NNN REIT, Inc.

Climate Impact & Sustainability Data (2021, 2023, 2024)

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:296,088 metric tons CO2e (Scope 3, estimated)

Scope 1 Emissions:n/a

Scope 2 Emissions:12.1 metric tons CO2e (location-based)

Scope 3 Emissions:296,088 metric tons CO2e (estimated)

Total Energy Consumption:115.1 GJ (corporate HQ only)

Carbon Intensity:8.8 kg CO2e/sf (Scope 3, estimated)

ESG Focus Areas

Governance
Human Capital
Community Service
Environmental Practices

Environmental Achievements

NNN’s Orlando, Fla. headquarters is EPA Energy Star certified, which means that it uses 35% less energy and generates 35% fewer greenhouse gas emissions.

Social Achievements

92% employee retention rate in 2021
Selection to the 2021 Bloomberg Gender Equality Index
Donated more than $150K in financial contributions to nonprofit organizations in Central Florida in 2021

Governance Achievements

Established an internal ESG team and our board’s Governance and Nominating Committee has assumed the responsibility to oversee our ESG efforts.
Conducted a materiality assessment and published inaugural sustainability report

Climate Goals & Targets

Long-term Goals:

Reducing energy and emissions footprint
Water stewardship

Environmental Challenges

Lack of direct operational control over tenants' environmental impact
Estimating environmental data due to limited data from tenants

Mitigation Strategies

Collaborating with tenants to improve data coverage and identify mutual sustainability goals
Requiring tenants to comply with environmental laws and regulations
Obtaining environmental assessments for all acquired properties

Supply Chain Management

Responsible Procurement

Vendor Code of Conduct (adopted in 2021)

Climate-Related Risks & Opportunities

Reporting Standards

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

Certifications: EPA Energy Star (HQ)

UN Sustainable Development Goals

SDG 8
SDG 11
SDG 12
SDG 10
SDG 5
SDG 7
SDG 17

Alignment of material topics with UN SDGs.

Awards & Recognition

Cigna Well-Being Award (5 consecutive years)
2021 Bloomberg Gender Equality Index

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:9,846.5 metric tons CO2e (Scope 1+2); 344,219.63 metric tons CO2e (Scope 3)

Scope 1 Emissions:2,704.3 metric tons CO2e

Scope 2 Emissions:7,142.2 metric tons CO2e

Scope 3 Emissions:344,219.63 metric tons CO2e

Renewable Energy Share:10.76% (from natural gas)

Total Energy Consumption:143,948.27 GJ

Carbon Intensity:0.044380755 metric ton CO2e/sqft

ESG Focus Areas

Environmental Stewardship
Human Capital Development
Community Engagement
Corporate Governance

Environmental Achievements

NNN’s headquarters is Energy Star® certified, using 35% less energy and generating 35% fewer greenhouse gas emissions.
Added sustainability clauses to form lease to achieve Green Lease Leader Silver recognition.
Purchased carbon offsets to offset estimated Scope 1 and 2 emissions from headquarters and vacant properties.

Social Achievements

Increased workforce diversity by 100% since 2017.
Selected for inclusion in the 2023 Bloomberg Gender Equality Index.
Donated more than $150K to nonprofit organizations in Central Florida in 2023.
92% employee retention rate in 2023.

Governance Achievements

Board of Directors comprised of seven independent directors and two internal directors.
Implemented proxy access bylaws and a mandatory Board retirement policy.
Annually reviews policies to effectively manage risks, including climate change related regulations.

Climate Goals & Targets

Medium-term Goals:

Further integrate ESG considerations into property investment analysis and operational strategy.

Short-term Goals:

Continue to expand sustainability data collection and reporting.

Environmental Challenges

Limited direct operational control over tenants' environmental impact.
Data collection limitations for energy and emissions from properties outside of corporate HQ and vacant properties.

Mitigation Strategies

Engaging with tenants to promote environmental best practices and data sharing.
Implementing a new sustainability data management and reporting system.
Adding sustainability clauses to form lease agreements.

Supply Chain Management

Responsible Procurement

Vendor Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

Natural disasters impacting properties

Transition Risks

Climate change regulations

Reporting Standards

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

Certifications: Energy Star®

UN Sustainable Development Goals

SDG 5
SDG 7
SDG 8
SDG 10
SDG 11
SDG 12
SDG 17

NNN's initiatives align with these SDGs through various programs and partnerships.

Awards & Recognition

Green Lease Leader Silver

Reporting Period: 2024

Environmental Metrics

Waste Generated:20,800 pounds/year

ESG Focus Areas

Environmental Responsibility
Social Responsibility
Governance Practices

Environmental Achievements

NNN headquarters achieved ENERGY STAR certification, using 35% less energy and generating 35% fewer greenhouse gas emissions than typical buildings.
20,800 pounds of shredded materials diverted from landfills (equivalent to saving roughly 200 trees).

Social Achievements

Inclusion in the 2023 Bloomberg Gender-Equality Index.
Named among the 79 companies in Central Florida on the “2023 Best Places to Work” list by the Orlando Business Journal.
Long associate tenure; 46% of associates have been with the company for 10 years or longer.

Governance Achievements

Nine-member Board of Directors with seven independent directors.
Annual review of policies to effectively manage risks.
Regular meetings between the Board and executive leadership team.

Climate Goals & Targets

Environmental Challenges

Environmental risks and liabilities associated with properties.
Managing environmental conditions on properties to ensure tenant compliance.

Mitigation Strategies

Obtaining environmental assessments from licensed environmental consultants before property acquisition.
Maintaining a portfolio environmental insurance policy.
Engaging with tenants to promote environmental best practices.
Requiring tenants to carry full replacement cost coverage on improvements and flood/earthquake insurance where applicable.