53 Environmental, Social and Governance Report 2023 PILLAR 2: PROPERTY PORTFOLIO Core Elements of IFRS S2 Recommendations ESR-LOGOS REIT’s Approach and Progress Risk Management We have integrated environmental risk management into our existing Enterprise Risk Management Framework to identify, assess, monitor and manage climate-related risks and opportunities across our portfolio. With the climate risks identified above, we are in the process of reviewing existing and potential mitigation and adaptation actions to enhance climate resilience throughout our operations and we look forward to disclosing these in our future sustainability reports. We will also continue working with relevant stakeholders to further refine our governance and management of climate-related risks. For physical risks, our mitigating plans include augmenting existing flood control features and measures, such as flood barriers, sensors, water level pumps and flood emergency response plans for our existing properties, as well as regular scanning for exposure of our existing properties to physical risks. We will also identify asset enhancement initiatives (“AEIs”) to improve environmental performance where feasible and incorporate environmental risk due diligence as part of our investment consideration. In addition, periodic scanning will be conducted to identify our exposure to any new environmental risks or changes to prevailing environmental risks in the evolving ESG landscape including climate risks. Transition Risks Country Elaboration of Risk Singapore Part of the Singapore’s Green Plan 2030, Green Building Masterplan (“SGBMP”) aims to deliver three key targets of “80–80–80 in 2030”. Under this plan, 80% of buildings by GFA will have green certification. Effective 1 December 2021, there will be increased mandatory environmental sustainability standards for new buildings and existing buildings that undergo a major retrofit. This also includes raising minimum energy performance requirements and introducing mandatory sustainable construction practices. Singapore carbon tax rate is also set to increase from its current $5/tCO2e from 2019 to 2023 on facilities that emit 25,000 tCO2e or more emissions annually. Carbon tax will be raised to $25/tCO2e in 2024 and 2025, and $45/ tCO2e in 2026 and 2027, with a view of reaching $50-$80/tCO2e by 2030. Stakeholders are increasingly expecting companies to be proactive in managing climate change. Changing perceptions may lead more and more tenants to include sustainable building criteria in shortlisting lease options. Climate Change Resilience
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