Manulife US REIT - Annual Report 2021

91 Recommended Disclosure Approach Risk Management The identification and assessment of climate-related risks is communicated through our Sponsor’s Environmental Risk Policy, which sets out an enterprise-wide framework for the management of environmental risks within our business activities. Climate-related risks and opportunities are identified and mitigated through MUST’s ERM framework. As part of the acquisition process, environmental and social risks are evaluated as part of due diligence and presented as part of the investment approval to management. Once the property is onboarded, mitigation strategies are incorporated as part of the asset plans. Working closely with our Asset and Property Managers, climate risks are addressed and monitored annually as part of our portfolio ESG targets. To minimise environmental risks of our portfolio, properties are also insured against fire accidents, property damages, terrorisms, quakes, business interruptions and public liabilities, including personal injuries, in compliance with U.S. industry practice. In 2020, our Asset Manager conducted a portfolio risk study using current and forward- looking risk scenarios to assess asset level exposure to climate-related hazards – floods, extreme storms, wildfire, sea-level rise, drought, heat stress, and earthquakes. Corresponding resilience measures such as flood risk management, property features, property team’s resilience management practices, emergency and business continuity plans were also assessed to prepare for mitigation of such risks. Regulatory risks were also assessed using a third-party tool to determine our portfolio exposure to these transition risks. Based on the findings from the study, we were able to identify opportunities to strengthen the climate resilience of our properties. New requirements on property climate resilience will be included in our Property Manager’s Sustainable Building Standards. Metrics and Targets We are committed to reducing our GHG emissions by 38.0% by 2035, and 80.0% by 2050 1 . These targets are modelled based on the Carbon Risk Real Estate Monitor (CRREM), science- based decarbonisation pathways that are aligned with the Paris Climate Goals of limiting global temperature rise to 2.0°C, with ambition towards 1.5°C. These targets are also aligned with our Sponsor’s net zero target for its investment portfolio, and our Asset Manager’s GHG target of 80.0% reduction for its real estate portfolio by 2050. We have also set a long-term target to increase green building certifications with an aim towards achieving 100.0% by 2030. We continue to build upon our existing metrics and targets to help guide our decarbonisation strategy and are continually improving our data collection and disclosure. In 2021, we started reporting on our waste reduction efforts and are looking at developing targets to reduce waste generation and water consumption. In measuring and reporting our GHG emissions, we reference global standards including the GRI and the GHG Protocol Standard, and use the operational control approach in accounting for our emissions. We also partner tenants, investors and industry experts to tackle climate change on a broader scale (Please refer to page 110 for our MGG thought leadership initiative). By working collaboratively with our stakeholders, we are strengthening our efforts on reducing potential climate change impacts and realising the economic benefits of the low-carbon transition. For more details of our performance in GHG reduction and sustainable properties, please refer to pages 92 to 95 of this report. SUSTAINABILITY REPORT 2021 1 Targets are intensity-based reduction of Scope 1 and 2 emissions for the properties that are within our operational control, from a base year of 2018. Please refer to Pg.94 for more details.