Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic
• Environmental
• Social
• Governance

Environmental Achievements

• Installation of LED lighting in various properties (Arturo Soria offices, Albacenter car park).
• Replacement of incandescent and halogen lights with energy-saving bulbs in Arturo Soria offices.
• Installation of photovoltaic solar panels at El Rosal (100 kW), Albacenter (86 kW), and El Alisal (20 kW) shopping centers, generating approximately 280,000 kWh annually.
• Energy audits performed at all office properties (except Cardenal Marcelo Spínola).
• Energy efficiency plans defined for each property.
• Implementation of water-saving measures at Arturo Soria offices (frequency converters, diffusers in taps, air quality probes).

Social Achievements

• Improved accessibility in various properties (ramps, elevators, adapted bathrooms).
• OHSAS 18000 certification for occupational health and safety management system at As Termas shopping center.
• Initiatives to foster best sustainability practices among tenants (information on energy consumption, health and safety training, sustainability guides).

Governance Achievements

• Board of Directors approval of the Company’s CSR Policy.
• Establishment of a CSR Master Plan (in progress).

Climate Goals & Targets

Environmental Challenges

• Limited management remit at logistics centers, resulting in unavailable consumption and emission data.
• Water scarcity.

Mitigation Strategies

• Technological breakthroughs for efficient water consumption and sanitation.
• Water-saving and efficiency strategies in property design and maintenance.
• Rainwater reuse.

Supply Chain Management

Responsible Procurement

• Lar España and its Management Company only work with suppliers of renowned solvency, ensuring internal control mechanisms and codes of conduct.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environment
• Corporate Governance
• Social Capital
• Assets (portfolio)

Environmental Achievements

• Reduced CO2 emissions across its entire portfolio of real estate assets by 41% during 2017.
• 80% of the operational assets for which Lar España has full autonomy are certified in BREEAM or are in the process of obtaining BREEAM certification. This percentage goes up to 86% considering co-owned assets.
• 100% of the real estate assets over which Lar España has full management autonomy have implemented environmental and/or social sustainability initiatives.

Social Achievements

• Over 20,000 direct jobs created.
• Work-life and equal opportunities policies, training courses, talent retention programs implemented for employees.
• Annual surveys carried out to assess user satisfaction with the quality of services received.
• Fair, objective, and transparent tendering processes which factor in CSR criteria for supply chain.
• Communication channel being designed to engage customers in the CSR Master Plan.
• Numerous community initiatives, including collaborations with NGOs and charities, resulting in donations of clothing and food, and provision of space for various events and activities.

Governance Achievements

• Awareness-raising activities targeted at the governance body addressing social and environmental issues and reporting on the initiatives undertaken to tackle them.
• Resolution of and response to complaints and claims received in 2017, including labour-related lawsuits.
• Reporting on non-financial aspects in Lar España’s 2017 integrated report.
• Performance of environmental and social due diligence in respect of the various phases of the business model.
• Identification of the universe of material risks and their potential consequences, including those related with climate change.

Climate Goals & Targets

Environmental Challenges

• Minimizing environmental impact of investments while safeguarding economic viability and financial returns.
• Addressing accessibility deficiencies in existing buildings.
• Managing waste generation and improving recycling rates.

Mitigation Strategies

• Implementing environmental initiatives in shopping centers and office properties (e.g., energy-efficient lighting, HVAC improvements, water conservation measures).
• Developing a work schedule based on accessibility audits to prioritize and implement improvements in buildings.
• Increasing information related to waste generation and recycling in its assets.

Supply Chain Management

Responsible Procurement

• Stringent controls to collaborate only with suppliers of renowned solvency, with internal control mechanisms and codes of conduct.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, EPRA Sustainability Performance Measures, UN Sustainable Development Goals (SDGs)

Certifications: BREEAM, ISO 14001 (mentioned for one asset), ISO 21542 (accessibility and usability of the built environment) - in process, UNE-EN 17000 (universal accessibility) - in process

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced CO2 emissions across its entire property portfolio by 45.9% through renewable energy supply contracts.
• 100% of real estate assets under full management autonomy implemented environmental and/or social sustainability initiatives.
• 100% of shopping centers under full managerial control are BREEAM® certified.

Social Achievements

• Generated 21,684 direct jobs.
• 8.4% of indirect jobs at shopping centers are done by persons with disabilities.
• Completed its Customer Journey project to understand user needs and improve customer experience.

Governance Achievements

• Participated in the GRESB Real Estate Assessment, ranking as one of the best-performing REITs.
• Applied EPRA Sustainability Best Practices Recommendations (sBPR) for reporting.
• Published an Investor Agenda and performance reports on its website.

Climate Goals & Targets

Environmental Challenges

• Adverse weather conditions in 2019 impacting energy and water consumption.
• Standardizing waste generation information for more accurate analysis.
• Limited data on sub-metered water consumption from tenants in 2019.

Mitigation Strategies

• Implemented energy efficiency measures (fine-tuning BMS, thermostats, occupancy protocols) to reduce consumption despite adverse weather.
• Drafting a Waste Management Master Plan to embed circular economy processes.
• Developing a data automation system for collecting and managing data from all centers.

Supply Chain Management

Supplier Audits: Stringent controls to collaborate only with suppliers of renowned solvency with internal control mechanisms and codes of conduct.

Responsible Procurement

• Fair, objective, and transparent tendering processes factoring in CSR criteria.
• Long-term contracts with suppliers.
• Inclusion of ESG and CSR criteria in lease agreements (91.43% at Lagoh).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Transition Risks

• Price changes
• Material availability
• Regulatory and technological changes

Opportunities

• Energy efficiency improvements

Reporting Standards

Frameworks Used: GRESB, EPRA sBPR

Certifications: BREEAM

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Lar España analyzed which SDGs warrant priority attention based on its business activities and is prioritizing those where it can make the biggest difference (detailed in report).

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• EPRA Gold Award (2019)
• EPRA Gold Award for CSR reporting (2019)

Environmental Metrics

ESG Focus Areas

• Environment
• Corporate Governance
• Social Capital
• Asset Properties

Environmental Achievements

• Reduced emission intensity by 20.5% in 2021 (based on a static denominator in respect of 2020)
• Secured BREEAM In-Use certification at 8 assets, 7 with higher ratings than previously awarded. New certification obtained for Parque Abadía.
• Secured BREEAM In-Use certification for Rivas Futura retail park, obtaining a “Very good” rating for building features and an “Excellent” rating for asset management.
• 93% of Lar España’s portfolio currently has BREEAM certification.

Social Achievements

• Generated over 16,000 jobs in 2021
• 8.6% of indirect jobs at Lar España’s assets are done by persons with disabilities above 33%
• Undertook more than 160 social initiatives, resulting in over 1,400 hours of community and environmental initiatives, over 25 collaborations with NGOs and foundations, over €570,000 earmarked for community collaborations, sponsorships and initiatives, over 43,000 kg of clothing donated, and over 4,000 kg of food collected.

Governance Achievements

• Complies fully with 98.4% of the applicable recommendations set down in the CNMV’s Good Governance Code
• Established an active ESG Committee since 2020
• Implemented an Integrated Risk Management System since 2015
• Updated several internal governance rules and policies in 2021, including the Articles of Association, General Shareholders Meeting Regulations, Board of Directors’ Regulations, and others.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on footfall, contracts, and asset values
• Climate change adaptation and environmental sustainability risks
• Cybersecurity and information security risks

Mitigation Strategies

• Renegotiation of contracts with lessees
• Implementation of health and safety protocols
• Development of a Third-Party Cybersecurity Risk Management Model
• Implementation of a Waste Management Plan
• Energy Efficiency Master Plan including a comprehensive portfolio study and plans for photovoltaic energy installation.

Supply Chain Management

Supplier Audits: Audits carried out without any qualifications in the results; 446 out of 466 suppliers are local companies.

Responsible Procurement

• Supplier code of conduct
• Green clauses
• Sustainability/ESG Policy
• BREEAM clause for most centres

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes

Opportunities

• Improvements in energy efficiency

Reporting Standards

Frameworks Used: GRI Standards (Core option), EPRA Best practices and recommendations

Certifications: ISO 14001, ISO 45001, BREEAM In-Use, AENOR’s Universal Accessibility

Third-party Assurance: Third-party limited review

UN Sustainable Development Goals

• SDG 6.4
• SDG 7.2
• SDG 7.3
• SDG 8.5
• SDG 8.8
• SDG 9.1
• SDG 9.A
• SDG 12.1
• SDG 12.3
• SDG 13.1
• SDG 16.6
• SDG 17.3

Action plan developed to identify relevant issues and contribution to SDGs; 22 specific actions proposed at corporate and operational level.

Awards & Recognition

• GRESB assessment
• EPRA Gold Award
• FTSE4Good index inclusion

Environmental Metrics

ESG Focus Areas

• Corporate governance
• Social
• Environmental

Environmental Achievements

• 97% of portfolio assets (in GAV terms) are ISO 14001 and ISO 45001 certified.
• 4.1% fall in electricity used in communal areas of the properties in LfL terms compared to 2022.
• 17.8% increase in the amount of waste reused, recycled, composted or treated using energy recovery techniques in LfL terms compared to 2022.
• Lagoh achieved BREEAM "In Use" certificate with an "Exceptional" rating.

Social Achievements

• Average of 61 training hours per employee.
• UNE-170001 Universal Accessibility certification for c.70% of the portfolio.
• Social investment of close to Euros 360,000 plus over Euros 55,000 in grants, donations and sponsorships.
• Creation of the Social Impact Committee

Governance Achievements

• Comply with almost 100% of the recommendations set out in the CNMV's Good Governance Code.
• Variable remuneration measures tied to ESG objectives to our four employees and executives.
• Fitch confirmed its investment grade rating of 'BBB' with a stable outlook for both Lar España and its total debt.
• MSCI ESG Ratings index upgraded Lar España’s rating to ‘A’

Climate Goals & Targets

Environmental Challenges

• Retention of talent in a rapidly changing and highly competitive labour market.
• Promotion of a disruptive way of thinking that channels innovation and creativity.
• High inflation and rising interest rates.
• Scarcity of large volume operations in the retail investment market.

Mitigation Strategies

• Competitive remuneration and a policy of benefits in kind and flexible working hours.
• Continuous training of our teams.
• Pioneering the refinancing of corporate debt with green bonds.
• Focus on medium-sized retail spaces and retail parks with attractive returns and limited risk.

Supply Chain Management

Supplier Audits: 96% of suppliers are national.

Responsible Procurement

• Inclusion of environmental, social, and governance criteria in supplier contracts.
• Prioritization of local suppliers.
• New Procurement and Outsourcing of Services Policy approved in 2023.

Climate-Related Risks & Opportunities

Physical Risks

• Increased operating costs due to intensive climate control
• Disruption in construction and renovation activity due to high temperatures
• Increased maintenance costs due to damage from extreme weather
• Increased insurance premiums
• Damage/impairment of properties
• Business interruptions due to difficulties in providing basic services linked to water consumption

Transition Risks

• Increased costs linked to regulatory and transparency requirements
• Increased costs linked to emission allowances and energy prices
• Increased maintenance costs
• Loss of value of assets and difficulties in obtaining finance
• Decrease in rental income due to lack of adaptation of properties
• Increased raw material costs
• Increased cost of transition to a lower-emission technology and premature obsolescence

Opportunities

• Local energy generation and storage
• Increased footfall and diversification of services
• Exploration and use of innovative building materials
• Greater appeal to tenants
• Attraction of capital
• Increased asset resilience

Reporting Standards

Frameworks Used: GRI, EPRA, TCFD, SBTi, CRREM

Certifications: BREEAM, ISO 14001, ISO 45001, UNE-170001

Third-party Assurance: EY, Bureau Veritas

UN Sustainable Development Goals

• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 16
• SDG 17

Initiatives aligned with SDGs through materiality matrix analysis and action plans.

Awards & Recognition

• EPRA Gold Award (financial and sustainability)
• Best new European shopping center (Lagoh)
• Best ESG Model at the 19th Spanish Association of Shopping Centres and Retail Parks Awards Ceremony
• Winners of the 2023 Iberian Property Investment Awards in the Corporate Social Responsibility category

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced total electricity consumption in common areas by -9.8% year on year.
• Reduced natural gas consumption by -15.5% year on year.
• Reduced Scope 1 emissions by -19.8% compared to H1 2022.
• Reduced combined Scope 1, 2, and 3 emissions (CO2e per sqm) by -38.3% compared to H1 2022.
• Achieved BREEAM certification for all assets, with 98% rated “Excellent” or “Very Good” in GAV terms.
• 97% of assets are ISO 14001 and ISO 45001 certified.
• All energy consumed is from renewable sources (Scope 2 emissions zero using market-based method).

Social Achievements

• Continued rollout of UNE-17001 Universal Accessibility certification, with over 60% of the portfolio now certified.
• Established a Social Impact Committee.
• Invested more than €160,000 in social action and initiatives.
• More than 1,500 hours dedicated to social action and initiatives.
• Collaboration with over 70 organizations, companies, NGOs, and foundations.

Governance Achievements

• Updated Regulations of the Board of Directors and Committees in February 2023.
• Updated Company Bylaws at the General Shareholders’ Meeting.
• 33.3% women on the Board of Directors.
• Updated Risk Map and Integrated Risk Management System.
• Published a climate risk report in line with TCFD standards.

Climate Goals & Targets

Environmental Challenges

• Atypical weather conditions (warm winter, warmest spring since 1961) impacting energy consumption.
• Increased waste production due to higher footfall and sales.
• Quantifying Scope 3 emissions.
• Potential water stress due to climate change.

Mitigation Strategies

• Energy Efficiency Plan with energy audits and action plans for each property.
• Waste Management Plan with focus on improved traceability and treatment processes.
• Development of green clauses in lease agreements.
• Water consumption analysis and reduction plans based on ISO 14046.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Consolidated waste management contracts with a single supplier.

Climate-Related Risks & Opportunities

Physical Risks

• Temperature variability
• Water stress
• Heatwaves
• Heavy rainfall
• Forest fires
• Drought
• Flooding

Transition Risks

• Regulatory changes related to decarbonisation.

Opportunities

• Initiatives to improve the energy efficiency of the Company’s assets.
• Optimising resource use.
• Emission reduction initiatives.

Reporting Standards

Frameworks Used: GRI, IIRC, EPRA Best Practices Recommendations, TCFD

Certifications: BREEAM, ISO 14001, ISO 45001, UNE-170001

Third-party Assurance: Bureau Veritas

UN Sustainable Development Goals

• Not disclosed

Participation in the SDG Ambition Accelerator programme.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Reduzco seal

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Environment
• Social Capital

Environmental Achievements

• Reduced GHG emissions by -39.8% vs 2021 (Scope 1+2+3), -95.3% vs 2015 (Scope 1+2 market-based)
• Reduced electricity consumption by -27.8% vs 2015
• Reduced fuel consumption by -32.3% vs 2021
• Reduced energy consumption per visitor by -15.4% vs 2021
• 100% of energy consumed has guarantees of renewable origin

Social Achievements

• Joined the United Nations Global Compact in 2020
• Participated in the SDG Ambition Accelerator Programme (2022) and Climate Ambition Accelerator Programme (2023)
• Ongoing projects and new initiatives aimed at consolidating its position as an industry leader in ESG

Governance Achievements

• Established a Green Bond Committee to oversee project evaluation and selection
• ESG Committee held 3 meetings in 2022 and 3 in H1 2023
• Developed an ESG Master Plan and Sustainability/ESG Policy (2015)

Climate Goals & Targets

Environmental Challenges

• Potential climate change risks to its portfolio
• Not disclosed

Mitigation Strategies

• Studying climate-related risks of its assets under the TCFD framework
• Energy Efficiency Plan
• Waste Management Plan
• Sustainable Mobility Plan
• Developing a process to calculate the Company’s Water Footprint and drawing up a new water consumption reduction plan for the portfolio

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ICMA Green Bond Principles (GBP) 2021, TCFD, UN SDGs, BREEAM, ISO 14001

Certifications: BREEAM (Excellent or Very Good rating for 98% of assets), ISO 14001

Third-party Assurance: EY (limited assurance)

UN Sustainable Development Goals

• SDG 7
• SDG 9

Green buildings and renewable energy investments

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• EPRA Gold Award for ESG Reporting (5 years in a row)
• EPRA Gold Award for Financial Reporting (8 years in a row)