45 Environmental, Social and Governance Report 2023 PILLAR 2: PROPERTY PORTFOLIO ESR DATA CENTRE FUND SUPPORTING DIGITAL GROWTH The rapid growth of artificial intelligence and modern technologies such as streaming, gaming, self-driving cars, along with conventional cloud and storage, continue to drive data centre demand. To that end, ESR has raised over US$1 billion capital from investors including some of the world’s largest sovereign wealth and pension funds to develop greenfield/ brownfield data centre projects representing over 700 MW of capacity. Strategic guidance on the development of a Data Centre is crucial to utilising the capital commitment from investors. As a result, ESR has formulated three pillars, namely Sustainable Construction, Operational Efficiency and Renewable Energy to provide guidelines on the development and operations of Green Data Centres. In walking the talk, ESR has become an official signatory of the iMasons Climate Accord, which is a global initiative aimed to accelerate the adoption of sustainable practices in the Information and Communications Technology (“ICT”) industry. The targets and progress to date under ESR Data Centre are summarised in the table below: Pillars Focus Area Targets/Strategy Status Sustainable Construction Site selection Conduct physical climate risk assessments for all sites to check climate resiliency and design for mitigations — Utilised Climanomics Platform by S&P Global to assess the physical climate risks associated with all new sites as part of the site due diligence process. In the event of identifying any material climate risks, we will conduct in-depth investigations, followed by the integration of appropriate mitigation measures into our buildings. — Comprehensive physical climate risks were analysed, which include pluvial flooding, temperature extremes, coastal flooding, drought, wildfire, tropical cyclones and water and fluvial flooding. — Successfully integrated all existing and new sites into the platform. There are no significant climate risks associated with any of our locations. Embodied carbon — Retrofit existing buildings — Consider low-carbon construction materials and fuel — Quantify embodied carbon — Retrofitted an existing 76-year-old building into a new data centre in Kwai Chung, Hong Kong to reduce a significant amount of embodied carbon by reusing the existing structure. The project will also adopt electrification during the construction phase, which will enable the construction site to be diesel-generator-free and lower the carbon emissions. With these initiatives, we secured the first Sustainability-Link-Loan (SLL) for ESR in Hong Kong with an amount of HK$1.6 billion to fund this project. — Currently working with an external consultant to quantify Scope 1, 2 and 3 greenhouse gas (GHG) emissions for ESR’s Data Centre business and all our construction projects starting from FY2023. CASE STUDY Sustainable & Efficient Operations
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