Climate Change Data

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental
• Social

Environmental Achievements

• Reduced energy consumption by 5% in the like-for-like portfolio
• Reduced water consumption by 4% compared with 2015
• 38% of portfolio (excluding Metrovacesa and high street retail) certified under LEED and BREEAM standards

Social Achievements

• Integration of Testa and Metrovacesa workforces
• Creation of a single Human Resources (HR) team
• Resumption of the unified Training Plan for the entire team
• 0% employee turnover

Governance Achievements

• Approval of MERLIN’s CSR policy
• Implementation of the Internal Audit Department
• Assurance work on specific risks identified in the Company’s Risk Map
• Full audit of personal data protection following Testa and Metrovacesa integrations

Climate Goals & Targets

Environmental Challenges

• Relocation into a new workplace
• Changes to the Company’s compensation plan
• Extension of ISO 14001 certification to include 100% of multi-tenant office buildings (excluding Metrovacesa)
• Energy audits in buildings to subsequently implement ISO 50001 certification of Energy Management Systems

Mitigation Strategies

• Approval of MERLIN Properties’ HR Procedures Manual
• Approval of the Welcome Manual
• Development of corporate manuals to encourage more sustainable behaviours by tenants
• Introduction of sustainability criteria in clauses for tenants of shopping centers and logistics assets
• Implementation of an official complaints mechanism for tenants

Supply Chain Management

Responsible Procurement

• Priority to local suppliers in competitive bids meeting quality standards and legal requirements

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 Guidelines

Certifications: LEED, BREEAM, ISO 14001, ISO 9001

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental
• Social

Environmental Achievements

• Obtainment of 30 new LEED/BREEAM certificates.
• Obtainment of the first LEED Platinum certificate for a logistics facility in Spain at the Meco building.
• ISO 50001 certification for three office buildings and a business park, totalling over 88,000 m2 certified.

Social Achievements

• Launched CSR Plan resulting in donations to various foundations and employee participation in social initiatives.
• Improved employees’ life insurance policy.
• Received DIGA 2017 Award for Accessibility.

Governance Achievements

• Development of new policies and procedures: asset disposal, review of powers of attorney and financial closing.
• Development of new policies and procedures by the Audit Committee: Auditor Contracting and Relations Policy, Procedure for Transactions with Related Parties.
• Inclusion of a contractual clause in contacts with suppliers regarding ethical behavior.

Climate Goals & Targets

Environmental Challenges

• Integration of Metrovacesa portfolio and departure of relevant tenants affected office portfolio occupancy.
• Political uncertainty in Catalonia affected share price.
• Increase in energy consumption and greenhouse gas emissions due to portfolio growth.

Mitigation Strategies

• Focused on increasing portfolio occupancy.
• Implemented a Placement Plan for employees affected by collective dismissal.
• Implemented measures to reduce energy consumption and partially offset emissions (reforestation, RECs).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Priority given to local suppliers meeting quality standards.
• Inclusion of ethical clause in supplier contracts.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 Global Reporting Initiative Guidelines, EPRA Sustainable Best Practice Recommendations (SBPR)

Certifications: ISO 14001, ISO 9001, ISO 50001, LEED, BREEAM

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• DIGA Award for Accessibility 2017
• Director of the Year Award (Ismael Clemente)

Environmental Metrics

ESG Focus Areas

• Energy efficiency
• Greenhouse gas emissions
• Waste
• Water
• Accessibility
• Talent management
• Local community integration
• Supply chain sustainability
• Governance
• Economic performance
• Tenant wellbeing
• Ethics, compliance & fiscal responsibility
• Asset intervention and development
• Dividend sustainability
• Transparency & communication

Environmental Achievements

• Reduced energy consumption by 0.6% in like-for-like shopping centers.
• Obtained 44 LEED or BREEAM certificates, covering 75% of the asset portfolio (excluding net lease assets).
• Reduced greenhouse gas emissions by 19.2% in like-for-like assets.
• Increased number of ISO 50001 certified assets to 33.
• Reduced energy consumption by over 20% at Arturo Soria shopping center.
• Certified 4 new offices under the AEO standard.

Social Achievements

• Successfully integrated LOOM's workforce.
• Launched the Merlin Hub initiative.
• Improved accessibility certification in four shopping centers.
• Carried out more than 300 activities and initiatives with communities.
• Established a collaboration agreement with Fundación Juan XXIII Roncalli for maintaining the “Urban Gardens”.

Governance Achievements

• Updated the Board of Directors Regulations.
• Included ESG risks in the Group's risk management model.
• Approved new corporate governance policies.
• Renewed UNE 19.601 certification for the Group's crime prevention system.
• Implemented a comprehensive improvement plan for the Corporate Governance system, approving 14 new policies.

Climate Goals & Targets

Environmental Challenges

• Economic uncertainty and instability.
• Growing challenges in the real estate sector.
• Integration of LOOM's workforce.
• Maintaining a sustainable shareholder remuneration policy.
• Ensuring active improvement in competitiveness and productivity.

Mitigation Strategies

• Active repositioning of assets under value creation plans.
• Growth of logistics driven by new developments.
• Business expansion in Portugal.
• Disposal of non-strategic assets.
• Implementation of a solid corporate governance system.
• Integration of sustainability into MERLIN's assets.
• Access to new funding sources through sustainable financing.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Favouring local suppliers and subcontractors who comply with social and environmental standards.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards, EPRA Sustainability Best Practice Recommendations (SBPR)

Certifications: UNE 19601 (Criminal Compliance Management System), ISO 14001 (Environmental Management System), ISO 50001 (Energy Management System), LEED, BREEAM, AIS (Accessibility Indicator System)

Third-party Assurance: PricewaterhouseCoopers Auditores, S.L.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• EPRA Gold Award for sustainability reporting (two consecutive years)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions by 21.7% in like-for-like assets and 25% in absolute terms.
• Reduced water consumption by 39.9% in like-for-like assets and 40.3% in absolute terms.
• Reduced waste generated by 26.5% in like-for-like assets and 31.2% in absolute terms.
• 81% of assets (by GAV) were LEED or BREEAM certified.
• Launched Project Sun, aiming to install photovoltaic panels on 24 assets.

Social Achievements

• Donated eight robots for mass COVID-19 testing.
• Implemented a commercial policy to support retail tenants affected by the pandemic.
• Obtained AENOR COVID-19 certification for 52 office assets and 13 shopping centers.

Governance Achievements

• Adapted Board of Directors Regulations and Committees to the new Good Governance Code.
• Updated Compliance System and Risk Map to reflect the pandemic.
• Published extensive documentation on corporate governance policies on the website.
• Obtained a 78/100 score in the GRESB survey and a 'B' rating in the CDP survey.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its impact on occupancy rates, rent collection, and CAPEX plans.
• Reduced footfall at shopping centers and offices.
• Need to adapt assets to the new health and safety requirements.

Mitigation Strategies

• Adjusted Value Creation Plans, prioritizing ongoing projects.
• Extended maturity of corporate bonds.
• Implemented rent relief policies for retail tenants.
• Adopted best practices to guarantee the health and safety of users and suppliers.
• Obtained AENOR COVID-19 certifications.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Prioritizing local suppliers meeting social and environmental standards.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services.

Reporting Standards

Frameworks Used: GRI Standards, EPRA sBPR

Certifications: ISO 14001, ISO 50001, LEED, BREEAM, AENOR COVID-19 Protocols, AIS

Third-party Assurance: PricewaterhouseCoopers Auditores, S.L.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Mayordomo Smart Points, LOOM flexible workspaces, last-mile logistics solutions.

Awards & Recognition

• EPRA sBPR Gold Award (3 years running)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Governance
• Social

Environmental Achievements

• Reduced energy consumption of the asset portfolio by 2% compared to 2021 (like-for-like basis).
• Reduced the corporation's carbon footprint by 23% compared to 2021 (2,580 tons of CO2).
• 94% of the portfolio is LEED or BREEAM certified.
• 37% of the portfolio achieved ISO 14001 and 50001 certifications.
• Improved scores in all sustainability indexes.

Social Achievements

• Donated €223,575 in direct contributions and €192,374 through multiplier effect, supporting 73 foundations and benefiting 6,646 people.
• Measured social contribution using the LBG model.

Governance Achievements

• Improved governance through the creation of a Planning and Coordination Committee.
• Unified Appointments and Remuneration Committees.
• Approved a Director Remuneration Policy (2022-2025) with sustainability criteria.
• Implemented an Internal Control System over Non-Financial Information (ICNFI).
• Approved new policies (human rights, biodiversity, human capital management).

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to rising costs of construction, raw materials, and energy.
• Changes in consumer behavior (remote working, e-commerce).
• Difficulty in attracting and retaining talent.
• Climate change risks (physical and transition).
• Regulatory non-compliance risks.

Mitigation Strategies

• Strategic Board meetings to review business model and risks.
• Monitoring of external factors affecting asset value and return.
• Independent asset valuation every six months.
• Ongoing monitoring of business indicators.
• Five-year Investment Plan for asset refurbishment.
• Non-core divestment program.
• Sustainable certification of assets.
• Energy efficiency initiatives (MAEs, Photovoltaic Project).
• Green clause in leases.
• Meters installation in all assets.
• Sustainability Committee.
• ESG questionnaire for suppliers.
• Long-term Remuneration Policy.
• Short-term Remuneration Incentive Plan.
• Succession plans for key personnel.
• Employee evaluation based on objective criteria.
• Registered Equality Plan and Sexual Harassment Action Protocol.
• Outsourced occupational risk prevention plan.
• Measurement of social impact using LBG methodology.
• Implementation of general controls (Strategy and Tax Policy).

Supply Chain Management

Supplier Audits: 110 suppliers representing 72% of CAPEX audited; 78% of questionnaires received audited by Internal Audit.

Responsible Procurement

• ESG questionnaire for suppliers with contracts over €150,000.
• Calculation of embodied carbon footprint for contracts over €3 million.

Climate-Related Risks & Opportunities

Physical Risks

• Increased repair costs due to extreme weather events.

Transition Risks

• Changes in customer expectations regarding sustainability.

Opportunities

• Development of energy-efficient products and services.

Reporting Standards

Frameworks Used: EPRA Sustainability Best Practice Recommendations (sBPR), GRI Standards, TCFD

Certifications: LEED, BREEAM, ISO 14001, ISO 50001, UNE 19601, ISO 37001, AIS, WELL

Third-party Assurance: Deloitte S.L.

UN Sustainable Development Goals

• 3
• 4
• 5
• 7
• 8
• 9
• 11
• 12
• 13
• 15
• 17

MERLIN's initiatives contribute to these SDGs through various actions detailed in the report.

Sustainable Products & Innovation

• LOOM flexible workspaces.
• Air filtration and purification systems.

Awards & Recognition

• EPRA Gold Award (Sustainability Report)
• AECC Award for Best Medium/Small Shopping Centre (X-Madrid)
• AECC Award for Best Sustainability Campaign (Marineda City)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Wellbeing of Asset Users
• Positive City Impacts
• Corporate Social Responsibility (CSR)

Environmental Achievements

• Optimizing and improving energy performance by incorporating efficient equipment and systems
• Maximizing consumption of renewable energy
• Monitoring and reducing the carbon footprint of its value chain
• Improving the circularity of its assets
• Minimizing waste generation
• Rationalizing and reducing water consumption
• Minimizing potential negative impacts on biodiversity

Social Achievements

• Maximizing the well-being and health of occupants
• Creating community between business park users and shopping centre tenants
• Providing flexibility for tenants and asset users
• Prioritizing assets with good public transport links
• Providing shuttle services and promoting car-sharing services and the use of electric bicycles
• Promoting the installation of electric vehicle charging points
• Active communication and working together with tenants
• Promoting initiatives that foster cohesion and inclusion
• Supporting the integration of new professionals
• Promoting a stable and safe work environment
• Facilitating a work-life balance
• Maintaining fluid and horizontal communication

Governance Achievements

• Establishment of a Sustainability and Innovation Committee (CSI)

Climate Goals & Targets

Environmental Challenges

• Climate change risks
• Negative impacts on the environment

Mitigation Strategies

• Proactive management of climate change exposure
• Contribution to the decarbonisation of the economy
• Reducing the organisation's carbon footprint
• Identifying and managing risks and opportunities arising from climate change
• Improving operational efficiency
• Working with the entire value chain to minimize waste and improve circularity
• Installing water-saving devices
• Prioritizing assets in urban settings to avoid impacting ecologically critical areas

Supply Chain Management

Responsible Procurement

• Promoting the sustainability and maximum quality of products and services
• Promoting the acquisition of products and services with the best possible benefits in terms of energy efficiency

Climate-Related Risks & Opportunities