Aroundtown : AT FY 2023 In Focus (AT In%20Focus)

4

AROUNDTOWN SA | Sustainability: In Focus

Introduction

In 2023, we saw the introduction of a new piece of EU sustainability reporting legislation, and some changes to current regulations which relate to the real estate sector and therefore impact our ESG Strategy. These changes and the new legislation are reflected in our consolidated annual report, and throughout our In Focus report. We also continue to implement and integrate our ESG Strategy into our day-to-day business operations and for the first time produced a consolidated report which shows our financial reporting and progress alongside our ESG reporting and progress.

The Corporate Sustainability Reporting Directive (CSRD) is a piece of EU legislation developed by the European Commission aiming to enhance transparency, accountability and standardization in sustainability reporting. 2023 marked a transitional year for our reporting as we work towards our first year of compliance with this directive with our 2024 reporting. We prepared the sustainability report within our Annual Consolidated Reportin line with the recommendations of the European Sustainability Reporting Standards (ESRS) where possible, which detail the reporting requirements of the CSRD. Our sustainability report also includes EU Taxonomy disclosures published in compliance with the EU Taxonomy, Regulation (EU) 2020/852 of the European Parliament.

In addition to the newly introduced reporting legislation, the Energy Performance of Buildings Directive (EPBD) is a key element in the European Union's pursuit of its energy and climate goals. Key revisions to the EPBD include accelerating building renovations, especially those with poor energy performance, promoting better air quality and digitalization, and facilitating sustainable mobility infrastructure. It also supports targeted financing for building investments, addresses energy poverty, and aligns with the EU's ambitious climate goals, aiming for substantial emission reductions by 2030 and climate neutrality by 2050. Aroundtown has placed emphasis on adhering to the EU's climate commitments outlined in the revised EPBD, and our ESG Strategy will support us in this process.

We have made great progress during 2023 across the key focus areas within our ESG Strategy including the integration of our energy and carbon reduction strategies into our business model, collecting and analyzing employee commuting data to help us understand the carbon footprint associated with our employees, and continuing to conduct our Activate the Base employee engagement program, to name a few. As part

of our energy and carbon strategy integration, we have placed focus on retrofitting existing buildings to help minimize our environmental impact. We have also made plans for 2024 to conduct asset-level physical climate risk assessments so we can implement tailored solutions over time. Our priorities in 2023 remained aligned with the key focus areas of our ESG Strategy, including tenant satisfaction, health and safety, and active engagement in local communities. We see investing in the professional development of our employees as essential to achieving the goal of becoming one of the most attractive employers in the industry by 2030, and we have a dedicated Diversity Committee which oversees our commitment to diversity, equity and inclusion. Throughout this In Focus report we offer deeper insights into these focus areas, spotlighting specific projects and case studies.

Climate Change Mitigation and Environmental Protection

Our carbon reduction strategy encompasses a blend of efficiency improvement initiatives, investments in renewable energy, stakeholder engagement facilitated by green leases, and rigorous governance and reporting mechanisms. These efforts aim at monitoring progress and upholding accountability. Aroundtown's Environmental Policy sets out our management framework to produce continued improvement across the Group's main environmental impacts, including water use and waste management. In the area of energy, key objectives include renewable energy procurement and progressive upgrading of energy systems during maintenance works. The policy establishes a consistent framework of action across the portfolio, with the necessary flexibility for the particular characteristics and tenant arrangements of our properties.

ENERGY AND CARBON EMISSIONS

Our practical approach to energy and carbon reduction is integrated into our business model and strategy and focuses on refurbishing existing building stock to minimize environmental impact. Key aspects include:

1. Refurbishment First Approach: Prioritizing renovating existing buildings over new construction to minimize energy consumption, construction waste, and environmental impact.
2. Long-TermTargets and Goals: Targeting a 40% reduction in CO2 intensity and a
   20% reduction in energy intensity by 2030, along with transitioning to certified renewable electricity through PPAs by 2027.
3. Carbon Reduction Strategy: Developing a comprehensive environmental and energy
   policy to guide efficiency and renewable energy projects, including a CO2 pathway to monitor progress and identify improvement measures.
4. Investments in Renewable Energy Infrastructure: Focusing investments on solar PV systems, efficient energy generating systems like CHP, electricity storage, EV charging stations, and smart meters to optimize energy consumption.
5. Renewable Power Purchasing Agreements: Aiming to switch all electricity to renewable sources by 2027, reducing carbon emissions from purchased electricity.
6. Green Leases and Internal Carbon Pricing: Incorporating green lease clauses to promote energy conservation and utilizing an internal carbon pricing mechanism to assess the benefits of emissions reduction actions.
7. Governance and Reporting: Overseeing climate-related risks through the interplay between risk committee, management,energy, sustainability and operations departments and regularly reviewing and updating environmental and energy policies, with reporting on energy consumption, emissions, and progress towards reduction targets.
8. Utilities Data Reporting and Monitoring: Reporting utilities data based on absolute and like-for-like consumption. GHG emissions are documented utilizing market-based conversion factors provided by utility providers and location-based conversion factors provided by respective authorities for our countries of operation.

5

AROUNDTOWN SA|Sustainability: In Focus

10

In Focus

Aroundtown employee commuting

In response to changing work patterns and a societal shift towards hybrid working between the office and home, we have taken steps to calculate our Scope 3 corporate emissions relating to employee commuting and teleworking. We have approached these calculations following the technical guidance of the GHG Protocol for Category 7 emissions: Employee

GHG emissions reported in tons CO2e (t CO2e)

AROUNDTOWN SA | Sustainability:

commuting. Our employee commuting calculation was done on the basis of the average-data method, with consideration given to the proportion of office working over the reporting period. The time spent as a proportion of office working was a product of known employee requests for home working over the year. This proportion was used to reflect reduced journeys for office commuting. Data for German transport trends3 was used to create the average-data calculations. Our teleworking calculations were performed on the basis of average domestic German energy use and home office appliances, extrapolated using the home office hours worked over the reporting period. Therefore, only our German workforce was considered in our calculations. The addition of home office working was accounted for by applying an intensity factor, using the estimated floor area of a home working space with the entirety of the home. As can be seen in the table below, our Scope 3 emissions related to employee commute increased by around 3% in comparison with 2022. These higher emissions are due to a slight increase in number of employees in 2023.

On foot

Bicycle

Private motorized transport Public transport

Total employee commuting Teleworking emissions

0

0

466

125

591

967

0

0

430

112

542

9424