39 Environmental, Social and Governance Report 2023 PILLAR 2: PROPERTY PORTFOLIO The Group is committed to environmental stewardship by developing and maintaining sustainable and efficient buildings. This is achieved through reducing energy consumption and emissions in construction and operations, generating renewable energy in our buildings, and adopting renewable energy solutions as part of our decarbonisation efforts. To enhance our environmental performance, sustainability is embedded throughout the life cycle of our buildings. We incorporate sustainable design features, use environmentally friendly materials, implement low-carbon construction processes and optimise energy efficiency of our operations. In alignment with the ISO 14001 Environmental Management System (“EMS”) international standard, various business units including ESR China, ESR Japan, ESR Korea, ESR Data Centre and ARA Property Management (representing around 22% of the Group’s total AUM as at end-2023) have obtained the ISO 14001 certification. This certification provides a framework to manage and improve the environmental performance of our operations through robust policies, sound standard operating procedures, clear consultation and communication channels, feasible operational-level targets, well-informed action plans, careful implementation, detailed auditing and continual review. Some examples of improvement initiatives to enhance the environmental management and performance of all our operations are listed in the table below, for implementation where applicable. Sustainable & Efficient Operations TENANT ENGAGEMENT STRATEGY Collaborating with tenants to share and track environmental data is key to identifying energy efficiency opportunities and facilitating data transparency and reporting. Tenants collaboration and engagement is a crucial part of the Group’s strategy which includes raising awareness of their environmental performance, providing platforms for two-way communication and feedback on environmental issues, identifying feasible action plans to address tenants’ environmental performance, jointly organising environmental events and activities, as well as sharing best practices and guidelines on environmental performance management through different forums (e.g., internal working groups, memberships in industry bodies, etc.). To extend our partnerships with tenants on green practices, we are committed to incorporate green clauses and provisions in new and renewal leases progressively, especially in our major markets of operations. In Japan, 98% of our current leases include the green clause/ provision as part of our overall tenant engagement strategy to drive specific initiatives and enhance environmental performance of the asset operations. Such green clauses and provisions include green fitout guidelines and recommendations on energy, water and waste management. Other countries such as Australia and Singapore also implemented green leases, where feasible, to drive better collaboration and environmental building performance. These green leases form part of our overall tenant engagement strategy to work with tenants to achieve long-term sustainable goals and efficient operations at all our assets.
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