Corporate citizenship

Pivotal understands the need to play an integral role in the societies in which it operates and it recognises the necessity for embracing sustainability as a key strategic move that supports ongoing shareholder value. Pivotal’s impact on the environment, the communities in which it operates, other businesses in its value chain and the government will continue to be evaluated by its directors for areas of improvement.

Pivotal’s sustainability strategy aligns with its core business of property investment and as such, the company focuses on making a contribution in its areas of expertise by assisting in projects which provide construction, project management and development support.

Environmental risks

Pivotal has identified its primary environmental risks, listed below in order of highest perceived risk to lowest perceived risk:

Key risk

Mitigation strategy

Energy security and cost

  • Portfolio-wide implementation of SMART real-time metering
  • Portfolio-wide energy-management programme
  • Conduct and implement energy-efficiency opportunities
  • Conduct and implement renewable-energy feasibility studies
  • Train key personnel

Legislative compliance and reputation

  • Regular monitoring of legislation
  • Roll out company-wide sustainability awareness campaign

Water supply and water quality

  • Portfolio-wide water-efficiency assessments
  • Implement water-efficiency opportunities
  • Train key personnel

Insurance and climate change

  • Monitor insurance premiums
  • Investigate green building designs

Waste management

  • Implement efficient waste management at retail properties
  • Train key personnel

Carbon tax

  • The fund will not be directly affected by carbon tax
  • Energy-efficiency and renewable-energy opportunities investigated to reduce indirect impact

Sustainability strategy

As a first step in Pivotal’s sustainability strategy, the fund has embarked on a sustainability gap assessment which includes:

  • competitor assessment which is focused specifically on sustainability elements in the property industry;
  • developing the best practice sustainability matrix for a property company (based on JSE-listed) against current performance;
  • determining available internal skills and identifying skills shortages;
  • identifying company risks and opportunities based on current sustainable progress:
    • Risks: electricity (security, availability and cost); reporting risks (CDP, Integrated Reporting, King III); climate-related risks (flooding, storm surges, impact on suppliers, new developments); regulations (carbon tax, fuel levies); tenant behaviour; and market-related risks.
    • Opportunities: incentives (Eskom, 12L, Accelerated depreciation, GBCSA), green leases, smart metering and tenant billing, renewable energy and energy efficiency;
  • developing a three-year action plan for the company to be a leader in sustainable performance; and
  • creating a strategy for revenue enhancement and cost savings through sustainability initiatives.

Our environment

Pivotal’s strategy includes the development of an environmental policy, which will disclose environmental commitments which the company will adhere to including, among others, commitments to reduce energy, water and waste through assessments, investigation of renewable-energy opportunities, training of employees and tenants on environmental elements, and ensuring that new developments are built according to GBCSA standards.

As part of its strategy, Pivotal will also conduct a carbon footprint assessment to establish a baseline from which to measure and compare its buildings’ environmental performance, both internally and externally. Conducting a carbon footprint assessment provides data that can highlight properties which are not operating in an efficient manner. Such detailed energy-efficiency assessments will enable Pivotal to reduce its energy usage per square metre.

These sustainability-focused projects will benefit both shareholders and tenants by reducing costs and identifying specific risks.

Pivotal has identified solar photovoltaic power generation as another excellent opportunity for the fund to divert municipal electricity revenue to the company, aimed at securing a new strongly growing revenue steam for our shareholders. Pivotal is currently conducting energy-efficiency and renewable-energy feasibility studies on selected properties with the aim of identifying the most suitable sites for implementation. We are confident that the sustainability strategy will deliver increased growth and revenue to shareholders.

The strategy thus, in conjunction with Pivotal’s utilisation of the latest techniques in reducing consumption, its incorporation of natural landscapes wherever possible, its installation of smart meters and energy-efficient appliances and fittings, and its commitment to increase the level of environmentally friendly technology used in future developments, enables and promotes Pivotal’s commitment to protecting and improving the environment.

Pivotal’s success has been recognised by the South African Property Owners Association (“SAPOA”), which awarded Cradlestone Mall in Ruimsig the Innovative Excellence in Retail Property Development Award 2014. The award acknowledged the mall’s economic viability, the satisfaction of investor and user needs, the mall’s aesthetic attractiveness and the enhancement of the locality in which the mall is situated.

Our community

Pivotal’s commitment to the many communities it affects goes beyond just providing a safe and comfortable environment for its tenants. The company endeavours to contribute positively to the greater nodes in which properties are located, through creating and maintaining neat and tidy surroundings, monitoring security and crime levels, and contributing to community needs and initiatives.

Pivotal has aligned itself with the Abcon Group in terms of its social responsibility initiatives. The group includes Abland, Abcon Foundation, Abreal Property Management, Pivotman Property Asset Manager, Sable Homes and Sabreal Property Management.

Our value chain

Pivotal’s goal is to be a landlord of choice to potential tenants. Embedded in this is the desire for Pivotal to conduct itself with professionalism and integrity, which enables the company to deliver quality service to its clients. Suppliers and partners are selected in line with these values and are treated accordingly. This will ensure that Pivotal meets its objective of supplying A-grade properties, while minimising operating costs and tailoring solutions for tenants that will ultimately enhance its property portfolio and create value for its shareholders.

Stakeholder engagement

Tabled below is a brief analysis of the stakeholders Pivotal has identified, their primary concerns, and how the company interacts with these stakeholders:

Stakeholder

Considerations

Interaction/communication

Tenants

  • Appropriate property type and location
  • Occupational costs
  • Response to problems and requests
  • Well-serviced, maintained and secured premises
  • Complementary tenant mix
  • Meetings with external property management
  • Monthly statements and written communications

Financiers

  • Interest and capital repayments
  • Loan covenants
  • Appropriateness and extent of security provided
  • Proper asset and tenant management, including strength and duration of leases
  • Regular covenant reporting
  • Ad hoc requests and discussions
  • Availability of senior management
  • Integrated annual report
  • Site visits

Shareholders

  • NAV per share
  • Value of underlying properties
  • Distributions
  • Accuracy of forecasted results
  • Belief in and communication with management
  • Integrated annual report
  • Newsletters
  • Website
  • Direct communication with
    management

Communities

  • Clean, safe and appealing properties
  • Corporate social responsibility initiatives
  • Appropriateness of tenants
  • Various community forums and associations
  • Website
  • Newsletters

Suppliers and service providers

  • Fair service-level agreements and trading terms
  • Timely payments
  • Continuing relationships
  • Direct communication with asset and property managers
  • Access to senior management

Government

  • Compliance with regulations and laws
  • Timely payment of rates and taxes
  • Various tax returns and statutory
    returns/filings