39 Environmental, Social and Governance Report 2022 PILLAR 2: PROPERTY PORTFOLIO Listed REITs — As part of regulatory requirements, listed entities under ESR (such as Suntec REIT and ARA US Hospitality Trust) performed a year-long exercise to understand the material climate-related risks and opportunities and their associated impacts on the business and asset portfolios. Both entities carried out comprehensive climate risk assessments using climate scenario analysis to identify physical and transition risks pertinent to their operations through the assistance of an independent consultant. The identified physical risks and impacts were assessed using their respective risk management frameworks (risk appetite, parameters, rating and matrix) to derive the inherent risk profile and eventual risk register after considering their climate change adaptation and mitigating strategies and actions. Appropriate enhancements were also made to existing governance policies and processes, such as the ERM framework, to ensure adequate oversight and instil accountability, responsibility and ownership of climate-related risks and opportunities material to the business. Capability training in the form of an external course for directors was also arranged to raise awareness and improve their level of competency in managing climate-related issues. Suntec REIT, in particular, has set a decarbonisation target to attain net zero carbon status for all assets by 2050. By 2022, 177 Pacific Highway in Sydney, Australia achieved carbon neutral status while four assets within the portfolio are utilising renewable energy from the electricity grid. ESR Australia — ESR Australia pledged to become a carbon neutral organisation in 2024 by achieving the Climate Active Carbon Neutral Standard. Climate Active is an ongoing partnership between the Australian Government and Australian organisations to drive voluntary climate action, meet carbon neutrality standards, and transition to a lowcarbon economy. This commitment aligns with many other leading Australian property groups, representing a significant step on the pathway to net zero. To build capabilities in delivering low upfront embodied carbon and net zero developments, ESR Australia joined the Materials Embodied Carbon Leaders Alliance (MECLA). MECLA is an association formed by leading property groups, contractors, material suppliers and stakeholders in the construction materials supply chain, to accelerate the reduction of embodied carbon in materials. LOGOS — LOGOS aims to offset scope 1, 2 and 3 (electricity related) emissions starting from 2030. To achieve this decarbonisation target, LOGOS carried out a comprehensive Climate Change Risk Assessment to identify the physical risks posed to the assets and operations. A mitigation plan was subsequently developed to address the identified climate risks and reduce operational carbon footprint. Climate Change Resilience ESR Bringelly Road Business Hub, New South Wales, Australia
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