CEE ESG event

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CEE ESG event

VARSAW, 21 NOVEMBER 2024

S e

t t i

n g t h e D a t e T i t l e t x t

CEE ESG event

ESG & Sustainability Solutions

Content

CBRE Services & Network

2. Setting the scene – CEE ESG Trends

– The Ultimate Sustainable Building

3. Levers to tackle challenges – Decarbonization Strategy – Whole Life Carbon WLC – ESG Strategy & Reporting – ESG Due Diligence – The Social & Accessibility Challenge

Click

T e x t s t y l e s

PROPERTY WHOLE LIFECYCLE

Drive positive impact throughout your sustainability journey with CBRE

Access to experts at each stage of your property whole lifecycle.

Supporting your Sustainability strategy through actionable solutions to ensure future-proof real estate. Whenever you need us on your Sustainability journey.

Transaction support

Property/asset management – Energy audit – Net zero action plan – In-Use Building certification – KPI and data management – Tenant engagement – Green lease clauses (renewals) – Renewable energy

Construction/ refurbishment/ fit out

Governance

Disposals

– ESG strategy – Reporting/ benchmarking (GRESB) – Reporting/disclosure assistance (EU Taxonomy, SFDR, TCFD) – Policies and Procedures

– Mitigate risks as appropriate through environmental due diligence – ESG due diligence to achieve ‘green premium’

– ESG due diligence – Environmental due diligence – Flood risk screening – Climate change risk analysis (physical andtransitional risks) – CRREM analysis – Green lease – Low-carbon mobility

– Sustainable

refurbishment and fit-out guide

for Landlord/ Tenant works – EPC improvement – Building certification

(Green building, Wellness, Digital)

CBRE ESG

Dedicated ESG professionals covering Europe

25 310+

Our ESG & Sustainability team benefits from active engagement with our wider network of property specialists, creating unrivalled knowledge around impacts on value, asset management and occupier expectations. This makes us ideally placed to help deliver practical sustainable property solutions that reduce risk and add value to your business.

Setting the scene

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CEE ESG Trends

Aron Horvath Head of ESG and Sustainability Services CEE & Hungary, CBRE

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Poland • Delay in local ESG reg • Decarb – energy mix • High awareness • Foreign landlord influence • Sustainable finance influence • Employee well-being on the rise

IN SUMMARY

ESG Challenges we need to address

Hungary • Decarb: banks, occupiers demanding • EU regulations: EU Taxonomy, CSRD • Local ESG Law! • Green building certificates • Accessibility certificates • Biodiversity certificates (~EPC) Czech Republic • Sustainable finance influence • ESG competitive advantage - funds • Decarb: a must SEE • Decarb - energy mix / transition risks • Employee well-being – return to office • EU regulations, esp. CSRD • Anti-corruption • Sustainable resource mgnt, circularity • Serbia (non-EU): local sustainable financing regulation • energy production/procurement

Slovakia • EU regulations • Circularity • Decarb - energy mix

• Sustainable finance influence • Data availability / collection

Romania • Decarb - energy mix / transition risks • Employee well-being – return to office • EU regulations, esp. CSRD • Anti-corruption • Sustainable resource mgnt, circularity

CEE ESG Trends

Property Market Context

After EXPO Real 2024: „things started to move” …a new cycle might kick off?”

Change in Investment Volume by Geography

Change in Investment Volume by Asset Class

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

-20% -10% 0% 10% 20% 30% 40% 50% 60%

42%

30%

68%

24%

12%

9% 9% 12%

-9%

20%

12%

Office

Retail

Industrial

Residential

Hotel

Q3 vs Q2 2024 vs 2023 (YTD)

European Average (YTD)

Q3 vs Q2

2024 vs 2023 (YTD)

European Average (YTD)

Source : CBRE Research

CEE Q3 2024

CEE Office Market Figures

OFFICE STOCK AND VACANCY RATE

OFFICE PIPELINES UNDER CONSTRUCTION (UNTIL 2026) IN CEE

700

647

20%

8,0

600

527

18%

7,0

17,3%

500

16%

6,0

14,0%

14%

M sq

389

13,2%

400

5,0

12,3%

12%

'000 sq m

10,7%

10,3%

10%

4,0

300

229

8,7%

8,1%

222

3,0

200

122

2,0

100

1,0

0,0

Bratislava Bucharest Budapest Prague Warsaw SEE*

Baltics** Poland Regional

U/C volume 2024 Pipeline for 2025 Pipeline for 2026

Total Stock (left)

Vacancy Rate (right)

*SEE: Belgrade, Zagreb, Sofia, Ljubljana **Baltics: Tallinn, Riga, Vilnius

Source : CBRE Research

CEE Q2 2024

CEE Industrial & Logistics Market Figures

COMPLETIONS AND VACANCY RATE

9,0%

1 800

8,5%

8,3%

8,0%

1 600

7,0%

1 400

6,0%

1 200

5,6%

5,0%

1 000

5,0%

4,0%

800 Thousand sq m

4,0%

3,7%

3,4%

3,0%

600

2,9%

2,0%

400

2,0%

1,0%

200

0,0%

Czech Republic

Hungary Poland Romania Slovakia SEE* Lithuania Latvia Estonia

Completions H1 2024

Vacancy rate

Source : CBRE, Q2 2024

*vacancy rate estimation for SEE

CEE ESG Trends

CEE ESG Context

ESG CONTEXT

Focus on ESG has intensified

Reducing Energy consumption is a priority

88% of all respondents say that reducing energy consumption and carbon emissions is the top ESG consideration most likely to impact property value.

70%

of survey respondents reported a heightened focus on ESG strategies in 2022, mostly due to higher energy prices and government-imposed ESG disclosure requirements. Occupiers plan to meet net-zero targets sooner and under a more robust set of principles than investors.

Investors and occupiers are most often willing to pay a premium for buildings with on-site renewable energy generation and/or smart technology to monitor and adjust energy usage.

53% of respondents say that lack of quality data is the most concerning impediment to achieving ESG goals . Lack of data is a barrier to achieving ESG goals

Emphasis on wellbeing

86% of respondents indicate that proximity to public transit (or lack thereof) impacts property value because easier commutes are associated with better employee well-being.

Half of respondents are willing to pay a premium for buildings that support the physical and mental health of their employees.

Investors from CEE consider “Access to green financing” one of the top 5 initiatives to follow in order to become ESG compliant

Question 14: What are the following ESG initiatives you will consider for your real estate investments?

74%

Retrofit existing buildings to be more energy efficient/ ESG-compliant

70%

Enable on-site renewable energy generation (e.g. solar)

66%

Acquire / develop green buildings

65%

Install EV car charges

39%

Access to green financing / loans / bonds

38%

Incorporate green lease

35%

Consider climate risk (e.g. flooding, typhoon) in due diligence for new acquisitions

22%

Invest in or develop socially responsible housing (e.g. affordable housing, senior housing) Dispose aged, non-green assets

18%

17%

Pay premiums for assets that are ESG compliant

10% 20% 30% 40% 50% 60% 70% 80% 90%

CEE

All EMEA

Source: European Investor Intentions Survey, CBRE Research, December 2023

CEE ESG Trends

Regulations

FIT-FOR-55 EUROPEAN CLIMATE LAW

ESG - ACCUTE QUESTIONS

One answer to why invest in “ESG conformity”

EU TAXONOMY

COP21

SFDR

UN SDG

EU GREEN DEAL

ENERGY AUDITS

PUBLIC

Regulations are materially different, will impact assets and will not go away

VOLUNTEER INITIATIVES

ACCOUNTABILITY FOR ACHIEVING INTERIM TARGETS

2015

2020

2030

COMMITMENTS

REPORTING: CSRD - 2025 ENERGY PERFORMANCE DIRECTIVE (EPBD) - 2026

REPORTING

NON-FINANCIAL REPORTING DIRECTIVE

CORPORATE SUSTAINABLE DUE DILIGENCE DIRECTIVE - 2025

SOCIAL TAXONOMY

EPBD

New covered parking lots adjacent to buildings equipped with solar technologies

All deep renovations equipped with solar technologies (>500m 2 )

Selected EPBD actions timeline relevant to commercial real estate

All new developments equipped with solar technologies (>250m 2 )

All new developments Zero Emissions Buildings

TRANSPOSITION EXPECTED

2024 2025 2026 2027 2028 2029 2030 2031

2032 2033

Compulsory renovation passports

Are you ready?

Ban on 16% worst efficient buildings (2020 baseline)

Ban on 26% worst efficient buildings (2020 baseline)

WE ARE HERE

Member states reporting on life-cycle global warming potential of building stock (exact year TBC)

On-site fossil fuels totally phased out by 2030 for new buildings

EU TAXONOMY

Which activities are eligible ? EU TAXONOMY COMPASS The European Commission has made available an identification tool for activities called the EU Taxonomy Compass. Users can check which activities are included in the EU Taxonomy (taxonomy-eligible activities), which objectives they substantially contribute to, and which criteria they need to meet.

7 activities for the “Construction & Real Estate” Sector

13 SECTORS

1. Forestry 2. Environmental protection and restoration activities 3. Manufacturing 4. Energy 5. Water supply, sewerage, waste management and remediation 6. Transport 7. Construction and real estate 8. Information and communication 9. Professional, scientific and technical activities 10. Financial and insurance activities 11. Education 12. Human health and social work activities 13. Arts, entertainment and recreation

1. Construction of new buildings 2. Renovation of existing buildings 3. Installation, maintenance and repair of energy efficiency equipment 4. Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) 5. Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings 6. Installation, maintenance and repair of renewable energy technologies 7. Acquisition and ownership of buildings

Tool

CEE ESG Trends

Green Building Certifications

Top five environmental building features that impact a real estate transaction (Continental Europe)

Pay a Premium (if present)

INVESTORS

OCCUPIERS

Seek a Discount (if absent)

Reject Building (if absent)

Seek a Discount (if absent)

Reject Building (if absent)

Total Impact*

Green building certification

Features that reduce energy consumption Smart technology that adjusts building operations to reduce environmental impact

89.4%

85.6%

47.1%

28.2%

14.1%

32.1%

21.4%

32.1%

Features that reduce energy consumption Superior resilience to effects of climate change (e.g., flooding) Smart technology that adjusts building operations to reduce environmental impact On-site renewable energy generation

88.4%

78.9%

35.5%

42.4%

10.5%

50.9%

17.5%

10.5%

Green building certification

78.2%

80.1%

35.3%

28.8%

16.0%

40.0%

18.2%

20.0%

On-site renewable energy generation Superior resilience to effects of climate change (e.g., flooding)

76.7%

48.2%

21.4%

7.1%

80.0%

55.0%

22.5%

2.5%

75.0%

42.3%

13.5%

19.2%

79.7%

60.7%

14.7%

4.3%

Source: CBRE Research

* Note: Total Impact = If present, we’d consider paying a premium + If absent, we’d seek a discount + If absent, we’d exit from or reject the building.

Certified office stock 2019-H1 2024

Share of certified offices in the total office stock (2019-H1 2024)

80%

70%

60%

50%

40%

30%

20%

10%

Source: CBRE Research

2019 2020 2021 2022 2023 H1 2024

Certified stock sample average H1 2024

We Need To Act

You may delay, but time will not.

Benjamin Franklin

The Ultimate Sustainable Building

Ludovic Chambe Head of ESG and Sustainability Services Continental Europe, CBRE

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THE ULTIMATE SUSTAINABLE BUILDING

Investor vs Occupier

Goals

Targets

Requirements

Specifications

Investor

– Efficient HVACR – High performance thermal shell – BMS – On-site renewable energy generation – Withstand extreme weather/conditions – Biodiversity features – Ability to upgrade to more efficient systems in the future – Low carbon construction material … – Efficient lighting – On & Off-site renewable energy – Sub-metering – Public transportation – Bicycle storage, EV charging points – Low carbon fit out design – Irrigation water – Constant IAQ, acoustic measures – Biophilic design – Outdoor amenities, terrace, green space …

ESG compliant building with high occupancy rate and low exit yield

– Energy efficient building (EPC B or better, NZEB – 10%) – Electrification, incl. HVAC – NZC roadmap – Decarb CAPEX – Ability to source 100% renewable energy – Low-cost BREEAM credits – Low vulnerability to physical climate risk – Green lease clauses – …

– Net Zero by 2040/2050

– No CRREM stranding – EU Taxonomy aligned – Meet SFDR requirements – BREEAM 'Excellent’ or better

Occupier

Resilient and efficient building with access to the right workforce, in line with corporate sustainability strategy

– Net Zero buildings – Renewable energy – Availability of ESG data

– Net Zero by 2030/2040

– Fossil free by 2030 – Sustainability ratings – Business continuity – Low OPEX – Attractive workplace

– Accessible by public transportation – Alternative to fossil fuel vehicles

– Circular economy – Climate resilience – Water efficiency – Health and well-being design – Amenities & services – ….

THE ULTIMATE SUSTAINABLE BUILDING

Investor vs Occupier

Sustainable building features High performing properties with circular building materials Heat pumps Smart LED lighting On- and off-site PV solar BMS optimization and monitoring Low carbon mobility solutions ( EV ready) Health & wellbeing features Green outdoor spaces including biodiversity & water efficiency features

Specifications

Requirements

Targets

Goals

Targets

Requirements Specifications

Occupier

Investor

THE ULTIMATE SUSTAINABLE BUILDING

The Third Stakeholder

Investor

Regulator

Occupier

T e x t s t y l e s

“What is the level of investment required?”

Question from clients

INVESTOR SURVEY

Willingness to pay premiums for

Premium certain investors are willing to pay to acquire assets that meet sustainability standards

40%

sustainable assets has receded YoY although some investors are still prepared to do so

35%

30%

25%

20%

15%

10%

Less than 5%

6% - 10%

11% - 15%

16% - 20%

20%+

Source: 2024 European Investor Intentions Survey, January 2024

LENDER SURVEY

Lenders are willing to offer margin stepdowns for the origination of assets with strong ESG credentials

How much of a margin stepdown are lenders willing to offer?

Are lenders willing to offer margin stepdowns for assets with strong ESG credentials?

14%

Unsure

54%

Yes

13%

Minor stepdown (<5 bps)

22%

46%

Slight stepdown (5-10 bps)

Planning to implement within the next 12 months

15%

23%

Moderate stepdown (10-20 bps)

Unsure

Large stepdown (>20 bps)

0% 10% 20% 30% 40% 50% 60%

0% 10% 20% 30% 40% 50%

Source: European Lender Intentions Survey, CBRE Research, June 2024

OCCUPIER SURVEY

Occupiers are increasingly unwilling to pay a rent premium over market rent for new green certified facilities

Rent premium over market rent for a green certified facility

59%

are unwilling to pay a rent premium for green certified facilities. This is a significant increase from 2023, where less than a third of respondents selected these options. The response this year presents challenges, given that nearly two-thirds of respondents say they plan to be net zero before or during 2030.

10% 15% 20% 25% 30% 35%

0% 5%

None, but we would seek a discount for non-compliant facilities

None

A premium below 5%

A premium between 5% and 10%

A premium over 10% Do not know / No answer

2024 2023

Source: CBRE and Analytiqa (European Logistics Occupier Survey 2024)

T e x t s t y l e s

“What are the key elements for the success of my strategy implementation ?”

Question from clients

CAPEX

Sustainability CAPEX Plan

How to make my property ready for the future ?

Building certification

Decarbonisation audit

ESG Due Diligence

Regulation compliance

Physical climate risk & adaptation

Renewable energy feasibility

Fund

GOVERNANCE

Sustainability at every level of your organization

ENGAGEMENT DISCLOSURE, COMPLIANCE, BEST PRACTICES AND INNOVATION – Local communities – Industry bodies – Regulators – Suppliers – Non-financial rating agency

External

STRATEGIES INTERACTIVE ESG STRATEGY AND PROGRAMME DELIVERY – Governance – Stakeholders Engagement

House

– ESG Manager – Targets/KPI – Strategies

Fund

OBJECTIVES DEDICATED FUND STRATEGY, LABEL, MEASUREMENT AND RISK MANAGEMENT

– Portfolio / Fund Managers – Regional / Local Strategies

ACTIONS PRACTICAL IMPLEMENTATION, AUDIT AND IMPROVEMENT PLAN – Asset managers – Property Managers – Facility Managers – Building Operator-tenants

Asset

OVERALL STRATEGY & KNOWLEDGE

House Portfolio

Approach & Delivery

Programme Updates

Template Development

Ad Hoc Advice

Occupier Engagement

ESG Policy & Guidance

Market Updates

Regulatory Guidance

Reporting + GRESB + EUT & SFDR

Fund team engagement

Net Zero Roadmap

Implementation Toolkits

Investor Engagement

Portfolio Strategy

Data Management

Net Zero Audits

Energy Ratings

Certifications Due

Physical Climate Risk

Asset Improvement Plans

Asset

Diligence

Key takeaways

01 Sustainability CAPEX plan

02 Stakeholder engagement

03 Social and biodiversity

Levers to tackle challenges

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Decarbonization - tackling energy & GHG emissions

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DECARBONIZATION - TACKLING ENERGY & GHG EMISSIONS

Decarbonisation Hierarchy

Understand Energy consumption, GHG emissions, and comfort today

Efficiency Maximize operational efficiency of current building operations, systems, and BMS

Retrofit Upgrading your systems and

Generate Install on-site renewable energy generators such as PV solar panels

Purchase Ensure procurement of renewable generated energy from off-site powerplants

Offset Emissions that cannot be avoided, should be neutralised with high quality carbon credits

components to energy efficient and fossil-free alternatives

REAL ESTATE DECARBONISATION

External

A 2-phase approach

Portfolio Screening Aggregate information, track performance and identify assets needing retrofits 1

Corporate strategy

Portfolio/ fund

Asset deep dive Tailormade strategy and action plan on improvement measures to enhance energy and sustainability performance

Asset

DECARBONIZATION - TACKLING ENERGY & GHG EMISSIONS

What improvement measures should be implemented toreach specific sustainability targets.

Energy & Carbon Advisory

The most valuable outcome for the client is know how much CAPEX should be invested at what moments to reach the targets.

1 2 The most important process for the advisor is:

Determine the financial impact of installing an improvement measures E.g. CAPEX of installing X and its running costs

Calculation of the effectiveness of improvement measures

E.g. kWh saved when X get installed

T e x t s t y l e s

250

DECARBONIZATION - TACKLING ENERGY & GHG EMISSIONS

Shell upgrades

Energy storage

HVAC upgrades

Rooftop PV solar

Smart LED lighting

HVAC optimisation

Energy and GHG emissions reduction roadmap

200

Renewable energy PPAs

150

100

Energy intensity [kWh/m²/yr]

GHG intensity [kgCO2e/m²/yr]

2021

2031

2026 €€€€€ 2027 2028 2029

2039 €

2041

2037

2022

2023

2032

2033

2025

2035

2038

2047

2036

2024

2042

2034

2043

2045

2020

2030

2048

2050

2046

2049

2044

2040

Decarbonisation pathway

Energy reduction pathway

T e x t s t y l e s

DECARBONIZATION - TACKLING ENERGY & GHG EMISSIONS

Net Zero Cowboys

What’s wrong?

How can you minimize the risk of receiving faulty decarbonization advice?

—

Incorrect assumptions with data gaps

—

Long-term engagement and accountability

—

Wrongly established baselines

—

Multi-discipline advisory

—

Over simplified energy calculations

—

Inquire about the use of subcontractors

—

The CAPEX figures do not cover the full scope

—

BMS connection and updating of recommendations

—

Not all potential measures are evaluated

—

Dynamic modelling and transparent cost calculations

—

Does not fit into asset management plan

—

Request raw files and a technical demo

—

Accreditation and use of standards (e.g. ASHRAE)

—

Principal contractor potential

CBRE’s Approach

Understand and optimise before investing in upgrades

In-house dynamic modelling team and local cost surveyors

Real-time insights and periodic review of recommendations

End-to-end renewable energy offering

Guarantees and/or principal contracting of implementations

Whole life carbon – the new normal

Sladjana Popović Head of ESG & Sustainability Services SEE, CBRE

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LIFE CYCLE ASSESSMENT (LCA)

(GWP) Global Warming Potential

A 'Net Zero Embodied Carbon’ asset: – Total GHG emissions and removals over an asset’s lifecycle (Modules A1-A5, B1-B5 and C1-C4) – are minimized , meeting local carbon targets (e.g. kgCO2e/m2) – with additional ‘offsets’ , equals zero . •

It is recommended to calculate embodied carbon emissions , as this will represent one of the largest emission component in your GHG inventory, it is a requirement of the EU Taxonomy, and certifiers, investors are increasingly asking for it. • This requires collecting the components of the building and calculate embodied emissions based on LCA analysis using • This emission element is a major contributor to the industry’s impact, and also targeted by legislators and other organizations as a number one factor to reduce and ask for in terms of compliance. • Moreover, with this GTC would be ahead of the curve in emissions measurement. The buildings’ design teams and general contractor representatives will need to be involved in collecting the relevant data based on which the inventory is created. either Environmental Product Declarations or an approximative product lifecycle emission figure.

(LCA) Life Cycle Assessment

Requirement of the EU Taxonomy for commercial building constructions above 5000 m2

LIFE CYCLE ASSESSMENT MODELING STANDARD

LCA modeling standards

Which standard applies?

Building life-cycle carbon footprint or LCA should be performed in compliance with standard EN 15978. Sustainability of construction works. Assessment of environmental performance of buildings. Calculation method.

Building’s LCA – stages according to EN 15978 Source: LETI, 2020

POLICY BACKGROUND

Indicative timeline of

introducing net zero whole-life carbon (WLC) requirements

Source: BPIE, 2022

12 years to go before zero carbon buildings become the norm.

POLICY BACKGROUND

EU policy instruments

Lifecycle stages

Modules

EPBD*

EED CPR Ecodesign WFD ETS Level(s)

Taxonomy

A1 Raw material supply

EU policy instruments targeting buildings’ whole life carbon

●

● ●

●

PRODUCTION

● ● ●

● ● ● ●

● ●

● ● ●

A2 Transport

A3 Manufacturing

●

A4 Transport

CONSTRUCTION

A5 Construction installation process

●

● ● ● ●

● ● ● ● ● ● ● ●

● ● ● ●

B2 Maintenance

B3 Repair

Source: Self-made based on BPIE, 2021 and WGBC, 2022

B4 Replacement

USE

B5 Refurbishment

B6 Operational energy use

●

Glossary: EPBD – Energy performance of buildings directive EED – Energy Efficiency Directive CPR – Construction Products Regulation WFD – Waste Framework Directive ETS – EU Emissions Trading System

● ● ● ● ●

● ●

●

● ● ● ● ●

C1 Deconstruction

●

C2 Transport

END-OF-LIFE

● ● ● ● ● ●

● ● ●

C3 Waste processing

● ●

C4 Disposal

BEYOND LIFE

D Reuse/recycle

Legend ● Fully covered ● Partially covered ● Under revision - Not covered *As of 2027, the EPBD will require life-cycle GWP calculation for buildings larger than 2000 m 2 . In 2030, this requirement will be extended to all newly constructed buildings.

Levers to tackle challenges II.

ESG Strategy & Reporting

Joanna Mroczek Head of Strategic Consulting & ESG Poland, CBRE joanna.mroczek@cbre.com Tel. 500 000 583

Anna Jarzębowska Associate Director ESG and Sustainability Services Poland, CBRE anna.jarzebowska@cbre.com Tel. 519 078 730

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CSRD

Timeline

The Corporate Sustainability Reporting Directive (CSRD) was enacted on January 5, 2023. This new directive revamps and fortifies the regulations surrounding the social and environmental information that companies must report.

WE ARE HERE

2025 : Publication of the first reports following the CSRD requirements for large firms (EU Companies) already subject to the NFRD being replaced by the CSRD

Here are some of the critical requirements under the 12 ESRS Standards published in 2023: – Carbon footprints Scope 1, 2 and 3 – ESG risks and opportunities with the business model – Impacts on climate, biodiversity, and water – Supply chain risks and opportunities

CSRD release first framework

2026 : For large companies not currently covered by the NFRD

CSRD approved

ESRS Standards published

2027 : For Small and mid-sized companies

2028 : For Non-EU companies

2021

2022

2023

2024

2026

2027

2028

2029

2030

2025

companies’ turnover > 75%

Companies impacted by this directive across Europe ≈50 000

Covering > 75% of total EU

FROM EU TO COUNTRY LEVEL

have already partially or fully completed CSRD transposition 45%

CSRD transposition into EU national regulations

Currently, 13 countries have already partially or fully completed the transition of the regulation into local law

Transposition partially or fully completed

Draft consultations or regulations have been published

Drafts or opened consultations not submitted yet

Not in scope

PROCESS

Right approach to ESG Strategy and Reporting should help to build value of the business – limit vacancy and costs, increase the value and attract investors

I. DOUBLE MATERIALITY & AUDITS

II. ESG STRATEGY -GOALS

III. ESG ROADMAP

V. BUSINESS RESULTS

The pillars of the client's ESG Strategy will be identified, with their main associated objectives. Key KPIs for monitoring will also be recommended

TENANTS

The main actions to be followed to achieve the objectives set out in the strategy will be defined, and their recommended implementation over an estimated horizon of 3 years.

Develop a double materiality exercise that will allow the client to define the most relevant aspects of their ESG Strategy. The guidelines set forth in the ESRS will be referenced

INVESTORS

and disclosure guidelines to be followed will be recommended

FINANCING INSTITUTIONS

CITIES

IV. ANNUAL REPORT

CSRD REPORTING - CASE STUDY

Double-materiality is focused on understanding the most relevant ESG Topics for each company and its related Impacts, Risks and Opportunities

Anticipating the process of identifying Impacts, Risks and Opportunities is key for a robust evaluation of the topics

ESRS: “A sustainability matter is material from an impact perspective when it pertains to the undertaking’s material actual or potential, positive or negative impacts on people or the environment over the short-, medium- or long-term. Impacts include those connected with the undertaking’s own operations and upstream and downstream value chain, including through its products and services, as well as through its business relationships. (…) (…)A sustainability matter is material from a financial perspective if it triggers or could reasonably be expected to trigger material financial effects on the undertaking. This is the case when a sustainability matter generates risks or opportunities that have a material influence, or could reasonably be expected to have a material influence, on the undertaking’s development, financial position, financial performance, cash flows, access to finance or cost of capital over the short-, medium- or long-term.”

Financial Materiality Financial ESG related risks and opportunities for the organization

Impact Materiality Organization impact on people and the planet

CSRD REPORTING - CASE STUDY

The results of the Double-materiality can be summarized in 2 key outputs: the materiality matrix and the list of Impacts, Risks and Opportunities (IROs)

Level of importance – Optionally showed in a materiality matrix

IROs

ESRS: “The ESRS sustainability statement shall include relevant and faithful information about all impacts , risks and opportunities (also referred to as IROs) across environmental, social and governance matters determined to be material from the impact materiality perspective, the financial materiality perspective or both . “

CSRD REPORTING - CASE STUDY

Challenges of the new Directive – key takeaways

02 Lack of ESG strategies / goals

03 Lack of knowledge about the risks

01 Lack of data

04 Lack of the engagement of BOD / blurring of responsibility

05 The temptation to treat ESG

06 Complicated guidelines and regulations

Reports as promotion

The Role of Due Diligence

Aron Horvath Head of ESG and Sustainability Services CEE & Hungary, CBRE

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LEVERS TO TACKLE CHALLENGES

ESG Due Diligence

01 Is my building ESG-proof?

02 How can I tell my tenant?

03 What is S & G?

CHALLENGES

02 Link to accepted frameworks

03 Clear improvement measures

01 Standardized analysis

LEVERS

CASE STUDY ESG proofing to prepare for sales transaction

• Environmental, Social and Governance (ESG) assessment of the Client’s building and its operation. • LEED v4.1 Operation & Maintenance (O+M) gap analysis and Access4you certification. • EU Taxonomy assessment against „Acquisition and Ownership of Buildings” activity criteria based on relevant documentation. • Temperature, wind, water and solid mass related risks were evaluated using the Munich RE database and using HAZID methodology. • Energy audit to identify energy saving measures i.e.: AHU renovation, time schedule adjustment, air re-mixing, solar PV installation. • Decarbonisation pathways analysed with the CRREM Tool comparing the 1,5°C Target pathway to the asset’s performance with and without the recommended measures . • Life Cycle Operating and Embodied impacts were calculated. • Benchmarking of the asset via One Click LCA and Ramboll European benchmarks. • Scenario analysis based on different energy consumption pathways and share of recycled reinforcement content in concrete.

A must have for investment due diligence Assessment of the following key elements:

ESG DUE DILIGENCE

Our approach to Asset-level ESG Due Diligence

– Net Zero Pathway using CRREM – Climate Risks for mitigation strategies, aligning with the EU Taxonomy, using Climate X or local source – Building Certification a gap analysis according to BREEAM In-Use International and/or LEED O+M and/or LEED BD+C

- Environmental, Social and Governance impacts. - Regulatory Compliance by screening the EU and country legislations

Net Zero Pathway

Environmental, Social, Governance

Building Certification

Climate Risks

Health & Wellbeing

0 20 40 60 80

Pollution

Energy

Landuse & Ecology

Transport

Regulatory Compliance

2018 2022 2026 2030 2034 2038 2042 2046 2050

kgCO2 per sqm per year (target)

Resilience

Water

Office

Retai High Street

Shopping Centre

Warehouse Healthcare

Hotel

Resources

CLIMATE X

Leisure

CRREM, 2024

Current situation

After improvment

The Social & Accessibility Challenge

Nicole Sommer Head of ESG and Sustainability Solutions Romania, CBRE

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OUR APPROACH TO DEVELOP SOCIAL VALUE STRATEGY

Economic Regeneration

Environment

Asset performance & Occupiers Data

Run workshops with the site managers and occupiers to engage them in the purpose of the exercise

Issue surveys to the site managers and occupiers and check data with property managers and asset managers

Security & Safety

Community

Connectivity

Education

Local Area Data

Climate

Employment

Identify the communities relevant to the site in question and draw a geographical boundary for data collection

Pull data from the indexes of multiple deprivation, ONS, Public Health Profiles, NOMIS, Police Crime Profiles and DEFRA

Diversity & Inclusion

Health

Local area data

Asset performance data

Social Value Snapshot Tool Explained

Priority Areas

High

Medium

Assessing priority areas to develop the Social Value Strategy

Affordability

Local Economy

Overcrowding

Quality

Homelessness

Site Safety

Access to Heating

Resilience

Overheating

Cardiac Arrests

Net Zero

First Aid

Workforce Representation Youth Education

Water

Safe Access

Crime

Adult Skills

Building Utilisation

Carbon

Accessibility

Ecology

Inclusivity Fair Employment Gender Discrimination Local Employment Air Pollution Amenities Noise Car Emissions Public Space Wi-Fi Social Engagement Food Post Offices Physical Health Sunlight

KEY

Wellbeing Air Quality

Local Area Needs Asset Performance

LEVERS TO TACKLE CHALLENGES

Social Impact - Access4you

03 Ensuring

01 Measuring impact

02 Setting clear goals

CHALLENGES

accountability & compliance

02 Stakeholder engagement & colaboration

03 Reporting structure & transparency

01 Data analytics & progress

LEVERS FOR CHANGE

CASE STUDY

ESG CONSULTANCY

NEPI Rockcastle Access4you certification pilot project – 3 countries: RO, HU & PL

Key Project Objectives: • Provide a view on the status of the buildings and what NEPI has to address to make the assets fully accessible in accordance with Access4you certification; • Give a full view on the existing level of Access4you certification of the three assts and provide a comprehensive set of recommendations to help achieve a higher level; • With these, help the client budget the implementation of the recommended solutions and provide metrics for social impact reporting. Key Results:

Geographic scope: 3 countries (RO,HU, PL,) Mega Mall, Bucharest (2015) Aréna Mall, Budapest (2007) Bonarka City Center, Krakow (2009) Portfolio: 3 assets (for the pilot) Asset-class: retail/shopping malls GLA: 218,200 sqm A4Y Certification Delivered: 2024

Bonarka

Mega Mall

Arena Mall

Social KPIs Access4you Score helps to make your Social data measurable, further supporting your CSRD compliance in the ESRS S1, S2, S3 and S4 frameworks Access4you is a building certification that helps you develop the Social part of ESG through DE&I and accessibility Development through inclusion This directive ensures that everyday products and services are accessible to people with disabilities, . In particular that people with disabilities have equal access to banking products and services, starting from 28 June 2025. Compliance with EAA – Directive 2019/882

ACCESS4YOU CERTIFICATION

Our approach to Accessibility Certification

Certification System

Certification Process

Building Certification Mark & Sticker

Thank you.

ধন্যবাদ

ध�वाद

תודה .

ﺷﮑرﯾہ .

ﺷﻛرا

Спасибо

Gracias

Salamat

Obrigado

Merci

Danke

Terima Kasih

謝謝

감사합니다

ありがとう

Aron Horvath Head of ESG and Sustainability Services CEE & Hungary

Joanna Mroczek Head of Strategic Consulting & ESG Poland Tel. +48500000583 joanna.mroczek@cbre.com

Sladjana Popović Head of ESG & Sustainability Services SEE

Nicole Sommer Head of ESG and Sustainability Solutions Romania, CBRE

Tel. +36 20 268 28 67 aron.horvath@cbre.com

Tel. +381 63 110 9238 sladjana.popovic@cbre.com

Tel. +4 0731 492 098 nicole.sommer@cbre.com

CBRE ©2024 All Rights Reserved. All information included in this proposal pertaining to CBRE—including but not limited to its operations, employees, technology and clients—are proprietary and confidential, and are supplied with the understanding that they will be held in confidence and not disclosed to third parties without the prior written consent of CBRE. This letter/proposal is intended solely as a preliminary expression of general intentions and is to be used for discussion purposes only. The parties intend that neither shall have any contractual obligations to the other with respect to the matters referred herein unless and until a definitive agreement has been fully executed and delivered by the parties. The parties agree that this letter/proposal is not intended to create any agreement or obligation by either party to negotiate a definitive lease/purchase and sale agreement and imposes no duty whatsoever on either party to continue negotiations, including without limitation any obligation to negotiate in good faith or in any way other than at arm’s length. Prior to delivery of a definitive executed agreement, and without any liability to the other party, either party may (1) propose different terms from those summarized herein, (2) enter into negotiations with other parties and/or (3) unilaterally terminate all negotiations with the other party hereto. CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such logos does not imply any affiliation with or endorsement of CBRE.

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