Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Continued to ensure that all sites are visited at least annually by our asset managers, and any environmental issues identified are reported to the chief executive immediately and recorded in the managers’ quarterly management report and appropriate actions are taken; all new leases require occupiers to observe relevant environmental regulations; all our property maintenance suppliers have SafeContractor accreditation; asset managers recognise the requirement for, and actively encourage, sustainable working practices to minimise environmental impacts both in respect of their own business activities and when managing clients’ properties; asset managers are committed to operating to an environmental policy and management system that satisfies the requirements of BS EN ISO 14001: 2004 accreditation and as part of which they measure and set targets for improvement; steps are taken to reduce the weighted average of the EPCs on the 19 of our 22 properties where we have certificates. In the year, this has improved from 69 to 64, which is a C rating, which is above the national average; adopted a paperless strategy with our shareholders, which has reduced our paper mailings to shareholders by 75% in the last two years; and made recommendations to the landlord of our serviced office for energy savings that could be made.

Social Achievements

• Made charitable donations totalling £11,000 to support the sick, terminally ill and disadvantaged.
• Maintained a policy of ensuring that, during its review of board composition and during any recruitment process, all aspects of diversity are considered.

Governance Achievements

• Introduced a board portal to enhance governance systems and procedures.
• Reviewed compliance with the UK Corporate Governance Code and evolving best practice at least annually.
• Carried out an annual evaluation of the board and its committees.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic significantly affected the property market, impacting tenant ability to pay rent and causing a shortfall of 6% on rent collections.
• Two tenants went into CVA and one into administration.
• Property valuations fell, although less than the market average.
• Uncertainty regarding the extent and duration of lockdown and social distancing measures.
• Reduced demand for high street retail and retail warehouse assets due to increased online shopping.

Mitigation Strategies

• Worked with tenants to agree rent concessions or payment plans.
• Maintained high rent collection rates (94% for 2020).
• Took advantage of HMRC concessions regarding PID payments.
• Conserved cash and drew an additional £1m from Handelsbanken plc.
• Did not pursue acquisitions or disposals in 2020.
• Implemented protocols for remote working.
• Reduced exposure to high street retail over past few years.
• Closely monitored retail warehouse properties.
• Took steps to ensure bank covenants were complied with.

Supply Chain Management

Supplier Audits: All property maintenance suppliers have SafeContractor accreditation.

Responsible Procurement

• SafeContractor accreditation for suppliers
• Asset manager’s purchasing policy followed

Climate-Related Risks & Opportunities

Physical Risks

• Increasing temperatures
• Flooding

Transition Risks

• Stricter legislation (e.g., MEES)
• Market demand for higher efficiency buildings

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001:2004 (asset managers)

Environmental Metrics

ESG Focus Areas

• Energy Consumption
• Greenhouse Gas Emissions
• Charitable Donations
• Sustainability

Environmental Achievements

• Upgraded LED lighting and encouraged energy savings by reducing car parking spaces and providing cycle racks at Cardiff property.
• Addressed EPC ratings of the portfolio, focusing on properties below Minimum Energy Efficiency Standards.

Social Achievements

• Made charitable donations of £12,000.

Governance Achievements

• Complied with the independence provisions in the controlling shareholder agreement.

Climate Goals & Targets

Environmental Challenges

• Difficulty in measuring and attributing indirect Scope 3 emissions.
• Significant improvement and dilapidation works at Cardiff property impacting energy consumption.

Mitigation Strategies

• Investigating best means of measuring and attributing indirect Scope 3 emissions.
• Works at Cardiff property completed.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Greenhouse gas emissions
• Governance
• Charitable donations

Environmental Achievements

• Began reviewing EPC ratings of all properties to improve ratings

Social Achievements

• Made charitable donations of £12,000

Governance Achievements

• Complied with the QCA Code
• Implemented measures to ensure independent non-executive director elections are approved by independent shareholders

Climate Goals & Targets

Environmental Challenges

• Difficulty in measuring and attributing indirect Scope 3 emissions due to reliance on serviced office and involvement with suppliers and tenants

Mitigation Strategies

• Investigation into best means of measuring and attributing indirect Scope 3 emissions

Supply Chain Management

Climate-Related Risks & Opportunities