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Our position on Lendlease's development at Mt Gilead

Lendlease continues to attract scrutiny for the development of an estate at Mt Gilead near Campbelltown, NSW with concerns about potential harm to local koalas. Here's an update on our position and the action we're taking.

December 2021

Lendlease’s development of the Figtree Hill estate near Campbelltown, NSW, and plans for an adjacent site are drawing widespread concern about potential harm to local koalas. These concerns are being raised by local communities and animal protection groups – and by responsible investors like Australian Ethical.

We have engaged with Lendlease on the development and koala protection since the end of 2018. We have seen significant strengthening of koala protection measures being adopted by Lendlease since we first engaged.

This is in large part because of the important work of environmental and koala protection groups that have challenged the development and raised public awareness of the threats to the Campbelltown koala colony. We also think our investor pressure has helped.

In early 2021, we attended a site visit with Lendlease and two NGOs. Lendlease explained their plans to plant trees to offset the impacts of clearing. We challenged Lendlease on this. If existing koala habitat is cleared before new trees are established, there will be a temporary net loss of habitat. As a result of this conversation, Lendlease redesigned the timeline for the project, bringing forward conservation activities and pushing out some of the impacts. Lendlease has now made a commitment that at no time during the development will there be less core koala habitat than exists today.

Koalas must be the priority

Koalas in Queensland, NSW, and the ACT had already been listed as vulnerable well before the Black Summer bushfires devastated millions of hectares of koala habitat. One of the biggest threats koalas face is habitat loss and fragmentation, predominantly to create pasture for livestock, but also as a result of urbanisation. We need to urgently stop and reverse habitat loss and fragmentation, and address other threats to koalas, to help get koalas off the road to extinction.

The Campbelltown koala colony is a good news story. The colony is growing and is uniquely chlamydia free. It is one of the few remaining koala populations in the Sydney region. It is critical these koalas are protected.


How do we think about the Lendlease development?

Our position, which we made clear to Lendlease, is that a responsible developer would not go ahead with a development that results in the loss of a healthy colony of a vulnerable species. We have told Lendlease that we could not continue to invest if this development threatens the viability of the local koala population. To assess this, we make sure we listen to independent experts. This includes environmental and koala protection groups and the Office of the NSW Chief Scientist & Engineer.

It is positive that Lendlease has committed to improving the quality and quantity of koala habitat on site, and to improve habitat before commencing construction. Lendlease has also made a commitment that at no time through the 10-15 year construction program will there be less core habitat available to the local koala population than they have today.

It is important the koalas have multiple options to move east to west across the landscape. The site is at the narrowest point between the Georges and Nepean rivers and so serves as an important crossing. The east to west connectivity depends on koalas being able to safely cross Appin Road. Lendlease has offered to construct two underpasses at Appin Road, and is waiting for NSW government approval to confirm it can do so.

The east to west connectivity also depends on there being functional koala corridors on the site. There are two east to west corridors (Noorumba Reserve to Menangle Creek; and Beulah Reserve to Woodhouse Creek) and one north to south corridor along the Nepean River. Lendlease has offered to revegetate patches of land to widen the existing corridors to meet or exceed requirements including the minimum widths and minimum average widths. However, its proposal for a functional koala corridor from Noorumba Reserve to Menangle Creek is dependent on consents from various government bodies.

Our current understanding is that if Lendlease's proposals are implemented (including the underpasses, the corridors, exclusion fencing and predator management), this will meet the requirements of the Office of the NSW Chief Scientist & Engineer and so provide necessary protections for the koala colony. However this outcome is not guaranteed as many aspects of Lendlease's proposal to provide east to west connectivity are dependent on government approvals that have not yet been granted. We therefore continue to keep our assessment of this development, and of Lendlease, under review.


Wouldn't it be better for the development to not go ahead at all?

This is an important question. The answer is not as clear cut as we originally thought. The Mount Gilead site contains patches of vegetation and heavily vegetated riparian corridors and gullies. Koalas currently use the site as a corridor.

However the majority of the site is land that has long been cleared for agriculture, and ongoing cattle grazing has damaged the ecological value. Koala habitat on the property is expected to deteriorate unless there is active revegeation, restoration and sustained conservation management.

If Lendlease's koala protection measures are implemented, there will be some areas where koala habitat, protection and corridors are expected to be improved, compared to the status quo. We also acknowledge that there could be alternative land uses that would offer greater protection to koalas than either the existing agricultural use or the proposed residential use. Ideally, other options would be more fully explored by local and state governments.


Why not divest now?

While divestment can be an important tool to influence, we use it as a last resort where we assess a company to not be aligned with our Ethical Charter and we don’t see real prospect of change from our continued engagement as an investor.

Our current assessment is that the company is taking steps to align the development with the recommendations of the Office of the NSW Chief Scientist & Engineer and other experts, and to include important protection measures that will increase existing habitat. We continue to monitor the situation, particularly as some of the protection measures are not yet guaranteed for the reasons discussed above.

If Lendlease does successfully protect the local koalas, this development could set a helpful precedent for future developments in the area. This is important as the Greater Macarthur region has been declared a growth area to provide homes for Sydney's growing population, with the local population between Menangle Park and Appin set to increase from approximately 3000 people today to potentially 109,000 people over the next 36 years.

However if Lendlease fails to meet their protection commitments and proceeds with a development that will harm the viability of the colony, Lendlease is on notice that this would be a trigger for divestment.

You can read more about our approach, including our successes as well as divestments here.