SUSTAINABLE STRATEGY AND GOVERNANCE

SUSTAINABLE STRATEGY AND GOVERNANCE

Cundall Sustainable Strategy and Governance Capturing the value of sustainability The context within which business operates is rapidly changing. Unprecedented environmental challenges such as climate change and a growing awareness of social inequalities and negative externalities have contributed towards a deeper understanding by stakeholders that environmental, social, and governance (ESG) factors affect value creation and the long-term success of an organisation. Investors and tenants are increasingly demanding more efficient buildings, climate change resilience preparedness, and enhanced health, safety and productivity. Furthermore, changing policy and regulation will continue to drive the industry to address these issues and increase transparency. Successful leaders must stay ahead of these trends and be proactive about managing the resulting risks and opportunities. By taking a long-term strategic view of sustainability organisations can: Meet existing and emerging legal and regulatory requirements Reduce cost of input materials Reduce operational costs Minimise business disruption from environmental, social and economic impacts Maintain their social license to operate and protect brand value and reputation Reduce cost of capital by meeting rising investor expectations Drive innovation, discover new markets and tap into unmet demands Cundall offer a range of services to help businesses integrate sustainability into their business strategy. 4

Sustainable Strategy and Governance Cundall About Cundall Positioned at the forefront of sustainability in the built environment, Cundall provides professional services from business level strategy and governance through to building performance and design. Driven by the consideration of people, design, environment, economics and technology, Cundall has proven that sustainability and commercial pragmatism are not mutually exclusive, but are inextricably linked. International experience with local knowledge With more than 20 offices around the globe, Cundall combines international experience with local knowledge to deliver tailored solutions to support our client s individual needs. Specialist expertise in property and the built environment Our sustainability team consists of multi-disciplinary professionals with specialist skills and experience across all stages of property life cycle, from planning and development through to operations and management. Practical not theoretical Cundall can not only assist with the creation of a strategy, we also know how to implement it. We will be with you for the long-term, throughout your sustainability journey, with technical staff who can execute plans and provide innovative yet practical solutions to achieve your sustainability vision. We practice what we preach We are the first consultant to be endorsed as a One Planet Company. We therefore understand first-hand the challenges companies can face when embarking on this journey. 21 800+ 45+ 1976 OFFICES GLOBALLY PEOPLE WORLDWIDE NATIONALITIES ESTABLISHED 50+ 35+ 1st 400+ COUNTRIES PROJECTS DELIVERED IN LANGUAGES ONE PLANET COMPANY AWARDS WON 1

Cundall Sustainable Strategy and Governance Our approach Business is dealing with a range of social, environmental, market, and technological trends which require sophisticated sustainability-based management. Using a simple step by step process, Cundall can help clients think more broadly about their environmental, social, and governance (ESG) performance and provide practical real-world advice to support clients in their sustainability journey. Our approach is set out below. This is applies to Portfolio Analysis; Sustainable Supply Chains; Impact Measurement; and Business Strategy. Every company is unique and requires a comprehensive review of its ESG risks and opportunities Understand, identify and assess sustainability trends, risks, challenges and opportunities. Create a clear purpose and understanding of what sustainability means for the organisation. Identify material issues to focus on. A long term approach is required to manage ESG factors Develop SMART targets to improve ESG performance. Establish specific on-the-ground strategies and pathways to achieve desired outcomes. Sustainability is a journey that requires continuous improvement Monitor the effectiveness of programmes and initiatives. Ensure reporting clearly explains to investors, lenders, rating agencies and others how the organisation is tracking. Implementation is key to success Execute new programmes and initiatives. Integrate and embed sustainability criteria into day-to-day operations. 2

Sustainable Strategy and Governance Cundall Portfolio Analysis Helping companies to identify ways to improve the environmental, social and governance (ESG) performance of their property operations or real estate investment portfolio. Undertake a strategic review of sustainable practices across your property portfolio, including assessment of current approaches against industry best practice and regulatory requirements. Undertake risk and opportunity assessments to identify and provide analysis and advice on opportunities for sustainabilityoriented innovation relevant to the property portfolio. Conduct a climate adaptation and resilience study to identify the physical, social and economic risks associated with climate change. Develop targets and KPIs to support performance improvement in sustainable practice and operations of assets. Develop a road-map and pathway for achieving carbon neutrality, net zero emissions or net positivity across your property portfolio, based on different scenarios. This includes evaluation of initiatives such as Science Based Targets (SBTs), 100% Renewables (RE100), and 100% Energy Productivity (EP100). Develop policies, plans and management systems across core streams including energy, water and waste reduction as well as transport, biodiversity, procurement, health and wellbeing. Enable more effective engagement and collaboration with occupants and tenants to address split incentives and include sustainability requirements into leasing agreements. Case study A luxury global retail brand catering to the traveling public around the world approached Cundall to improve the performance of their stores in multiple global locations. Aim To significantly reduce their greenhouse gas emissions and energy consumption. Process From the audit stage, through to engineering, procurement and project management and monitoring performance, Cundall guided the client to identify and implement the most effective opportunities to reduce energy consumption. Outcome Achieved significant carbon reduction and over $1m has been saved each year in reduction of energy consumption. Assist with portfolio reporting such as Global Real Estate Sustainability Benchmark (GRESB), the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) and the Asian Association for Investors in Non-Listed Real Estate Vehicles (ANREV). 3

Cundall Sustainable Strategy and Governance Sustainable Supply Chains Helping companies reduce risk and improve environmental, social and economic outcomes within their supply chain. Business case development to evaluate the business case for action and understand the internal and external landscape. This includes benchmarking against peers, customers, and suppliers. Supply chain mapping and prioritisation to understand exposure to supply chain risks and opportunities and determine where there is greatest actual and potential risk. Establish a sustainable supply chain vision to provide direction and help define the company s commitment. Set sustainable procurement goals, targets and objectives that are aligned with business needs and establish clear roles and responsibilities for effectively preventing and addressing adverse social and environmental impacts. Development of a sustainable procurement policy and supplier code of conduct to establish expectations for employees, customers and suppliers. Development of a sustainable supply chain management framework to embed sustainability criteria in procurement processes. Advice and support to help deliver reductions in energy, carbon, water, waste, and socio-economic impacts across your supply chain. This includes carbon footprinting, life cycle costing, and environmental and social life cycle assessments. Case study A leading investment house with $160bn in funds under management, specialising in real estate and infrastructure, appointed Cundall to undertake a materiality assessment and create a sustainability framework. Aim Wanted to identify and manage the most significant sustainability risks associated with the procurement of materials encompassing three aspects of sustainability - business conduct, social and environmental risk. Process Cundall conducted a materiality assessment to determine the top three consumables in terms of risk and spend for a significant asset they owned and managed. Outcome Tools were developed by Cundall to help manage the procurement processes and their suppliers/contracts, in order to verify compliance with the Sustainable Procurement Framework and drive continuous improvement. Development of supplier engagement and continuous improvement program to build supplier ownership, monitor supplier performance, and incentive continuous improvement. Conduct life cycle assessments (LCAs) to measure and communicate the environmental and social impact of your projects and inform future decisions. 4

Sustainable Strategy and Governance Cundall Impact Measurement Helping investors seeking social returns, or companies seeking to measure benefit to stakeholders, evaluate the broader social and environmental impacts and outcomes of their projects, programs and investments. Business case development for integrating sustainability and ESG factors into investment decision-making processes to obtain leadership buy-in and garner support from key internal stakeholders. Undertake a high-level impact assessment to identify and prioritise environmental, social and economic issues to focus on. Develop clear scope, set boundaries and clarify the goals and objectives for measuring impacts and outcomes. Map and align impacts and outcomes with stakeholder expectations and frameworks such as the Sustainable Development Goals (SDGs) or One Planet Living Principles. Case study A 36,000m² retail extension received 5 Star Green Star As-Built Rating, the first retail development to achieve this. Aim To look beyond consumption of resources and consider the social impacts. Process Cundall undertook a SROI study which quantified the positive social impact of this development. Assess methods for measuring social impact (e.g. qualitative, quantitative or monetary), enabling inclusion of ESG criteria into investment and due diligence processes. Conduct environmental and social impact measurement based on the natural and social capital protocols. Undertake social return on investment (SROI) to estimate or evaluate societal value generated relative to resources invested for projects, programs or investments. Set decision-making criteria for determining whether the performance is acceptable or for comparing different options. Outcome Positive impacts included reduction in crime, provision of free performance spaces for local artists and reduced burden on healthcare facilities by creating healthy environments. Enable monitoring and disclosure of performance on social, economic, environmental and governance performance data. This could be linked to the Sustainable Development Goals (SDGs) or One Planet Living Principles. 5

Cundall Sustainable Strategy and Governance Business Strategy Helping companies to better understand the changing context within which they operate, understand what sustainability means to the organisation and work towards improving their environmental, social and governance (ESG) performance. Materiality assessments to identify, assess and prioritise sustainability trends, risks and opportunities. Stakeholder engagement to get insights into your organisation s social licence to operate and obtain valuable input from customers and investors. Trend analysis and desktop research to develop an appropriate strategic response to material ESG issues. Company benchmarking to identify gaps and provide a more sophisticated understanding of the landscape. SMART target development to support your organisation s sustainability strategy and objectives. Vision workshops to help define what sustainability means for your organisation and develop a pathway/roadmap for improved ESG performance. Case study A private equity fund management company that focuses on global real estate markets appointed Cundall to develop their global Sustainability Policy, develop reporting systems for both GRESB and INREV compliance, as well as train all their asset managers in Asia and the UK on how to use the environmental performance reporting tool we developed. Aim Required GRESB assessment to access investor funding. Policy and process development to help integrate sustainability into your company s operations and improve accountability. Capacity building through internal stakeholder engagement, workshops, and training programs and tool development. Process Reporting process was developed to capture data of 37 operational properties located across 11 different countries, including hotels, industrial, residential, retail and mixed-use properties. Outcome Asset s performance in line with GRI Standards is now achieved and a well-defined and clear sustainability policy has been created that can be understood by all stakeholders of the business. Monitoring and evaluation frameworks to track performance, measure effectiveness of programmes and initiatives and guide future decisions. ESG reporting advice and content development to help ensure effective communication with stakeholders. This includes advice regarding compliance with ESG reporting requirements and frameworks as well as how to enhance ESG scores and rankings. 6

For more information please contact: Asia Ding Li ding.li@cundall.com Australia Hannah Morton h.morton@cundall.com MENA Hala Yousef h.yousef@cundall.com UK and Ireland Simon Wyatt s.wyatt@cundall.com Asia Australia Europe MENA UK and Ireland www.cundall.com