To the Board, Executive and Stakeholders of Landcom:

Landcom commissioned Net Balance Management Group Pty Ltd (Net Balance) to provide independent assurance of their 2008-2009 Annual Report (the report). The report presents Landcom’s sustainability performance over the period 1 July 2008 to 30 June 2009. Landcom was responsible for the preparation of the report and this statement represents the assurance provider’s independent opinion. Net Balance’s responsibility in performing its assurance activities is to the Board and Executive of Landcom in accordance with the terms of reference agreed with them. Other stakeholders should perform their own due diligence before taking any action as a result of this statement.

Assurance Standard

The assurance was undertaken in accordance with the AA1000 2008 Assurance Standard (AA1000AS). Net Balance provided Type 2 moderate level of assurance in accordance with the AA1000AS (2008). This involved an assessment of the organisation’s adherence to the AA1000 AccountAbility Principles (2008) and an assessment of the accuracy and quality of the sustainability performance related information contained within the report. A full description of the Assurance standard and methodology is available here.

Our Independence

Net Balance was not responsible for preparation of any part of the report. During the reporting period, Net Balance was commissioned by Landcom to undertake an internal review of key sustainability issues and the corresponding performance indicators. This work informed a larger project conducted by Landcom to develop new sustainability reporting indicators.

To maintain independence, the indicator review was undertaken by the Melbourne office of Net Balance, whilst the assurance engagement was undertaken by the Sydney office. Net Balance has strict procedures in place to ensure independence and partition of project teams at all times.

Findings and Conclusions

Adherence to AA1000 Principles

Inclusivity: How does the organisation include stakeholders in developing and achieving an accountable and strategic response to sustainability?

During the reporting year, Landcom undertook an extensive review of its sustainability indicators in consultation with internal and external stakeholders. This resulted in a revised set of indicators that better align to Landcom’s core business, are reflective of stakeholder feedback and are geared to achieve further improvements in sustainability performance via the new stretch targets. The process for revising the indicators is discussed in detail in the report with the new indicators being utilised in the 2009-10 report.

Materiality: How does the organisation include in its report the material (most important) information required by its stakeholders to make informed judgements, decisions and actions?

Landcom has multiple processes in place to determine material issues across the organisation. The report was found to align with the outcomes of these processes and, as such, appropriately addresses Landcom’s environmental, social and economic material issues. In addition, the review of sustainability indicators by stakeholders also included a review of material issues to ensure the indicators were relevant.

Responsiveness: How does the organisation respond to stakeholder concerns, policies and relevant standards and adequately communicate these in its report?

Net Balance tested the responsiveness of Landcom to its stakeholders through a review of management systems and policies that govern the way that Landcom responds to stakeholder concerns and interests. Landcom was found to be responsive to stakeholder concerns and expectations as demonstrated by the review of indicators and the inclusion of three key contractors in the assurance process.

Reliability of Performance Information
 

Overall, it is Net Balance’s opinion that the information presented within the report is fair and accurate. The report was found to be a reliable account of Landcom’s sustainability performance during the reporting period. Detailed information on the reliability of performance information is available here.

The Way Forward

Net Balance found the report appropriately addresses Landcom’s environmental, social and economic material issues. To ensure that Landcom continues to improve, Net Balance recommends Landcom:

• Develops data management protocols that clearly state assumptions, boundaries, the projects to be included, calculations, and roles and responsibilities of data owners. This will improve the consistency in reporting indicators, reduce aggregation errors and improve the efficiency of reporting.
• Develops more detailed guidelines to help contractors provide consistent and quality data. Whilst the methodologies of contractors is generally sound, Net Balance recommends that Landcom provides civil works contractors with more guidance on the methodologies used to calculate data for indicators that requires estimations such as vegetation waste. This will ensure consistency of information reported between contractors year on year.
• More clearly differentiates between the indicators required to meet regulatory targets and indicators that demonstrate best practice and leadership within the sector. This will help demonstrate Landcom’s leadership in sustainable housing developments.
• Provides further discussion on how it plans to address the tensions between providing affordable /moderate income housing and improving the sustainability performance of new housing.
• Provides further discussion on the selection and use of sustainable materials in new houses, which is an emerging material issue in this sector.

These recommendations have been outlined in a more detailed report presented to Landcom’s Board and Executive.