PRS REIT : Sigma Capital Group Limited ESG Report 2021

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

JUNE 2021 ANNUAL REPORT

ESG REPORT2021

The Environmental, Social and Governance (ESG) report is representative of the work Sigma Capital has undertaken in this area over the past year, covering the Company's own work, its management of ESG for the PRS REIT through Simple Life Homes and our joint venture work with EQT through Simple Life London.

Contents

Foreword	02
Introduction	03
Our Values	04
Our Approach	06
Environmental	08
Social	34
Governance	82
The Future	92

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Foreword

When writing this report last year, in the early stages of the pandemic, we could not have envisaged the worldwide impact and the enduring nature of the consequences. While we are now on the road to recovery, we are still assessing the impacts and adjusting to the new normal. The last 12 months has been an unprecedented year of challenge and uncertainty for us all, a year when community, support, care and togetherness came into their own.

We have continued to place people and communities at the forefront of our engagement and support, with donations distributed, and partnerships built, nationally. This report highlights the many activities, initiatives and events we have had the very great privilege and pleasure to support.

Resilience and adaptability, alongside collaboration and strong partnerships have ensured our communities have thrived, and I have thoroughly enjoyed hearing of creative ways we have kept connected as communities. Such events as the very successful and special Christmas online bedtime stories form lasting memories and preserved that connectivity we felt was taken from us over the last year. Reading the nominations for our Peace of Mind month and moments of community togetherness, clearly illustrates our values in action.

As part of our ongoing commitment to our residents and the wider community, we continue to focus, alongside our building partners, on providing efficient, high quality homes, with support services and surrounding spaces which enrich their experience. We are also mindful of our impact on the environment, and installation of more solar panels; enhanced planting for biodiversity; opportunities for residents to access sustainably responsible products through the SaveMoneyCutCarbon club; and the addition of book boxes are all exciting expansions in this area. The launch of the My Simple Life mobile app is particularly exciting, further reflecting our commitment to making life that little bit easier for our residents.

I take this opportunity to thank two outgoing Sigma Board members, David Sigsworth and Jim McMahon, for their commitment, energy and support over the years. David's experience and knowledge was pivotal in promoting and driving the environmental agenda, and I am sure we will call upon his expertise and wisdom in the future.

As we move on from and out of the global pandemic, I am very optimistic about the next 12 months for the company as it drives ahead with ambitious plans and goals. I am pleased to share this report with you and I hope you enjoy the contents within, which brings to life the real stories behind all we stand for and do.

Ian Sutcliffe,

Chairman

Introduction

Starting a new job is a time of great change, anticipation and exhilaration, and I was super excited to join Sigma as Environmental, Social and Governance (ESG) Director, in November 2020, and the expectant set of experiences, challenges and adventures this afforded! However, joining the team at the height of the global pandemic definitely gave a different perspective, unique challenges and experiences.

With over 30 year's leadership experience in Education, people and the planet have always been a focus of my daily work and living. I saw my new role as a natural progression and opportunity, where teamwork, people, community and a keen sense of making a positive difference by my actions and activities continued to be my focus.

Working online was certainly different and I could never have envisaged it would be some months before I would meet people in person. Seeing the silver lining of those pandemic clouds has been wonderful, and having the opportunity

to visit our many partners has been incredibly invigorating. As we find our way out of, and begin to recover from, the last year, I am amazed and inspired by the resilience, kindness and determination of so many.

ESG is all about our impact on people and the planet, and keeping our focus on these two areas results in positivity for partnerships, prosperity and peace. Being tasked with the remit to, 'make people's lives better, or simply a little bit easier, by our actions and activities', clearly reflects the values and ethos of all in Sigma and my personal values too. Meeting people, nurturing partnerships, searching for solutions and ways of supporting one another, and working with like-minded committed and determined people fires me! Since joining I have met many truly inspirational members of our communities, local and national, and building on these strong relationships is, I believe, key to progress and success.

As we move forward this is a time of great change and opportunity, a chance to ensure we are in the driving seat affecting positive change, creating and telling a great story, leaving a legacy of which to be proud. All in the Sigma team are committed to being leaders in our field, putting people first, as people will drive the

ESG REPORT2021

overall change needed. I take this opportunity to extend my sincere thanks to outgoing Board members David Sigsworth and Jim McMahon for their insight, advice and support as I settled into my role, particularly David with his wealth of environmental experience and knowledge. I wish them well for the future and hope we keep connected.

I believe we all have a responsibility to look after one another and the world beyond our home, be that our close community environment or on a greater global level. We are here for such a short time and our legacy will be our lasting contribution. It is a privilege working as part of a team where such values as integrity, resilience, collaboration and innovation, alongside a passion for people, are at the root of all we do. Within this report I am delighted to share with you the wide range of activities and initiatives undertaken by all in Sigma and we look forward to building on this work in the months, and years, ahead.

Niamh Waldron,

ESG Director

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Our Values

COLLABORATION

INTEGRITY

RESILIENCE

PASSIONATE

ABOUT PEOPLE

INNOVATIVE

ESG REPORT2021

We believe that strong partnerships lie at the very heart of our success. Relationships are our building blocks and we can't succeed without them. By marrying the diverse skill sets of our team and working with like-minded partners, everyone benefits. That's customers, investors and local authorities alike.

Quite simply, we focus on doing the simple things well. With the greater good always in mind, we believe in bettering the standards in the rental market to fulfil a genuine need.

We recognise that in today's world, change is constant. And we are nimble enough to learn, adapt and respond, which we believe is vital for the success of our rental brands, our investors and employees.

As well as delivering growth for our investors, our customers and communities lie at the very heart of everything we do. We truly are a people business. We know that people not only deserve a good place to live, but to be treated well and be connected to critical infrastructure. And this passion for people stretches to those within our business too.

At Sigma we're the one and only. The originators. The innovators. The ones who spotted a gap in a market, an alternative to ownership. Our position of uniqueness enables us to use our independent maverick spirit to look for new ways, new options, new opportunities. And to do the more traditional our way.

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Our Approach

Recognising, reacting and responding to the sustainability and ethical impacts of all we do is the foundation of ESG. With this in mind, and to help focus and better direct our ESG efforts, Sigma has signed up to the UN Global Compact, and commits to complying and adhering to

its 10 core principles, based on human rights, labour, environment and anti-corruption. Our management structure operates with clear policies and practices, to identify, address and manage ESG issues effectively throughout the lifecycle of our managed PRS assets. The appointment, in November 2020, of a dedicated ESG Director was designed to enhance and further develop our commitment to and engagement in this area.

Reflecting the growing importance of ESG globally, the Company intends to seek external assessment and recognition of its achievements in these areas. It is currently working towards submissions to achieve a rating from GRESB, a globally recognised benchmark for reporting real estate ESG performance, and to join the European Public Real Estate Association (EPRA) which represents the real estate sector by providing better information to investors and promoting best practice. To support these efforts, the Company has appointed EVORA, a leading sustainability consultant specialising in real estate solutions, to help direct strategies, plans and decisions going forward. Initial engagement and detailed gap analysis has been carried out, and the company has started work on recommendations and actions, including the formation of an ESG Working Group consisting of colleagues across all areas of the business.

We are aware that though voluntary at present, many of these frameworks are important investor tools, and though not certifications they increasingly reflect a 'license to operate' within the market. We are also mindful of the ever-evolving global legislative canvas, giving consideration to such regulations as the EU Sustainable Finance Disclosure Regulation (SFDR), EU Taxonomy alongside growing National and indeed City level regulations. Such developments are a very important aspect to our future proofing and risk management.

Defining Value is a challenge and we identify the growing significance of Social Value in real estate, with frameworks such as the Social Value Portal (SVP) and Housing Associations' Charitable Trust (HACT) providing matrix and dashboards reflecting performance and progress in these areas. The Company has engaged with the SVP and dialogue has started, with a draft strategy and policy document drawn up for consultation. Further to this project is reference and alignment to the UN Sustainable Development Goals, drawing up an annual report illustrating our intent and position in relation to specific goals of the

17 listed. Identifying our key material issues and therefore which specific SDGs we believe we can have the greatest impact, will be the outcome of our team consultation.

Demonstrating transparency and meeting stakeholder expectations is important to us, therefore we are also reviewing other reporting frameworks, such as the UN Principles of Responsible Investment (PRI), and the Task Force on Climate-related Financial Disclosures (TCFD). We do however also know that there is no magic key, and that one size does not fit all in this area. Points and scores should not and will not direct our strategic journey, rather focusing on materiality is key.

Operational Approach

Sigma recognises that the PRS investments, which it undertakes and manages on behalf of its partners and funders, have an impact on the environment and can also affect the lives of our employees, service providers, supply chain, residents and the wider community, indeed all with whom we engage and interact. We therefore incorporate environmental, social and governance (ESG) factors into decision-making processes and the way in which we operate. Sigma strongly believes that all three elements of ESG are intertwined and are viewed as one entity, but for the purposes of this report, each element is reported below, with clear overlaps evident.

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