SEGRO : Responsible SEGRO report 2023

Overview			Championing		Investing in our		Nurturing talent		Appendices
			low-carbon growth		local communities
					and environments

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Responsible SEGRO Report 2023

Contents

Overview

Responsible SEGRO commitments

Responsible SEGRO materiality assessment refresh

ESG indices

Championing low-carbon growth

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About this report

We publish this Responsible SEGRO Report annually,

and it has two main functions above that of our

Annual Report & Accounts:

In this report

In this report, you will find information such as:

- Our Responsible SEGRO commitments, the metrics

we use to track progress and how we did in 2023

- Our full scopes 1 to 3 carbon footprint

- Our corporate and customer carbon reduction targets and

how we are working with our customers to achieve them

- Our targets for reducing the embodied carbon of our

Investing in our local communities and environments

Nurturing talent

Appendices

Appendix I:

European Public Real Estate Association (EPRA) disclosure

Appendix II:

Global Reporting Initiative and

EPRA performance measures

Appendix III:

Governance metrics

Appendix IV:

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To provide more detail to stakeholders on our targets, initiatives and progress to reduce our carbon footprint, invest in our local communities and nurture talent

2

To provide in-depth data (in the appendices) to allow SEGRO's progress to be benchmarked by organisations such as the European Public Real Estate Association and the Sustainability Accounting Standards Board

developments and how we are working with our

contractors to achieve them

- The energy ratings and sustainability certification

of our buildings

- Our community engagement activities and achievements

- How we are building a diverse workforce, strengthening

our culture and investing in building capability for

the future

There is also a full account of SEGRO's response to the risks and opportunities that the climate agenda presents in appendix X, aligned to the recommendations of the Taskforce on Climate-Related Financial Disclosures.

If you come across any terms that are not familiar to you,

Nurturing talent and workforce data

Appendix V:

Community metrics

Appendix VI:

Sustainability Accounting Standards Board disclosures

Appendix VII

EU Sustainable Finance Disclosure Regulation

- Principal Adverse Impact indicators

Appendix VIII:

Greenhouse gas reporting methodology

Appendix IX:

SEGRO Mandatory Sustainability Policy

Appendix X:

Climate-related Financial Disclosures

Appendix XI:

SEGRO and SELP Green Bonds

Appendix XII:

Policies

Appendix XIII:

SEGRO plc GRI content index

Appendix XIV:

Glossary

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Responsible SEGRO as a key part of our future success

How this works for our business

Responsible SEGRO is embedded into the day-to-day running of our business and all of our decision making. This helps us to ensure that our business remains fit for the future and delivers long-term value for all of our stakeholders.

Annual Report 2023

See our Annual Report 2023 and read how

Responsible SEGRO is part of our strategy

there is a glossary in appendix XIV.

SEGRO European Logistics Partnership (SELP) is a 50-50 joint venture between SEGRO and the Public Sector Pension Investment Board (PSP Investments), established in 2013 to own big box warehouses in Continental Europe. The information in this report covers all assets managed by SEGRO, including those owned by SELP. Environmental statistics related to SELP properties can be found in the SELP Annual Reports at www.selp.lu.

Cover image: SEGRO Day of Giving, Warsaw, Poland

Overview

Championing low-carbon growth

Investing in our local communities and environments

Nurturing talent

Appendices

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Responsible SEGRO Report 2023

Responsible SEGRO commitments

ESG is taken very seriously at SEGRO.

Responsible SEGRO demonstrates how our environmental and social contributions are embedded within our business strategy and are fundamental to how we create the space that enables extraordinary things to happen

- whether that is the spaces that we create for our customers or enabling our people and the communities and environment close to our warehouses to flourish.

ESG has been a thread running through our business for over 100 years, guiding our strategy, the way we operate and how we engage with people. Responsible SEGRO is our framework which supports our goal to be a force for societal and environmental good and provides a focus for delivery, ensuring it is embedded authentically and consistently into the way we work across the whole of our business.

Contributing positively to the environment and society isn't just an option, it is a necessity. First and foremost it is the right thing to do. But more than that, businesses that integrate sustainable practices are more likely to endure in the long term, which is why Responsible SEGRO will remain at the core of our business now and into the future.

Led by our Board and delivered through our people, our Responsible SEGRO commitments are fundamental to building and enjoying stronger relationships with customers which are themselves increasingly becoming more environmentally conscious. They are vital for attracting and retaining the best people to our organisation, and they are helping drive innovation and operational efficiency

to differentiate us from our competitors, manage risks, support financial performance and enable the Group to thrive in a constantly evolving business landscape.

We are focusing our efforts on three priorities, which were informed through consultation with a range of our stakeholders and which we believe provide us with the opportunity to make the greatest contribution to the environment and the communities where we operate, these are:

Championing low-carbon growth

Investing in our local communities and environments Nurturing talent

"As we make progress along this journey and as the environment we are operating in continues to change, we will evolve too."

It is important to us that the actions we take to deliver against these priorities are not only those that genuinely can make the biggest positive difference, but that have outcomes that can be clearly measured. For each of the areas we have set challenging targets that are linked to non-financial KPIs. These KPIs are interwoven into the values and behaviours expected of all our employees and used as part of the criteria for additional remuneration depending on seniority.

We are now in the third year since our refreshed Responsible SEGRO approach was launched and the evidence to date suggests that it is driving the outcomes that were intended. As we make progress along this journey and as the environment we are operating in continues to change, we will evolve too, setting appropriate and stretching targets and reflecting technological advancement and the priorities of our customers, communities, colleagues and wider stakeholders.

Our Purpose is to create the space that enables extraordinary things to happen. Delivering this space responsibly and sustainably is key to achieving this, and is a critical component of our aspiration to be the best property company.

Paul Dunne

Group Customer & Operations Director

Overview

Championing low-carbon growth

Investing in our local communities and environments

Nurturing talent

Appendices

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Responsible SEGRO Report 2023

Responsible SEGRO commitments continued

Key highlights during 2023

	Championing low-carbon growth		Investing in our local communities		Nurturing talent
			and environments
Responsible SEGRO commitments
Context	SEGRO recognises that the world faces a climate		SEGRO is an integral part of the communities in which		SEGRO's people are vital to and inseparable from
	emergency and we are committed to playing our		it operates, and we are committed to contributing to		its success, and we are committed to attracting
	part in tackling climate change, by limiting global		their long-term vitality.		and retaining a diverse range of talented individuals
	temperature rise to less than 1.5°C, in tandem with				in our business.
	growth in our business and the wider economy.
Targets	Our carbon reduction targets are a 42 per cent		We will create and implement Community Investment		We will increase the overall diversity of our own
	reduction in corporate and customer emissions, and a		Plans for every key market in our portfolio by 2025.		workforce throughout the organisation.
	20 per cent reduction in the embodied carbon
	intensity of our developments, both targets by 2030
	against a 2020 baseline. We are reviewing new
	net-zero target guidelines and we intend to publish any
	new targets in our 2024 Annual Report and Accounts.

Actions	We will reduce carbon emissions from our
	development activities, operation of our buildings,
	and throughout our value chain. We will set
	challenging targets and drive to achieve them
	as early as possible.

We will work with our customers and suppliers to support our local businesses and economies. We will help improve the skills of local people to enhance their career and employment opportunities, by investing in local training programmes. Equally, we will enhance the spaces around our buildings, working with local partners to ensure we meet the needs of our communities.

We will provide a healthy and supportive working environment, develop fulfilling and rewarding careers, foster an inclusive culture and build a more diverse workforce.

UN SDG Alignment

We have reviewed the United Nations Sustainable Development Goals against our Responsible SEGRO strategic priorities to understand which goals are particularly significant to our business. Elements of our business are aligned with all of the goals but we believe we are able to make the greatest contribution to six of them:

SEGRO is committed to reducing the embodied carbon in its development programme as well as reducing the carbon-intensity of our properties.

We want to play our part in tackling climate change and have ambitious net-zero goals.

SEGRO has a strong track record of supporting local communities and employment (including training) is one of the areas that our Community Investment Plans (CIPs) focus on. We want to play our part in reducing inequalities and ensuring more people have the right skills to access meaningful work.

We want our people to have rewarding and fulfilling careers and are committed to fair pay throughout our operations and also our supply chain, and to ensuring that our spaces provide safe working environments and promote health and wellbeing for all.

Overview			Championing		Investing in our		Nurturing talent		Appendices
			low-carbon growth		local communities
					and environments

Responsible SEGRO materiality assessment refresh

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Responsible SEGRO Report 2023

We regularly review our materiality assessment to ensure that our strategic priorities and the targets within them are appropriate and reflect our stakeholders' expectations. Our last review was in 2022 and followed guidelines by the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), now part of the IFRS Foundation

The 2022 process included a review of benchmarks, standards and peer reporting and aligned with internal risk management processes. The aim was to identify those issues (both risks and opportunities) that are most important to the Company and its primary stakeholders, to ensure that they are considered within our Responsible SEGRO strategic priorities, and to inform the structure of our sustainability reporting. Emerging issues were also identified and considered.

This process identified 18 material issues, considered through four lenses - environmental, societal, economic and governance - but with recognition that the issues may well be inter-dependent. We refined these to eight priority material issues (PMIs) to focus on the areas which are both important to our stakeholders and where we intend to focus our immediate efforts. We recognise this represents their relative importance at a point in time and is based on the views of a small number of informed participants.

Each issue identified has been allocated to the relevant team within SEGRO for further attention has been embedded into business processes. All financially material PMIs are governed by the SEGRO business risk process (see page 54 of the SEGRO Annual Report and Accounts 2023). These issues remain aligned with our current Responsible SEGRO priorities.

During 2024 we intend to refresh this work and will consider the concept of double materiality, i.e. looking at the impact SEGRO's activities have externally, as well as the financial impact of sustainability and climate issues on SEGRO.

Materiality assessment four-step process

1.	Understanding
	the organisation's
	context
2.	Identifying actual
	and potential impacts

3. Assessing significance of impacts

4.	Prioritising the
	most significant

impacts for reporting

1 SEGRO Park Collégien

2 SEGRO Logistics Centre Tilburg

Overview

Championing low-carbon growth

Investing in our local communities and environments

Nurturing talent

Appendices

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Responsible SEGRO Report 2023

Responsible SEGRO materiality assessment continued

For 2023, the following priority material issues and material issues continue to form the basis for our reporting.

Our material issues	Priority Material Issues
	Material Issues

Championing low-carbon growth

Driving a pathway to net-zero through effective energy management (including embodied carbon), and by enabling a transition to renewable energy for SEGRO and our customers.

Ensuring environmental compliance, today and in anticipation of future regulatory changes, and ongoing certification against relevant standards.

Understanding the need and opportunity for climate adaptation, and building resilience to climate change, for SEGRO and our customers.

Identifying and executing business and diversification strategies in the renewables sector, that build on our unique positioning and strengths.

Understanding our biodiversity impacts and supporting urban greening. Responsible water management.

Nurturing talent

Attracting, developing and nurturing talent for rewarding careers.

Ensuring the safety and health of our employees, our suppliers and those who use our facilities. Promoting diversity, equity and inclusion, including and beyond succession planning and compliance.

Investing in our local communities and environments

Implementing smart technology that makes lives better, and protects the environment.

Leading in the development and implementation of ethical building standards.

Engaging with and investing in local communities for mutual positive impact.

Operating in the context of sound governance (see pages 76-133)

Ensuring sound and ethical business conduct, including through the effective management of our supply chain, and in our customer base (to the extent that this is possible).

Ensuring ongoing and increasing ESG disclosure and transparency.

Protecting and upholding human rights (including Modern Slavery) within SEGRO and amongst customers and suppliers.

Protecting and preserving our reputation, by doing the right thing and anticipating stakeholder concerns.

Promoting and preserving a positive and caring culture, which is mindful of economic equality and hardship. Being mindful of cyber security and the ethical use of information and data.

The material issues therefore remained aligned with our Responsible SEGRO framework. The Priority Material Issues in particular are reported on in this section and elsewhere in this report.

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1 SEGRO Park Amsterdam Airport

2 Slough Trading Estate

Overview			Championing		Investing in our		Nurturing talent		Appendices
			low-carbon growth		local communities
					and environments

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Responsible SEGRO Report 2023

ESG indices

We monitor our performance across various Environmental, Social and Governance (ESG) indices and review trends to ensure our approach and the information we disclose meet the needs of our stakeholders. There are a number of different organisations and structures for reporting on our wider ESG metrics, and we report against the following either in this report or in the Responsible SEGRO area on our website.

Along with Prologis, GLP and Tritax, we have formed the Logistics Real Estate Sustainability Group, to jointly represent the sector on critical ESG topics such as building standards.

We are an integral part of sustainability and climate change forums of well-established Real Estate industry groups, such as the Better Building Partnership, British Property Federation, European Logistics Federation, European Public Real Estate Association, and the UK Green Building Council. During 2023, our Director, Sustainability, Gabriella Zepf has joined the Nomination Committee of the Better Building Partnership.

ESG reporting and ratings

There are a number of different frameworks that we use to report on our wider ESG metrics, including:

- Global Reporting Initiative (GRI)

- Task Force on Climate-related Financial Disclosures project (TCFD)

- EPRA sustainable Best Practice Reporting: Gold

- Workforce Disclosure Initiative: 80 per cent

- National Equality Standard

- Parker Review

- FTSE Women Leaders

There are also various agencies who review and assess our ESG reporting and performance, including:

- MSCI: AAA

- Carbon Disclosure Project (CDP): A-

- Global Real Estate Sustainability Benchmark (GRESB):

• Standing investments: three-star

• Development: four-star

• Public disclosure: A

- FTSE4GOOD: 3.2 (2.9 sub-sector average)

The above is correct as at 31 December 2023.

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1 SEGRO Park Greenford North

Overview	Championing	Investing in our	Nurturing talent	Appendices
	low-carbon growth	local communities
		and environments

Championing low-carbon growth

In this section:

Delivering reductions in our main sources of carbon emissions is a priority for SEGRO. This section outlines what these sources are, what we are doing about them and how we track progress.

Quick links
Carbon management at SEGRO	09
Corporate and customer carbon emissions	10
Embodied carbon	11
Full Scope 3 emissions inventory	12
Carbon reduction metrics and targets	14
SEGRO's pathway to net-zero	15
Building certifications	16

Embodied carbon

The emissions from making the concrete, steel and other building materials that go into our developments are a core focus of our carbon reduction efforts.

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Responsible SEGRO Report 2023

2023 in numbers

Target to reduce absolute corporate and customer carbon emissions by 2030 from a 2020 baseline

-42%

Corporate and customer carbon emissions reduction versus 2020 baseline

-19%

Key achievements during 2023:

- A seven per cent reduction in corporate and customer emissions, putting us a year ahead of plan.

- Significant reductions in our embodied carbon, putting us three years ahead of plan.

- 19 per cent increase in the visibility we have of our customer energy data.

- 92 per cent of our development completions were rated BREEAM 'Excellent' or higher.

- Our first BREEAM 'Outstanding' refurbishment in our London portfolio.

- A record 15 MW increase in our solar capacity.

Priorities for 2024:

- Continuing to drive reductions in our carbon emissions.

- Reassessing our net-zero pathway in light of new guidance.

- Moving away from gas to efficient low-carbon heat sources.

- Increasing the automation of the retrieval of our customers' energy data.

- Helping our local markets take ownership of their carbon footprint.

- Progressing our large scale solar installation strategy.

Find out more on page 11

Overview

Championing low-carbon growth

Investing in our local communities and environments

Nurturing talent

Appendices

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Responsible SEGRO Report 2023

Carbon management at SEGRO

The world is facing a climate crisis. Governments, business and consumers across the world are making commitments and changing their behaviour to help tackle this challenge and limit global temperature rise to 1.5°C.

The scale of the challenge means there is even more focus on the impact of buildings on the environment. We find many of our customers are equally committed to minimising their carbon footprints and reducing overall energy costs. It is therefore important that landlords and developers own and create buildings that are sustainable and use natural resources efficiently.

Major European conurbations are looking to make their city centres congestion free and to reduce traffic emissions which means it will be even more important for businesses to be located in the properties that help them reach their customers by low-carbon means.

What it means for SEGRO

- We have ambitious science-based targets for reducing our embodied and operational carbon emissions and are in the process of reviewing our net-zero targets.

- We factor a building's sustainability into our investment decisions, not only for potential acquisitions but also for deciding whether to dispose of or refurbish assets. We have also assessed our portfolio under different climate scenarios and identified adaptations that need to be made.

- We will continue to adapt our investment process when deciding on allocating new capital to acquiring assets and new developments, to ensure that we take into account the newest information available to us.

- Our urban portfolio is located on the edge of major European cities which makes reaching the city centre possible via electric vehicles. Our newer inner-city assets facilitate delivery by means such as cargo bicycles. A number of our urban estates are located close to canals and waterways which customers are starting to use in innovative ways as part of their distribution networks. Two of the UK big box parks that we have developed

in the Midlands have strategic rail freight interchange terminals which allow our customers to transport goods by rail rather than more carbon-intensive HGVs.

- All employees' variable remuneration is linked to SEGRO's performance on metrics linked to corporate and customer emissions, embodied carbon emissions and visibility of customers' energy consumption data.

Our approach to carbon management is dictated by our carbon footprint - i.e. we focus on our two main sources of emissions, making up 88 per cent of our carbon footprint:

• Our corporate and customer emissions: SEGRO's scope 1 and 2 emissions (gas, electricity, transport fuel etc.) plus the gas and electricity use of our customers in our spaces.
• The embodied carbon from our developments: the carbon emitted in the production and transport of our building materials and transport, as well as the construction process.

The following sections present our approach in these two areas, followed by a section presenting our full scope 1 to 3 carbon footprint.

2023 in numbers

Visibility of customer energy data

81%

2022: 68%

Corporate and customer carbon intensity reduction versus 2022

10%

SEGRO's full scope 1 to 3 carbon footprint (detail in later sections)

	a.	Corporate and customer	57%
a.	emissions (including
c.	upstream fuel and energy
		emissions)
	b. Embodied carbon from	31%
		developments
	c. Other procurement	12%
		related emissions

b.

1 Electric vehicle charging point at SEGRO Park Coventry

2 SFRI, SEGRO Logistics Park East

Midlands Gateway

Overview			Championing			Investing in our		Nurturing talent		Appendices
			low-carbon growth		local communities
						and environments

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Responsible SEGRO Report 2023

Corporate and customer carbon emissions

Our corporate emissions are less than one per cent of our total scope 1, 2 and 3 carbon emissions.

In contrast, the emissions generated by the activity of our customers inside our warehouses amount to approximately 57 per cent (including upstream energy emissions).

As with many landlords, responsibility for sourcing energy and monitoring use rests with our customers for the majority of our portfolio. However, given the significant contribution of these customer emissions, we have chosen to include them in our science-based targets, aligned to the SBTi framework. We have made good progress on reducing our carbon footprint, with a 19 per cent absolute reduction in corporate and customer emissions since 2020 (7 per cent since 2022) to 254,168 tonnes CO2e (2020 baseline:

312,115 tonnes CO2e). We have also reduced our corporate and customer carbon intensity to 20.2 kgCO2e per sq m (2022: 22.5 kgCO2e).

With the inclusion of our customers' emissions in our science-based targets, obtaining good quality energy data and prompting our customers to purchase renewable energy is paramount. During 2023 we have improved our energy visibility, collecting data on 81 per cent of our total property floor area (up from 68 per cent during 2022). This helps to increase the accuracy of our carbon data and allows us to better identify priorities for investment in energy efficiency and generation. For the remaining part of the portfolio where we do not yet have the data, we apply best practice estimation methodologies.

All of SEGRO controlled electricity (both for our own operations and for those markets where we procure electricity on behalf of our customers) is zero carbon. This certified renewable energy helps SEGRO and our customers reduce their carbon footprint.

Our solar installations and zero carbon electricity tariffs are reducing emissions from electricity consumption.

We are now increasing our focus on our gas consumption. For some years we have been transitioning away from heating our spaces with fossil fuels to efficient low-carbon electrical heat sources, such as heat pumps, and this will be a key part of our strategy going forwards.

During 2023 we added 15 MW of solar capacity across our portfolio - our biggest year-on-year increase so far

Gabriella Zepf, Director - Sustainability

During 2022 we introduced a standardised green lease clause, asking our customers to share their energy data with us and commit to procuring a zero-carbon electricity tariff. We are rolling out automatic meters to facilitate the data collection process for us and our customers. Over 400 customer meters have been upgraded so far. We are introducing the standardised green lease clauses into customer contracts as part of lease negotiations and

are monitoring their adoption.

The majority of our portfolio is modern and built to the highest sustainability and energy efficiency standards that our customers have come to expect from our buildings, but there are still some older assets where we can make improvements. We do this through an ongoing maintenance and refurbishment programme.

Changes that we make include installing LED lighting, solar panels, air source heat pumps and automatic metering. We aim to have our entire portfolio Energy Performance Certificate (EPC) rated 'B' or equivalent by 2030.

At the end of 2023, 65 per cent of the portfolio now has an EPC rating of B or better (2022: 58 per cent), including 58 per cent of our UK portfolio (2022: 52 per cent).

Photovoltaic electricity generation is a key element of our strategy. We are fitting solar panels to our portfolio both as part of refurbishment work, and on new developments. During 2023 we added 15 MW of solar capacity across our portfolio - our biggest year-on-year increase so far. We have identified a pipeline of other projects, which we anticipate will deliver a significant increase in installed capacity over the next two years.

The figures below show where we consume energy and the relative effect of our zero carbon electricity tariffs

Gas and electricity consumption

	8 1		1.	UK	56%
		2.	Czech Republic	1%
				3.	France	6%
6 7			4.	Germany	7%
				5.	Italy	7%
	5			6.	The Netherlands	1%
	4			7.	Poland	20%
			8.	Spain	2%
	3
	2
Gas and electricity carbon emissions
	8	1		1.	UK	34%
		2.	Czech Republic	2%
	7			3.	France	4%
6			4.	Germany	20%
			5.	Italy	17%
				6.	The Netherlands	1%
	5		3 2	7.	Poland	19%
	4	8.	Spain	2%
Gas and electricity carbon emissions
		1		1.	Gas	16%
				2.	Electricity	84%
			2