Nicoleen Moolman, Investor Relations and ESG at Growthpoint, explains how sustainability is embedded into governance, investment decisions and long-term portfolio resilience.
Growthpoint has built an impressive sustainability track record over two decades. What aspects of your strategy are you protecting and what are you adapting?
Our conviction that sustainability and commercial performance are the same discipline remains unchanged. We have one of the country’s largest green-certified portfolios, are a founding member of the Green Building Council South Africa (GBCSA) and have 17 consecutive years in the FTSE/JSE Responsible Investment Index. Sustainability is embedded in our investment criteria, development specifications and environmental, social and governance (ESG) structures.
What we are protecting is responsible governance, ambitious decarbonisation targets, resilient assets and meaningful social impact, underpinned by our commitment to net zero carbon by 2050, transformed leadership and lasting stakeholder value.
What is changing is the operating model. We have simplified and flattened our executive structure, including removing the South African chief executive officer (CEO) role, which brings sustainability closer to the Group CEO’s desk and reinforces integration into core strategy. We are accelerating renewable energy procurement, scaling energy wheeling and rooftop solar, strengthening water resilience, expanding green building certifications and aligning reporting with evolving global frameworks such as the International Financial Reporting Standards Sustainability Disclosure Standards (IFRS S1 and S2). Data and technology are improving resource efficiency and building performance, while we continue to recycle capital into assets and precincts that will remain relevant long term.
At what point in the strategy cycle do the board committees engage with sustainability?
Sustainability enters at the front of the cycle. Our social, ethics and transformation committee monitors commitments across the group. All acquisitions, developments and disposals are considered against those commitments at committee level and the remuneration committee assesses executive performance against ESG metrics, closing the accountability loop at the board.
The clearest example is energy. By approving our power purchase agreement with Etana Energy and the pooled wheeling pilot with the City of Cape Town, the board backed a procurement model largely untested in South Africa, accepting regulatory and counterparty risk ahead of the market. The same lens applies across the portfolio − from the net zero carbon redevelopment of 36 Hans Strijdom for Ninety One to ongoing investment in green-certified buildings, renewable energy infrastructure and energy wheeling. These decisions show how sustainability is embedded in capital allocation and asset management, ensuring long-term resilience and relevance.
How is sustainability shaping investment and disposal decisions in real time rather than being certified after the fact?
Certification is the evidence, not the objective. The discipline sits in the numbers the board interrogates. For example, green-certified offices outperform non-certified peers on the MSCI South Africa Green Property Index. They hold tenants longer and energy performance now shapes building value. The sustainability lens is applied where capital is committed: in development specifications, refurbishment cases and disposal decisions, because it can change the answer.
We are committed to 20 net-zero certified (carbon, waste or water) buildings by 2028, with 16 already achieved. Several certifications required efficiency retrofits and on-site renewables that would not have been approved on a pure payback basis five years ago. Without the sustainability lens, our office disposals would look different too: the energy-efficient, certified buildings are the ones we keep.
When a refurbishment decision or a municipal cost squeeze puts the decarbonisation pathway in tension with distributable income, what is the escalation and decision process? Does selling a building export the problem?
The tension is real. Distributable income is core for a Real Estate Investment Trust (REIT) and administered costs − with municipalities increasing rates and taxes while services decline − squeeze the cash flows that fund green investment.
Our answer is the precinct strategy: concentrating capital where we can manage energy, water and infrastructure ourselves and selling assets that do not fit. If a sustainability initiative improves asset relevance, tenant demand, operational resilience or cost efficiency over time, it becomes part of the investment case.
On disposals, we are concentrating our capacity to solve the problem rather than export it. A sold building’s pathway becomes its new owner’s responsibility, but the sector as a whole must close that gap.
If the green premium narrowed, tenants stopped paying for certification or offshore reporting pressure eased, how would the board view decarbonisation − as a strategic commitment or a market-contingent priority?
You would know the difference by what survives a bad market and we have evidence. We were a founding member of the GBCSA and invested in certification when it carried a cost rather than a rental advantage. Today, the premium is measurable and offshore-listed tenants need the carbon reporting our buildings enable, so conviction and commercial logic point the same way. If that reversed, the strategic case would still hold, because in South Africa property sustainability is not primarily a marketing position, it is about resilience.
Energy and water insecurity and municipal decline are operating realities. A building that generates its own power and manages its own resources is worth more to a tenant regardless of ESG sentiment. That conviction belongs to the board and is priced into our 2030 and 2050 targets.
