ESR IR 2021 - EN

14 STEP FORWARD Management Discussion and Analysis Strengthened environmental, social and governance (“ESG”) commitments ESR continues its focus on sustainable growth as it constantly enacts a positive impact on the industry and creates a purpose-driven culture for the communities where it operates. ESG is at the heart of the Group’s business, driving all decisions to maximise value for all stakeholders across the value chain. The Group has undertaken significant sustainability initiatives under its ESG 2025 Roadmap, underscored by sustainable properties and operations as well as best corporate practices. As the Group expands into new markets and frontiers, it puts great emphasis on supporting local causes to contribute to the well-being of its communities. In southern Vietnam, the Group recently joined forces with its joint venture partner BW Industrial to accelerate the completion of a 40,000 sqm facility in the My Phuoc 4 Industrial Park in Vietnam, converting it into a makeshift treatment centre in response to the country’s evolving COVID-19 pandemic. The Group and its partner worked in close alliance with the People’s Committee of Binh Duong, where the facility is located, to provide a safe environment to support the local community in need. In April 2021, ESR was awarded an MSCI ESG rating of A, recognising its outstanding performance in ESG best practices. OUTLOOK Asia is projected to recover faster than other regions economically and will be at the centre of all logistics activity — both in growth and investment. Asia will contribute about half of the world’s trade growth by 2030 and the Asian e-commerce logistics market will account for 57% of total market growth from 2020 to 2025 3 . ESR has developed depth and expertise in its asset-light logistics strategy of high quality logistics development that has positioned the Group well for future growth. 2021 has already seen a strong uptick in leasing sentiment and activity, with Asia warehouse net absorption reaching its highest first quarter total in recent years 4 . Investment Segment There has been a clear shift towards occupiers engaged in the new economy, with a greater level of take-up and activity from e-commerce retailers and 3PL sector expansion. The Group continues to strengthen its deep tenant relationships across its markets which have seen expansion by repeat tenants, redevelopment opportunities and acquisitions. In June 2021, ESR completed the A$3.8 billion (approximately US$2.9 billion) purchase of the Milestone Portfolio and its management platform from Blackstone, propelling ESR Australia as the third largest logistics and industrial owner in the country at an AUM of US$6.1 billion. Notes: 3. McKinsey & Company, Asia: The Highway Of Value For Global Logistics, 19 May 2021. 4. CBRE, Q1 2021 Asia Pacific Industrial & Logistics Trends. ESR Kawasaki Yako Distribution Centre, Japan