Transition Risk Description Timeline Mitigation and Opportunity Regulation • Increasing climate-related regulations, including jurisdictional carbon pricing, regional efficiency, or emissions standards, and increasing disclosure requirements. Regulation changes could lead to increasing operation and compliance costs. Short- to long-term We continue to monitor emerging regulations and incorporate assessment of building performance and efficiency in our due diligence to stay ahead of carbon pricing and minimum efficiency requirements. Market • Shift in capital away from high-emitting products and services, potentially affecting tenant demand, asset value, and fundraising. Short- to long-term Improving portfolio efficiency could create new avenues for financing and increase investor and tenant demand. We continue to certify our properties to building standards such as LEEDTM, ENERGY STAR, WiredScore, SmartScore, Fitwel® and Fitwel® Viral Response, and BOMA 360, implement energy and emission reduction programmes, and collaborate with tenants and clients on shared climate goals. Technology • Cost to move to a low-carbon economy, including capital upgrades to retrofit assets, advanced technologies for buildings, demand for high-quality transactable ESG data, real-time metering, and shifting to renewable energy sources. Short- to long-term Short-term capital costs are expected to be offset from paybacks on lower operating costs and meeting tenant demand. Our ongoing energy, water, GHG and waste programmes support our team in allocating capital towards low-carbon technology and improving property performance. Reputation • Failure to act or the perception of not acting on climate change could affect our reputation and risk our relationship with tenants, employees, communities, and investors. Short- to medium- term To communicate our climate change action and impact, we disclose our objectives and performance annually through GRESB and our Sustainability Report. ENVIRONMENTAL STEWARDSHIP Our key priorities remain reducing our properties' environmental impact and supporting the transition to a net zero economy. As such, we are dedicated to optimising resource efficiency and integrating conservation practices into our operations. We are committed to reducing our Scope 1 and 2 GHG emissions intensity by 38.0% by 2035, and 80.0% by 2050, from 2018 base year. We recognise the importance of tracking our progress towards our goal as it allows us to understand the impacts of our strategies. Improving energy efficiency in our operations is a crucial strategy for reaching our targets. We have implemented various efficiency measures, such as optimising operations and exploring renewable energy sources. These efforts align with our target of securing green certifications for our entire portfolio by 2030. We continue to incorporate green lease provisions into our new lease agreements to minimise environmental impact such as recommendations for tenants to reduce energy and water consumption. For some new leases, cost recovery clauses are included where tenants are responsible for the cost involved in the sourcing or offsetting of electricity from renewable energy sources. As part of our environmental risk management strategy, we insure our properties against various risks including fire, property damage, terrorism, earthquakes, business interruptions, and public liabilities, adhering to U.S. industry practices. ANNUAL REPORT 2024 | 81
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