, 52 Martin Place, Sydney^ 3.0Exchange Plaza, Perth^ 3.5*452 Flinders Street, Melbourne 1.5541 St Kilda Road, Melbourne 4.0*60 Waterloo Road, Macquarie Park 2.5*16 Giffnock Avenue, Macquarie Park 2.5*Macquarie Technology Centre Building 2, Macquarie Park 3.0** Awaiting certification from NSW Department of Energy, Utilities and Sustainability^ Book value represents Stockland’s 50% ownership interestMembershipsGreen Building Council ofAustralia, including participation in:• Shopping Centre GreenStar ToolTechnical Working Group• Education CommitteeUrban Development Instituteof AustraliaProperty Council of Australia,including participation in:• NSW Sustainability Committee• Residential DevelopmentCouncil, Chairman• Shopping Centre CouncilAustralian Business andCommunity Network:• Board Member• Member, Operational TaskforceHousing Industry Association,including:• GreenSmart National LeaderProperty Industry Foundation:• Advisory BoardNational Association of Womenin ConstructionStockland awardsFY06BRW Most Admired Companies,2006:• Most Admired Company• Most Admired CEO• Second Most AdmiredChairman• Equal second Most Admired CFONAWIC (National Association ofWomen in Construction) NSWChapter Awards:• Rider Hunt Award CrystalVision Award: Deborah Dearing,National Manager, StrategicUrban Planning, DevelopmentDivision• Southern Cross ConstructionAward for Contribution toSustainability: Siobhan Toohill,Group Manager, CorporateResponsibility and SustainabilityAustralasian Reporting Awards:• Bronze Award: Stockland 2005Annual ReportShopping Centre News MarketingAwards:• Little Guns Community Award:Super School Brekky campaign• Little Guns Development Award:Campaign Launch for “Ride theWave of Development”• Multi-Centre Sales PromotionCategoryAustralian Category Association,Shopping Centre Category:• High Commendation for“Christmas 2005”FMA (Facility ManagementAssociation) Rider Hunt TerotechIndustry Award:• Highest commendation:Stockland Service Centre,jointly developed by Stockland’sCommercial & Industrial Divisionand Mowlem AqumenNational HIA Award• GreenSmart ProfessionalCompany of the Year:Featuring projects from allDevelopment Division’s BusinessUnits, including Bridgewater, Wallarahand Waterside (NSW), Prince Henryand Tooronga (Apartments), Merndaand Hidden Grove (Vic), Jacobs Ridgeand The Observatory (Qld), SettlersHills and The Sanctuary (WA)HIA NSW Energy Efficiency Award:• Lumina Collection of Homes,Fernbrook Sanctuary, WarriewoodHIA NSW Awards:• Best Customer ServiceManagement in NSW Industry:Stockland DevelopmentDivision, NSW• Best Apartment Developmentover 10 Storeys: The Abode,St LeonardsUDIA Qld Chapter Awards:• Best Master PlannedCommunity: North LakesUDIA WA Chapter Awards:• Best Residential Estate, over250 lots: The Boardwalk,Southern RiverUDIA NSW Chapter Awards:• Excellence in ResidentialDevelopment: Outlook Walk,The Outlook, KellyvilleAILA (Aust Institute for LandscapeArchitects) NSW Awards:• Environment Category:Lakewood – Commendation forVegetation ManagementPlanning Institute Australia (NSWDivision) Awards for Excellence:• Urban Design Planning andIdeas Commendation: WallarahPeninsula27Stockland Corporate Responsibility and Sustainability Report 2006

GRI indexIn preparing this report we were guided by the indicators of the Global Reporting Initiative (GRI) Sustainability Reporting Draft G3 Framework. GRI indicators that have been discussed in this report(either wholly or in part), or are to be addressed in future reports are referenced in the following table.28Indicator Location Covered Partially Futurecovered reports1 Strategy and Analysis1.1 Statement from the CEO and Chair p4 ¸1.2 Description of key risks and opportunities p3–6, p18 ¸2 Organisational Profile Annual Report3 Report Scope/Profile3.1 Contact point p28 ¸– sustainability@stockland.com.au Back cover3.2 Reporting period p28 ¸– FY06.3.3 Most recent report p28 ¸– First Corporate Responsibility and SustainabilityReport 2006.3.5 Future reporting p3–4 ¸3.6 GRI Reporting Framework documents p28 ¸– Draft G3 Framework.3.7 Explanation of process p5–6 ¸3.8 Limitations on scope of the report p28 ¸– Report includes all operations except Saville HotelGroup. Stockland announced its intention to sellthe Saville Hotel Group in July 2006.3.9 Data measurement techniques p12–13, p19 ¸3.10 Approaches to stakeholder engagement p21–24 ¸3.11 Stakeholder engagement specifically for reporting p12–13 ¸– Data currently collated for employees (as a keystakeholder group) only.3.12 Boundary of the report IFC, p28 ¸– Australian operations only.3.14 Basis for reporting on joint ventures, leased facilities p19, p27 and ¸– Environmental indicators are reported on for a Propertyrange of assets held in joint ownership. Details Portfolioof ownership are outlined in Stockland’sProperty Portfolio.3.16 GRI content index p28–29 ¸3.17 Position on independent assurance p3 ¸4 Governance4.1–4.7 Governance Annual Report4.8 Mission and values statements p2 ¸Indicator Location Covered Partially Futurecovered reports4.9 Highest governance body for overseeing economic, Annual Reportenvironmental and social performance4.10 Processes for evaluating performance of highest Annual Reportgovernance body with respect to economic,environmental and social performance4.11 “Precautionary Approach” p15–20 ¸4.12 Commitments to external initiatives p5, p17–19, p27 ¸4.13 Significant memberships p27 ¸4.14 List of stakeholder groups engaged by the organisation p2, p21–24 ¸4.15 Basis of identification and selection of stakeholders p2, p22–23 ¸4.16 Approaches to stakeholder engagement p22–23 ¸4.17 Key issues raised through stakeholder engagement p22–23 ¸ECEconomic Performance IndicatorsEC1 Economic value generated and distributed p25 and ¸Annual ReportEC2 Financial implications of climate change ¸EC4 Financial assistance received from government ¸EC5 Entry wage level compared to local minimum wage ¸EC6 Proportion of spending on locally-based suppliers at ¸significant locations of operationEC7 Procedures for local hiring ¸EC8 Infrastructure investments and services supported p21–24 ¸that provide public benefitEC9 Indirect economic impacts ¸ENEnvironmental Performance IndicatorsEN1 Weight of materials used p19 ¸EN2 Percentage of materials used that are recycled p17–19 ¸EN3 Direct energy consumption p19 ¸– This figure refers to on-site gas consumption.EN4 Indirect energy consumption p19 ¸EN5 Percentage of total energy consumption met by ¸renewable resourcesEN6 Total energy saved due to conservation and p16–18, p27 ¸energy efficiencyStockland Corporate Responsibility and Sustainability Report 2006

GRI indexcontinuedDesigned and produced by Ross Barr & Associates Pty LimitedIndicator Location Covered Partially Futurecovered reportsEN7 Initiatives to provide energy efficient products p16–19, p27 ¸and servicesEN8 Initiatives to reduce indirect energy consumption p16–19, p27 ¸EN9 Total water withdrawal p19 ¸EN10 Water sources and related habitats significantly p17 ¸affected by withdrawal of waterEN11 Percentage and total volume of water recycled p17, p20 ¸and reusedEN12 Location and size of land owned, leased or managed p17, p23 ¸in, or adjacent to protected areasEN13 Description of significant impacts of activities on p17, p23 ¸protected areasEN14 Area of habitats protected or restored p17, p23 ¸EN15 Programs for managing impacts on biodiversity p16–17, p23 ¸EN17 Greenhouse gas emissions p18–19 ¸EN18 Emissions of ozone-depleting substances ¸EN19 NOx, SOx and other significant air emissions by weight ¸EN20 Total amount of waste by type and destination p18–19 ¸EN21 Total water discharge and quality p16–17 ¸– Implementing “Water Sensitive Urban Design”.Water discharge and quality data not yet collatedacross sites and projects.EN22 Total number and volume of significant spills p29 ¸– No significant spills reported for FY06.EN23 Other relevant indirect Greenhouse emissions p19 ¸EN26 Initiatives to manage environmental impacts of p16–19, p27products and servicesEN28 Incidents of non-compliance with applicable p29 ¸environmental regulations– No incidents reported for FY06.EN29 Significant environmental impacts of transportation p19 ¸LASocial Performance: Labour Practices andDecent Work PerformanceLA1 Breakdown of total workforce p12–13 ¸LA2 Total number and rate of employee turnover p13 ¸Indicator Location Covered Partially Futurecovered reportsLA5 Minimum notice period and consultation and ¸negotiation practices regarding operationalchangesLA6 Percentage of workforce represented in health and ¸safety committeesLA7 Rates of injury, lost days, absenteeism p12–13 ¸LA9 Elements of Occupational Health and Safety approach p8 ¸LA11 Hours of training per year per employee p13 ¸LA13 Percentage of employees receiving regular p12–13 ¸performance and career development reviewLA14 Composition of employees according to gender, p12–13 ¸age, minority groupsSOSocial Performance: Society PerformanceSO1 Programs and practices for managing the impacts p21–24 ¸of operations on communitiesSO2 Extent of training and risk analysis to prevent ¸corruptionSO3 Actions taken in response to instances of corruption p29 ¸– No instances reported for FY06.SO4 Participation in public policy development p17–18 ¸and lobbyingSO5 Total value of contributions to political parties Policy reference ¸or related institutionsat p8SO6 Instances of legal actions for anti-competitive p29 ¸behaviour– No instances reported for FY06.PRSocial Performance: Product ResponsibilityPerformancePR1 Procedures for improving health and safety across ¸the life cycle of products and servicesPR3 Procedures for product and service information p9 ¸and labellingPR6 Procedures and programs for compliance related to p9 ¸marketing communicationsPR8 Percentage of customer data covered by the data p8 ¸protection procedures29Stockland Corporate Responsibility and Sustainability Report 2006

Stockland Corporation LtdACN 000 181 733Head Office157 Liverpool StreetSydney NSW 2000SydneyTelephone 02 9321 1500MelbourneTelephone 03 9520 1300BrisbaneTelephone 07 3305 8600PerthTelephone 08 9368 9222This report has been printed on a stock that has55 per cent recycled paper content, comprising 25 per centpost-consumer and 30 per cent pre-consumer waste, and45 per cent fibre from sustainable, well managed forests, andhas an ISO 14001 Environmental Accreditation.www.stockland.com.auFor queries regarding this report andStockland’s corporate responsibility andsustainability initiatives please email:sustainability@stockland.com.auDisclaimer of LiabilityWhile every effort is made to provide accurate and complete information, Stockland does not warrant or represent that the information in this brochure is free from errors or omissionsor is suitable for your intended use. Subject to any terms implied by law and which cannot be excluded, Stockland accepts no responsibility for any loss, damage, cost or expense(whether direct or indirect) incurred by you as a result of any error, omission or misrepresentation in information. Note: All figures are in Australian dollars unless otherwise indicated.

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