Climate Change Data

Environmental Metrics

ESG Focus Areas

• Governance
• Social Responsibility
• Environmental Responsibility
• Economic Performance

Environmental Achievements

• Reduced energy consumption by 3.1% and GHG emissions by 4.1% compared to 2015.
• Completed 363 emissions reduction projects, saving an estimated 5,782 metric tonnes of CO2 emissions.
• Achieved a 12.5% increase in total recycled waste overall, and a 36.3% increase in recycled waste in the MOB portfolio.
• UC Davis Medical Group Midtown Clinic MOB earned LEED Silver (Core and Shell) and Gold (Commercial Interiors) certifications.
• Skyridge III - Evergreen MOB earned LEED Silver (Core and Shell), and 531 Eccles Avenue Life Science Property earned LEED Certified (New Construction).

Social Achievements

• Employee satisfaction rate of 74%.
• Tenant satisfaction rate at MOBs of 84%.
• Over $521,429 in charitable donations.
• Women account for 46% of the workforce, 59% of which are in leadership positions.
• Zero reported incidents of discrimination.

Governance Achievements

• Enhanced corporate governance by electing a lead independent director and improving supplemental financial disclosures.
• Strengthened alignment of executive pay with corporate performance.
• 100% of employees completed Code of Conduct training.
• No incidents of non-compliance with regulations or voluntary codes concerning health and safety.

Climate Goals & Targets

Environmental Challenges

• Increased competition impacting leasing ability and revenues.
• Stringent reporting requirements from GRI, CDP, DJSI, and GRESB.
• Impasse in joint venture structures due to lack of sole decision-making authority.
• Regional climatic events causing higher operational costs.
• Information technology risks leading to financial loss and reputational damage.

Mitigation Strategies

• Ongoing risk assessment and management guided by best practices and regulatory standards.
• Improved credit metrics and competitive cost of capital.
• Enhanced supplemental financial disclosures.
• Disciplined capital allocation and investment underwriting processes.
• Implementation of efficient equipment and sustainability initiatives where possible.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Almost entirely local supply base for each property.

Climate-Related Risks & Opportunities

Physical Risks

• Regional climatic events

Transition Risks

• Not disclosed

Opportunities

• Energy efficient upgrades

Reporting Standards

Frameworks Used: GRI (Core)

Certifications: LEED

Third-party Assurance: Ernst & Young LLP

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• NAREIT’s 2016 Healthcare Leader in the Light Award
• Inclusion in North America and World Dow Jones Sustainability Index
• 2nd rank in Healthcare Sector by GRESB
• Leadership category by CDP
• Inclusion in FTSE4Good Index

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• GHG emissions decreased 26.7% compared to 2011 (surpassing the 2020 goal of 15% reduction from 2011 baseline)
• Waste disposal decreased 16.9% compared to 2011 (surpassing the 2020 goal)
• Energy consumption decreased 7.6% compared to 2011
• Water consumption decreased 5.7% compared to 2011
• Implemented 241 energy-saving projects with estimated energy savings of 12,401 MWh (71% increase from 2017)
• Implemented 123 HVAC projects with estimated energy savings of 3,604 MWh (65% increase from 2017)
• Saved an estimated 6,276 metric tonnes of CO2 emissions through emissions reduction projects
• Eliminated plastic water bottles in offices, saving approximately 31,000 water bottles compared to 2017
• 4,951 metric tonnes of waste diverted from landfills

Social Achievements

• Added two new female directors to the Board, one of whom is racially diverse
• Renamed the Compensation Committee to the “Compensation and Human Capital Committee,” expanding its oversight to human capital management
• Improved employee satisfaction scores for the last two years
• 40% of employees hired in 2018 were women, and 47% were ethnically or racially diverse
• Achieved a 0% lost time incident rate
• Tenant satisfaction rate of 88% (up from 87% in 2017)
• Donated nearly half a million dollars to charitable entities
• Implemented a generous paid parental and family care leave policy (effective January 2019)
• Implemented the HCP Get Fit Program (effective January 2019)

Governance Achievements

• Expanded the Board’s oversight to human capital management
• Reinforced Board refreshment by appointing Brian Cartwright as Independent Chairman and three new independent directors
• Enhanced Board diversity with the addition of two women to the Board, one of whom is racially diverse
• Strengthened balance sheet with credit rating upgrades and $2.3 billion of debt repayments
• 100% of employees completed Code of Conduct and Harassment Prevention training

Climate Goals & Targets

Environmental Challenges

• Impasse due to lack of sole decision-making authority in business and joint venture structures (limiting control to implement efficient equipment and sustainability initiatives)
• Higher operational costs due to regional climatic events and potential property damage
• Financial loss due to operational interruptions caused by information technology system failures and negative reputation from security breaches

Mitigation Strategies

• Proactive risk analysis to mitigate potential business disruptions and regulatory requirements
• Disaster preparedness in developing resilient properties
• Compliance with existing and emerging climate and energy-related ordinances
• Internal Audit Department oversees enterprise risk management and reports directly to the Audit Committee

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Almost entirely local supply base for each property
• Vendor Code of Business Conduct and Ethics

Climate-Related Risks & Opportunities

Physical Risks

• Regional Climatic Events (hurricanes, flooding, wildfires)

Transition Risks

• State and local government climate and energy-related ordinances (minimum energy performance requirements and water consumption limitations)

Opportunities

• Cost savings from energy efficient upgrades

Reporting Standards

Frameworks Used: GRI Standards (Core)

Certifications: LEED, ENERGY STAR

Third-party Assurance: Cventure LLC

UN Sustainable Development Goals

• Good Health and Well-Being
• Diversity and Gender Equality
• Sustainable Cities and Communities
• Responsible Consumption and Production
• Climate Action

HCP's business contributes to these SDGs through providing healthcare infrastructure, promoting diversity and gender equality, developing resilient buildings, implementing recycling programs, and increasing energy efficiency.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• North America Dow Jones Sustainability Index (DJSI) Member (Sixth Consecutive Year)
• Sustainability Yearbook Member (Fourth Consecutive Year)
• Leadership Band by CDP (Sixth Consecutive Year)
• Green Star Designation by GRESB (Seventh Consecutive Year)
• FTSE4Good Index Member (Seventh Consecutive Year)
• Community Partner Honoree by Alzheimer’s Orange County

Environmental Metrics

ESG Focus Areas

• Environmental Responsibility and Operational Eco-Efficiency
• Social Responsibility
• Governance Initiatives

Environmental Achievements

• Reduced GHG emissions by 1.9%, saving 6,716 metric tonnes of CO2 emissions
• Reduced energy consumption by 1.5%, saving 16,471 MWh
• Reduced water consumption by 2.6%, saving 40.2 million gallons
• Increased recycled waste by 18.4% compared to 2011 baseline
• Reduced landfill waste by 7.1% compared to 2011 baseline
• Became the first healthcare REIT in North America to adopt long-term (15-year) science-based emissions reduction targets aligned with 2ºC scenario planning

Social Achievements

• Increased racial and ethnic diversity of workforce from 40% to 42%
• Increased employee engagement and satisfaction for the 4th straight year
• Increased tenant engagement rate to 89%
• Supported over 20 community organizations, representing a 9% increase in charitable donations
• Added a new female director to the Board, resulting in four female directors (two racially or ethnically diverse)

Governance Achievements

• Appointed a new independent female director, reducing average director tenure to 6 years
• Adopted a 1-year post-vesting holding period for executive equity awards
• Eliminated tax gross-up payments for executive perquisites
• Memorialized robust crisis management response protocols with company-wide training
• Engaged with stockholders representing at least 40% of outstanding shares on ESG matters

Climate Goals & Targets

Environmental Challenges

• Regional climate events, natural disasters, and other catastrophic events could significantly disrupt business operations.
• Business and joint venture structures may limit the ability to implement sustainability initiatives.
• Changes in legislation and regulation on climate change could require increased capital expenditures.
• Environmental compliance costs could be substantial.
• Key personnel retention is a challenge due to intense competition.

Mitigation Strategies

• Proactive analysis of risks that may adversely affect business, operations, or financial condition.
• Board and committees oversee risks within respective areas of oversight.
• Management identifies material risks and implements management and mitigation strategies.

Supply Chain Management

Supplier Audits: Enhanced supply chain monitoring and screening of top 25 vendors in 2019

Responsible Procurement

• Vendor Code of Business Conduct and Ethics
• Green leases and agreements specifying regulatory compliance

Climate-Related Risks & Opportunities

Physical Risks

• Regional Climate Events, Natural Disasters

Transition Risks

• Changes in Federal, state and local legislation and regulation on climate change

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards (Core), SASB, TCFD

Certifications: ENERGY STAR, LEED

Third-party Assurance: Cventure LLC

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 5 (Gender equality)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Initiatives contribute to these goals through various programs and targets.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• NAREIT Diversity & Inclusion Recognition (Silver)
• NAREIT Investor CARE Award (Bronze)
• 2020 Women on Boards Winning Company
• 2019 Women’s Forum of New York Corporate Champion
• Ethical Boardroom’s Best Corporate Governance — North American REITs
• 100 Best Corporate Citizens (2019 & 2020)
• Investors’ Business Daily’s Top 50 ESG Companies
• Newsweek’s America’s Most Responsible Companies

Environmental Metrics

ESG Focus Areas

• Climate Change
• GHG Emissions Reduction
• Energy Savings
• Water Savings
• Waste Reduction
• Sustainable Buildings
• Diversity, Equity & Inclusion
• Talent Attraction & Retention
• Employee Training & Development
• Health, Safety & Wellness
• Tenant Engagement & Satisfaction
• Employee Engagement & Satisfaction
• Community Engagement
• Corporate & ESG Governance
• Ethics & Integrity
• Transparent Disclosure
• Investor Engagement
• Risk Management
• Responsible Supply Chain

Environmental Achievements

• Exceeded 10-year goals for reducing GHG emissions and energy usage, and increasing recycling by 15%
• Reduced annual GHG emissions by 35% over 10 years
• Reduced energy consumption by 6.7%
• Increased recycled waste by 16.9%

Social Achievements

• Launched the 'We Stand Together' initiative to enhance racial diversity, education, and awareness
• Maintained a diverse workforce (47% female, 39% racially or ethnically diverse)
• Improved employee engagement and satisfaction for the 5th straight year
• Achieved a 90% tenant satisfaction rate
• Supported over 20 community organizations with charitable contributions

Governance Achievements

• Aligned ESG disclosure with TCFD and SASB frameworks
• Codified Board oversight of ESG matters
• Maintained best-in-class governance practices (independent board, majority voting, etc.)
• Zero reported Code breaches or material cybersecurity breaches

Climate Goals & Targets

Environmental Challenges

• Rising costs of compliance with legal/regulatory requirements (e.g., reducing emissions)
• Regional climate events and natural disasters
• Enhanced environmental reporting obligations
• Increased cost to invest in new green technologies
• Potential supply chain disruptions
• Potential carbon neutrality regulatory mandates
• Significant increases in the cost of capital to shift to a carbon-neutral economy

Mitigation Strategies

• Implementing energy-savings technologies
• Utilizing renewable energy
• Implementing water-savings projects
• Constructing properties with fire-retardant and air-purifying technologies
• Working with insurance companies to mitigate financial losses
• Adopting science-based emissions reduction targets
• Implementing development policies to foster sustainable practices
• Launching an inaugural green bond
• Including sustainability-linked metrics in credit facilities

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Vendor Code of Business Conduct and Ethics

Climate-Related Risks & Opportunities

Physical Risks

• Wildfires
• Heat Stress
• Water Stress
• Earthquakes
• Floods
• Hurricanes & Typhoons
• Sea Level Rise

Transition Risks

• Rising costs of compliance
• Enhanced environmental reporting obligations
• Increased cost of green technologies
• Potential carbon neutrality mandates
• Increased cost of capital

Opportunities

• Increased tenant demand for sustainable buildings
• Opportunities in green capital markets
• Reputational benefits
• Attracting and retaining top talent
• Cost savings from energy, water, and waste reduction
• Reduced insurance premiums
• Public incentives for green technologies
• Increased portfolio value

Reporting Standards

Frameworks Used: GRI Standards (Core), TCFD, SASB

Certifications: LEED, ENERGY STAR

Third-party Assurance: Cventure LLC

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Nareit Leader in the Light (9 times)
• GRESB Green Star (9 consecutive years)
• FTSE4Good Index (9 consecutive years)
• CDP Leadership Band (8 consecutive years)
• S&P Global N. America Dow Jones Sustainability Index (8 consecutive years)
• S&P Global Sustainability Yearbook (6 consecutive years)
• 3BL’s 100 Best Corporate Citizens List (3 consecutive years)
• Women’s Forum of New York Corporate Champion (3 times)
• Bloomberg Gender-Equality Index (2019 & 2020)
• Nareit Diversity & Inclusion Recognition Award (Silver, 2019)
• Certified Great Place to Work (2020)
• Orange County Business Journal Best Place to Work (2020)
• Corporate Secretary/IR Magazine Best Proxy Statement Nominee (2020)
• Newsweek America’s Most Responsible Companies (2019 & 2020)
• 50/50 Women on Boards Gender-Balanced Board Certification (2020)
• CDP Supplier Engagement Rating A-

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity, and Inclusion
• Corporate Governance
• Employee Engagement
• Tenant Engagement
• Community Engagement

Environmental Achievements

• Reduced GHG emissions by 38.7% since 2011 (Scopes 1 & 2)
• Issued two green bonds totaling $950 million
• Established ambitious 2030 long-term goals for energy, water, and waste savings

Social Achievements

• Increased employee engagement and satisfaction for the 6th consecutive year
• Launched several initiatives to enhance racial diversity and awareness through recruiting, training, and outreach (We Stand Together initiative)
• Medical office building tenant satisfaction rate of 89%, surpassing the industry average
• Made over $350,000 in charitable contributions

Governance Achievements

• Amended Nominating and Corporate Governance Committee’s charter to formally reflect the Board of Directors’ oversight of ESG matters
• Adopted an ESG metric as part of the 2021 executive cash bonus program (15% of bonus)
• Recognized by Fortune as a top 25 innovative board among S&P 500 companies

Climate Goals & Targets

Environmental Challenges

• Anticipated rising costs of compliance with legal/regulatory requirements (e.g., carbon and energy standards)
• Physical climate risks (wildfires, heat stress, water stress)
• Transition risks (potential carbon neutrality regulatory mandates, increased costs to adapt buildings)
• Potential supply chain disruptions

Mitigation Strategies

• Conduct annual physical climate risk assessments
• Regular review of insurance coverage
• Conduct transition risk assessments
• Implement efficiency measures at properties
• Transition to a carbon neutrality economy through net zero targets
• Implement energy-saving technologies (LED lighting, energy-efficient HVAC systems)
• Utilize renewable energy
• Implement water-saving projects

Supply Chain Management

Supplier Audits: Enhanced supply chain screening of top 50 vendors

Responsible Procurement

• Vendor Code of Business Conduct and Ethics
• Green leases

Climate-Related Risks & Opportunities

Physical Risks

• Wildfires
• Heat stress
• Water stress

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Increased tenant demand for energy-efficient and sustainable buildings
• Opportunities in green capital markets

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UN SDGs

Certifications: LEED, ENERGY STAR

Third-party Assurance: Cventure LLC

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)
• Goal 11 (Sustainable Cities and Communities)
• Goal 17 (Partnerships for the Goals)

Long-term ESG goals are aligned with the UN SDGs

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• ENERGY STAR® Partner of the Year
• GRESB Green Star designation
• FTSE4Good Index
• CDP Leadership Band
• S&P Global N. America Dow Jones Sustainability Index
• Fortune Modern Board 25
• Newsweek America’s Most Responsible Companies
• The S&P Global Sustainability Yearbook
• GREAT PLACE TO WORK Certification
• 3BL 100 Best Corporate Citizens List

Environmental Metrics

ESG Focus Areas

• Climate Risk and Environment
• Social Responsibility
• Governance

Environmental Achievements

• 4.2% like-for-like reduction in GHG emissions in 2022
• 16.1% cumulative like-for-like reduction in GHG emissions since 2018
• 2.0% like-for-like reduction in energy consumption in 2022
• 2.7% cumulative like-for-like reduction in energy consumption since 2020
• 0.4% like-for-like reduction in water consumption in 2022
• 3.1% cumulative like-for-like reduction in water consumption since 2020
• 3.9% like-for-like increase in recycling in 2022
• 4.2% cumulative like-for-like increase in recycling since 2020
• 157k sq. ft. in new LEED certifications in 2022
• 45 new ENERGY STAR certifications in 2022

Social Achievements

• Annual employee engagement score remained above the Kingsley Index industry average for the fourth consecutive year
• 46% gender-diverse and 37% racially-diverse workforce
• 79% gender- or racially-diverse intern program
• Successfully implemented return to office through a hybrid work model based on employee-led recommendations
• Year-over-year support of organizations serving underrepresented communities increased from 18% of charitable giving in 2021 to 33% in 2022
• Maintained tenant satisfaction score above Kingsley Index industry average for the seventh consecutive year

Governance Achievements

• Average monthly ISS Governance Quality Score in the top 10% of all public companies surveyed
• 100% completion of annual employee Code of Conduct training
• ESG metric accounted for 15% of overall annual executive cash bonus program and was earned at the maximum level

Climate Goals & Targets

Environmental Challenges

• Wildfires, heat stress, water stress, hurricanes/typhoons, sea level rise, earthquakes, compliance with new and emerging regulations, increasing interest among tenants in building efficiency and sustainable design criteria

Mitigation Strategies

• Construct properties with fire-retardant and air-purifying technologies
• Implement energy-saving technologies
• Work with property brokers and insurance carriers to develop recommendations and ensure adequate insurance coverage
• Utilize renewable energy
• Implement water-saving projects
• Actively monitor current and emerging regulations
• Invest in energy and water efficiency programs
• Establish green design and construction criteria
• Obtain green building certifications

Supply Chain Management

Responsible Procurement

• Locally sourcing supplies where possible
• Green leases

Climate-Related Risks & Opportunities

Physical Risks

• Wildfires
• Heat stress
• Water stress
• Hurricanes/typhoons
• Sea level rise
• Earthquakes

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UN SDGs

Certifications: LEED, ENERGY STAR

Third-party Assurance: Cventure LLC

Awards & Recognition

• ENERGY STAR Partner of the Year (2023, 2022, 2017)
• GRESB Green Star
• FTSE4Good Index
• CDP Leadership Band
• S&P Global N. America Dow Jones Sustainability Index (DJSI)
• The S&P Global Sustainability Yearbook

Environmental Metrics

ESG Focus Areas

• Decarbonization & Climate Resiliency
• Sustainable Buildings & Certifications
• Natural Resource Stewardship
• Green Leasing Strategies
• Inclusion, Diversity, Equity, & Accountability (IDEA)
• Training, Culture, & Engagement
• Community Impact
• Corporate Impact Oversight & Plan Management
• Leadership & Accountability
• Disclosure & Transparency
• Ethics & Responsibility
• Responsible Supply Chain

Environmental Achievements

• 45% reduction in greenhouse gas emissions within operations since 2011
• 6.4 million sq. ft. of portfolio earned LEED certification
• 17.7 million sq. ft. achieved ENERGY STAR certification
• 36% of portfolio earned a green building certification as of December 31, 2023
• 2.1% like-for-like reduction in GHG emissions in 2023
• 2.4% like-for-like reduction in energy consumption in 2023
• 3.7% like-for-like reduction in water consumption in 2023
• 5.5% like-for-like increase in operational recycling in 2023
• 394k sq. ft. in new LEED certifications in 2023
• 72 new ENERGY STAR certifications in 2023

Social Achievements

• 48% gender-diverse and 37% racially-diverse workforce in 2023
• 50% gender- or racially-diverse intern program in 2023
• 100% new hire participation in belonging and inclusion training in 2023
• Launched a new quarterly wellness reimbursement program in 2024
• Supported MKE CRE and Project Destined programs
• Merged with Physicians Realty Trust on March 1, 2024

Governance Achievements

• Average monthly ISS Governance Quality Score of 1 in 2023 (top 10% performance)
• Independent female Board Chair appointed in 2023
• Earned AMO® designation from IREM® in 2024
• 100% Code of Conduct training completion for all active team members in 2023
• No reported violations of Code of Conduct in 2023
• Revised Diversity and Human Rights Policy in 2024
• 2024 engagement with a diverse supplier database, Supplier.io

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (implied)
• Data integration following merger with Physicians Realty Trust

Mitigation Strategies

• Developed alternative sourcing strategies (implied)
• Implementing a 10-Year Corporate Impact Plan focusing on decarbonization
• Refreshing and rebaselining environmental and social goals in 2024-2025

Supply Chain Management

Responsible Procurement

• Vendor Code of Business Conduct and Ethics
• Supplier.io database for sourcing diverse vendors

Climate-Related Risks & Opportunities

Physical Risks

• Wildfires
• Heat stress
• Water stress
• Hurricanes/Typhoons
• Sea level rise
• Earthquakes

Transition Risks

• Regulation
• Reputation

Opportunities

• Investment in energy and water efficiency programs
• Establishing green design and construction criteria

Reporting Standards

Frameworks Used: GRI, TCFD, SASB, UN SDGs

Certifications: ISO 14001:2015

Third-party Assurance: Cventure LLC

UN Sustainable Development Goals

• Goal 7
• Goal 13

Awards & Recognition

• 2024 ENERGY STAR Partner of the Year (Sustained Excellence)
• Green Lease Leader Platinum
• GRESB Green Star Rating (12 consecutive years)
• Nareit Leader in the Light (10-time award recipient)
• FTSE4Good Index (12 consecutive years)
• CDP’s Leadership Band (11 consecutive years)
• S&P Global Dow Jones Sustainability N. America Index (11 consecutive years)
• S&P Global Sustainability Yearbook (9 consecutive years)
• Newsweek’s America’s Most Responsible Companies (5 consecutive years)
• Modern Healthcare Best Places to Work (3 consecutive years)
• Fortune Best Workplaces in Real Estate™ (2 consecutive years)
• Bloomberg Gender-Equality Index (4 consecutive years)
• Best Proxy Statement (Mid Cap) and Finalist — Best ESG Reporting (Mid Cap)