Manulife US REIT - Annual Report 2021

MANULIFE US REIT 94 Optimising our Operations At MUST, we are focused on optimising our operations to improve energy efficiency. Capital improvements increase a property’s overall value, reduce operating costs, improve efficiency and lead to tenant satisfaction. The Asset Manager has a process in place to monitor consumption for reporting and quality assurance and proposes opportunities for energy efficiency improvements. This helps us assess opportunities for capital and operational improvements and provides timely recommendations on asset enhancement plans. Beyond our internal expertise, we also leverage external consultants to conduct ASHRAE 1 energy audits to identify energy efficiency opportunities. MUST is also capitalising on technology to drive energy efficiency with smart building technology and data analytics. Energy and Emissions Alignedwithour Sponsor andAssetManager’sGHGreduction targets, we have developed new targets that aim to achieve the following reduction from a base year of 2018: • 38.0%reduction in GHG emissions intensity by 2035 and 80.0% reduction by 2050 2 . • 33.0% reduction in energy intensity by 2035 and 49.0% reduction by 2050. We are committed to maximise our resource efficiency and optimise our operations. In 2021, we implemented a variety of energy conservation initiatives across our portfolio, translating the energy efficiency of our 90.0%green-certified portfolio into cost savings for MUST: Initiatives in 2021 • Use of building analytics to improve access to real time utility data, predict energy demand, and run Heating, Ventilation, and Air Conditioning (HVAC) operations efficiently, yielding US$110,000 energy savings and 20.2% reduction in energy consumption at Exchange • Reduction of peak energy use with smart energy storage at Michelson, which predicts optimal battery discharge time, achieving over US$110,000 in energy savings • Retrofitted energy-saving LED lights in buildings and external columns to improve energy efficiency • Installed Variable Frequency Drive on condenser water pumps to reduce water and energy consumption • Installed charging stations at various locations for electric vehicles and shuttle buses In 2021, MUST’s properties consumed a total of 67,656,204 ekWh of energy, with an energy intensity of 11.052ekWh/sf. MUST’s total GHG emissions was 19,901.7 tCO 2 e, comprising 1,903.7 tCO 2 e of Scope 1 GHG emissions and 17,998.0 tCO 2 e of Scope 2 GHG emissions. Overall, MUST’s portfolio recorded a 5.8% YoY reduction in energy intensity and a 9.3% YoY reduction in GHG emissions intensity in 2021 to 3.251 kgCO 2 e/sf. This was due to lower building occupancy, as well as energy savings initiatives at Exchange, Penn, Figueroa and Michelson. Energy 3,4,5 GHG Emissions 3,6,7,8,9 Scope 2 Emissions Scope 1 Emissions GHG Emissions Intensity Energy Consumption Energy Intensity Energy Consumption (‘000 ekWh) Energy Intensity (ekWh/sf) GHG Emissions (‘000 tCO 2 e) GHG Emissions Intensity (kgCO 2 e/sf) 80000 20 0 60000 15 40000 10 20000 5 0 2019 2020 2021 15.337 11.729 11.052 2019 2020 2021 25 6 4 5 3 2 1 0 20 15 10 5 0 5.141 3.586 3.251 1 The American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) is a standard and guideline for performing energy audits on buildings. 2 Targets are based on Scope 1 and Scope 2 emissions for the properties that are within our operational control. 3 2019-2020 values are restated as a result of data and property area updates. 4 Building areas include below grade parking if mechanically ventilated and/or heated, and are calculated in accordance with best practices such as BOMA. 5 Energy Intensity is calculated by total normalised energy consumption/total gross floor area. Reported energy intensity figures are normalised for weather adjustments. 6 Scope 1 emissions include direct emissions fromnatural gas. Scope 2 emissions include indirect emissions frompurchased electricity, steamand chilledwater. 7 Conversion factors for Scope 1 and Scope 2 GHG emissions were obtained from the U.S Environmental Protection Agency’s Emission Factors Hub and Emissions & Generation Resource Integrated Database (eGRID). 8 GHG Emissions Intensity is calculated by total GHG Emissions/total gross floor area. 9 The GHG emissions methodology is aligned with the requirements of operational control approach as per the World Resources Institute’s and the World Business Council for Sustainable Development’s The Greenhouse Gas Protocol, Revised Edition. Building Resilience