PATRIZIA : Sustainability Report 2023

SUSTAINABILITY REPORT 2023

PATRIZIA SUSTAINABILITY REPORT 2023

CONTENTS

1. EDITORIAL																					3
2. PATRIZIA AT A GLANCE													4
	2.1	PATRIZIA IN NUMBERS														5
	2.2	ESG HIGHLIGHTS															7
3.	GOVERNANCE												10
	3.1 GOVERNANCE STRUCTURE										11
	3.2	BUSINESS CONDUCT										14
4.	SUSTAINABILITY STRATEGY					15
	4.1	SUSTAINABILITY AT PATRIZIA						16
	4.2	DISCLOSURES AND ENGAGEMENT				25
	4.3	OUR JOURNEY TO NET ZERO			30
	4.4	IMPACT INVESTING					42
	4.5	OUR PEOPLE					45
5.	PATRIZIA FOUNDATION			55
6.	2024 OUTLOOK			60

PATRIZIA SUSTAINABILITY REPORT 2023	EDITORIAL | PATRIZIA AT A GLANCE | GOVERNANCE | SUSTAINABILITY STRATEGY | PATRIZIA FOUNDATION | OUTLOOK 2024	3

1. EDITORIAL

Amal Del Monaco

Mahdi Mokrane

Mathieu Elshout

Dear Reader,

Sustainability is at the heart of what we do at PATRIZIA. We are playing an important role in decarbonising the built environment: we are enabling the long-term megatrend of the energy transition through our investments and are meeting the continuously increasing ESG standards and legislation, which demand that we act as a responsible investment manager.

We have a responsibility, not only to preserve the environment around us, but towards our investors and our tenants. We continuously improve the quality and energy efficiency of the assets we manage on behalf of investors, in order to provide strong and stable returns and satisfy occupiers. Despite a rocky 2023, our commitment towards sustainability didn't waver, and we are proud to share PATRIZIA's 2023 Sustainability Report, which highlights the significant progress we made in advancing our four sustainability goals over the year.

Our first goal is 'to achieve net zero carbon status across our corporate operations and real asset portfolio by 2040 or earlier, with a clear ambition to execute as fast as external and our stakeholder requirements permit'. In 2023, we launched a range of tools and committed resources to support this goal, including an operations- focused Net Zero Carbon Strategy, an electric vehicle policy and an asset-focused decarbonisation manual. In addition to this, we launched an ESG toolkit for our asset managers and introduced a fund-level Net Zero Carbon Strategy, which was adopted by the majority of our managed discretionary funds.

Our second goal is 'to become a leading sustainable investor in real assets with a consistent PRI five-star rating from 2025 onward'. Despite a strict scoring model in 2023, we outperformed most of our peer group, remaining well on course to achieving our goal of a combined five-star PRI rating by 2025. We also improved our funds' and assets' Global Real Estate Sustainability Benchmark (GRESB) scores by 8% and expanded our external commitments to include CDP and the Net Zero Asset Managers initiative (NZAM).

Our third goal is 'to be an employer of choice in the real assets sector, where everyone feels included, represented and valued equitably'. Over the course of 2023, we held more than 30 ESG training sessions, including some focused on ED&I, introduced an inclusive leadership programme and created more internal employee development programmes. To enhance our work as an employer, we also invited feedback from all employees through an engagement survey and collected voluntary demographic data.

Our fourth goal is 'to become a leading global impact investor in the real assets sector with a meaningful part of our assets under management in impact investments by 2035'. PATRIZIA's first impact investment fund had its final close in December 2023 with almost EUR 300 million raised. The fund aims to house more than 7,500 individuals in social and affordable accommodation in around 25 European cities and to focus on affordable housing, green real estate, and strengthening inclusion and connectivity.

The PATRIZIA Foundation continues to play a vital role for the company. Our employees raised EUR 190,000 for the foundation through various challenges in 2023, contributing to the charity's overall impact in helping to provide 600,000 children and young adults with access to education, healthcare and welfare so they have the chance to live a better life. Additionally, up to 1% of PATRIZIA's EBITDA is donated to charitable organisations, such as the PATRIZIA Foundation.

In this report, you can read in detail about the progress we are making to achieve our sustainability goals that are closely aligned with our ambition to become a smart Real Asset Player in a world in transition. We hope it inspires you as much as our employees who remain committed to making an impact.

Amal Del Monaco	Mahdi Mokrane	Mathieu Elshout
CEO Asset Management &	Head of Global Investment	Head of Sustainability &
Development European	Strategy, Research &	Impact Investing
Real Estate	Investment Solutions

PATRIZIA SUSTAINABILITY REPORT 2023	EDITORIAL | PATRIZIA AT A GLANCE | GOVERNANCE | SUSTAINABILITY STRATEGY | PATRIZIA FOUNDATION | OUTLOOK 2024	4

2. PATRIZIA

AT A GLANCE

PATRIZIA SUSTAINABILITY REPORT 2023	EDITORIAL | PATRIZIA AT A GLANCE | GOVERNANCE | SUSTAINABILITY STRATEGY | PATRIZIA FOUNDATION | OUTLOOK 2024	5

2.1 PATRIZIA IN NUMBERS

A LEADING PARTNER FOR GLOBAL REAL ASSETS

PATRIZIA offers investment solutions with global reach and opportunity.

40

years of experience in real estate investments

&

26

years of experience in infrastructure

28

PATRIZIA offices

globally	PATRIZIA offices globally	Markets with PATRIZIA operations & clients
	Operating partner offices	Markets with PATRIZIA Foundation projects

∼1,000

employees worldwide

40+

boutique operating partners worldwide

500+

institutional clients

7,000+

private clients

PATRIZIA SUSTAINABILITY REPORT 2023	EDITORIAL | PATRIZIA AT A GLANCE | GOVERNANCE | SUSTAINABILITY STRATEGY | PATRIZIA FOUNDATION | OUTLOOK 2024	6

2.1 PATRIZIA IN NUMBERS

ASSETS UNDER

MANAGEMENT

With EUR 57.3 bn real assets under management, our investment strategies are designed to achieve the objectives of our clients.

EUR 57.3bn

real assets under management

EUR  48.3 bn

real estate assets under management

EUR 9.0 bn

infrastructure assets under management

AUM by	AUM by	AUM by
real estate
geography	risk style
sector

	Germany	53%			Office	27%			Core	63%
	UK & Ireland	11%				Residential	27%			Core plus	18%
	France & Belgium	5%				Retail	10%				Value-add	18%
	Nordics	7%				Logistics & Industrial	12%
	Asia-Pacific	4%				Infrastructure	16%
	Netherlands	4%				Hotel	3%
	Italy	2%				Healthcare	3%
	Spain	3%				Other	3%
	North America	5%
	Other	6%

Due to commercial rounding of figures and percentages, small deviations may occur.

PATRIZIA SUSTAINABILITY REPORT 2023	EDITORIAL | PATRIZIA AT A GLANCE | GOVERNANCE | SUSTAINABILITY STRATEGY | PATRIZIA FOUNDATION | OUTLOOK 2024	7

2023 ESG HIGHLIGHTS

The following represents a snapshot of our sustainability highlights and progress throughout 2023.

47%	of real estate portfolio
	without on-site fossil
	fuel heat sources2.

Launched

Yearly growth in

gender diversity

across all talent development programmes.

HIGHLIGHTS

ENVIRONMENTAL

50%

of discretionary real estate funds adopted fund-level Net Zero Carbon Strategies.

Net zero carbon plan

developed for corporate operations.

Asset Decarbonisation Manual

established with 'evergreen' list of best-practicebrown-to-green measures.

250+ energy audits instructed.

Climate transition risk

(CRREM) analysis of

1,106 assets

(100% of real estate assets in scope).1

100%

of real estate and infrastructure assets assessed for physical climate risk with scenario analysis.

Sustainability

Roadmaps

across all discretionary infra­structure equity port­ folio companies to drive sustainable transformations.

SOCIAL

30+

ESG training sessions conducted, with

1,400+ attendees,

including 21 ED&I training sessions.

88%

40%

of PATRIZIAns with personal ED&I goals.

Active Employee

Resource Group

engagement.

EUR 190K

raised for the

PATRIZIA Foundation

through challenges undertaken

by 73 PATRIZIAns, and

EUR 789K

2.2 ESG

Internal carbon price

adopted by flagship fund.

100%

of infrastructure equity is included in our NZAM commitment.

Electric vehicle policy

established to phase out fossil fleet within 3 years.

response rate to the global

engagement survey &

78%

demographic data collected.

PATRIZIA contribution.

1. Not all assets were in scope, reasons include and are not limited to: assets were infrastructure assets, in the process of being sold, not active assets, the fund was winding down in 2023 or the asset was outside of Europe.
2. Analysis of EUR 31bn AUM of real estate portfolio.

PATRIZIA SUSTAINABILITY REPORT 2023	EDITORIAL | PATRIZIA AT A GLANCE | GOVERNANCE | SUSTAINABILITY STRATEGY | PATRIZIA FOUNDATION | OUTLOOK 2024	8

GOVERNANCE

Became a signatory to the

Net Zero

Asset Managers

initiative (NZAM).3

Became a

signatory of CDP.

Completed a

double materiality assessment

with

150

stakeholders.

A growing team of 15 dedicated

ESG professionals

(+4 from 2022).

ESG action plans

and scoring models launched for real estate and infrastructure assets.

Commenced onboarding of new best-in-class

ESG data management platform.

Achieved

2.2 ESG HIGHLIGHTS

8%

year-on-year improvement of GRESB score average.

2

infrastructure funds scored highest in their respective GRESB groups.

5 STARS

in 4 out of the 5 modules assessed in the real estate and infrastructure PRI submission.

3 PATRIZIA′s real estate business at the beginning of 2023 and PATRIZIA's infrastructure business in 2022.

PATRIZIA SUSTAINABILITY REPORT 2023	EDITORIAL | PATRIZIA AT A GLANCE | GOVERNANCE | SUSTAINABILITY STRATEGY | PATRIZIA FOUNDATION | OUTLOOK 2024	9

2.2 ESG HIGHLIGHTS

IT ALL STARTED IN 1984 ...

• PATRIZIA's infrastructure business became a signatory to the Net Zero Asset Manager Initiative.

• Net Zero Carbon Strategy published.

2022 • First Impact Fund launched.

• First Sustainability Report published.
• PATRIZA became an official supporter of the Task Force
  2020 on Climate-related Financial Disclosure (TCFD).

2017	PATRIZIA's infrastructure business became a
signatory of the UN PRI.
2015	First set of Responsible Investment Guidelines4
established.
2011	Participation of first PATRIZIA real estate fund
in GRESB.
1999	PATRIZIA Foundation established.

1. Responsible Investment Guidelines for PATRIZIA Infrastructure.
2. PATRIZIA′s real estate business became a signatory at the beginning of 2023 and PATRIZIA's infrastructure business in 2022.

• Fund-level Net Zero Carbon Strategies developed.
• Became a signatory to CDP and NZAM (real estate).5
• Global Employee Engagement survey conducted.	2023
• Final close of PATRIZIA's first impact investment fund.
• PATRIZIA's infrastructure business becomes signatory
to the UN Global Compact.
• Formation of ED&I Council.
• Create Better was set up as an employee engagement
initiative for innovative sustainability solutions.
• First carbon footprint calculation based on proxy data.	2021
• Sustainability Goals launched.
Participation of first PATRIZIA infrastructure fund	2019
in GRESB.
PATRIZIA's infrastructure business launched an	2016
ESG Due Diligence framework.
PATRIZIA's real estate business became a	2012
signatory of the UN PRI.
ESG Committee established.	2010

1984

The start of PATRIZIA

PATRIZIA SUSTAINABILITY REPORT 2023	EDITORIAL | PATRIZIA AT A GLANCE | GOVERNANCE | SUSTAINABILITY STRATEGY | PATRIZIA FOUNDATION | OUTLOOK 2024	10

3. GOVERNANCE