CLIMATE RISK ASSESSMENT In the current year, we engaged MSCI, an investment research firm providing stock indexes, portfolio risk and performance analytics to conduct forward-looking and return-based valuation assessment that will measure climate related risks and opportunities in our portfolio. Through this assessment, the associated transitional risks relating to regulatory and technological developments and physical risks can be identified and evaluated across various scenarios at the portfolio and asset level. An appropriate comprehensive risk management framework is then formulated to address those risks accordingly. PILLAR 3 CORPORATE PERFORMANCE This pillar focuses on governance impacts arising from our business operations. Focus Areas Goals Targets Status Responsible Investment Acting in the longterm best interests of our stakeholders by incorporating ESG factors into investment decision-making and active ownership of our assets US$15 million Social Investment Programme by 2030 • In early November, 2021, ESR successfully closed the fundraising of the Group’s first Sustainability-Linked Loan (“SLL”) of US$700 million; • In the same month, the first SLL is further upsized to US$1 billion. • Planning on becoming a signatory to the UN-PRI in the coming year. Corporate Governance Growing our business upon a strong foundation of Core Values Maintain a strong Corporate Governance culture • 100% employee endorsement of ESR Group Code of Conduct. • 100% employee trained with “Anti-Bribery and Corruption, Third-party Due Diligence and Supply Chain Risk Management” by ComplySci in 2021. Disclosure & Reporting Benchmarking our ESG performance against international best practices 3-Star average rating from GRESB— The Global ESG Benchmark for Real Assets • ESR tops the lists of 2021 GRESB Assessment for the second consecutive year. • ESR achieved outstanding results with the Group’s funds in South Korea, Japan and China in particular, topping multiple GRESB ranking lists. • For key highlights, please refer to our standalone ESG report. Risk Management Harmonising and strengthening our management approaches to ensure compliance across all markets 100% of employees receive annual training • Enhanced Third-Party Due Diligence workflow has been fully implemented. • 1 New Function added to Compliance Desktop where requestor can order an Enhanced Due Diligence report. INCLUDED IN ESR’S CORE POLICIES ARE THE FOLLOWING: • Code of Conduct and Business Ethics • Anti-bribery & Anti-corruption (ABAC) and the Handling of Gifts, Travel & Entertainment • Anti-Money Laundering (AML) & Counter-Terrorist Financing (CTF) • Conflict of interest • Whistleblowing • Information Security • Communications Guideline CORPORATE POLICIES ENHANCED IN 2021 In 2021, we have enhanced policies for both China and Japan. In view of implementing these policies, formal approval and endorsement by the Board are expected to be completed in the next few months. • Sustainable Procurement Policy • Asset Management & Development Guidelines E S R C A Y M A N L I M I T E D A N N U A L R E P O R T 2 0 2 1 33
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