Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on business, operations, and financial condition; impact on tenant ability to pay rent; reduced tenant utilization leading to lower parking revenue; lease expiry in Ontario.

Mitigation Strategies

• Rent collection of approximately 99% in 2020; participation in CECRA and CERS programs; rent deferrals; refinancing of mortgages; focus on government and credit-rated tenants; implementation of safety measures to allow for safe return to office.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters and severe weather (floods, blizzards, rising temperatures)

Transition Risks

• Changes in environmental laws and regulations

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on business, operations, financial condition, and tenant behaviors; ability to enforce leases, perform capital expenditures, increase rents, and obtain mortgage financing; reduction in parking revenue due to lower tenant utilization; vacancy in Edmonton asset; lease expiry in Ontario.

Mitigation Strategies

• High-quality tenant base (76% government and credit-rated tenants); rent collection of approximately 99%; access to cash and undrawn credit facility; participation in CECRA program; rent deferrals; refinancing of mortgages; implementation of safety measures (increased cleaning, sanitization, security, hand sanitization stations, signage); enhanced cybersecurity processes and controls.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its impact on rent collection, economic activity, property operating costs, capital raising, and distribution maintenance.

Mitigation Strategies

• Engaging with tenants to address concerns, utilizing government assistance programs (CECRA, CERS), maintaining strong cash position and undrawn credit facilities, and exploring early refinancing opportunities.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its impact on rent collection, occupancy, tenant inducements, future demand for space, market rents, and property valuations.
• Uncertainty surrounding the duration and impact of COVID-19, including potential future lockdowns and emergency measures.

Mitigation Strategies

• Engaging with tenants on return-to-office plans.
• Working with tenants on short-term rental deferrals or participation in government assistance programs (CECRA and CERS).
• Refinancing debt to take advantage of low interest rates.
• Implementing health and safety guidelines and initiatives to ensure safe return to office (increased cleaning, sanitization, signage, etc.).
• Maintaining a high-quality tenant base (predominantly government and credit-rated tenants).

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on business, operations, and financial condition of the REIT and its tenants, including rent collection, capital expenditure work, rent increases, capital raising, and mortgage financing.

Mitigation Strategies

• Maintaining strong relationships with tenants, accessing Available Funds, participating in government programs to assist tenants, and monitoring governmental actions to curtail the spread of COVID-19.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Carbon emissions
• Resource consumption
• Climate risk
• Transparency and accountability
• Social impact

Environmental Achievements

• Reduced carbon emissions, energy, and water use by 2% annually or 10% over 5 years (annually) from 2019 (baseline year) to 2023. Like for Like figures: Energy L4L - 1.5% decrease, Carbon L4L - 3.2% decrease, Water L4L - 3.4% decrease
• Increased number of buildings with ENERGY STAR scores to approximately 68% in 2023 (aiming for 100% in 2024)
• Increased whole building energy and water data to approximately 88% in 2023 (aiming for 100% in 2024)
• Increased waste data coverage to approximately 68% in 2023 (aiming for 100% in 2024)
• Achieved approximately 23.3% waste diversion rate in 2023 (targeting 85% by 2025)
• Approximately 50% of Properties have waste reduction plans based on green building certifications

Social Achievements

• Improved/created amenities at certain Properties (tenant lounge, gym, café)
• Engaged tenants on ESG through property managers running events and campaigns

Governance Achievements

• Completed climate risk assessments in 2023, including physical and transition risks
• Engaged with 100% of property managers and tenants on ESG activities (annually)
• Increased green building certification to approximately 52% in 2023 (aiming for 75% by 2025)

Climate Goals & Targets

Environmental Challenges

• Shift to hybrid working impacting business, operations, and financial condition
• Fluctuating interest rates and general economic conditions, including inflation
• Lease renewals and rental increases
• Ability to re-lease and secure new tenants for vacant space
• Moderated leasing assumptions and increased capitalization rates in the Alberta portfolio

Mitigation Strategies

• Maintaining high levels of occupancy
• Maintaining high tenant concentration of government and credit-rated tenants
• Executing an effective leasing strategy
• Leveraging strong relationships with lenders to renew maturing debt
• Evaluating and pursuing dispositions of certain non-core assets
• Staggering the maturity dates of its mortgage portfolio
• Utilizing various financing sources (cash flow, mortgage debt, credit facility, debt and equity issuances)

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Universal Standards (2021), GRESB, ISSB IFRS Sustainability Standards S1 and S2, UN SDGs

UN Sustainable Development Goals

• Good health and well-being
• Quality education
• Gender equality
• Decent work and economic growth
• Industry, innovation and infrastructure
• Sustainable cities and communities
• Climate action
• Partnerships for the goals

Environmental Metrics

ESG Focus Areas

• Carbon emissions
• Resource consumption
• Climate risk
• Transparency and accountability
• Social impact

Environmental Achievements

• Reduced carbon emissions, energy, and water use by 2% annually or 10% over 5 years
• 2019 (baseline year) - 2023 Like for Like ("L4L") figures: ◦ Energy L4L - 1.5% decrease ◦ Carbon L4L - 3.2% decrease ◦ Water L4L - 3.4% decrease
• Increase number of buildings with ENERGY STAR scores to 100% in 2024 - approximately 68% in 2023
• Increase whole building energy and water data to 100% by 2024 - approximately 88% in 2023
• Increase waste data coverage to 100% in 2024 - approximately 68% in 2023
• Target to achieve 85% waste diversion by 2025 - approximately 23.3% diversion rate achieved in 2023
• Approximately 50% of the Properties have waste reduction plans based on green building certifications including BOMA Best, LEED®, and FITWEL®
• Completed climate risk assessments in 2023

Social Achievements

• Improve/create amenities at certain Properties (i.e, tenant lounge, gym, café)
• Engage tenants on ESG through the REIT’s property managers running events and campaigns that relate to supporting the environment and/or health and wellness of tenants

Governance Achievements

• GRESB 3-star rating (80 points)
• Engage with 100% of property managers and tenants on ESG activities (annually)
• Increase green building certification to 75% by 2025 - approximately 52% in 2023

Climate Goals & Targets

Environmental Challenges

• Challenging local market conditions in Alberta
• Shift to hybrid working models and elevated interest rates impacting valuation of investment properties

Mitigation Strategies

• Focus on leasing to government and credit-rated tenants
• Strong relationships with brokers
• Focus on ensuring new leases provide adequate consideration for tenants to develop their leased space
• Investing in capital expenditures geared towards tenant amenities and common spaces

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Universal Standards (2021), GRESB, ISSB IFRS Sustainability Standards S1 and S2, UN SDGs

Certifications: ENERGY STAR, BOMA Best, LEED®, FITWEL®

UN Sustainable Development Goals

• Good health and well-being
• Quality education
• Gender equality
• Decent work and economic growth
• Industry, innovation and infrastructure
• Sustainable cities and communities
• Climate action
• Partnerships for the goals

REIT's ESG strategy contributes to these UN SDGs