Capitaland Investment Sustainability Report

[Dominik Ransom]

AscendasReal Estate Investment Trust (Ascendas Reit or the Trust) is Singapore's first and largest listed business space and industrial Real Estate Investment Trust (REIT), and has presence in Singapore, Australia, the United Kingdom (UK) / Europe and the United States of America (USA). As at 31 December 2021, Ascendas Reit had a customer base of around 1,570 local and international companies across a wide range of industries.

Between 2013 and 2017, Ascendas Reit published five sustainability reports. In 2018, it improved its report by incorporating elements of the Integrated Reporting (IR) Framework of the International Integrated Reporting Council and renamed its report as 'Integrated Sustainability Report'. This is Ascendas Reit's fifth Integrated Sustainability Report. The report provides updates on its Environmental, Social, and Governance (ESG) performance.

This report has been prepared in accordance with the Singapore Exchange Securities Trading Limited's (SGX-ST) Listing Manual Rules 711A and 711B, Global Reporting Initiative (GRI) Standards: Core option, and GRI's Construction & Real Estate Sector Supplement (CRESS). The GRI Standards have been selected as it is an internationally recognised reporting framework that covers a comprehensive range of sustainability disclosures that is relevant to Ascendas Reit's business. This report has also incorporated elements of the Integrated Reporting (IR) Framework of the International Integrated Reporting Council, and Sustainable Development Goals (SDGs) of the United Nations. This year, Ascendas Reit has begun taking steps to integrate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in its reporting.

Ascendas Reit, a CapitaLand Investment (CLI)-sponsored REIT, is managed by wholly owned subsidiaries of CapitaLand Investment Limited (the Sponsor), which include Ascendas Funds Management (S) Limited (the Manager) and Asset & Property Managers who are responsible for the Trust and oversee its daily property operations. The Sponsor is a leading global real estate investment manager with a strong Asia foothold and is the listed investment management business arm of the CapitaLand Group (CapitaLand).

Taking guidance from the operational control approach1 as defined by the Greenhouse Gas (GHG) Protocol Corporate Standard, environmental performance of 94 properties under operational control have been covered in this report. As at 31 December 2021, about 43% of Ascendas Reit's portfolio was directly under the operational control of the Asset & Property Managers, in terms of Gross Floor Area (GFA).

The multi-segmented portfolio comprised 68% and 32% of multi-tenant and single-tenant properties by asset value respectively. Please refer to pages 62 to 107 of the Annual Report 2021 for the full list of Ascendas Reit's properties.

The Manager welcomes all feedback as it enables continual improvement in the sustainability policies, processes, performance and reporting. Please direct your questions and feedback to a-r...@capitaland.com.

At Ascendas Reit, sustainability is at the core of everything we do. We are committed to growing in a responsible manner, delivering long term economic value, and contributing to the environmental and social well-being of our communities. The environmental, social and governance (ESG) factors that are material to our business have been identified and reflected in the CapitaLand 2030 Sustainability Master Plan (2030 SMP), which was launched in 2020, and will be reviewed every two years.

The CapitaLand 2030 Sustainability Master Plan guides our efforts to build a resilient and resource efficient real estate portfolio, which enables thriving and future-adaptive communities, and accelerates sustainability innovation and collaboration. Ambitious ESG targets have been set, which include carbon emissions reduction targets validated by the Science Based Targets initiative (SBTi).

The Board of the Manager of Ascendas Reit (the Board) is responsible for overseeing Ascendas Reit's sustainability efforts, determining the material ESG factors and taking them into consideration in determining Ascendas Reit's strategic direction and priorities. The Board also oversees the management and monitoring of the material ESG factors and approves the executive compensation framework based on the principle of linking pay to performance. The Manager's business plans are translated to both quantitative and qualitative performance targets, including sustainable corporate practices.

Ascendas Reit's sustainability performance is ranked by globally recognised indices, including Solactive CarbonCare Asia Pacific Green REIT Index, the iEdge SG ESG Leaders and iEdge ESG Transparency Indexes. As an industry leader, Ascendas Reit will continue to raise our ambitions in adopting meaningful ESG practices and enhancing sustainability in the industrial real estate sector.

The COVID-19 pandemic has posed unprecedented challenges to businesses and communities worldwide over the past two years. The introduction of COVID-19 vaccines has helped many nations in their fight against the disease and we have started to see economies recover and borders reopen to international travel.

Ascendas Reit's business remained resilient despite the challenges of the pandemic. We concentrate on the acquisition of good quality and accretive properties while managing capital prudently to create value for all Unitholders. We maintain a welldiversified portfolio in developed markets across different geographic locations and asset classes. Our portfolio of over 1,570 customers across more than 20 industries also reduces customer concentration risk and exposure to any one industry.

Sustainability is central to Ascendas Reit's business strategy. With the introduction of the 2030 SMP, a series of long-term targets have been established across the areas of energy and water usage, carbon emissions, and waste generation. To align with CapitaLand's objective, Ascendas Reit introduced a new long-term target this year - to achieve a minimum green rating for all its existing (owned and managed) properties worldwide by 2030. Green certifications for new acquisitions and developments2 would also have to meet the minimum green rating of Green Mark GoldPLUS in Singapore, while overseas properties would need to obtain certification by a green rating system administered by a national government ministry/agency or a Green Building Council recognised by the World Green Building Council (WGBC)3.

Building upon the success of the solar installations at six properties in Singapore, additional solar panels were installed at 37A Tampines Street 92, Singapore, in March 2021. This added a further 0.24 GWh of annual solar energy capacity to the existing 11.2 GWh. Ascendas Reit will commence the second phase of solar panel installations in Singapore in 2022.

Ascendas Reit continues to hold the largest number of Building and Construction Authority (BCA) Green Mark building certifications among S-REITs. Our global portfolio includes 49 green-certified properties. Of note, Ascendas Reit completed the development of Grab's Headquarters in Singapore in July 2021, and the property achieved a BCA Green Mark GoldPLUS certification.

Aside from minimising emissions from its properties, Ascendas Reit also encourages our community to reduce their carbon footprint. In 2021, 36 additional EV charging points were installed in Singapore, bringing the total to 76 charging points across 16 properties. Across our global portfolio, there were 227 EV charging points as at 31 December 2021 (31 December 2020: 138).

Ascendas Reit strives to foster a sense of community among employees, customers as well as the wider community. Digital outreach events organised by CapitaLand continues to be the main channel of customer engagement. An example is Tabao Thursday Series which features a series of online webinars and workshops covering a wide range of topics on health, wellness, interest groups and festivities. Campaigns were also held via your Workspace Community (yWC) which serves as platform to enable, promote and communicate with customers to build a more vibrant, tight-knit CapitaLand community.

Customers and their staff are provided with opportunities to volunteer alongside the Manager in signature events such as the #GivingAsOne campaign which aims to uplift lives of vulnerable groups through virtual workshops, as well as #LoveOurSeniors which involves packing and delivery of care packs, meals and bread to seniors. The Manager's employees also participated in Temasek Foundation's nationwide mask distribution initiative while the Manager made available Aperia Mall to be one of the venues for mask collection.

Good corporate governance is the cornerstone of every business. At Ascendas Reit, we seek to adopt best practices so as to maintain effective leadership, structure and overall culture within the organisation. In October 2021, the Board established a Nominating and Remuneration Committee and also constituted a fully independent Audit and Risk committee.

We were heartened to receive the Special Edition Corporate Excellence and Resilience Award (in the category of companies with market capitalisation of S$1 billion or more) at the Singapore Corporate Awards 2021. Ascendas Reit was also runner-up for the Singapore Corporate Governance Award at the Securities Investors Association (Singapore) (SIAS) Investors' Choice Awards 2021 under the REITs and Business Trusts Category.

For two consecutive years, GRESB rated Ascendas Reit an A and ranked us 1st amongst Singapore industrial REIT peers for Public Disclosure. This year, Ascendas Reit also moved up five spots from 8th position to be ranked 3rd on the Singapore Governance and Transparency Index 2021 (REITs and Business Trust Category). Our commitment towards transparency, disclosure and communications is reflected by our leading positions in these listings.

Ascendas Reit is committed to upholding social responsibility and managing social risks and opportunities among its key stakeholder groups. The safety and well-being of its stakeholders is a key priority. Hence, immediate response and support were taken to address emerging issues through a series of precautionary measures that are summarised in the table below:

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