Manulife US REIT - Annual Report 2021

MANULIFE US REIT 82 Dear Stakeholders, Despite the challenges faced in 2021 as a result of the second year of COVID-19, we remained focused on improving environmental excellence.We have kept our properties open throughout the past year, placing the safety andwell-being of our people, tenants and vendors as our priority. At MUST, future-proofing our business is key to creating long-term value for our stakeholders. For instance, during the year, we continued to strengthen our ESG governance structure, linking all our employees’ remuneration to sustainability performance indicators. We also expanded our ESG capabilities, recruiting a dedicated ESG specialist to the management team to increase our resources. To improve our ESG integration, we refined our sustainability framework, building three strategic pillars that now guide our business operations: Building Resilience, People First, and Driving Sustainable Growth. These pillars, alignedwith global sustainability goals, have enabled us to sharpen our focus on material ESG issues in 2021 and will guide our sustainability strategy going forward. Property Resilience With the world’s real estate sector contributing about 40.0% of global carbon emissions, decarbonisation of the built environment is imperative in tackling climate change. Together with our Sponsor and Property Manager, MUST has developed GHG and energy reduction targets that are consistent with the Paris Agreement goal of securing global net zero emissions by 2050, as reaffirmed at the recent UN Climate Change Conference in Glasgow (COP26). To achieve our goal, we will undertake various measures, such as improving energy efficiency through the optimisation and digitalisationof our operations, fuel switching, and renewable energy usage. We have set a target of achieving a 100.0% green-certified portfolio by 2030. As at end December 2021, ~90.0%of our portfolio was certified green by either Leadership in Energy and Environmental Design (LEED TM ), ENERGY STAR ® or both.We have andwill continue to pursue water conservation and waste reduction. In 2021,MUST recordedGHGand energy intensity reductions of 9.3% and 5.8% respectively. These improvements were attributed to energy savings initiatives, as well as lower physical occupancy of our buildings due to the ongoing pandemic. As part of our continued strategy to build climate resilience, andinpreparationforenhanceddisclosures, newrequirements on property climate resilience will be included in our Asset Manager’s Sustainable Building Standards to ensure that climate-related risks are addressed and monitored across MUST’s portfolio. In this report, we have started to incorporate climate-related disclosures aligned with the Taskforce on Climate-Related Financial Disclosures (TCFD) recommendations in our reporting framework. Promoting Health and Well-being Thepandemichashighlightedthe importanceoforganisational resilience. Keeping our employees and tenants safe, healthy and engaged has become more important than ever. We have continued to implement safe management measures aligned with social distancing and business continuity and tightened safety and health protocols. COVID-19 highlighted the critical role that our surroundings play in supporting the health, safety, and well-being of all propertyoccupants andvisitors.Weupheld themost stringent standards including rigorous cleaning and sanitisation, upgrading of air filters and comprehensive air quality inspections, and installation of touchless building access systems and fixtures to reduce transmission of contagious diseases. As many tenants continued to work from home (WFH) through much of 2021, our Property Manager kept tenant communities connected and engagedwith a variety of online events focused on health and wellness. Weachieveda Fitwel ® certification for theMichelsonproperty (the first in our portfolio) for providing building features and amenities that improved the health and productivity of tenants. In addition, as at March 2022, four of our buildings also achieved the Fitwel ® Viral Response Approval. Nurturing our Talent Weare committed tonurturingour peopleandhaveprovided our employees with the resources and flexibility needed to support themthroughout thepandemic. This included flexible Message to Stakeholders