In 2021, our Group Compliance function worked with colleagues in all local offices to ensure smooth implementation of Compliance Desktop® which is licensed by Refinitiv, an LSEG (London Stock Exchange Group) company. As part of our enhanced Third Party Due Diligence Workflow, this automated process improves compliance and risk management across the Group by providing enhanced transparency. Third-party risk includes circumstances that could expose the Group to threats and risks through engagement with third parties. Our enhanced Third-Party Due Diligence Workflow improves risk management by providing complete transparency over the compliance status of vendors, contractors and other suppliers, as well as capital partners and tenants. THIRD-PARTY RISK MANAGEMENT • 3,716 third parties screened • 214 ‘hits’ requiring further review • 67 third parties underwent further assessment by ESR local offices • 100% resolution rate • Implementation of automated Third-Party Due Diligence workflow • Training of responsible persons, business unit managers and Legal and Compliance teams • Successful roll-out of ESR Compliance Desktop® across 8 markets • New function added to Compliance Desktop® where requestor can order an Enhanced Due Diligence report • As of the end of this reporting period, 5,235 third parties have been screened through the platform PHASE 1: REMEDIATION (COMPLETED IN 2019) PHASE 2: AUTOMATION (SEPTEMBER – NOVEMBER 2020) PHASE 3: EXECUTION (JANUARY – DECEMBER 2021) AUTOMATED THIRD-PARTY DUE DILIGENCE WORKFLOW KEY PERFORMANCE INDICATORS Pre-due diligence screening • Data collection and automated screening of responses from Third Parties • Responsibility of Business Unit Managers Due Diligence Investigation • Due Diligence reports from Refinitiv • Initiated and overseen by Legal and Compliance teams Post-due diligence monitoring • Monitoring via Worldcheck • Approval of Third Parties subject to renewal every 24 months 5,235 THIRD PARTIES BY GEOGRAPHIC LOCATION Australia 2,681 China 1,329 Hong Kong 130 India 271 Japan 515 Korea 174 Singapore 113 Indonesia 22 3 RISK BUCKETS CONTAINING 67 SPECIFIC RISK AREAS ASSESSED • Official lists covering sanctions, watchlists, regulatory and enforcement lists • Political exposure • Structured adverse media ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2021 38 PILLAR 3: CORPORATE PERFORMANCE
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