Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced energy consumption by 2.2% in 2019 from 2018 and 10% from 2016 baseline; reduced greenhouse gas emissions by 2.4% in 2019 from 2018 and 10% from 2016 baseline; 71 buildings (47% of total square feet) utilizing real-time electricity monitoring, yielding a 20% average reduction in electricity use; LED lighting upgrades at 90% of properties, reducing lighting energy use by 75%; expanded water efficiency benchmarking in ENERGY STAR® Portfolio Manager®; 808 lightbulbs recycled in Washington state properties; 111.5 trees saved by corporate office paper recycling; 416 cubic yards of waste composted in Washington state properties; four buildings (569,000 square feet) with LEED certification

Social Achievements

• Tenant satisfaction levels above industry averages in 88% of rated areas; 79% of tenants value sustainability, 75% satisfied with sustainability efforts; implemented Engineering Impact Award program; provided employee discounts to YMCA; hosted lunch-and-learn sessions on diet and exercise and weekly yoga classes; formed a Social Committee for employee activities; partnered with Baptist Memorial Health Care to redesign a medical office building, including native plants in landscaping and preserving a tree buffer; participated in March of Dimes/March for Babies fundraiser with $5,000 donation and $4,000 employee pledges; initiated a toy donation drive through Youth Encouragement Services, helping 160 families; hosted tenant events with blood drives and school supply donations

Governance Achievements

• Formed a Sustainability Working Group and a Sustainability Committee; developed and launched company-wide sustainability principles and policies; adopted an amendment to bylaws to implement “proxy access” and opted out of the “Maryland Unsolicited Takeover Act”; refreshed the board, reducing tenure and enhancing diversity, adding six new members between 2015 and 2019

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: LEED

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Social Responsibility
• Governance

Environmental Achievements

• Reduced energy consumption by 9.5% and greenhouse gas emissions by 8.1% in 2020 compared to a 2016 baseline.
• Increased LED lighting by 652,000 square feet in 2020 (19% increase).
• Actively utilizing building automation to reduce energy consumption in 89% of portfolio square footage.
• Owned five LEED certified properties totaling 689,000 square feet as of 12/31/20.
• Invested $12 million in efficiency projects (HVAC, roofing, lighting, etc.).
• Implemented solar energy projects at six properties with a total capacity of 3.3 megawatts.

Social Achievements

• Achieved 3-year average employee voluntary turnover of 10.7% (below 11% goal) and officer turnover of 2.9% (below 5% goal).
• All full-time employees paid more than $15 per hour in 2020.
• Launched a Charitable Giving program with employee volunteer time-off and donation matching.
• Employees donated over $100,000 to communities in 2020.
• Conducted employee engagement surveys with a 90% response rate.
• Formed a new wellness committee and implemented various wellness initiatives.

Governance Achievements

• Achieved goal of at least one-third of Board of Directors comprised of females and/or minorities by May 2021.
• Created two new positions to lead ESG initiatives in 2020.
• Adopted a new Vendor and Supplier Code of Conduct.
• Updated 2021 executive officer incentive program to include ESG performance.
• Participated in first GRESB assessment in 2020.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacted 2020 data due to reduced building utilization.

Mitigation Strategies

• Implemented remote work policies, provided PPE, offered rent deferrals to tenants ($7 million), and provided compensation bonuses for front-line teams.

Supply Chain Management

Responsible Procurement

• Vendor & Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

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

Opportunities

• Renewable energy projects

Reporting Standards

Frameworks Used: GRESB, SASB, UN SDGs

Certifications: LEED, ENERGY STAR®

Awards & Recognition

• Inclusion in State Street Global Advisors Gender Diversity Index

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Climate Goals & Targets

Environmental Challenges

• Climate risk (physical and transitional risks)

Mitigation Strategies

• Climate risk assessments, energy and water retrofits, proactive addressing of climate-related ordinances, incident response plans, relationships with climate resilience assessment providers, Climate Resilience Guides

Supply Chain Management

Responsible Procurement

• Criteria when hiring suppliers and procuring materials
• Purchasing recycled content or zero waste materials
• Using sustainability-certified materials (FSC, Rainforest Alliance, Cradle to Cradle, Floorscore, Green Seal, Greenguard)
• Purchasing local materials

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Costs of transitioning to a low-carbon economy, fines for non-compliance with building performance legislation

Reporting Standards

Frameworks Used: UN Global Compact

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Increased total number of green building certifications
• Expanded physical climate risk assessments
• Achieved a 29% improvement in GRESB score (from a blended 2022 score of 42 and 80 to 75 in 2023)
• Increased utility data coverage to 69% in 2023

Social Achievements

• Reinforced corporate culture post-merger, strengthening employee engagement
• Maintained competitive employee benefits packages post-merger
• Increased charitable giving by 25% in 2022

Governance Achievements

• Enhanced the diversity of the Board of Directors (increased women/racially diverse representation to 38%)
• Completed the first-ever materiality assessment
• Executive officer incentive compensation includes ESG performance component

Climate Goals & Targets

Environmental Challenges

• Integrating data collection systems across the expanded portfolio post-merger
• Increased employee turnover (16.9%) due to the merger

Mitigation Strategies

• Consolidating best practices from both legacy companies
• Adopting a unified set of systems and processes
• Increased communication and engagement with employees post-merger
• Restructuring the engineering department to provide increased support

Supply Chain Management

Responsible Procurement

• Purchase consumable materials with recycled content
• Recycle building materials
• Purchase building materials composed of recycled content for construction projects

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Wind
• Earthquakes
• Named storms
• Wildfires
• Water stress
• Extreme heat
• Extreme cold

Transition Risks

• Cost of transitioning to a low-carbon economy
• Changes in environmental regulations and public policy

Opportunities

• Cost savings from reduced utility consumption and renewable energy
• Tenant and investor demand for green-certified buildings
• Access to green financing

Reporting Standards

Frameworks Used: GRESB, TCFD, SASB

Certifications: ENERGY STAR, LEED, IREM® CSP®

Third-party Assurance: RE Tech Advisors

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Increased whole-building utility data to 71% of the combined portfolio (goal of 90% by year-end 2024)
• Earned GRESB’s 3-star rating in 2023, with a score of 75, ranking second in a group of ten peer companies and receiving an “A” rating on GRESB’s Public Disclosure scorecard.
• Energy consumption, GHG emissions, and water consumption decreased compared to 2022.

Social Achievements

• Launched new employee engagement initiatives, including a quarterly employee recognition program called the Values in Action Awards.
• All full-time employees were paid $19 per hour or more in 2023.
• Engineering personnel participated in over 200 hours of training in 2023.

Governance Achievements

• Women and racially diverse representation on the board of directors increased from 38% at year-end 2023 to 42% in June 2024.
• 100% employee participation in annual review of Code of Business Conduct.
• 100% company participation in semiannual cybersecurity training.
• Maintained Institutional Shareholder Services (ISS) Prime status.

Climate Goals & Targets

Environmental Challenges

• Integrating Healthcare Realty’s utility data collection discipline across the legacy HTA properties and improving data integrity.

Mitigation Strategies

• Robust progress toward embedding ESG practices portfolio-wide and improving scores on key industry benchmarks.

Supply Chain Management

Responsible Procurement

• Purchase of consumable materials with recycled content
• Utilization of e-waste services
• Reuse or donation of furniture and construction materials

Climate-Related Risks & Opportunities

Physical Risks

• Flood
• Wind
• Earthquakes
• Named storms
• Wildfire
• Water Stress
• Extreme Heat
• Extreme Cold

Transition Risks

• Cost of transitioning to a low-carbon economy
• Changes in environmental regulations and public policy
• State and local benchmarking and building performance standards

Opportunities

• Cost savings from reduced utility consumption and renewable energy
• Tenant and investor demand for green-certified buildings
• Access to green financing
• Savings on insurance premiums

Reporting Standards

Frameworks Used: GRESB, UN SDGs, TCFD, SASB

Certifications: LEED, ENERGY STAR, IREM CSP

Third-party Assurance: Third-party assurance provider (unnamed)