PS 5: Land Acquisition and Involuntary Resettlement was not triggered at appraisal as no displacement has occurred during acquisition of the existing properties. However, the possibility of physical or economic displacement remains since the company is still interested in investment in greenfield properties in the future, addressed in ESAP #2. Growthpoint portfolio buildings are (i) located in urban areas, (ii) no priority ecosystems are proximal to the locations of these buildings and (iii) no conversion of natural/critical habitats is expected to take place. Therefore, the Project is not expected to trigger PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources. There is no known indigenous people within the vicinity of the project locations, thus PS7: Indigenous Peoples is not considered to be applicable. PS8: Cultural Heritage was not triggered as no known cultural heritage present at project locations, however, as there remains a possibility of future impacts on cultural heritage, mainly due to chance findings on greenfield developments (addressed in ESAP #2).

 This is a Category B project, according to IFC’s Environmental and Social Sustainability Policy. The key environmental and social (E&S) issues identified include: (i) Growthpoint’s management systems to assess manage and monitor E&S risks of its operations, including development of new properties; (ii) supply chain management per PS requirements; (iii) consistent management of Life and Fire Safety (LFS) risks for buildings in portfolio with public access; and (iv) stakeholder engagement process related to E&S aspects.

 PS 1: Assessment and Management of Environmental and Social Risks and Impacts

Growthpoint established two corporate level E&S overarching policies (including the Environment Policy and Occupational Health and Safety Policy), a set of related procedures, and the Risk Management Strategy, a framework document that covers strategic, operational, reporting and compliance risks. The two policies are comprehensive in setting out management commitments, while some of the newly developed E&S risk management procedures still need some further updates to align to IFC’s PSs. The company is presently in the process of upgrade and standardization of these procedures as well as development of new procedures to ensure a comprehensive and integrated approach to environmental and social risk management. Growthpoint will submit the updated procedures to IFC for review before they are operationalized (ESAP #1).

Growthpoint established detailed E&S Due Diligence (ESDD) Checklist for appraisal of new and brownfield properties. Growthpoint will update the ESDD Checklist constantly with the requirements of IFC’s PS. This update will clearly define the scope of its applicability, the designation of E&S officers to undertake the E&S due diligence and a L&FS audit protocols and benchmark the due diligence against applicable IFC’s PSs and relevant WBG EHS Guidelines. The company will also develop and implement a Land Acquisition and Resettlement Procedure and a Cultural Heritage Management Procedure as part of the update of E&S risk management procedures and apply it for the future site selection processes (ESAP #2).

Growthpoint has a dedicated Sustainability Team lead by the Head of Sustainability and a dedicated Environment, Social and Governance (ESG) Manager. The Head of Risk Management and Compliance (with support from the Chief Operating Officer) has the responsibility to ensure that all national E&S and other compliance requirements are met. Other departments/units currently undertake ESG-related tasks, irrespective of their staff competencies; the corporate risk assessments for routine operations are undertaken by the Facility/Utilities Team; while ESG risks for greenfield and brownfield projects are identified and managed by the Trade and Development Team. There is limited oversight from the corporate level on the quality of E&S due diligence work, ESIAs or routine ESG risk assessments for existing operating properties from the Sustainability Team. Also, operations of the non-E&S departments impact overall E&S performance of the business, but they do not have E&S metrices as part of their performance requirements. To streamline E&S risk management across the organization, Growthpoint will; i) designate overall responsibility for spearheading implementation of the ESMS, oversight of ESIAs, ESDDS and routine ESG property risk assessments, to the Head of Risk Management and Compliance, to be delegated as appropriate; ii) ensure that training on adequate E&S competence is provided to support Facilities, and Trade and Development departments in discharging the delegated E&S tasks, reporting to the Head of Risk and Compliance; and iii) integrate E&S KPIs into job functions where appropriate or where there is an impact on E&S, mainly in the Facilities, Trade and Development, Procurement departments (ESAP #3).

In routine operations, all buildings operated by Growthpoint have documented asset-specific emergency response systems that include clear emergency plans, evacuation routes, emergency drills programs and key emergency contacts. The fire safety master plans and technical design of the buildings are reviewed and cleared by the respective City authorities before construction permits are issues, and before issuance of occupational permits. Growthpoint Facility Managers are trained and tasked with undertaking regular property inspections, leading regulated emergency drills, information sharing with tenants, ensuring clear emergency routes, sharing of public information, and managing adequate maintenance of passive and active fire safety systems. Growthpoint conducts regular inspections of the emergency response systems as part of annual statutory health and safety (H&S) processes. Further, Growthpoint’s insurance providers annually undertake independent building inspections to assess the risk.

ESG Performance is monitored via a corporate environmental dashboard, which provides timely, facility-level, portfolio-level and consolidated Group data for ESG indicators (carbon emissions, energy use, water use and waste generation). Quarterly reports go to the Social, Ethics and Transformation (SET) Committee of the Board. The Sustainability team keeps track of progress against overall corporate targets and progress reports are submitted monthly to the management for review.  

 Growthpoint currently retains over 600 direct workers and 32 contractor workers. The contractor workers’ number varies across the year and with different projects. The company has documented human resources (HR) policies and procedures that need to be strengthened to consistently meet the requirements of IFC PS2 and apply to all employees. Growthpoint is currently developing a consolidated HR Handbook that combines all HR policies and procedures including codes of conduct, confidentiality, conflicts of interest, information technology and risk management, anti-corruption, social media; and the existing policies on recruitment, benefits, disability, sexual harassment, substance abuse, whistle blowing, human rights, grievance policy, and disciplinary measures. The company will; i) include a statement on rights to join or form workers’ unions in the Handbook; and ii) submit the Handbook with these policy statements for IFC review before making them operational (ESAP #4).

The Growthpoint management allows the workers liberty to join workers’ organizations. However, none of the workers has currently joined any of national or regional unions, although this liberty has been expressed in the HR Handbook. As part of the development of the HR Handbook in ESAP #4 above, Growthpoint will include a statement on its commitment to respect workers’ rights to join trade unions. Growthpoint has developed an adequate employee grievance procedure that guides on the grievance reporting hierarchy, processing timeframes, feedback to complainants and alternative dispute resolution where complainants are not satisfied.

Occupational Health and Safety

Growthpoint has formulated Occupational Health and Safety (OHS) Policy and Risk Insurance Management Manual (RIM) that outlines risk responsibilities, and basic identification and management of hazards associated with facilities (for employees, tenants, and the public) including LFS, public access areas, elevators, generators and security-related emergencies. The company has a dedicated Health and Safety Committee that proactively monitors, and reports OHS concerns to ensure that the work environment remains incident-free as far as possible.

The expansion and refurbishment work at Growthpoint properties are undertaken by contractors. The procurement department has developed a standard EHS management plan as part of the contractor pre-qualification documents. ESG due diligence for all suppliers is primarily focused on statutory compliance to financial, credit and black economic empowerment (BEE) requirements. To supervise the contractors, the company contracts E&S consultants to oversee contractors on their behalf, in line with the company policies and the stringent South African national legislated requirements. Each project implements an EMP approved by the Company and supervised by the E&S consultants. Growthpoint have updated their Supplier Code of Conduct and developed a Supplier E&S and governance policy which has recently been approved by the SET Board Committee. These policies stipulate the E&S expectations of contractors and suppliers.

 At least 17% of Growthpoint properties are “Green” certified by the Green Building Council of South Africa (GBCSA), to at least level 4 (Best Practice). This rating demonstrates the energy and water use efficiency of these properties. Growthpoint also uses “GreenX5.0” to calculate and improve efficiency in energy and water consumption in South Africa portfolio. The Company intends to achieve at least a level 4 “Green” rating for properties in South Africa by implementation by the end of FY22 of roof solar projects with total install capacity of 9.44MW and a total of 16.04MW installed or under construction. A target of 27.1MW including co-owned capacity of 2.54MW is set for FY23. This investment in renewable energy will contribute to carbon emission reductions and ensure continuity of power supply to the facilities. Growthpoint collected water data for 372 of the 408 buildings in their portfolio. In FY22, a total of 2,923,977m3 of water was used. The company continues to assess water supply management, catchment and the nature of water uses within their properties with the intention of continued improvement in efficiency in of water usage. For consistency and effective performance review, the company will document the practices for managing energy and water use in the resource efficiency management procedure as part of ESAP #1.

Growthpoint undertakes carbon footprint assessments annually for all buildings that they own and manage. These assessments are externally verified by a third party, under the international standard ISO 14064-3 (2006) specification with guidance for validation and verification of greenhouse gas assertions. In FY22, Scope 1 and 2 GHG emissions were estimated at 52,478ton carbon dioxide equivalent per year (“tCO2e” or “tpa”). The company has set a carbon neutral target by 2050. An emission reduction target of 0.106ton carbon dioxide equivalent per square meter per year is set for FY26 using FY20 as a base year (0.14tCO2/m²/pa). Growthpoint has made a commitment to have all its long-hold office buildings attain a minimum 4-Star Green Star SA rating.

Growthpoint has implemented solid waste and materials management procedure at the building level, which is the responsibility of the facilities managers. The procedure covers the ongoing handling of consumables, hazardous materials, movable and electronic goods and construction waste from alterations and tenant installations. The company targets to achieve diversion of recyclable waste to landfill at 50% of the Growthpoint portfolio by 2026. Sanitary discharges and effluents are permitted and monitored through the local municipality against national standards. During construction of new assets, these are governed by site-specific construction ESMPs.

Growthpoint does not store significant quantities of hazardous materials. Some chemical cleaning agents and equipment repair materials would fall into this category but are few in the operations. However, during project development activities, the nature of works, equipment and processes may involve use of various forms of hazardous materials (including stand-by generators and fuel storages). These are usually handled in line with ESMPs for each construction site.

Growthpoint used pest control to a limited extent in their properties. The company outsources pest control measures at their buildings. Risk management related to pesticide use is checked through procurement functions, by means of appointment of suitably qualified and reputable contractors and service providers and undertaken per local laws.  

 The company properties are designed, constructed, and operated in compliance with the National Building Regulations and Building Standards Act (SANS) 10400, and the British Standard (BS) 7974, local fire department regulations, and local legal/insurance requirements. Therefore, properties are equipped with   adequate LFS passive and active systems, measures and means of escape for all occupants and provide means of access for emergency services as Growthpoint will update E&S due diligence procedure for acquisition of brownfield properties, by including risk-based LFS audit protocol, which will be completed for every new acquisition and shared with IFC for review, per ESAP #1.

IFC’s recent supervision visit concluded that all visited properties have adequate emergency and LFS passive and active systems, personnel and established emergency plans, and records of regular maintenance of fire safety systems and equipment. The facility managers, risk officers and insurance agencies conduct comprehensive annual health and safety audits (including fire safety audits). Further, Growthpoint coordinates with tenants to conduct regular building/facility inspections and emergency drills and collaborate to address identified corrective actions. All LFS and emergency measures at Growthpoint properties are on continual monitoring and improvements as risks change in line with the management of change procedure.

The business operations pose road safety risks, through project contractors and the company vehicles. Though no road traffic accidents have been recorded, this may be due to lack of procedures to oversee this aspect of the business and obtain data from contractor activities. To address this risk, Growthpoint will develop and implement a Transport Safety Procedure (to be developed per ESAP #1) that will include driver competence assessment, training, incident documentation and investigation process and reporting framework. The Procedure scope will cover both direct transportation risks and contractor activities. Growthpoint does not employ armed security guards at its premises.

 Primarily, Growthpoint undertake continuous sector-wide engagements with peers, engagements with shareholders, the media and suppliers. The Company also publishes its annual Environment, Social and Governance reports on its website for public disclosure and has open contacts to address any related comments or queries. The Company has developed a Disclosure Policy that provides guidance on various types and scales of the disclosure and engagement process. However, the Disclosure Policy does not expressly provide for public disclosure of environmental and social impact assessment reports or environmental management plans, as required in international practice, and the IFC Performance Standards. The Company will therefore develop a corporate stakeholder engagement policy and procedure to standardize and formalize stakeholder engagement for the business, as part of the update of their Corporate Social Responsibility Policy (ESAP #5).

Company: Growthpoint Properties Limited

Address The Place, 1 Sandton Drive, Sandton, Gauteng, 2196

Contact: Bushang Seroka

Email:              BSeroka@growthpoint.co.za

Website www.growthpoint.co.za