Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Construction of two headquarters buildings incorporating water-conserving fixtures, programmable thermostats, energy-saving lighting, LEED HVAC systems, and LED occupancy-sensored lighting.
• Extensive reuse of existing structures during construction to minimize waste.
• Landscaping with ornamental grasses to reduce water usage.
• Implementation of paper, battery, and toner cartridge recycling services.

Social Achievements

• Implementation of the Agree Wellness Program, including on-site fitness center, catered lunches, and company-reimbursed dinners for late-working employees.
• Comprehensive benefits package including medical, dental, vision, life insurance, Simple IRA, short-term and long-term disability.
• Ongoing professional development opportunities, including career advancement, internal mobility, professional development plans, and company-sponsored attendance at industry conferences.

Governance Achievements

• Adoption of a Code of Business Conduct and Ethics and Corporate Governance Guidelines.
• Appointment of four new Directors since 2018.
• All members of the Audit, Nominating and Governance, and Compensation committees are independent.
• Adoption of an insider trading policy.
• Establishment of a succession plan for the CEO.
• Annual submission of “say-on-pay” advisory votes with over 95% support for the past five years.
• Adoption of a clawback policy.

Climate Goals & Targets

Supply Chain Management

Responsible Procurement

• Vendor code of conduct requiring compliance with environmental laws and regulations.

Climate-Related Risks & Opportunities

Awards & Recognition

• One of the 2020 Coolest Places to Work by Crain's Detroit Business
• One of the Best Places to Work by Globe St Real Estate Forum
• One of Michigan's Best and Brightest in Wellness
• Crain’s Detroit Business | Fast 50 (2017-2020)
• Institutional Investor | America’s Most Honored Companies | Small Cap Company CEOs & Investor Relations (2019)
• Sandler O’Neill | Top 25 REIT Heavyweights (2018 and 2019)
• EY | Entrepreneur Of The Year | MI & NW OH (2018)
• NREI | Top Owners of Real Estate (2015-2018)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Corporate Governance
• Supply Chain Responsibility
• Tenant Satisfaction

Environmental Achievements

• Enhanced engagement with retail partners on shared sustainability initiatives, including green lease language.
• Anticipates achieving LEED certification for its new headquarters.
• Implementation of water-conserving plumbing fixtures, programmable thermostats, and energy-saving lighting control systems in existing headquarters.

Social Achievements

• Created an ESG Steering Committee to guide ESG strategy.
• Assigned formal oversight responsibility for ESG to the Nominating & Governance Committee.
• 100% of employees completed compliance training.
• Launched Agree Realty’s Women’s Insight Network.

Governance Achievements

• Created an ESG Steering Committee.
• Assigned formal oversight responsibility for ESG to the Nominating & Governance Committee.
• Adopted the SASB and TCFD frameworks.
• Improved Cybersecurity measures (upgraded Microsoft licenses, enabled MFA, conducted penetration testing and ransomware simulations).

Climate Goals & Targets

Environmental Challenges

• Many emissions at properties are considered Scope 3 due to long-term triple-net leases where tenants are responsible for environmental practices.
• Climate-related risks (cyclones, hurricanes, floods, sea level rise, extreme temperatures).
• Transition risks (enhanced emissions reporting, climate-related litigation, increased operating expenses).

Mitigation Strategies

• Expanded engagement with retail partners to collaborate on emissions reduction.
• Conducting comprehensive review of climate-related risk of every asset with insurance partner, including overlaying assets on a heat map.
• Insuring every asset in a high-hazard flood zone through the National Flood Insurance Program.
• Maintaining a geographically diverse portfolio to mitigate concentration risk.
• Conducting environmental site assessments (Phase I) on every acquired asset.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Cyclones
• Hurricanes
• Floods
• Sea level rise
• Chronic heat waves
• Extreme temperature change

Transition Risks

• Enhanced emissions reporting requirements
• Climate-related litigation
• Increased operating expenses
• Portfolio impairment

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Best Places to Work in Michigan (2020 & 2021)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Adopted green lease language into standard lease forms
• Achieved Gold Level recognition from Green Lease Leaders
• Conducted a complete Scope 1 and 2 greenhouse gas emissions inventory and calculated Scope 3 emissions using tenant data
• Enhanced due diligence to include evaluation of prospective tenants’ ESG policies
• Started tracking common area water usage across the portfolio

Social Achievements

• Published ESG-related policies (Human Rights, Whistleblower, ESG Policy Statement)
• Enhanced compensation packages with equity for every team member
• Enhanced health and well-being programs
• Conducted an employee engagement survey and implemented a plan to address responses
• Rolled out updated Core Values
• Launched the ADC Rotation Program
• Advanced Diversity, Equity & Inclusion initiatives (unconscious bias training, DEI focus groups)

Governance Achievements

• Formed an ESG Steering Committee with a three-year action plan
• Published an ESG Steering Committee charter
• Improved cybersecurity risk management (quarterly Audit Committee reporting, system audits, ransomware simulations, enhanced Disaster Recovery plan, penetration testing, enhanced email filtering, employee training)

Climate Goals & Targets

Environmental Challenges

• Gathering more tenant data to better inform emissions measurements
• Formalizing a procedure for identifying, assessing, and mitigating climate-related risks and opportunities
• Additional employee training and education

Mitigation Strategies

• Continued engagement with tenants to discuss data sharing and sustainability initiatives
• Planning to formalize a procedure for identifying, assessing, and mitigating climate-related risks and opportunities and disclose time horizons
• Prioritizing additional employee training and education

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Drought
• Earthquake
• Flooding
• Hail
• Tornado
• Sea level rise
• Windstorm
• Wildfire

Transition Risks

• Enhanced emissions-related reporting requirements
• Exposure to climate-related litigation
• Increased operating expenses
• Portfolio impairment

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: LEED, ENERGY STAR

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Gold Level recognition from Green Lease Leaders

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental
• Social

Environmental Achievements

• Measured or estimated Scope 1, Scope 2 and Scope 3 greenhouse gas emissions for our portfolio
• Executed numerous green leases, achieving Gold level recognition from Green Lease Leaders for the second consecutive year
• Moved into our soon-to-be LEED certified office on Woodward Avenue, in Royal Oak, Michigan

Social Achievements

• Advanced our DEI initiatives with Introduction to ESG, DEI in the Workplace, and other trainings
• Hosted seven lunch and learns for employees with topics ranging from sustainability to communication skills
• Provided health and well-being programs for our team members with Mental Health Awareness Week, and covered employee assistance programs for mental health

Governance Achievements

• Met our commitment to add a third female to the Board of Directors (the “Board”) with the appointment of Linglong He, increasing female representation to 30%
• Incorporated ESG into the Compensation Committee's assessment of performance for named executive officers
• Enhanced our risk management processes with the establishment of a formal enterprise risk management (“ERM”) committee that reports to the Board

Climate Goals & Targets

Environmental Challenges

• Difficulties obtaining complete utility data for a net lease REIT
• Failure to maintain building quality and install energy and water efficiency improvements during periods of vacancy can lead to higher tenant operating costs and therefore reduce tenant demand
• Reputational risk arising from failure to meet widely-accepted energy efficiency standards

Mitigation Strategies

• Engaged with tenants to collect utility data and applied standard estimation methodologies to fill in gaps
• Focus on industry-leading, national and super-regional retailers provides for relationships with some of the most environmentally conscientious retailers in the world.
• Monitoring tenant sustainability policies throughout their life cycle in our portfolio
• Actively engaging with retail partners on shared sustainability initiatives, including green lease language.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Flood risk
• Storm surges
• Earthquakes
• Tsunamis
• Windstorms
• Hailstorms
• Tornadoes
• Lightning
• Increase in extreme temperatures
• Sea level rise
• Heat waves

Transition Risks

• Increasing requirements associated with current and emerging climate-related regulations
• Exposure to climate-related litigation
• Insurance premiums are expected to rise as the climate changes and weather-related risks become more likely
• Portfolio impairment resulting from changes in public policy
• Reputational risk arising from increasing stakeholder demand for climate-related disclosures and actions

Opportunities

• Reputational benefit from disclosing and managing climate-related risks
• Improved portfolio resiliency through risk identification and mitigation
• Potential to improve returns through green leasing clauses allowing for collaboration with tenants and property-level initiatives such as installing more efficient energy equipment or on-site renewable energy systems
• Repricing of assets due to level of climate resiliency could lead to improved returns and potential investment opportunities

Reporting Standards

Frameworks Used: SASB, TCFD, IFRS S1 and S2

Certifications: LEED, ENERGY STAR

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Green Lease Leaders Gold level recognition (two consecutive years)