Climate Change Data

Environmental Metrics

ESG Focus Areas

• Governance
• Social
• Environmental

Environmental Achievements

• Earned ENERGY STAR certification for San Diego headquarters
• Launched green retrofit program with clients for energy efficiency upgrades (LED lighting, HVAC)
• Issued inaugural Green Bond (£750M) for green building acquisitions and projects
• More than tripled the floor area of green-certified buildings (LEED and BREEAM) in portfolio from 2020 to 2021
• Added over 3.2 million square feet of EPC A- and B-rated buildings to portfolio

Social Achievements

• Launched client engagement program to understand sustainability goals and opportunities
• Expanded DE&I training for all employees
• Added female and underrepresented community members to Board of Directors and executive team (as of Dec 31, 2021, 67% of Board and 80% of executive team were diverse)
• Launched partnership with Cristo Rey San Diego High School for internships
• Maintained 99% employee participation in engagement surveys (2019 and 2020)

Governance Achievements

• Continued to grow Sustainability Department
• Expanded ESG disclosures through responses to various third-party reporting frameworks (TCFD)
• Earned a Green Star from GRESB
• Developed a Green Financing Framework

Climate Goals & Targets

Environmental Challenges

• Limited environmental data due to primarily triple-net lease structure
• Difficulty aggregating and reporting on portfolio-wide environmental data due to client responsibility for sustainable practices
• Data quality challenges in developing a Scope 3 inventory and associated target
• Lack of legal access to activity data for Scope 3 emissions calculation

Mitigation Strategies

• Launched property characteristics initiative to gauge environmental footprint of leased portfolio
• Engaging with clients and utility providers to collect more data
• Integrating green lease clauses to access utility and performance data
• Estimating energy consumption and emissions based on industry factors where data unavailable, aiming to reduce estimations over time

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• OFAC sanctions lists and anti-money-laundering screening
• Green procurement pilot programs for LED retrofits, EV charging stations, and renewable energy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (hurricanes, floods, fires)
• Rising mean temperatures
• Rising sea levels

Transition Risks

• Changes in regulations (resource efficiency, energy sources)
• Costs to transition to lower emissions technology
• Changes in consumer behavior

Opportunities

• Partnering with clients to scale greenhouse gas emissions reduction efforts
• Developing a menu of options for green retrofit program
• Developing and expanding new, lower emissions offerings to clients

Reporting Standards

Frameworks Used: GRI Standards, TCFD, UN Sustainable Development Goals (SDGs)

Certifications: ENERGY STAR, LEED, BREEAM, EU Energy Performance Certificates (EPCs)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 1
• SDG 2
• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 8
• SDG 13
• SDG 16
• SDG 17

Various initiatives contribute to these goals, as detailed throughout the report

Sustainable Products & Innovation

• LED lighting
• Efficient HVAC systems
• Solar
• EV charging

Awards & Recognition

• Green Star from GRESB
• Community Economic Development Awards from the Texas Economic Development Council

Environmental Metrics

ESG Focus Areas

• Governance
• Social
• Environmental

Environmental Achievements

• Reduced irrigation water use by approximately 42% compared to 2018 at San Diego headquarters.
• Recycled 3,125 pounds of electronic material at Phoenix and San Diego locations.
• 2021 year-end LED retrofit reduced 2022 lighting electricity usage by approximately 50% at San Diego headquarters.

Social Achievements

• Increased the number of employees who identify as female or from historically underrepresented communities.
• Launched a new employee intranet site, "The O Zone", to promote transparency and facilitate resource sharing.
• Continued partnership with Cristo Rey San Diego High School for Education to Employment Program.

Governance Achievements

• Established a Global Sustainability Committee and an SEC ESG Task Force.
• Reported zero known incidents of corruption, bribery, or unethical behavior.
• Achieved a 96% employee response rate in the 2022 employee engagement survey.

Climate Goals & Targets

Environmental Challenges

• Limited access to environmental data for the full portfolio due to the triple-net lease structure.
• Delays in installing onsite renewable energy at San Diego headquarters due to engineering and utility challenges.
• Difficulty in aggregating client utility data for the operations of our real estate.

Mitigation Strategies

• Partnering closely with clients to collect data and set shared sustainability goals.
• Purchasing Green-e® certified renewable energy certificates and carbon removal credits to offset 100% of corporate electricity usage for 2021 and 2022.
• Developing data share agreements and green lease provisions to improve access to client data.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct
• OFAC screening

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (hurricanes, floods, fires)
• Rising sea levels
• Rising mean temperatures

Transition Risks

• Changes in regulations (resource efficiency, energy sources)
• Costs to transition to lower emissions technology
• Changes in consumer behavior

Opportunities

• Partnering with clients to scale emissions reduction efforts
• Developing and expanding lower emissions offerings to clients
• Improving climate resilience of assets

Reporting Standards

Frameworks Used: GRI Standards, TCFD, UN SDGs

Certifications: Green-e®

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 7
• SDG 8
• SDG 10
• SDG 11
• SDG 12
• SDG 13
• SDG 17

Initiatives contribute to these goals through various programs and activities detailed in the report.

Sustainable Products & Innovation

• LED lighting
• Efficient HVAC systems
• Solar
• EV charging

Awards & Recognition

• Green Star designation for GRESB Real Estate Assessment

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Installed solar power at San Diego headquarters
• Supported green upgrades at client properties (solar installations, LED lighting, HVAC replacements, EV charging infrastructure)
• Invested in green-certified buildings and sustainable farming

Social Achievements

• Created an Inclusion and Belonging Committee
• Expanded partnerships with community organizations
• Launched leadership development programs

Governance Achievements

• Enhanced ESG and climate governance structure
• Board members completed ESG regulatory training
• Increased Board engagement in cybersecurity issues

Climate Goals & Targets

Environmental Challenges

• Data reporting challenges due to net lease structure
• Difficulty in unilaterally making sustainability upgrades without client cooperation
• Uncertainty and inconsistency related to ESG regulations

Mitigation Strategies

• Implemented new sustainability data management and reporting platforms
• Partnered with third-party experts for GHG accounting and reporting
• Enhanced green leasing practices and Energy Data Cooperation Agreements (EDCAs)

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Wildfire risk
• Flood risk
• High-wind weather events

Transition Risks

• Energy efficiency standards
• ESG regulations
• Carbon pricing
• Changing client expectations

Opportunities

• Expansion of green infrastructure
• Green leasing options

Reporting Standards

Frameworks Used: GRI Universal Standards, TCFD, SASB

Awards & Recognition

• 2024 Green Lease Leader