Eurocommercial Properties N : ESG update report 2023

Our ESG strategy

At Eurocommercial Properties, we recognise that building a sustainable and resilient business is the foundation for long-term success. The ESG and business strategies are carefully aligned, and each business decision is approached with a long-term view, supported by detailed research to evaluate its environmental and socio-economic impact. While each shopping centre presents its individual set of challenges and opportunities, Eurocommercial has developed a broad ESG vision and strategy to meet global challenges and the future demands of customers, tenants, and employees while creating sustainable centres. The ESG approach is centred around three strategic pillars: Be green, Be engaged, Be responsible. These pillars guide our efforts to reduce environmental impact, engage with stakeholders, and act responsibly towards society and the environment.

Materiality assessment

ESG applies to all aspects of Eurocommercial's business operations. In 2020, the Company mapped out particular topics and targets to help develop the business with impact while enhancing value. These clear objectives underpin the current strategy. The first step was to execute a detailed materiality assessment to thoroughly assess a wide range of ESG topics. The Company then selected which topics would create the most value for Eurocommercial and its stakeholders, while aligning with the United Nations Sustainable Development Goals on the global agenda. Eurocommercial carefully examined the core components of its business strategy, progressing their integration with the ESG strategy over the short, medium, and long term.

for external stakeholders High

Connectivity and accessibility

Climate change and carbon impact Innovation an technology

Cyber security and data privacy

Health and safety of building users

Tenant engagement

Customer and and satisfaction visitor attraction

Energy management

Building certification

Medium Level of importance

In 2023, Eurocommercial took proactive steps in anticipation of upcoming European regulations, particularly the Corporate Sustainability Reporting Directive (CSRD). The CSRD, a regulatory framework aimed at strengthening corporate accountability and sustainability, requires companies to provide detailed disclosures regarding their sustainability and environmental impact within corporate reports. Eurocommercial is committed to aligning its 2024 financial report with the CSRD regulations to enhance transparency and accountability in its sustainability efforts.

Recognising the importance of this directive for Eurocommercial, the ESG Committee has taken an active role in advancing its disclosure on ESG matters in the coming years. An integral part of this effort is the undertaking of a double materiality assessment, planned for completion in the first half of 2024.

The double materiality assessment encompasses two distinct perspectives: impact materiality and financial materiality. Impact materiality focuses on evaluating Eurocommercial's influence on both people and the environment across various timeframes, considering factors such as scale,

scope, and irreversibility of impact. In contrast, financial materiality relates to sustainability matters that may affect the Company's financials, taking into account the likelihood of occurrence and the size of potential financial effects.

Furthermore, in 2023, the Company began a peer analysis and stakeholder mapping exercise to gain deeper insights into the ESG priorities within the real estate market. Key stakeholders, including shareholders, tenants, banks, suppliers, and property management companies with whom Eurocommercial collaborates closely, have been identified. Qualitative interviews were conducted in the first quarter of 2024 and will be followed by a quantitative assessment through an online survey, with active leadership from the ESG Committee.

The latter half of 2024 will be dedicated to preparing the organisation for further refinement of its ESG strategy, updating internal policies, and collecting necessary data. The outcomes of the double materiality analysis will be presented in our 2024 annual report, demonstrating our commitment to sustainability and transparency in line with regulatory requirements and stakeholder expectations.

Connectivity and accessibility

Cybersecurity and data privacy

Employee engagement and satisfaction

Business integrity

Waste and resource management

Health and safety of building users

Customer and visitor attraction

Tenant engagement and satisfaction

Create an attractive and professional workplace

BREEAM certifications in place for all shopping centres by 2025

Why ESG matters for Eurocommercial

For the past three decades, Eurocommercial has been dedicated to promoting ESG through various initiatives. The Company aims to benefit stakeholders by investing in retail properties and fostering community gathering places. The goal is to provide opportunities for entrepreneurs to connect with their audience and generate income, ensuring sustainable financial and social returns for shareholders. Eurocommercial must strive for greater sustainability in the future due to population growth and climate change effects. It is crucial for businesses to reduce environmental impact and operate responsibly, especially for Eurocommercial, owning and operating retail properties across Europe.

Increased sustainability brings financial benefits, like lower operating costs for energy-efficient buildings, resulting in higher net income. Corporate sustainability initiatives enhance reputation and attract customers and investors. Overall, it is clear that improved sustainability is an important measure of Eurocommercial's future success. Action is needed to reduce pollution, conserve resources, and improve efficiency for long-term viability. With the right strategies and investments, Eurocommercial can further drive growth and success.

In 2023, Eurocommercial commenced thorough property assessments conducted by external experts to identify potential physical climate change risks impacting our organisation. Detailed reports were received outlining strategies to mitigate these risks in the near future. Mitigation plans are integrated into property-level business plans.

Ensuring health and safety and enhancing measures at our shopping centres remains a top priority. The indoor environmental quality has gained added significance in recent times. It is important to uphold the highest standards for the comfort and well-being of our customers, tenants, and employees.

At our shopping centres, all Health & Safety requirements are met, and further investments are made in monitoring tools such as CO² meters to constantly check air quality inside our premises. Furthermore, customers' comfort and satisfaction with their journey through our centres are monitored.

Efficient use of Reducing operational expenses for

resources our tenants to enable them to run their businesses at lower costs, while also offering energy-efficient, more sustainable retail spaces.

In 2023, commitment remained strong to implementing significant measures to enhance energy efficiency and decrease the carbon footprint. Investments such as solar panels, LED lights, upgraded Building Management Systems, and advanced monitoring tools like smart metering enable sustained reasonable energy costs and savings.

As a responsible owner, it is imperative to offer shopping centres with efficient waste management, water conservation, biodiversity, material usage, sustainable transportation, etc.

Eurocommercial is proactively engaged in the maintenance or pursuit of recertification for BREEAM In-Use certificates across all its shopping centres. These certifications provide the teams with guidelines to regularly measure and compare assets in order to reduce carbon emissions, energy consumption, waste, conserve water, focus on using safer materials, and minimise pollution.

Eurocommercial has taken meticulous steps in 2023 to prepare its external reporting to align with the upcoming EU regulations. The ESG Committee will continue in 2024 to prepare future financial reporting to adequately align with these new standards.

We adhere to stricter national and local environmental legislations and adapt our properties to comply with changing building codes that support the low- carbon initiatives of national governments and to improve energy efficiency in order to reduce carbon emissions and upgrade Energy Performance Certificates (EPC).

In 2023, a CRREM analysis was conducted for 18 properties to gain insights into initiatives and required investments for aligning our portfolio with the Paris Accord carbon reduction target. The remaining properties will develop a CRREM pathway in 2024. Our aim is carbon neutrality in all scope 1 and 2 emissions by 2030 and establishing a reduction target for scope 3 emissions soon. Additionally, Energy Performance Certificates are being updated to comply with national regulations.

In 2023, the Company conducted customer engagement surveys for 14 centres, with over 13,000 customers providing valuable input, to continuously monitor the needs and satisfaction of this important stakeholder group. Outcomes are discussed within local teams and shared between countries to exchange best practices.

Having a good relationship with tenants is important to create a welcoming and enjoyable shopping experience for customers in our centres. Striving to work closely with retailers as business partners is essential.

Eurocommercial assesses tenant satisfaction levels through regular surveys and ongoing communication. Additionally, the introduction of a tenant app enhances communication, and Green Committees in our shopping centres promote sustainable practices. In 2024, tenant engagement surveys will be undertaken again as part of the biennial assessment process.

In 2022, Eurocommercial established a Green Finance Framework and integrated ESG factors into individual loans.

To become a preferred business partner and establish a reputation as a trustworthy, long-term real estate investor.

Our teams maintain long-term relationships with the main participants in their local markets including tenants, investors and financing partners.

ESG governance

We structured the Company's ESG governance in January 2021 and set up an ESG Committee and an ESG Working Group. The ESG Committee is responsible for the Company's ESG strategy and includes all members of the Board of Management and the Group Director Legal, and regularly updates the Supervisory Board. The ESG Committee oversees the implementation of the strategic framework, evaluates if the ESG performance of the organisation is in line with its long-term targets and ensures ESG is embedded throughout the different teams and countries.

The ESG Committee has final responsibility on all topics related to the ESG programme including climate change risk assessment, environmental performance, socioeconomic impact, diversity and inclusion and other topics mentioned in this

ESG governance structure

chapter. The ESG Working Group is responsible for implementing the ESG strategy and directing initiatives in the local countries and sharing information and best practices.

The ESG Working Group is composed of the Group Director Legal (chairman) and a diverse group of employees responsible in their respective countries for implementing the ESG strategy steering initiatives, collecting ESG data and sharing information between countries. The Chair of the ESG Committee informs the Supervisory Board (at least) twice a year regarding ESG issues on key ESG topics (vision, strategy, initiatives taken) and ESG performance (performance against targets, benchmarking scores etc.).

• Monitor usage of natural resources
• Develop and implement action plans
• Engage with tenants and suppliers
• Ensure compliance with local legislation
• Engage with local communities

Recognition

Eurocommercial is dedicated to annual reporting on its Environmental, Social, and Governance (ESG) performance. In 2023, the Company's sustainability reporting efforts were recognized with the prestigious EPRA Gold Award, and it achieved its highest-ever score of 86 in the GRESB assessment, earning a Green Star and four-star position, aligning with industry best practices. Additionally, Eurocommercial's commitment to ESG excellence led to its inclusion in both Euronext's AMX® and AEX® ESG indices, effective from 19 September 2022. These indices spotlight companies within the AEX® and AMX® indices showcasing top-tier Environmental, Social, and Governance (ESG) practices, fostering the adoption of mainstream ESG investment approaches.

Furthermore, in 2023 Eurocommercial made its inaugural participation in the Carbon Disclosure Project (CDP), receiving a commendable C level rating. The CDP, an annual disclosure project, allows companies to voluntarily report their environmental impacts and climate-related data to investors and stakeholders, enhancing transparency, accountability and sustainability practices.

Be green

The 'Be Green' pillar of Eurocommercial's ESG strategy entails close collaboration with key stakeholders to tackle climate change, circularity, biodiversity, low-carbon transportation and pollution prevention. In 2023, Eurocommercial placed emphasis on evaluating the risks and opportunities associated with climate change and establishing decarbonisation pathways for its properties. By obtaining green building certifications such as BREEAM, the Company systematically monitors and improves its portfolio, thereby diminishing its environmental footprint.

Carbon neutral

Operating as a carbon-neutral company entails ensuring that our operations across all locations produce net zero carbon emissions, thereby making our direct impact emission-free. This encompasses leveraging efficient energy management to influence energy source usage, prioritising the transition to renewable energy sources, particularly onsite generation where feasible.

In 2023, local teams began developing decarbonisation pathways using the Carbon Risk Real Estate Monitor (CRREM) to prepare for carbon neutrality. Eighteen shopping centres have prepared decarbonisation pathways in 2023, with the remaining centres to follow in 2024. These carbon reduction plans are based on clear, science-backed methods aligned with the Paris Climate Goals, aiming to limit global temperature rise to 1.5°C, with limitations of 2°C. Additional measures have been taken to collect tenant data (scope 3 carbon emissions) with the aim to review our carbon reduction commitment and extend this to incorporate scope 3 carbon emissions into our overall reduction target by 2050.

In 2022, we dismantled the gas plants at Collestrada and Curno, replacing them with highly efficient, electricity fuelled plants, resulting in reduced direct carbon emissions for these centres in 2023. In February 2024 the gas plants at Il Castello were replaced by a district heating system of the Ferrara Municipality. Starting from March 2024, all Italian shopping centres are purchasing electricity 100% from renewable sources with contracts provided with the Guarantee of Origin