UBM Development : Second Party Opinion by ISS ESG

SECOND PARTY OPINION (SPO)

Sustainability Quality of the Issuer and Green Finance Framework

UBM Development AG

14 April 2023

VERIFICATION PARAMETERS

Type(s) of instruments contemplated

Relevant standards

Scope of verification

Lifecycle

Validity

• Green Finance Instruments
• Green Bond Principles as administered by the International Capital Market Association (ICMA) (as of June 2021 with June 2022 Appendix I)
• Green Loan Principles as administered by the Loan Market Association (LMA) (as of February 2023)
• UBM Green Finance Framework (as of April 12, 2023)
• UBM Selection Criteria (as of April 12, 2023)
• Pre-issuanceverification
• As long as there is no material change to the Framework

© 2023 | Institutional Shareholder Services and/or its affiliates

S E C O N D P A R T Y O P I N I O N

Sustainability Quality of the Issuer

and Green Finance Framework

CONTENTS
SCOPE OF WORK	3
UBM BUSINESS OVERVIEW	3
ASSESSMENT SUMMARY	4
SPO ASSESSMENT	5
PART I: ALIGNMENT WITH GREEN BOND PRINCIPLES AND GREEN LOAN PRINCIPLES	5
PART II: SUSTAINABILITY QUALITY OF THE ISSUANCE	7
A. CONTRIBUTION OF THE GREEN FINANCE INSTRUMENTS TO THE UN SDGs	7
B. MANAGEMENT OF ENVIRONMENTAL & SOCIAL RISKS ASSOCIATED WITH THE SELECTION
CRITERIA	10
PART III: LINKING THE TRANSACTION(S) TO UBM'S ESG PROFILE	14
A. CONSISTENCY OF GREEN FINANCE INSTRUMENTS WITH UBM'S SUSTAINABILITY STRATEGY 14
B. UBM'S BUSINESS EXPOSURE TO ESG RISKS	16
ANNEX 1: Methodology	19
ANNEX 2: ISS ESG Corporate Rating Methodology	20
ANNEX 3: Quality management processes	20
About this SPO	21

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S E C O N D P A R T Y O P I N I O N

Sustainability Quality of the Issuer

and Green Finance Framework

SCOPE OF WORK

UBM Development AG ("the Issuer" or "UBM") commissioned ISS Corporate Solutions (ICS) to assist with its Green Finance Instruments by assessing three core elements to determine the sustainability quality of the instruments:

1. UBM's Green Finance Framework (as of April 12, 2023) - benchmarked against the International Capital Market Association's (ICMA) Green Bond Principles (GBP) and Loan Market Association's (LMA) Green Loan Principles (GLP).
2. The Selection Criteria - whether the project categories contribute positively to the UN SDGs and how they perform against proprietary issuance-specific key performance indicators (KPIs) (See Annex 1).
3. Linking the transaction(s) to UBM's overall ESG profile - drawing on the issuance-specific Use of Proceeds categories.

UBM BUSINESS OVERVIEW

UBM operates as a development company. It is classified in the Construction industry, as per ISS ESG's sector classification.

UBM Development AG, together with its subsidiaries, engages in the development, management, and sale of real estate properties in Germany, Austria, Poland, and other markets. The company's property portfolio comprises residential, office, hotel, and other properties. It also engages in hotel leasing business. The company was formerly known as UBM Realitätenentwicklung Aktiengesellschaft and changed its name to UBM Development AG in May 2015. UBM Development AG was founded in 1873 and is headquartered in Vienna, Austria.

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S E C O N D P A R T Y O P I N I O N

Sustainability Quality of the Issuer

and Green Finance Framework

ASSESSMENT SUMMARY

	SPO SECTION			SUMMARY						EVALUATION1
	Part 1:			The Issuer has defined a formal concept for its Green Finance
			Instruments regarding use of proceeds, processes for project
	Alignment
			evaluation and	selection, management of	proceeds	and			Aligned
	with GBP and
			reporting. This concept is in line with the Green Bond Principles
	GLP
			and Green Loan Principles.
				The Green Finance Instruments will (re-)finance eligible asset
				categories which include Green Buildings and Renewable
				Energy.
				The Green Buildings use of proceeds category has a contribution
				to SDGs 7 'Affordable and clean energy', 11 'Sustainable cities
Part 2:		and communities', and 13 'Climate action'.
Sustainability
quality of the		The remaining	use of proceed categories	improve	the		Positive
Selection
	company's operational impacts and mitigate potential negative
Criteria
	externalities of the Issuer's sector on SDGs 7 'Affordable and
				clean energy' and SDG 13 'Climate action'.
				The environmental and social risks associated with those use of
				proceeds categories are well managed.
	Part 3:			The key sustainability objectives and the rationale for issuing
	Linking the			Green Finance Instruments are clearly described by the Issuer.			Consistent
			The project category considered is in line with the sustainability			with Issuer's
	transaction(s)
			objectives of the Issuer.					sustainability
	to UBM's
	overall ESG			At the date of publication of the report and leveraging ISS ESG			strategy
	profile			Research, no severe controversies have been identified.

1 The evaluation is based on UBM's Green Finance Framework (April 12, 2023 version), the Selection Criteria as received on April 12, 2023, and on the ISS ESG Corporate Rating updated on March 15, 2023 and applicable at the SPO delivery date.

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S E C O N D P A R T Y O P I N I O N

Sustainability Quality of the Issuer

and Green Finance Framework

SPO ASSESSMENT

PART I: ALIGNMENT WITH GREEN BOND PRINCIPLES AND GREEN LOAN PRINCIPLES

This section evaluates the alignment of the UBM's Green Finance Framework (as of April 12, 2023) with the Green Bond Principles and Green Loan Principles.

GREEN BOND PRINCIPLES AND GREENLOAN PRINCIPLES

ALIGNMENT

OPINION

1.

Use of Proceeds

✓

The Use of Proceeds description provided by UBM's Green

Finance Framework is aligned with the Green Bond

Principles and Green Loan Principles.

The Issuer's green categories align with the project

categories as proposed by the Green Bond Principles and

Green Loan Principles, Criteria are defined in a clear and

transparent manner. Disclosure of the allocation period

and commitment to report on the allocation per project

category is provided and environmental benefits are

described.

The identification of exclusion criteria for harmful project

categories is in line with best market practices.

2.

Process for Project

✓

The Process for Project Evaluation and Selection

Evaluation and

description provided by UBM's Green Finance Framework

Selection

is aligned with the Green Bond Principles and Green Loan

Principles.

The project selection process is defined and structured in

a congruous manner. ESG risks associated with the project

categories are identified and managed through an

appropriate process. Moreover, the projects selected

show alignment with the sustainability strategy of the

Issuer.

The inclusion of different expertise within the company in

the process is in line with best market practices.

3.

Management of

✓

The Management of Proceeds proposed by UBM's Green

Proceeds

Finance Framework is aligned with the Green Bond

Principles and Green Loan Principles.

The net proceeds collected will be equal to the amount

allocated to eligible projects, with no exceptions. The net

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