41 Environmental, Social and Governance Report 2023 PILLAR 2: PROPERTY PORTFOLIO NET ZERO STRATEGY AND DECARBONISATION ROADMAP The Group is on track to develop our overall Net Zero Strategy and Decarbonisation Roadmap as part of the transition to net zero, with the advisory support from an external consultant. The scope of this work includes accounting and establishing a carbon baseline, conducting representative sampling of standing assets and development projects, reviewing market-specific carbon regulatory requirements and decarbonisation opportunities/constraints, identifying and assessing tailored and feasible opportunities through carbon modelling, setting carbon reduction targets and pathways, and developing an actionable net zero strategy and decarbonisation roadmap. This work considers different asset typologies in different markets, with the aim to mitigate operational carbon (Scope 1 & 2), embodied carbon (Scope 3), and whole life carbon (Scope 3) across our value chain according to our carbon mitigation hierarchy. RENEWABLE ENERGY As part of the Group’s commitment to decarbonise our property portfolio and transition to a low-carbon economy, we adopt a carbon mitigation hierarchy approach. This approach prioritises carbon avoidance through low-carbon design and construction, and achieves energy efficiency via the enhancement and optimisation of asset operations. These efforts are also complemented with the launch of synergistic partnerships across major markets over the past year to complement the Group’s overall decarbonisation efforts. Our installed rooftop solar power capacity has increased across our major markets and we continue to explore other renewable energy sources. Across the Group, we have installed 112 MW of rooftop solar power capacity as of December 2023. By 1H 2024, the total capacity will be approximately 150 MW, including solar panels to be installed during the early six months. Installed rooftop solar power capacity as at FY2023 In MW ESR Australia 6.2 China 21.6 India 1.8 Japan 32.0 South Korea 0.7 Singapore 15.6 Sustainable & Efficient Operations Installed rooftop solar power capacity as at FY2023 In MW ARA 4.7 LOGOS 29.7 Total 112.3 Australia In 2023, ESR Australia partnered with a leading Australian clean energy system developer, Solar Bay, to invest up to AUD$500 million in renewable energy infrastructure over the next decade. The collaboration aims to deploy 50 MW solar panels, 300 MW battery storage and electric vehicle (EV) charging infrastructure around various assets in Australia. ESR Australia’s customers get to enjoy up to a 50% reduction in energy costs while achieving an annual decrease of up to 56,000 tonnes in carbon emissions. This partnership enables ESR and its investment partners to benefit from the energy transition opportunity associated with our large portfolio of warehouses and supports customers who are pursuing net zero targets and EV fleets. As we expand our efforts to achieve decarbonisation and transition towards a low-carbon economy, ESR Australia actively enhances capabilities through various initiatives. These include the deployment of electricity monitors on industrial properties to provide detailed interval data on whole-of-building electricity use and associated Scope 3 emissions, as well as the implementation of water monitors to ensure accurate and timely water data and support leak detection. In addition to these measures, ESR Australia made significant progress in its renewable energy transition. Currently, 98% of the electricity under our operational control, including business park base-buildings, industrial estate common area lighting and our own tenancies, was converted to a 100% Green Power product. This remarkable achievement nearly eliminated the operations’ scope 2 emissions.
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