58 Environmental, Social and Governance Report 2023 PILLAR 2: PROPERTY PORTFOLIO Climate-related risks and opportunities Impact Key Mitigating Measures Increased market demand for green and climate resilient properties • Increasing costs to conduct due diligence on assets from a green/climate resilience perspective • Increasing costs due to the replacement of greener and more energy efficient equipment • 100% green building certification has been obtained across the entire Fortune REIT portfolio in Hong Kong. Market demand for green finance • Increasing opportunities for lower-carbon enhancement, such as improving energy efficiency from green financing • Reinforcing the Manager’s ongoing commitment to sustainable development and the advancement of its ESG goals, Fortune REIT has secured four sustainability-linked loans, representing 45% of the total loans of Fortune REIT. • Moreover, Fortune REIT has entered into its first sustainability-linked interest rate swap with DBS Bank, which upon the satisfaction of predetermined targets concerning community engagement, enabled Fortune REIT to receive a sponsorship from DBS Bank, giving rise to Farm@Fortune. ESR Australia — ESR Australia is developing a net zero target and strategy in alignment with upcoming climate-risk financial disclosure requirements. This includes Scope 3 emissions and is supported by its new solar offerings to customers and initiatives to reduce upfront embodied carbon in developments. LOGOS — To achieve the decarbonisation commitment, all new acquisitions with physical climate risk assessment are included in the due diligence process, which can identify the physical risks posed to our assets and operations. Also, the buildings targeting Green Star certification will undertake a climate change risk assessment. Climate Change Resilience
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