###### Governance
Board of Directors
The governance body responsible for oversight of
climate-related risks and opportunities at Precinct is our
Board of Directors. Full Director bios can be found on
[Precinct's website.](https://www.precinct.co.nz/about-us/board-and-executive-team)
Precinct's Board of Directors established an ESG
Committee in May 2021 to assist with implementing and
monitoring the Company's strategic objectives in relation
to ESG issues and other key risks (including sustainability
and climate-related risks) having regard to Precinct's
circumstances and portfolio of businesses. However, the
Board retains ultimate oversight of climate-related risks
and opportunities. The Board evaluates the performance
and work of the ESG Committee together with the Chair
of the ESG Committee. As part of this process, the Board
undertakes an annual review of the ESG Committee's
objectives and activities in terms of its responsibilities as
set out in the ESG Committee Charter.
Upon the recommendation of the People and
Performance Committee, the Board approves Precinct's
people-focussed policies and processes to support
Precinct to deliver on its long-term strategies and goals.
This includes evaluating the competencies required of
Directors and setting performance-based metrics that
link executive remuneration to Precinct's climate-related
targets as part of the annual remuneration process and
short-term incentive framework.
The Board of Directors is informed on climate-related
risks and opportunities by Management on a quarterly
basis through a standing climate-related section in
Board reporting with further in-depth updates provided
during bi-annual ESG Committee meetings. In these biannual ESG Committee reports, Management provides
the Board of Directors with an update on progress against
established material risks and opportunities which are
addressed accordingly. The Board also considers climate
risks and opportunities on an ad-hoc (out of cycle) basis
as needs arise, for example in relation to any acquisition
as part of the Board sign-off process on due diligence
and feasibility, and in decisions to divest properties. A
table setting out the number of Board and Management
engagements during FY24 is set out in Appendix 5.
As part of its annual business planning, the Board
integrates climate-related risks and opportunities into
its development of Precinct's overall ESG strategy,
framework and initiatives.
The Board of Directors also has oversight over Precinct's
performance against its metrics and targets. The
introduction of new, or adjustment of existing, significant
and strategic climate-related metrics and targets is
discussed and agreed by the Board, having received the
recommendation of the ESG Committee. Once agreed,
Precinct's performance against its climate-related metrics
and targets is discussed as a standing item within the
ESG Committee reporting.
**Board of Directors skills and competencies**
Precinct's current Directors' skills matrix can be found
[in Precinct's 2024 Annual Report available on Precinct's](https://www.precinct.co.nz/investors/2024-annual-results)
[website. The Directors' skills matrix reflects the director](https://www.precinct.co.nz/investors/2024-annual-results)
attributes which the Board considers are required
to oversee Precinct's strategic business objectives.
Sustainability, which includes climate-related matters, is
one of the ten capabilities against which directors assess
their current skills.
During the year, Anne Urlwin, Chair of the Board,
participated in the New Zealand Institute of Directors'
Advanced Climate Governance Programme and Nicola
Greer, Chair of the ESG Committee, completed the
New Zealand Institute of Directors' Climate Change
Governance Essentials Course.
Management informs the Board of Directors of
recommended climate-related training and education
within ESG Committee meetings.
--NEW-PAGE--
###### ESG Committee
The ESG Committee assists the Board's oversight of
climate-related risks and opportunities and is comprised
of four independent directors. During FY24 the ESG
Committee held two committee meetings, each followed
by an ESG Committee report to the Board. Precinct's
CEO, Deputy CEO, CFO, Head of Sustainability and other
key representatives across the business also attended
the meetings to set objectives, review Precinct's Climate
Risk register, track updates and discuss and approve
current and future strategic initiatives which help manage
Precinct's impacts on the economy, environment and
people. The ESG Committee can seek independent
professional advice and invite expert third parties to
attend meetings to ensure appropriate climate-related
skills and competencies are available to the Board.
Following the recommendation of the ESG Committee, the
Audit and Risk Committee's role with respect to oversight
of the CRD process includes:
- reviewing draft climate related
disclosure documentation;
- ensuring due process is followed in order to achieve
compliance with FMCA/NZCS1-3 requirements;
- engaging external providers to provide verification
and/or assurance as required; and
- recommending that the Board approve the CRD.
The Audit and Risk Committee meets every quarter (FY24:
four meetings) and reports back to the Board in respect
to financial reporting, compliance and risk management
which includes climate-related risks.
performance metrics, and present the recommendations
of the ESG Committee at the next scheduled meeting of
the Board.
###### Audit and Risk Committee
The Audit and Risk Committee assists the Board
in overseeing Precinct's climate-related risks. The
Committee oversees Precinct's risk register and reviews
it at least annually with Management to track existing
risks and the emergence of new risks. Key climate-related
risks are included in Precinct's risk register and reported
to the Board along with an evaluation of the strategic
ramifications of the risks.
The Committee is guided by the ESG Committee Charter
(available in Precinct's Corporate Governance Manual
[on Precinct's website), which requires the Committee to,](http://www.precinct.co.nz)
among other things:
- review and recommend for Board approval the
climate-related strategy, framework and initiatives;
- oversee the implementation of Precinct's
Sustainability Policy and practices;
- oversee the identification, preparation and review
of climate related risks and opportunities ahead
of incorporating into the Audit & Risk Committee
risk register;
- assess and recommend to the Board any changes
to Precinct's climate change risk management
framework and processes; and
- assist in the review of other key internal policies
to support effective consideration of climaterelated issues.
The ESG Committee recommends climate-related metrics
and targets to the Board. The Board approves metrics
and targets, except those that are operational in
nature, which do not require Board approval. Once
approved, the Board delegates responsibility for
monitoring performance against climate-related targets
to the ESG Committee, the ESG sub-committees
and Management. The ESG Committee also reviewed
and recommended the Board approve the climate
scenarios in the Strategy section of this report. Following
the recommendation of the ESG Committee, the Board
approved the climate scenarios. As outlined in the ESG
Committee Charter, the Chair of the ESG Committee is
required to report back to the Board no less than twice
a year on key points of discussion at ESG Committee
meetings, including the progress toward strategic
climate-related targets and the efficacy of associated
--NEW-PAGE--
###### Governance
Executive and Senior Management
Led by Precinct's Chief Executive Officer, Precinct's
Executive team is collectively responsible for the execution
and delivery of Precinct's sustainability strategy, including
managing climate-related risks and opportunities.
Management's role in assessing and managing climaterelated risks and opportunities is to ensure the impacts of
transition and physical risks to the business are reported
and integrated into key workstreams. Management
updates the Board on a regular basis through the ESG
Committee and the Audit and Risk Committee.
Precinct's Chief Financial Officer oversees Precinct's
sustainability strategy and, together with the Executive
and Senior Management, is primarily informed about
climate-related risks and opportunities through updates
from the Head of Sustainability through the bimonthly ESG Business Performance Committee (BPC).
Performance against climate-related metrics and targets
along with updates on Precinct's management of
climate-related risks and opportunities are presented
based on key workstreams of four internal ESG subcommittees which are detailed below. Precinct's Head of
Sustainability reports directly to Precinct's Chief Financial
Officer and is responsible for managing and assessing
Precinct's climate-related risks and opportunities. Precinct
has a dedicated ESG Analyst and seeks advice from
specialist external sustainability consultants as and
when required.
The full Executive Team and bios can be found on
[Precinct's website.](https://www.precinct.co.nz/about-us/board-and-executive-team)
###### ESG BPC and ESG Sub-Committees
Precinct's ESG BPC informs the Executive, Senior
Management and the ESG sub-committees on climaterelated initiatives, risks and opportunities. The Head of
Sustainability provides updates on progress from the
ESG sub-committees at the ESG BPC. Precinct's ESG subcommittees are responsible for assessing, actioning and
driving climate-related issues (including climate-related
risks and opportunities), reviewing performance against
climate-related metrics and targets and incorporating
Precinct's long-term sustainability strategy into business
activities. The ESG sub-committees comprise four key
focus areas as outlined below and include representatives
from various parts of our business:
- Building Developments (meet bi-monthly);
- Building Operations (meet monthly);
- Corporate, Legal & Marketing (meet monthly); and
- Finance & Acquisitions (meet bi-annually).