UDR : 2020 Corporate Responsibility Report

UDR

2020 Corporate Responsibility Report

Culture, Innovation, Execution

Resilience

ABOUT THIS REPORT

Our Corporate Responsibility Report (CRR) focuses on the 2019 reporting period. The report's Environmental, Social, and Governance (ESG) disclosures were prepared in accordance with the Global Reporting Initiative (GRI) Standards (core), the Sustainability Accounting Standards Board (SASB) standards, and the Task Force for Climate- related Financial Disclosure (TCFD) framework. The inclusion of SASB and TCFD disclosure is new to the 2020 report. We believe the addition of SASB and TCFD to our reporting enhances our disclosures and provides the most relevant and comprehensive ESG metrics for our business as defined by these leading organizations.

We developed this Corporate Responsibility Report using the best and most reliable information currently available to us but cannot guarantee that this information will not change due to conditions within or beyond our control. We undertake no duty to update any information included herein should a change occur.

Further, certain statements made in the Corporate Responsibility Report are "forward looking statements" that by their nature involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results and outcomes to differ materially from those expressed in a forward looking statement. These risks include those discussed in our Annual Report on Form 10-K and our Quarterly Report on Form 10-Q filed with the SEC from time to time.

WHAT'S NEW?

We believe that integrating ESG and sustainability targets into UDR's near and long-term strategic goals advances our objective to continuously improve

our corporate citizenry, drives innovation, enhances operating results and cash flow growth, and ultimately results in better Total Shareholder Return (TSR) over time. This, when combined with constructive feedback received from a variety of UDR's internal and external stakeholders over the past year, have helped influence changes we have adopted regarding how we implement, track, and report our ESG efforts. Primary additions to our 2020 CRR include:

• Added SASB real estate-specific disclosures for energy management, water management, management of tenant sustainability impact, and climate change adaption.
• Enhanced disclosure around the Company's climate-related risk management approach through the addition of the TCFD framework.
• Obtained independent, third-party assurance that our processes for compiling, measuring, and reporting primary electric-,gas-,water-, and GHG-based metrics are accurate and complete.

• Updated our Associate training and human capital development programs with a greater focus on diversity, ethics, and safety.
• Automated the measurement and reporting of real-timewhole-building energy and water consumption to ensure efficient usage, which improve operating margins.
• Increased our use of and investment in renewable energy by installing PV solar and solar thermal where possible, gained a better understanding of municipal green energy programs and their benefits, and purchased more Renewable Energy Certificates.
• Created a Government Affairs team to monitor and advise on regulatory matters, including potential environmental legislation that can impact our operating, capital allocation, and market selection strategies.

For any questions about this Corporate Responsibility Report, please contact our Corporate Services Department at [e-mail].

2 | About this Report

TABLE OF CONTENTS

Chairman and CEO Message______________________ 4

About UDR, Inc.__________________________________ 6

UDR's Business Strategy__________________________ 7

UDR's ESG Methodology__________________________ 8

Materiality Assessment____________________________ 9

ESG Measurement and Reporting_ ________________10

Environmental___________________________________12

Social__________________________________________22

Governance____________________________________32

Global Reporting Initiative Content Index___________38

Sustainability Accounting Standards Board__________49

Task Force for Climate-related Financial Disclosure____51

The Arbory - Hillsboro, OR

Contents | 3

CHAIRMAN AND CHIEF EXECUTIVE OFFICER MESSAGE

(GRI 102-14,102-18,102-43)

UDR's culture is one based on innovation, inclusion, empowerment, adaptability, and execution. I start with our cultural cornerstones, as without them, the successes we have realized implementing and reporting on a wide variety of ESG objectives would not have been possible. These days, ESG influences and contributes to our day-to-day and long-term growth and risk mitigation strategies, both of which benefit our stakeholders in intangible (e.g., being part of a company that promotes strong corporate citizenry) and tangible (e.g., better net operating income and cash flow growth, etc.) ways.

In 2019, and to date in 2020 I am proud to write that our Associates continued to progress our ESG objectives, many of which are reported in this Report.

For "E," we installed over 831,000 kilowatt hours of solar generation capacity at our properties, increased our purchase of Renewable Energy Credits, continued to retrofit our buildings with energy management systems and LED lighting, reported our emissions and carbon footprint for the first time, analyzed our portfolio against a variety of climate change risks, and committed to sector-leading energy, water and emissions-reduction goals - to name a few.

For "S," we enhanced mandatory training for Associates, greatly expanded opportunistic Associate training that can lead to career advancement, increased our efforts to ensure our pay standards are not discriminatory

due to race, ethnicity, or gender, paid our Associates for 2,558 hours of their time donated to charity (as actions speak louder than words), worked with residents

who experienced financial hardship as a result of the COVID-19 pandemic, and ensured that our Associates understood their value during the pandemic by offering additional time-off,one-time bonuses for our front-line workers, flexible work schedules, and vacation buyouts

- along with other benefits.

For "G," we continue to believe we have a strong governance structure in place, but we are consistently validating this view through conversations with UDR's investors and governance rating firms. During 2019, we directly engaged with 345 shareholders, representing approximately 79% of our shares outstanding. In general, our investors share our enthusiasm for advancing our ESG objectives and better understanding how UDR fits within their ESG investment frameworks. As such, continuing to improve how we report our ESG objectives and successes is paramount. In this Report, we enhanced our ESG disclosures, so they comply with the GRI Standards (core), the SASB standards, and the TCFD framework. We want to ensure that stakeholders understand what we are doing from an ESG perspective and can easily access the information we provide.

We believe that ESG is growing in importance and is key to being a strong corporate citizen, which is why we remain committed to consistently driving new ESG- related initiatives and further improving the transparency of our disclosures. In 2020, we have expanded our sustainability initiatives by installing Smart Home technology across an additional 10,000 apartment homes, again participating in the annual Global Real Estate Sustainability Benchmark ("GRESB"), installing an

4 | Chairman and CEO Message

incremental 840,000 kWh of solar energy production, and doubling our procurement of renewable energy to reduce the Company's carbon footprint. Looking ahead, UDR and the apartment industry face a variety of challenges. Risks such as the potential spread of rent control, future carbon tax legislation, changing customer preferences, climate change threats, cyber security threats, the long-term impact from Coronavirus, and sourcing and retaining talented Associates all will affect how we operate our business. When confronted with this laundry list of risks, I remind myself that our innovative, adaptive culture, which is driven by our diverse, dedicated group of Associates, will find a way to drive UDR's business and commitment to ESG forward.

We welcome your feedback on our progress towards our ESG goals, our transparency, and this Report.

Sincerely,

Thomas W. Toomey

Chairman and Chief Executive Officer

Fiori on Vitruvian Park - Addison, TX

Highlands of Marin - San Rafael, CA

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