Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• People
• Stakeholders

Environmental Achievements

• Reduced carbon footprint by 68% on an absolute basis (Scope 1, 2, 3) and 29% like-for-like.
• Reduced energy consumption by 65% on an absolute basis.
• Achieved 100% of assets rated ‘E’ or above for MEES purposes.
• Achieved BREEAM Very Good certification on completed developments.
• Installed 1.8 MW of solar PV capacity across assets.
• Increased percentage of landlord-controlled energy supply from low carbon sources to 85%.

Social Achievements

• Low annual voluntary staff turnover rate averaging 5% since merger.
• Published a diversity and inclusion policy.
• Increased female board representation to 20%.
• Undertook c. 800 hours of employee training.
• Completed office refurbishment with health and wellbeing features, resulting in improved employee satisfaction.

Governance Achievements

• Maintained Green Star status in GRESB assessment.
• Maintained EPRA sBPR Gold Award.
• Included in FTSE4Good Index for the first time.
• Improved ISS ESG benchmark score above peer group average.
• Finance Director's remuneration linked to Responsible Business objectives.

Climate Goals & Targets

Environmental Challenges

• Deterioration of asset quality and environmental standards leading to higher voids.
• Unsuccessful mitigation of climate change risks reducing investor appeal.
• Failure to meet investor expectations for environmentally efficient assets.
• Weak supply chain management leading to business interruption.
• Reliance on a few employees and insufficient diversity reducing competitive advantage.
• Poor stakeholder relations impacting reputation.

Mitigation Strategies

• Shifting portfolio to less operationally intensive, single-let, higher-quality assets.
• Undertaking enhanced review of material assets with environmental due diligence advisor.
• Implementing robust processes to ensure contractor adherence to high standards.
• Introducing initiatives to provide more flexible working, improve diversity, and general wellbeing.
• Engaging regularly with occupiers through events, meetings, and surveys.
• Developing and implementing a Communities Policy and a Charity and Communities Working Group.

Supply Chain Management

Supplier Audits: 20% of suppliers reviewed annually

Responsible Procurement

• Responsible Procurement Policy outlining standards on labour, human rights, health and safety, resource, pollution risk and community.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Risks from transitioning to a low carbon economy

Opportunities

• Improving asset efficiency and resilience

Reporting Standards

Frameworks Used: GRESB, EPRA sBPR, TCFD (initial considerations)

Certifications: BREEAM Very Good

Third-party Assurance: JLL (external advisor, not fully independent assurance)

UN Sustainable Development Goals

• Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• GRESB Green Star
• EPRA sBPR Gold Award
• FTSE4Good Index inclusion

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced energy consumption by 34% and GHG emissions by 82% (absolute) in 2020. Like-for-like consumption fell by 0.2%.
• Increased percentage of managed energy consumption from renewable sources to 96%.
• Increased proportion of supply covered by smart meters from 69% to 75%.
• Installed 1.0 MW of solar PV capacity (net reduction after sale of a warehouse).

Social Achievements

• Maintained low annual voluntary staff turnover rate (average 6% since merger).
• Increased female Board representation to 25%.
• High employee satisfaction scores (100% of respondents enjoyed working at LondonMetric, felt proud, and would recommend it).
• Created a COVID-19 Communities fund (£127,000) to support local causes.

Governance Achievements

• Maintained Green Star status in GRESB assessment (71% score).
• Maintained EPRA sBPR Gold Award.
• Included in FTSE4Good Index for the second year running.
• Executive Directors' remuneration partly linked to achieving ESG-related targets.

Climate Goals & Targets

Environmental Challenges

• Limited ability to further reduce energy consumption due to only a small proportion of the portfolio having landlord-controlled energy supply.
• Acquisition of Mucklow added less efficient assets, impacting EPC ratings.
• Unknown EPCs on 21% of assets requiring reviews.
• Increased climate change risks requiring enhanced environmental risk and resilience assessment.

Mitigation Strategies

• Undertaking energy audits, LED upgrades, and grid capacity reviews.
• Engaging with occupiers to support their carbon footprint reduction.
• Undertaking a full review of flood risks across the portfolio.
• Improving and climate-change adapting assets through maintenance and energy efficiency upgrades.

Supply Chain Management

Responsible Procurement

• Responsible Procurement Policy (focus on labor, human rights, health and safety, resource, pollution risk, and community).

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Extreme weather

Transition Risks

• MEES legislative changes
• Emissions pricing
• Costs from adopting lower emission technology
• Regulation of products
• Changes in consumer behavior

Opportunities

• Energy efficiency upgrades
• Renewable energy installations
• Sustainable building design

Reporting Standards

Frameworks Used: GRESB, EPRA sBPR, FTSE4Good, TCFD

Third-party Assurance: JLL (limited assurance)

Awards & Recognition

• GRESB Green Star
• EPRA sBPR Gold Award
• WELL Gold award (one office)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Sustainability
• Social Responsibility
• Governance

Environmental Achievements

• Material improvement in portfolio’s EPC rating
• 100% of main developments BREEAM Very Good/Excellent
• Significant reduction in embodied carbon seen on developments
• 92% reduction in absolute energy consumption since 2015
• 100% of landlord supplies from renewable sources
• 27% reduction in carbon at Bedford Link through on-site reduction measures and material specification amendments

Social Achievements

• Strong occupier feedback from survey (8.5/10 recommendation score)
• Continued high staff satisfaction levels from employee survey
• Continued charitable and local community focus (£66,766 donated)
• Low annual voluntary staff turnover rate (average 6% since merger)

Governance Achievements

• Full TCFD compliance and climate risk governance gap analysis undertaken
• 100% compliance by contractors with our contractor development checklist
• Health and safety audits undertaken on projects
• Annual contractor compliance audit
• Executive Directors and relevant employees have individual ESG targets linked to remuneration

Climate Goals & Targets

Environmental Challenges

• Limited ability to further reduce energy consumption due to small proportion of portfolio with landlord-controlled energy supply
• Potential rise in price of carbon credits
• Occupier/market demand changes
• Increased building standards/regulation
• Financial market impacts
• Increased energy demand/costs
• Supply chain & resource disruptions
• Insurance challenges
• Flooding (coastal, fluvial)
• Heavy rainfall & pluvial flooding
• Heat stress
• Extreme weather events

Mitigation Strategies

• Carbon offset strategy formalised
• Climate risk assessment undertaken
• Asset improvement embedded in business case for lower energy efficiency assets
• Implementing Net Zero Carbon strategy (operational NZC by 2023, development by 2030, tenant emissions by 2035)
• Collaborating with occupiers to assist them in mitigating their own exposure to climate-risks
• Proactive EPC reviews across portfolio
• Engaging with occupiers around their operational behaviour, energy efficiency and data sharing
• Shadow carbon pricing on select flagship developments

Supply Chain Management

Supplier Audits: Annual contractor compliance audit; review of Mildren Construction focusing on supply chain standards

Responsible Procurement

• Responsible Development Requirements checklist for contractors
• Responsible Procurement Policy

Climate-Related Risks & Opportunities

Physical Risks

• Flooding (coastal, fluvial)
• Heavy rainfall & pluvial flooding
• Heat stress
• Extreme weather events

Transition Risks

• Occupier/market demand changes
• Increased building standards/regulation
• Financial market impacts
• Increased energy demand/costs
• Supply chain & resource disruptions
• Insurance challenges

Opportunities

• Securing premium tenants
• Enhancing LondonMetric’s reputation
• Increasing asset values by investing in renewable energy and improving energy efficiency

Reporting Standards

Frameworks Used: TCFD, EPRA sBRP, GRESB

Certifications: BREEAM

Third-party Assurance: JLL (external evaluation, not fully independent assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• EPRA sBPR Gold Award
• GRESB Green Star

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Renewable Energy
• Occupier Engagement
• Community Investment
• Employee Wellbeing
• Corporate Governance

Environmental Achievements

• 92% reduction in absolute energy consumption since 2015
• 3% like-for-like reduction in energy consumption over the last year
• 90% of portfolio EPC rated 'A'-'C'
• 97% of developments BREEAM Very Good across 0.7 million sq ft
• 77% of landlord electricity supplies from renewable sources
• 125 kWp Solar PV installed in the year

Social Achievements

• 8.7/10 landlord recommendation score from occupier survey
• 99.1% portfolio occupancy
• 94% of employees are proud to work for LondonMetric
• 6% staff turnover since merger in 2013
• £104,000 charitable giving in the year

Governance Achievements

• Executive Directors and relevant employees have individual ESG targets linked to remuneration
• Regular ESG training for property team
• Maintained Green Star status in GRESB survey
• Continued inclusion in the FTSE4Good Index
• Achieved an 'A' rating above sector average in an unnamed assessment

Climate Goals & Targets

Environmental Challenges

• Limited ability to further reduce energy consumption due to small proportion of portfolio with landlord-controlled energy supply
• Occupier energy consumption (Scope 3 emissions) accounting for more than 40% of total emissions
• Potential for increased building standards/regulation leading to significant capex costs
• Climate-related risks (transition and physical) impacting business, strategy, and financial planning
• Flood risk for a small percentage of assets

Mitigation Strategies

• Implementing carbon offset strategy
• Increased occupier energy data collection (68% coverage)
• Proactive EPC reviews and MEES reviews
• Net Zero Carbon strategy (operational by 2023, development by 2030, tenant emissions by 2035)
• Climate risk assessment and scenario analysis
• Disposal of assets with elevated climate-related risks
• Green lease clauses on new lettings
• Collaboration with occupiers on energy efficiency and data sharing
• Investing in asset upgrades to improve energy efficiency
• Selling assets most at risk of flooding

Supply Chain Management

Supplier Audits: Annual reviews and audits on projects, 100% compliance with Responsible Development Requirements checklist

Responsible Procurement

• Responsible Procurement Policy
• Responsible Development Requirements checklist for contractors
• Considerate Constructors Scheme compliance

Climate-Related Risks & Opportunities

Physical Risks

• Flooding (coastal, fluvial)
• Heavy rainfall & pluvial flooding
• Heat stress
• Extreme weather events

Transition Risks

• Occupier/market demand shifts
• Increased building standards/regulation
• Financial market impacts/access to capital
• Increased energy demand/costs
• Supply chain & resource disruptions
• Exposure to litigation
• Insurance challenges

Opportunities

• Securing premium tenants with Net Zero Carbon ambitions
• Enhancing reputation and increasing asset values through renewable energy and energy efficiency improvements
• Acquiring underinvested assets for improvement
• Collaborating with occupiers to mitigate climate risks

Reporting Standards

Frameworks Used: GRI, TCFD, EPRA sBRP

Certifications: BREEAM

Third-party Assurance: JLL (partial)

UN Sustainable Development Goals

• Not disclosed

LondonMetric supports the UN’s 17 Sustainable Development Goals, with a focus on those most relevant to its business.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• GRESB Green Star
• EPRA sBPR Gold Award
• FTSE4Good Index inclusion

Environmental Metrics

ESG Focus Areas

• Climate change
• Energy efficiency
• Renewable energy
• Occupier engagement
• Community investment
• Employee wellbeing
• Board diversity

Environmental Achievements

• Improved GRESB score from 64 to 76, achieving a three-star rating
• Increased total installed solar PV capacity from 3.6 MWp to 7.6 MWp
• Added 25 EV charging points across the portfolio
• 85% of the portfolio has an EPC rating of A-C (91% excluding LXi assets)
• Undertook net zero audits across 2.9 million sq ft

Social Achievements

• Launched employee well-being program, resulting in 97% of employees feeling proud to work for the company
• Average staff turnover of 6% since 2013
• Occupier recommendation score of 9.0/10.0
• Charitable giving of £153,000

Governance Achievements

• Increased female representation on the Board to 40%
• Implemented a new Remuneration Policy
• Completed external Board performance evaluation
• Successfully completed mergers with CT Property Trust and LXi REIT

Climate Goals & Targets

Environmental Challenges

• Limited market liquidity impacting transactions and price discovery
• Elevated interest rates and higher borrowing costs
• Increased reliance on occupiers' environmental ambitions due to longer lease lengths (LXi merger)
• Integration of LXi's externally managed business model

Mitigation Strategies

• Focused on disposals to manage LTV and provide optionality
• Actively engaged with LXi staff and stakeholders to facilitate integration
• Secured a new £700 million unsecured bank facility to refinance LXi debt
• Developed alternative sourcing strategies for investments
• Collaborated with occupiers on sustainability initiatives

Supply Chain Management

Supplier Audits: Annual reviews and audits on projects, 100% compliance with Responsible Development Requirements checklist

Responsible Procurement

• Responsible Procurement Policy focusing on labor, human rights, health & safety, resource, pollution risk, and community

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Extreme weather events
• Heat stress
• Heavy rainfall

Transition Risks

• Occupier/market demand changes
• Increased building standards
• Financial market impacts
• Increased energy demand/costs
• Supply chain disruptions

Opportunities

• Securing premium tenants with net-zero ambitions
• Installing renewable technology (solar PV)
• Acquiring and upgrading poorer-quality assets
• Improving cost of capital through sustainable finance

Reporting Standards

Frameworks Used: EPRA BPR, TCFD

Third-party Assurance: Third-party assessment of carbon emissions and methodology

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 11 (Sustainable cities and communities)
• Goal 13 (Climate action)

Initiatives contribute to these goals through energy efficiency improvements, sustainable building practices, and climate risk mitigation

Awards & Recognition

• Three Green Star rating from GRESB
• Gold Award from EPRA sBPR
• Inclusion in FTSE4Good Index