ENVIRONMENTAL CLAS Employees n Female: 51% n Male 49% Managing our Environmental Footprint and Climate-related Risks Carbon Mitigation Hierarchy CLI’s SMP comprises several mitigation and decarbonisation strategies which have been prioritised based on their availability, feasibility and decarbonisation potential. Further details are presented in the Carbon Mitigation Hierarchy diagram below. CLI is also reviewing a carbon offsets strategy at the Group level. The planned use of offsets would be aligned to the current SBTi requirements, i.e. offsets will only be used in the last-mile for emissions reductions beyond CLI’s science-based reduction targets and decarbonisation strategies (i.e. residual emissions) to reach Net Zero, and offsets will be sourced from high quality reputable carbon credit projects that undergo the necessary verification and certification processes which are aligned to international standards. Environment, Health and Safety Impact Assessment and Shadow Internal Carbon Price During the feasibility study stage of any potential acquisition or investment in operational assets and development projects, CLAS uses the Environment, Health and Safety Impact Assessment (EHSIA) as a tool for identifying climate-related and EHS risks and opportunities as part of the due diligence process, in order to identify mitigation measures at an early stage. The EHSIA covers areas such as climate change risk exposure, carbon emissions, energy and water consumption, biodiversity, heritage or protected land use, pollution and air quality. The assessment also includes the application of a shadow internal carbon price, which CLI has implemented since 2021 to quantify climate-related risks and opportunities for new investments. The significant findings of the EHSIA and their cost implications are incorporated in the investment paper submitted to the Boards for approval, to provide a more holistic perspective of the investment and ensure necessary capital expenditure has been set aside for the investment to meet the SMP targets. Apart from the shadow internal carbon price, CLI will explore new metrics to measure climate-related risks and opportunities, which CLAS will assess and adopt where relevant for its portfolio. CLI also continues to enhance and develop its proprietary metric, Return on Sustainability, in addition to the regular financial return, to measure ESG impact. This metric aims to redirect investments towards lower-carbon solutions, and renewable energy projects across CLI’s and CLAS’ operations. AVOID REDUCE REPLACE COMPENSATE Low Consumption Design High Energy Efficiency Smart Building Analytics On-site Renewables Green Power Procurement Renewable Energy Certificates Carbon Offsets Applying sustainable design principles to lower consumption of energy, water, waste, materials and improved indoor environment quality (for AEI or new development projects). E.g. products with low embodied carbon, optimising daylight to reduce reliance on artificial lighting etc. Building services (mechanical, electrical and hydraulic system) shall be efficient. E.g. high efficiency HVAC design and equipment, LED lighting, conversion of gas equipment (e.g. gas boilers) to electric such as heat pumps. To adopt smart metering and monitoring system to enhance controllability of the various systems in the assets to operate more efficiently. E.g. Intelligent Building Platform (cloud-based; IOT driven) that enables centralised monitoring and data analytics-based insights towards optimising equipment performance. Explore opportunities to deploy renewable power systems at the properties. E.g. Solar photovoltaic (PV) on building rooftops wherever feasible, explore and pilot new technologies and innovations like micro-wind turbines, waste-to-energy solutions, building integrated PV etc. Enter into Renewable Power Purchase Agreements (PPA) with off-site solar, wind and hydro farms in geographies where it is technically and regulatory-wise feasible. A lower priority solution to be utilised only in cases where no further on-site renewable or offsite renewable power procurement is feasible. Last-mile option to address any residual carbon after all direct carbon-abatement initiatives have been exhausted. Quality and governance control of projects are extremely critical. 25 CAPITALAND ASCOTT TRUST
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