Talking with Ann about Corporate Responsibility

Q: Just for some background, can you tell me a bit about the business operations of Lend Lease?

A: Lend Lease is an international property real estate organization that spans 42 countries. It has four main business streams. The first is called Bovis Lend Lease which is a project management design and construction company. Next we have Lend Lease Retail – which builds, owns and tenants shopping centres. The third business stream is a group called Lend Lease Communities which specializes in residential development. They take a block of suburban land – and develop it into a housing estate. The last business we have is actually an investment management business – where we buy property on behalf of investors and find tenants. So as an international organization – we basically cover every facet of real estate.

Q: Lend Lease pride themselves on their commitment to Corporate Social Responsibility – and rightly so. What are the core values or principles that guide Lend Leases business operations?

A: First I should make one small distinction; here at Lend Lease we don’t use the term CSR, rather our guiding principle is sustainability – the idea that what we do now should enable things to happen in the future rather than disabling them. Lend Leases approach to sustainability, is much more then just about being Green – Lend Lease defines sustainability as encompassing social, economic and environmental sustainability. Our catch phrase “win win win” reflects what we are trying to do in all three fields, that is, trying to find something that’s a win economically, a win environmentally and a win socially. Basically we don’t see everything as a zero-sum game. We’re really trying to find how we can be financially profitable – which is really a part of economic sustainability – at the same time as being environmentally and socially responsible. it’s about realizing that if you’re going to make money – you don’t need to rape and pillage the planet

Q: How does the Sustainability unit operate? Do you work on a local or a global scale?

There is a small unit here in Sydney – a Corporate Sustainability Team – which was formed to guide Lend Leases global efforts on sustainability. Then there are sustainability sectors within each geographical business unit. We – the Corporate sustainability team work with these sectors to make sure that each of Lend Leases business units around the globe have a sustainability plan around all of their business operations, and that this is implemented effectively. The day to day of what they do is not under our supervision – BUT we do give them the sustainability guiding principles, that they are obligated to follow and fulfill.

Q: Your Commitment to environmental sustainability is evident in the design of this building – Lend Leases global headquarters. It has been recognized as one of Australia’s most energy efficient buildings and has recently been accredited 5 stars under the Australian Building Greenhouse Rating. Can you tell me a bit about the development and objectives of this building?

Well here in Sydney Lend Lease was spread out across a couple of buildings around the city. Our lease in our old site was due to end, so instead of renewing it, we thought that this was a great opportunity for Lend Lease Sydney to come together to show case more of what we keep telling other organizations what real estate can do, that it was time to put our money where our mouth is. We’re firm believers that a building is more than simply just somewhere that you turn up to – that it can actually drive cultures and atmospheres and productivity. The rationale behind the project was that if we bring all these different companies, with individual cultures together into the one space, then the opportunities to build relationships and synergies increases – and it absolutely has.

Q: This sounds like a good example of how Lend Leases sustainability principles are also applied to its internal corporate governance. How it regulates the relationships between its employees.

A: Yeah – fostering good corporate culture was the initial motivator for bringing Lend Lease Sydney together. The shape that the building project ending up taking – with a focus on environmental sustainability – was actually the result of a two year consultation process that was undertaken with our employees and the local community. Through this we uncovered all of the ‘hot topics’ that people were passionate about – and one of them was being seriously “green.” So that’s when we committed to this being a 5 star green building – something which had never been done in Australia before. This commitment meant that we had to implement different kinds of energy technology in the building. “Passive chilled beam cooling” as an alternative to air-conditioning systems is just one example. The way it works is that it doesn’t actually suck air in and pump it around, rather it’s filled with cool water and as the hot air rises, it falls over that and cools down. This technology is not used much in Australia (they are used a lot in Europe) yet they have about 1/3 of the energy requirements that a traditional air conditioning system would require! With this technology alone we drastically cut the GHG emissions from our building.

Q: I believe that Lend Leases goal is to take a leading role in sustainable environmental practice. Can you tell me about any other environmental programs that Lend Lease has implemented?

A: The first one that comes to mind is SYNERGY “Save your nations energy” in the US.
This is a grassroots approach to sustainability education and community based activism. We do a lot of military housing over there – and one of the housing schemes has incorporated a program called the Resident Direct Pay Program (RDPP). The way it works is that there is a nominated amount of energy that a house of a particular size can use, if the residents of a house actually use less then their designated amount – ie if they are energy efficient – then they get a financial bonus, if on the other hand they use more energy, then they are penalized. So there are some fantastic incentives built into that housing scheme to encourage them to more environmentally aware.

Q: You mentioned earlier that an important element of sustainability is the incorporation of sustainable social practices. How has Lend Lease incorporated this element of community engagement into its practices?

A: Well, the way we work with the community here at Millers Point is a great example. We are in the middle of a residential community here made up of some of the wealthiest and some of the most disadvantaged groups in Sydney. This community has a very strong voice, so there was a lot of skepticism about us as a ‘developer’ moving into the area. Because of this we undertook lengthy community consultations on how we could positively contribute. We finally came up with the ‘Millers Point Youth and Employment Partnership’ to address local youth and employment problems. We are partnered with 12 other public and private organisations – including Ultimo TAFE, Fort Street Primary School, The Rocks Police Local Area Command and the Millers Point Residents Action Group.

One of the programs run through this partnership these is a “Youth Mentoring” program. Through this, TAFE trains Lend Lease employees to become a ‘buddy’ or ‘mentor’ to a youth in the community. Lend Lease staff then meet with their buddy according to the individual circumstances of their ‘buddy’. Lend Lease staff may meet with their buddy everyday, once a week, once a month – this mainly depends on whether they are at primary school, high school or finished school.

Q: Have there been any other initiatives that have developed out of this partnership?

A: Absolutely, Rockfest came out of the partnership as well. This was one of our other programs where we took a group of about 6 young women to help us plan a community event. After lots of thinking they decided that they wanted to show films that they had been making through TAFE in a community film festival. I’m really excited because this year even though the Youth Partnership didn’t have enough money to support these girls again –they’ve gone on and organized their own annual event anyway. This year they’ve decided that its going to be a talent quest. I think it’s fantastic that they’ve got themselves organized. They’ve taken what we taught them and have put it into action – which is what sustainability is all about – giving people the skills to keep it going on their own.

Q: Were these projects basically in order to foster good relationships with the community that you’re surrounded by?

A: It’s hard to say what the original motivation was – and what the motivation is now.
Part of it was realizing that this was our community – this is where we work and so what’s not working in this community will impact us. There’s a whole kind of relationship that needs to be built with the community – because when you’re in you’re in – but if you’re out then you’re out.

Another big motivator was the potential for development that we could see already existed in the community. There were all these organizations that were doing good work independently but that had never come together to see what they could achieve. They had fantastic skills in their area of work, but they didn’t have the skills to work collaboratively. We realized that this was a gap that Lend Lease could fill and that could benefit everyone – so we put that on the table – and incorporated the partnership.


Q: In Australia Corporate Social Responsibility is not a legal obligation, in fact many argue that CSR principles are incompatible with Australian Corporations Law – which provides that the primary duty of a corporation is to its shareholders and not to the wider community and other stakeholders. Is this of any concern for corporations like Lend Lease that have voluntarily incorporated CSR principles into their business operations?

A: Well it’s interesting that you bring that up, because there are actually two parliamentary inquiries out at the moment examining whether or not to change corporate law in Australia to require corporations to have a broader consideration of stakeholders.

There is also a lot of debate at the moment about whether or not corporate law already incorporates these principles. Some argue that the process of determining what’s in the best interests of your share holders – also gives companies the latitude to determine what’s in the best interests of your stakeholders. This reasoning comes from the idea that what’s in the best interests of your stakeholders is also in the best interest of your shareholders.

Q: Would you say that this reading makes it unnecessary for changes to be made to the law?

A: Perhaps, but this reading isn’t everyone’s reading, and so I think that some kind of legislative support would be of great benefit – particularly around the issue of climate change – an area that Australia really needs to get going on.

Q: How do Australian corporations fare internationally in their commitment to CSR principles?

A: Well the Australian society is quite switched on about these issues, especially in comparison to the US, but unfortunately Australian corporations are lagging way behind the Europeans. Europe is right up there – both in terms of their commitment, their understanding and their history of measurement of impact. I think that this outcome has probably resulted from the comparatively low density of our population. We just don’t feel the impact of GHG emissions so immediately or directly.