1、Responsible Businessand ESG Report 2024Our sustainability performanceResponsible Business and ESG reviewOverview and progress2Environmental5Social12Governance and TCFD disclosure25Performance against targets34External perspective36EPRA sBRP37The Company recognises the need to consider and address al
2、l environmental,social and governance matters relevant to its business.As well as meeting legislation,environmental improvements are starting to translate into real asset value enhancement as occupiers value these improvements more highly than before,and valuers begin to differentiate between assets
3、 based on environmental attributes.Our Responsible Business framework guides us in mitigating climate-related risks,identifying and progressing environmental and stakeholder-related opportunities as well as ensuring a high standard of corporate governance.Responsible Business is embedded across all
4、of our corporate,investment,asset management and development activities.We have shifted our approach from core focus on top down analysis to incorporating bottom up asset-specific risk and opportunity assessment and case-by-case actions.Our Responsible Business and Environmental Policy sets out our
5、approach and ESG targets are set every year.Progress against those targets is monitored at Working Group meetings held monthly and attended by key business representatives and a Board member.ESG performance is reported to the Board at regular intervals with the Audit Committee responsible for overse
6、eing ESG progress.Executive Directors and relevant employees are set individual ESG targets and remuneration is linked to achieving those targets.Regular ESG training for our property team is undertaken throughout the year.The merger with LXi represents a material change to our portfolio,and we inte
7、nd to reassess our overall ESG Strategy,Framework,and objectives.This is to ensure they are still suitable and aligned with industry standards.EnvironmentalThrough our activities we look to minimise the environmental impact of our business,maximise opportunities to improve the efficiency of our asse
8、ts and improve the resilience of our assets to climate change and the impact of transitioning to a low carbon economy.Read more on page 5SocialOur actions consider the long term interests of all our stakeholders including those of our employees,suppliers,customers and local communities as well as en
9、suring that we maintain a high standard of business conduct.Read more on page 12GovernanceThe Board is committed to upholding high standards of corporate governance.In particular,it ensures that appropriate health and safety procedures and supply chains are in place.Read more on page 25Our ESG objec
10、tives UNs SDGsReducing portfolios carbon intensity&embodied carbon from our activitiesAddressing climate change through our Net Zero Carbon ambition Helping cities to develop sustainable infrastructureEnhancing and supporting local communities and wellbeing of stakeholdersImproving the natural envir
11、onmentPromoting good working conditions and equality for allLondonMetric supports the UNs 17 Sustainable Development Goals(SDGs).The goals shown above represent those that we feel are the most relevant to our business.”Martin McGannFinance DirectorOur Responsible Business activities aim to address o
12、ur material ESG risks and opportunities.LondonMetric Property Plc Responsible Business&ESG Report 202401Overview and progressWe have improved our ratings in external benchmarks,made good progress against our ESG targets and are integrating the assets acquired through the LXi merger.External benchmar
13、king Maintained our Green Star and achieved a 3 Star ratingIncreased score from 64 to 76 in the 2023 Global Real Estate Sustainability Benchmark survey(GRESB),achieving 3 Green Star rating and coming 2nd in our peer group.Continued inclusion in the FTSE4Good IndexIn the latest assessment,we achieved
14、 a score of 3.5 out of 5.0 compared to 2.9 for the peer group.Improved to AA ratingIn the latest assessment we increased our rating to AA from A,which is above the sector average.Maintained our Gold AwardIn EPRAs last review,we maintained our Gold Award in the Sustainability assessment,showcasing ou
15、r efforts to integrate sustainability into their core operations.Other benchmarksIn the latest ISS review,we maintained our C-score,which remains above the peer group average.In addition,we responded to CDP for the first time,scoring a D which demonstrates that we are transparent about climate issue
16、s.76GRESB score,up from 64 in prior year85%of portfolio EPC rated A-C2.9m sq ftof net zero audits obtained in year72%of occupier energy data captured0.8MWpSolar PV added in year9.0/10 landlord recommendation score97%of employees are proud to work for LondonMetricESG progress in the yearWe made good
17、progress against our 12 corporate ESG targets.The data opposite sets out outcomes for some of our main ESG targets and further detail on our progress is detailed on the following pages.Full details on our environmental,social and governance metrics and targets are set out on page 34 and 35.The merge
18、r with LXi has materially altered our portfolio.To implement environmental initiatives and ultimately achieve Net Zero Carbon on our buildings,we are now more reliant than before on our occupiers sharing similar environmental ambitions to us.We will therefore need to review the impact of the transac
19、tion on our Net Zero Carbon ambition and our wider ESG targets over the coming year.Sustainability linked financing675 million of financing is sustainability-linked and structured in accordance with the Loan Market Associations Sustainability Linked Loan Principles.Sustainability performance targets
20、(Targets)are set and aligned to LondonMetrics corporate ESG targets focused on:Improvements in EPC ratings;Adding renewable installations;and Developments meeting a minimum BREEAM Very Good standard or,where not applicable,an alternative minimum standard.During the prior year,two of the three Target
21、s for the sustainability linked loans were achieved.We receive a margin improvement of up to 2bps on our debt costs which is allocated to additional spend on LondonMetric charitable causes.LondonMetric Property Plc Responsible Business&ESG Report 202402Adapt and evolvePlaying a leading role in decar
22、bonisingMost stakeholders from shareholders,to employees,to occupiers,to communities,and governments now expect companies to act with integrity and long term vision.Opinion and reputation can impact capital allocation decisions,and potentially even the long term value of a company.We look to bring t
23、ogether our approach,market trends and desirable assets to ensure reliable income and fit for the future assets.Our responsible approachWhere our actions take into consideration the long-term interests of all our stakeholders and ensure that we maintain a high standard of business conduct.Fit for th
24、e future.LondonMetric Property Plc Responsible Business&ESG Report 202403Responsible focus#1Own sustainable buildings#2Collaborate with occupiers#3Manage climate risksLondonMetric Property Plc AnResponsible Business&ESG Report 202404Through our activities we aim to minimise our businesss environment
25、al impact,maximise building efficiency opportunities,and improve business and asset resilience to climate change and the impact of transitioning to a low-carbon economy.We understand the importance of addressing climate change and the significant impact that reducing emissions from real estate can h
26、ave on the UKs 2050 Net Zero target.LondonMetric recognises that it can have a material impact by reducing its emissions as well as supporting its occupiers in reducing theirs and helping them to meet their net zero carbon(NZC)ambitions.In 2021,we formalised our Net Zero Carbon Framework and,in 2023
27、/2024,we had intended to map out our Net Zero Pathway.However,the merger with LXi has increased our reliance on our occupiers environmental ambitions materially in meeting our Scope 3 emissions reductions.LXis WAULT of 26 years(twice that of the LondonMetric only portfolio)creates more barriers for
28、us to instigate asset improvement initiatives in the medium term.The merger has also introduced some additional operational assets,as well as properties with lower EPC ratings and fewer building certifications.Therefore,we have decided to delay the publication of our Net Zero Pathway,which was plann
29、ed for the year.We will revisit our previous NZC ambition to take account of the LXi transaction and the outputs of LXis Net Zero Pathway that had been published before the merger.In the year,we implemented a dedicated ESG platform to better track and capture energy performance at our assets,model i
30、nterventions on assets,and track ongoing and completed energy reduction initiatives.This is a material investment for us and will support us along our journey of minimising our environmental impact.OverviewLondonMetrics emissions split13 Our occupiers operations(Scope 3)Collaborating with our occupi
31、ers to achieve NZC on our buildingsEmissions from our occupiers activities(Scope 3)are the main source of our carbon emissions.So,in order to implement environmental initiatives and ultimately achieve NZC on our buildings,we are reliant on our occupiers sharing similar environmental ambitions to us.
32、Our full repair and insuring(FRI)/NNN lease structure and our long lease lengths mean that if our occupiers are not proactively improving buildings,then we are only able to intervene at lease expiry.We are collaborating with our occupiers to help them meet their NZC target and ensure our buildings a
33、re as sustainable as possible.We had set an ambition for our buildings to be NZC by 2035,but the LXi merger has brought potential barriers to achieving this.We will be reviewing our target as part of our wider Net Zero Pathway in the coming year.2 Our developmentsMinimising our emissions Whilst deve
34、lopment activity is minimal,we continue to reduce emissions from development activity,challenging our supply chains to select low carbon materials.We set an ambition of achieving NZC on developments by 2030 and will review this as we look to set our wider Net Zero Pathway in the coming year.1 Our op
35、erationsCarbon Neutral for 2024We had set a NZC in operations by the end of 2023 and had made good progress in minimising our own emissions.We have exhausted most opportunities to reduce emissions from our landlord managed supplies,which are now minimal.The LXi merger has required us to review our N
36、ZC ambition,and instead we are targeting carbon neutrality for calendar year 2024.Environmental2311.Our operations0.3%2.Our developments13.1%3.Our occupiers operations86.6%1 Operations emissions include Scope 1&2 emissions and business travel.Development emissions include embodied carbon for both di
37、rect and forward funded developments complete in the year.Occupiers emissions have been extrapolated based on 72%actual data receivedOur sustainability performanceResponsible Business and ESG reviewcontinuedLondonMetric Property Plc Responsible Business&ESG Report 202405The alignment of our portfoli
38、o to single tenanted NNN Income assets,where the occupier is responsible for the operations of a property,and away from operational offices and retail parks has meant that the energy consumption and greenhouse gas emissions for which LondonMetric is responsible has fallen significantly over recent y
39、ears.Since 2015,LondonMetrics absolute energy consumption has fallen by 88%from 9,056 MWh to 1,071 MWh today and we have worked hard to minimise consumption where there is landlord supply.This minimal level of consumption had allowed us to set an ambition of reaching NZC for Scope 1 and 2 emissions(
40、corporate head office and assets with landlord supplies and voids,as well as Scope 3 emissions related to our operations).The LXi merger has required us to push this target back.Whilst the LXi portfolio is similar in nature,we will need to assess its operational emissions and so are now aiming to be
41、 NZC in operations by no later than end of 2025.Notwithstanding the above,we are still aiming to be Carbon Neutral in operations for calendar 2024.Carbon Neutral for 2024Over the past year,we have worked closely with our managing agents to monitor our landlord supplies and reduce emissions where pos
42、sible.Our energy consumption was reduced by 2%on a like for like basis over the year,achieved through energy efficiency improvements.Our like for like emissions have,however,increased by 3%compared to the previous year.This is influenced by higher gas consumption at one of our office assets.Our abso
43、lute consumption increased considerably in the year due to the acquisition of the CTPT portfolio,which included offices with high landlord-supplied energy.Moreover,since acquisition,we have sold several CTPT assets that contributed to our consumption.Although we have made significant efforts to redu
44、ce our emissions,there are still some emissions that are difficult to eliminate or are not within our control.We will utilise carbon offset projects to make up for these remaining emissions and aim to be Carbon Neutral across our Scope 1 and 2,for 2024.The offsets will be Gold Standard Certified,whi
45、ch focuses on providing lasting social,economic and environmental benefits.We are also currently exploring options to use the renewable energy generated by our solar projects where we have PPAs in place,to offset our emissions.Actions undertaken to reduce Scope 1&2 emissionsOur actions to reduce emi
46、ssions mainly relate to upgrading LED lighting in common areas for which we are responsible.Several LED replacements were undertaken in the year.As a result of the replacements,our Victoria Retail Park and the Stargate Industrial Park saw a like-for-like energy reduction of 9%and 3%respectively.Ener
47、gy audits have been undertaken at five of our managed assets,as part of our ESOS compliance.Outcomes88%reduction in absolute energy consumption since 20152%like for like reduction in energy consumption over the last year97%of landlord electricity supplies from renewable sourcesOperations(Scope 1&2)O
48、ur energy consumption(MWh)1050010001500200025003000350020232022202120202019201820171 Graph shows data according to calendar year.Data for 2017-2021 is presented in financial years ending on 31 March with data from 2022 onwards representing calendar years ending on 31 DecemberLondonMetric Property Pl
49、c Responsible Business&ESG Report 202406Outcomes in the year2.9 m sq ft of net zero audits obtained 72%of occupier energy data captured*80%of leases signed with green lease clausesTop 10 assetsCRREM analysis undertaken*7.6MWpof solar now installed across portfolio*On assets held as at 31 December 20
50、23OverviewAs part of our drive to upgrade the portfolios quality,we have focused on working with our occupiers to progress energy efficiency and clean energy initiatives.We see ourselves as strong stewards of underinvested or poorer quality assets with the necessary expertise and appetite to materia
51、lly improve buildings.Our focus on NNN Income sectors and buildings which typically have a lower energy intensity and relatively easier potential to achieve carbon reduction compared to other property sectors means that it should be easier to achieve NZC at our buildings.Occupiers are typically fund
52、ing environmental improvements and this is being reflected in our EPC rating improvements and our de-minimis defensive capex required for environmental upgrades.Any of our capex is typically achieving higher rents or is paid for in lieu of normal lease incentive arrangements.Impact of LXi merger on
53、our NZC ambitionAs mentioned on page 5 we are having to review our NZC ambition in light of the LXi merger.Whilst we are still reviewing the LXi portfolio,there has been a significant amount of work and energy audits undertaken to assess EPC improvements and understand our ability to reach NZC on th
54、e LXi assets.With a greater occupier concentration,it is easier to collaborate more strategically with occupiers and we have good ongoing dialogue with key LXi occupiers,which will allow us to further understand and shape asset interventions.We are encouraged by the NZC commitments of these occupier
55、s.Progress in year As we focus on understanding how our buildings can achieve NZC,we undertook net zero audits across 0.4 million sq ft,in addition to 2.5 million sq ft of audits obtained from the CTPT and LXi portfolios.The net zero audits provide valuable insight into our buildings energy use and
56、associated greenhouse gas emissions,as well as identify carbon reduction interventions to effectively achieve NZC.As part of measuring our occupiers emissions(Scope 3),we increased occupier energy data coverage from 68%last year to 72%.Our new ESG platform is helping us to access data automatically,
57、achieve higher data coverage and allow us to better analyse our portfolio.Using this data,we have also expanded Carbon Risk Real Estate Monitor CRREM analysis across the largest assets in our portfolio to further understand how they align to key Net Zero Pathways.Green lease clauses and promoting en
58、vironmental improvements at leasing events have been key ways in which we have engaged with our occupiers towards improving the sustainability of our buildings.We continue to engage with occupiers on adding further solar installations to our portfolio,adding three PV systems in the year.For further
59、detail see page 9.Our occupiers emissions(our Scope 3)Aligning our NZC framework to occupiers Scope 1 and 2 ambitions-top 20 occupiers Reaching NZC across our buildings is dependent on our occupiers operations and their own Net Zero ambition.We have reviewed the NZC targets of our top 20 occupiers,r
60、epresented in the graph below,and 98%(by income)have targets to reach meaningful Scope 1&2 emissions reduction.203020352040205025%Rent Roll1 Timeline denotes occupiers target dates to achieve meaningful Scope 1 and 2 emission reductions.Based on publicly available information 8%Rent Roll5%Rent Roll8
61、%Rent RollOur sustainability performanceResponsible Business and ESG reviewcontinuedLondonMetric Property Plc Responsible Business&ESG Report 202407EPC rating of portfolioWe are committed to following regulatory standards and ensuring that our properties meet Minimum Energy Efficiency Standard(MEES)
62、Regulations.The proposed regulations set a target of a minimum C rating by 2027/2028.The merger with LXi has impacted our rating,and 85%of our assets now have an EPC rating of A C,which is down from 90%last year but materially up from 59%in 2015 and 74%in 2021.Excluding LXi assets,the LondonMetric l
63、ike for like portfolio A C rating was 91%,while the A B rating was 53%.We have developed action plans for all assets rated below C and aim to improve our portfolio performance through acquiring or developing higher rated assets and disposing of poorer buildings.We also take advantage of lease events
64、 to bring buildings up to standard and have mandated that a minimum B rating is achievable on all new leases,regears and refurbishments.In the year,we undertook EPC assessments on 1.2 million sq ft(excluding LXi assets)which included some enhanced energy assessments.We recognise that better EPC rati
65、ngs can act as first step towards achieving NZC and so we are also undertaking NZC assessments on certain assets,particularly ahead of refurbishment works.In the year,we undertook 0.4 million sq ft of net zero audits,in addition to 2.5 million sq ft of audits obtained on the CTPT and LXi portfolios.
66、49%36%8%1%5%A&BCDEInvalidOccupier emissions(Scope 3)continuedSolar PV installations In the year,0.8MWp of solar PV was installed,which,together with a further 3.1MWp installed post year end,takes our total capacity to 7.6 MWp.In our occupier survey,60%of occupiers said they were looking at installin
67、g solar PVs and we are in discussion on a number of near term projects with potential to add 3.2 MWp of solar.Improving energy efficiency at CrawleyFollowing a vacancy at a unit in Crawley,the unit was refurbished with the roof upgraded to be solar PV ready,new energy-efficient heat pumps replacing
68、gas and LED lighting installed.The works have improved the EPC to B,up from C.Similarly,at our FedEx unit in Crawley,an incentive package as part of a regear included a new solar-enabled roof which,together with other occupier works,should result in an EPC improvement to B.EV car charging As part of
69、 two EV Charging partnerships with Motor Fuel Group and InstaVolt,we have added an additional 25 chargers across five assets to our portfolio,in the year.EV chargers provide a dual benefit of driving traffic to our sites as well as supporting the wider UK target of decarbonising the transport indust
70、ry.26 additional chargers across four sites are currently in development.Measure emissions across all of the portfolio by increasing occupier data coverageContinued inclusion of green leases on letting events Follow up with occupiers on solar PV installations across the portfolioConsider sustainabil
71、ity improvements and incentives on regearsKey current&future actionsLondonMetric Property Plc Responsible Business&ESG Report 202408Huntingdon 1.9 MWp of solar has been installed on a warehouse let to AM Fresh that LondonMetric funded the development of in 2022.The system will provide AM Fresh with
72、c.28%of its annual energy needs and is expected to save c.500 tonnes p.a.of CO2 emissions.Bicester 302 kWp has been installed on a warehouse let to Greencore Homes,a builder of climate positive homes.The SmartGrid system,which includes a 100kW/200kWh battery storage system,is expected to meet c.40%o
73、f Greencores annual energy needs.The installation is expected to save c.39 tonnes p.a.of CO2 emissions.Coventry 275 kWp of solar has been installed on a warehouse let to Aubrey Allen.The system will provide Aubrey Allen with c.25%of its annual energy needs.Future projects3.2 MWpFurther potential add
74、itional solar from near term initiativesSolar PV installations provide our occupiers with the benefit of lower energy costs while meeting their own ESG and Net Zero ambitions through using renewable energy.ESG in actionIn the year,three solar PV systems were added to our urban logistics portfolio in
75、 Coventry,Bicester and Ely totalling 0.8 MWp capacity,which together with two projects in Huntingdon(1.9MWp)and Biggin Hill(1.2MWp)that completed post year end,have increased total installed capacity from 3.6MWp last year to 7.6 MWp today.Key projects that completed recently are shown below.0.8MWpSo
76、lar added in the year7.6MWpInstalled across portfolioCase StudySolar PV installations Our sustainability performanceResponsible Business and ESG reviewcontinuedLondonMetric Property Plc Responsible Business&ESG Report 202409Climate riskUnderstanding the climate risks that impact our portfolio has be
77、en an increasing focus area for us.In 2022,we undertook a significant assessment of our business and asset resilience against climate-related risks.The third-party assessment concluded that our sustainability strategy is well-positioned to manage climate related risks and opportunities.For the portf
78、olio assessment,two climate change scenarios were used to test a range of outcomes and identify material climate-related risks over the short(1-2 years),medium(3-9 years)and long term(10+years)with likelihood and impact scores assigned to each risk.The table opposite shows that under the less extrem
79、e scenario(RCP4.5),transition risks are the most significant for our business,whereas under the more extreme scenario(RCP8.5),physical risks are the most prevalent and will have a greater impact.For further details on our material risks and mitigation strategies,please see our TCFD disclosure on pag
80、es 26 to 34.At the asset level,an in-depth review was undertaken on representative assets,assessing their resilience to physical and transition risks.Again,transition risks were higher for the assets we assessed.We continue to embed climate risk analysis in our acquisitions and our portfolio managem
81、ent and challenge our advisors and the team to incorporate greater assessment of climate risk.Our plan is to now undertake an updated assessment of our enlarged portfolio following the LXi merger.In the forthcoming year,we will:Update our risk analysis of the portfolio to include LXi assets;Extend t
82、he transition risk analysis based on energy performance and occupier data;Work with our environmental experts to further include climate risk analysis in our procedures;Enhance our climate-risk due-diligence process for acquisitions and disposals;andPortfolio flood riskWe continue to improve our ass
83、essment of the potential impact of physical changes on our portfolio,such as extreme weather and longer term shifts in climate pattern.During the year,we continued to manage and mitigate our current portfolio flood risk.Through our asset management activities,we strategically sold one asset that was
84、 at high risk of flooding.We believe that,in most instances,proper flood mapping or better consideration of building levels would lower the risk profile further,both across our high risk assets but also our medium risk assets.We continue to look at risk reduction actions.Our current risk profile sho
85、ws that the majority of our assets have a low risk of flooding.Following the merger,we will need to review the LXi portfolio flood risk and include it in our analysis.However,we believe that the combined portfolio will have a similar risk profile.86%12%2%Low riskMedium riskHigh risk Only 2%of proper
86、ties rated high risk Full portfolio review to be conducted in the year,to include LXi assets Detailed flood reviews undertaken on acquisitions and developments Work with our environmental experts to further include climate risk analysis in our procedures;and enhance on our climate-risk due-diligence
87、 process for acquisitions and disposals.Physical risks(risk scoring on key risks)IPCC RCP4.5 global emissions scenario (1.7-3.2C of warming by 2100)IPCC RCP8.5 global emissions scenario (3.2-5.4C of warming by 2100)8.4Extreme weather eventsHeat StressFlooding(coastal,fluvial)Heavy rainfall&pluvial f
88、looding13.39.913.913.912.816.613.117.1Long termTransition risks1(risk scoring on key risks)13.8Occupier/market demand changesIncreased building standardsFinancial markets impactFuel source transition7.515.116.47.617.613.719.0Short termMedium term1 Risks shown in graphs are top risks for IPCC RCP 4.5
89、.Under RCP 8.5,risks from insurance challenges and increased energy demand and cost would have been included as top four transition risk with scores of 14.0 and 13.0See pages 27 to 29 for further detail on climate change scenariosLondonMetric Property Plc Responsible Business&ESG Report 202410Data q
90、ualifying notesThis is the Companys fourth year of disclosure under the Streamlined Energy and Carbon Reporting regulations.An operational control consolidation approach has been adopted.This statement has been prepared in accordance with the requirements of the GHG Protocol Corporate Accounting and
91、 Reporting Standard,the GHG Protocol Value Chain(Scope 3)Standard,and ISO 14064-1:2006.Our data quality is reviewed and improved every year,so previous years figures are updated if more data becomes available.A third party assesses our carbon emissions and methodology each year to confirm accuracy a
92、nd transparency.Our Scope 1 and 2 emissions are externally assured,in line with AA1000AS.Sources of greenhouse gas emissions3 Year to 31 December 2023 Year to 31 December 2022Tonnes of CO2e(location-basedcalculation)1Tonnes of CO2e(market-basedcalculation)2Tonnes of CO2e(location-based calculation)T
93、onnes of CO2e(market-based calculation)Scope 1 EnergyLandlord-controlled gas 20201515Void EnergyVoid asset gas0.030.0377Fugitive emissionsRefrigerant emissionsDe minimis De minimis De minimis De minimisScope 2 EnergyLandlord-controlled electricity17211000.2Void EnergyVoid asset electricity781312Scop
94、e 3 EnergyTransmission and distribution losses 15151010TravelEmissions from employee business travel,in third party vehicles991212Tenant Energy Landlord-obtained energy sub-metered to tenants3,781-12,765-Tenant Energy Tenant energy consumed at our buildings39,369-31,338-Total(Scope 1&2)1993013635Tot
95、al(Ex voids)1922211616Intensity(Scope 1&2)tCO2e/m net income after administration costs 1.350.200.920.231 For the location-based method of emissions calculations,standard emissions factors from the UK Government Emissions Conversion Factors for Greenhouse Gas Company Reporting 2022 and 2023 were use
96、d2 For the market-based method,the Companys contractual instruments for the purchase of certified renewable electricity were accounted for3 Disclosed emissions are 100%UK basedEnergy consumption-2%Over the year on a like for like basisLandlord obtained energy consumption fell by 2%to 509 MWh on asse
97、ts that were owned during both 2022 and 2023(calendar years).The reduction can be attributed to the ongoing asset upgrades to incorporate energy efficiency measures.Absolute energy consumption increased by 37%,due to the acquisition of CTPT assets.Greenhouse gas (GHG)emissions3%Over the year on a li
98、ke for like basis(location-based)Emissions increased by 3%on assets that were owned during both the 2022 and 2023 periods,for Scope 1 and 2.Absolute emissions have increased overall from 136tCO2e to 199tCO2e.Within Scope 1 emissions,refrigerant-related emissions for the period were de minimis.Scope
99、2 dual reporting is undertaken,disclosing emission figures using both location-based and market-based methods.For the location-based method,standard emissions factors from the UK Government Emissions Conversion Factors for Greenhouse Gas Company Reporting 2022/2023 were used.For the market-based met
100、hod,the Companys contractual instruments for the purchase of certified renewable electricity were accounted for.For the remainder of electricity which is not REGO backed,UKs residual mix factor was used to calculate the associated emissions.The breakdown of void asset emissions in both Scope 1 and S
101、cope 2 provides additional information.This clearly demonstrates where LondonMetric has operational control throughout the year and how void data impacts the overall total emissions.Emissions from employee business travel(by vehicle)have been calculated on a distance travelled basis,where the releva
102、nt vehicle emissions factor has been applied to expensed mileage.Scope 3 Tenants energy is provided,and its based on actual data that we have been able to obtain from our occupiers.This also includes a small amount of landlord obtained energy sub-metered to our tenants.In the year,we collected Scope
103、 3 data on 72%of the portfolio.Our sustainability performanceResponsible Business and ESG reviewcontinuedLondonMetric Property Plc Responsible Business&ESG Report 202411Building and nurturing relationships with our stakeholders is integral to our business model and the way we work.OccupiersWe work c
104、losely with our occupiers to create high occupational contentmentPeopleOur employees are critical to our success and delivering on our strategyContractors and AdvisorsWe rely on the support of a diverse group of contractors and advisorsInvestorsStrong relationships with our investors are critical to
105、 us accessing capital efficientlyCommunitiesSupporting local communities and charities is highly important to usLearn more on page 21Learn more on page 19Learn more on page 13Learn more on page 23Learn more on page 15Our stakeholdersSocialLondonMetric Property Plc Responsible Business&ESG Report 202
106、412Our sustainability performanceResponsible Business and ESG reviewcontinuedOccupiersWhy they are important to us Drivers of income and capital growth Lie at the heart of our business purposeWhat is important to them Fit for purpose real estate Lease terms that suit their business model Well design
107、ed and sustainable buildings Approachable and trustworthy landlordOutcomes99.4%portfolio occupancy9.0/10.0 landlord recommendation score99.9%of rent collected151occupier transactions Occupier survey results page 14Strong customer focusWe recognise that when our occupiers businesses thrive,our busine
108、ss also thrives.We treat our occupiers as customers and put them at the centre of our decision making.Our occupier-led approach provides us with market knowledge to better understand future trends and make informed decisions.Our customer satisfaction scores,high occupancy rate and rent collection de
109、monstrate the strength of these relationships.Extending existing relationships and developing new contacts continue to be a key focus for us.Develop trusted relationshipsOur customer focused approach reflects our differentiated proposition where we:Are approachable and actively engage with our occup
110、iers;Strive to listen,fully understand occupier requirements and create solutions that are mutually beneficial;and Make quick decisions,act swiftly and deliver on our promises.Customer satisfactionWe undertake regular surveys across our key occupiers and undertook our fifth occupier survey in March
111、2024.Responses were received from occupiers representing 46%of our income and the feedback continued to be strong with an average score of 9.0 out of 10.0 for whether our occupiers would recommend LondonMetric as a landlord.The survey continued to provide very helpful insight for us to follow up on
112、and include in our wider decision making.We are focused on owning assets that have enduring occupier appeal.”Mark StirlingAsset DirectorHow we engage with our occupiers Annual occupier surveys Leasing and regear activity Regular site visits and inspections Energy saving discussions Wider property ne
113、eds discussionsBoard Engagement Board provided with detailed analysis of occupier transactional activity on a regular basis Executive Directors feedback results of rent collection to the Board Results of the annual occupier survey presented to Audit Committee each year Site visits provide an opportu
114、nity for the Board to engage with customersLondonMetric Property Plc Responsible Business&ESG Report 202413Occupier survey(March 2024)194 of our occupiers were surveyed,representing 91%of rent.Responses were received from 77 occupiers representing 46%of rent.Questions were asked about occupiers sati
115、sfaction with our properties and their locations,how satisfied they were with LondonMetric and whether they would recommend us as a landlord.We also asked specific environmental questions.As for the previous years survey,we will address the results of the survey and any specific feedback through our
116、 ongoing occupier engagement.Encouragingly,wider sentiment from our occupiers was upbeat,with 35%saying that they are looking to increase their UK property footprint.A further 58%said that they expect their footprint to stay the same,whilst those looking to reduce space was only 7%.Average9.0/10Reco
117、mmend LondonMetric as a landlordWe scored an average of 9.0 out of 10.0 for whether our occupiers would recommend LondonMetric as a landlord.This compares with the 2023 result of 8.7.For our top ten occupiers,the average was higher at 9.1.Average8.5/10Satisfaction with our propertiesWe scored an ave
118、rage of 8.5 out of 10.0 for satisfaction with our properties.This compares with the 2023 result of 8.1.For our top ten occupiers,the average was higher at 8.7 compared to 8.2 in 2023.A proactive landlord who develops strong proactive relationships.”Feedback from Tesco as part of the occupier surveyA
119、s an occupier we are pleased to work with LondonMetric within our existing relationship and would be happy to extend that relationship when the right opportunities arise.”Feedback from FedEx as part of the occupier surveyAlways genuinely positive,collaborative and pragmatic conversations-a true part
120、ner landlord and tenant relationship.”Feedback from DFS as part of the occupier surveyOccupier survey feedbackLondonMetric Property Plc Responsible Business&ESG Report 202414Our sustainability performanceResponsible Business and ESG reviewcontinuedPeopleWhy they are important to us Build relationshi
121、ps with our occupiers and the property industry Allow us to execute on investment,asset management and development strategies Responsibility for their wellbeingWhat is important to them Flexibility and wellbeing Progression and career development Reward and recognition Fairness and equalityOutcomes6
122、%average staff turnover since merger in 201397%of staff feel proud to work for the Company Employee survey results page 16OverviewThe Company is highly focused with 47 employees and eight Non Executive Directors.Since 2013,employee numbers have fallen despite a significant increase in assets managed
123、.This reflects improved efficiencies and the lower operational requirements of our portfolio.Culture and approachWe have successfully attracted and retained a talented and loyal team.This is reflected in our low annual voluntary staff turnover rate which has averaged 6%since merger in 2013.We believ
124、e this reflects our:Culture of empowerment,inclusion,openness and teamwork;Fair and performance based remuneration;and Small number of staff,which allows a flexible and individual approach.We also have a flat management structure with clear responsibilities and decision making processes.Following th
125、e merger with LXi and the acquisition of LXi REIT Advisors Ltd we welcomed ten new employees across finance and property functions.We are confident that our culture and approach will be fully embraced by our new colleagues as we look to fully leverage their skills,contacts and expertise to drive the
126、 business further forward.We have successfully attracted and retained a loyal and talented team.”Martin McGannFinance DirectorHow we engage with our people Annual employee surveys Annual appraisals Training Committee meetings Regular business updatesBoard engagement Clear communication and regular u
127、pdates from the Chief Executive Direct interaction between the Board and employees on an informal and also formal basis at specific meetings Site visits for Non Executive Directors facilitated and attended by key employees Liaison with workforce Non Executive Director through employee eventsLondonMe
128、tric Property Plc Responsible Business&ESG Report 202415How we address employee needsFlexibility,wellbeing,satisfaction&safetyOur 2024 employee survey reflects ongoing high levels of satisfaction.We have implemented more flexible working arrangements over recent years covering dress code,holiday buy
129、 back,improved hybrid systems to enable home working and a core hours policy.We have also significantly reduced office space,undertaken a major office refurbishment and modernisation.Health&Safety is a key priority for us and our policy provides for appropriate equipment,workplace assessments,operat
130、ional processes and safe systems of work.Reward&recognitionRemuneration is aligned to personal and Company performance with LTIPs that replicate arrangements for Executive Directors.All employees receive a pension contribution of 10%of salary and medical insurance with access to childcare,cycle to w
131、ork vouchers and a car scheme,which allows employees to access electric and hybrid vehicles.Progression&career development An annual appraisal process is undertaken where training needs and performance are discussed.We actively encourage training and we continue to monitor our staff training each ye
132、ar.We continue to undertake ESG training across our employees,encourage participation in Young Property Professionals groups and offer secondment and work placement opportunities.Inclusion,fairness&equality We strongly encourage input on decision making from all staff,wide participation in Committee
133、 meetings and collaboration across teams.Regular business updates are provided by Executive Directors.We promote diversity across knowledge,experience,gender,age and ethnicity with a published diversity and inclusion policy in place and support of the Real Estate Balance group.Whilst overall female
134、employee representation is good,we recognised that we needed to specifically promote greater gender diversity.We continue to increase female representation in our property team,supporting a recent graduate joiner as she gains her relevant real estate qualifications.Employee gender diversityDirectors
135、 The number of Directors by gender:64Senior Leadership Team The number of members of the Senior Leadership Team by gender:62All employees The number of employees by gender:2324FemaleMaleFor more information on diversity,see page 126 of our Annual Report and Accounts 2024.LondonMetric Property Plc Re
136、sponsible Business&ESG Report 202416Our sustainability performanceResponsible Business and ESG reviewcontinuedPeople2024 Staff survey97%staff survey engagement level97%are proud to work for LondonMetric84%agree the Company supports and promotes social responsibility94%agree there is a strong culture
137、 of teamwork and collaboration at the CompanyOverview of satisfaction survey In February 2024,we undertook our seventh annual employee survey to track changes in staff satisfaction.In total,we asked 43 questions,focusing on the Company,the working environment,and the individual.Responses were receiv
138、ed from 97%of staff members in line with 2023.Survey FindingsOverall the survey is positive with 97%of employees feeling proud to work at LondonMetric.Employees remain highly supportive of the Company and working environment.It was noted that most scores were up on previous years.There were isolated
139、 cases of scores down on previous highs,however it was felt that these reflected a year focused on large transactional activity rather than a shift in employees view and attitudes.The highest scores were achieved as follows:Employees feel proud to work for this organisation;Employees enjoy working a
140、t LondonMetric;Employees believe they can make a valuable contribution to the success of this organisation;and Employees believe the leaders demonstrate that people are important to the companys success.The three most positive changes from 2023 are as follows:The leaders of LondonMetric value and ac
141、t on employee feedback;The Company is open to change and innovation;and Employees believe everyone is treated fairly.The Company does not operate a formal work from home policy recognising the benefits of collaboration and problem solving when all together and driving a strong entrepreneurial spirit
142、.On the question on a scale of 1-10 how likely are you to recommend LondonMetric to a friend,a score of 9 was achieved which is up from 8 last year.This confirms that we remain a friendly and positive employer.Enjoy working at LondonMetricCompany is considerate of life outside workThe leaders demons
143、trate that people areimportant to the companys successWork gives a sense of personal achievementFeel involved in decisions that affect my workI believe I can make a valuable contributionto the success of this organisationEmployeeCompany2024202394852024202375792024202391792024202391822024202375732024
144、20239194Survey breakdown of scores(percentageof employees that responded with agreeor strongly agree)LondonMetric Property Plc Responsible Business&ESG Report 202417Andrew Livingston is our designated workforce Non Executive Director and will keep providing feedback from this survey and informal mee
145、tings and discussions with staff in the coming year.As Chief Executive of Howden Joinery Group Plc,Andrew has experience of managing and motivating a large team of employees.His work as designated workforce NED ensures that the Board has access to the views of the workforce,regardless of their role
146、or position,and provides meaningful information that can be used by the Board when considering the potential impact of key decisions on employees.Each year since his appointment,Andrew has hosted an informal off site session for a select group of employees.The Remuneration Committee Chair attended t
147、he meeting to welcome any questions from staff on executive pay.The meeting is an opportunity for people to speak freely and openly and ask about topics discussed in the boardroom and share their day to day working experiences.Topics discussed included retaining the existing culture where the busine
148、ss continues to grow through corporate transactions,the LXi integration and any resource requirements including systems as well as the positives of being in the office full time,work life balance,personal growth and celebrations.Non attributable feedback was relayed to the Board at its next meeting.
149、As a result of this feedback and subsequent discussion,alongside the results of the annual staff survey,the Board will continue to focus on the following actions to support the wellbeing of employees:Provide internal and external training and development opportunities for staff,both professionally a
150、nd personally;Retain existing culture following corporate activity;and Ensure employees remain informed of relevant business activities on an ongoing basis.The work of the designated workforce Non Executive DirectorAndrew Livingston was appointed as designated workforce Non Executive Director by the
151、 Board in 2019.How does the designated workforce NED consult with the wider workforce?Consults directly with members of the Senior Leadership Team Holds own meetings with a small and diverse group of employees Reviews results of staff surveys Staff liaison at Board and Committee meetingsHis role was
152、 set out by the Board to include the following:Engage with workforce to give staff the opportunity to get to know and liaise with him Monitor the results of employee engagement surveys and any actions arising Feedback to the Board at meetings any staff concerns and the results of surveys and other l
153、iaison at least annuallyLondonMetric Property Plc Responsible Business&ESG Report 202418Contractors and AdvisorsWhy they are important to usBeing a small team we are dependent on a diverse group of key suppliers including professional advisors and contractorsWhat is important to them Fair payment te
154、rms and prompt settlement Good,effective and stable working relationship Long term partnershipsOutcomes14 days average payment100%compliance with our Responsible Development Requirements checklistOur Responsible Procurement PolicyOur policy outlines our approach to implementing supply chain and proc
155、urement standards on developments and our existing estate through our contractors and suppliers.It focuses on areas such as labour,human rights,health and safety,resource,pollution risk and community.ContractorsOur contractor relationships are highly important in allowing us to deliver on our develo
156、pments and refurbishments.In conjunction with our external project managers,our development team ensures that we select high quality and robust contractors with a proven track record.We regularly review the financial robustness of our contractors and work closely with them throughout projects.Our de
157、velopment team monitors progress and tracks all elements of our projects including sub-contracted works.We stay in close contact with our contractors and arrange regular visits and detailed reviews and checks of their systems and processes.Our Responsible Development Requirements checklist is used o
158、n all projects and sets minimum requirements for contractors.Compliance with this checklist is mandatory for all projects and sets minimum standards that our contractors must meet.The checklist covers environmental,responsible supply chain and H&S standards.We also specify compliance by contractors
159、with the Considerate Constructors Scheme on most of our projects where we deem it appropriate.At project meetings,we challenge all of our contractors to consider the environment,biodiversity,local community involvement and local sourcing.We value contractors that we can trust and develop long term p
160、artnerships with.”Nick HeathHead of DevelopmentHow we engage with our contractors&suppliers Regular project meetings Annual reviews and audits on projects Regular meetings with property and managing agents Sharing of learning between different suppliersBoard engagement The Board or its Committees re
161、ceive regular presentations and reports from its advisors The Board continues to advocate the Prompt Payment Code and promote responsible development standards The Board visit sites with the Development teamOur sustainability performanceResponsible Business and ESG reviewcontinuedLondonMetric Proper
162、ty Plc Responsible Business&ESG Report 202419Managing AgentsManaging Agents are an important part of the supply chain on our assets where there are multiple occupiers in place.We select a few highly competent companies to deliver our managing agent services.Whilst our spend on these services is rela
163、tively small,we continue to monitor their compliance against our Managing Agents policies and ensure that their sub-contractors are properly appointed and compliant with our standards,including responsible supply chain/anti-slavery and human trafficking.c.70Properties managed by five managing agents
164、Over recent years,we have undertaken a number of reviews of material sub-contractors employed by our key Managing Agents with a specific focus on sustainability,community,legislation and employment.Other SuppliersWe also rely on many other advisor relationships as part of our activities.These includ
165、e investment agents,external auditors,valuers,remuneration consultants,tax advisors,environmental experts and legal advisors.Annual contractor review of DeeleyEach year we undertake a detailed review of systems and processes at one of our contractors,looking in particular at compliance with our stan
166、dards,local sourcing,modern slavery and minimum wage.During the year we reviewed Deeley Construction,a Midlands based contractor with whom we have a longstanding relationship.Deeley recently completed a new build Starbucks drive-thru in Birmingham(as pictured opposite)for LondonMetric and are curren
167、tly tendering for further projects.Deeley has robust policies in place and it is clear that it shares the same core values as LondonMetric.The contractor maintains strong relationships with its clients and its key supply chain,with senior management having a very active role in all business activiti
168、es.Uckfield developmentUckfield was seen as an excellent opportunity to team up with a well known developer,BrideHall,with occupiers we also knew well,on a site adjacent to an asset we already owned.The scheme comprised of a 21,500 sq ft new format M&S Simply Food store and a 20,000 sq ft Home Barga
169、ins store.It was delivered to achieve BREEAM Good with both units achieving EPC A ratings.The total funding provided was 14.6m and the scheme was PCd in September 2023.M&S completed their subsequent fit out to open for Christmas 2023 trading,followed by Home Bargains who opened in the New Year.The f
170、eedback from both the occupiers and locals is positive.LondonMetric Property Plc Responsible Business&ESG Report 202420InvestorsWhy they are important to us Continued investment and support Feedback and direction Maintaining a flexible and attractive debt structureWhat is important to them Financial
171、 performance and progression Scale and liquidity Structurally supported assets with growth Well covered and growing dividend Clear strategy,execution and reporting ESG fully consideredOutcomes in the year380 investors met1.4bndebt facilities arranged or extended3.2bnAssets added through M&AEquity In
172、vestorsWe value our good relationships with our shareholders.Understanding their views continues to be a top priority for the Board and is vital to the Companys strategic direction.The Companys principal representatives continue to be the Chief Executive and Finance Director who,along with the Head
173、of Investor Relations and Sustainability,hold meetings throughout the year and particularly following results announcements.Over the year,we met with c.380 equity investors and brokers through one to one and group meetings.Unsurprisingly,with continued market uncertainty and our M&A activity,we saw
174、a significant increase in investor interaction compared to the previous year when we saw 241 investors.A breakdown of meetings by type of investor is shown in the chart opposite and key investor activities are shown on the next page.The Company continues to place great importance on and engage with
175、its private wealth shareholders,who represented 38%of investors met in the year.We continue to enjoy strong analyst coverage and interaction with the 12 brokers that cover our stock and we expect to see even greater broker coverage going forward given our increased scale and liquidity.Feedback remai
176、ns very supportive and,as would be expected,we continue to focus on ESG matters.Feedback on our ESG performance remains very positive.Following further investor requests,we responded to CDP(a global disclosure system for investors and corporates on environmental issues)for the first time in their 20
177、23 annual assessment.Our sustainability performanceResponsible Business and ESG reviewcontinuedHow we engage with our investors Investor roadshows&conferences Results presentations to analysts Annual General Meeting Chair attendance at investor meetings Debt refinancing activity Site visitsEquity in
178、vestors met(by type)12341Private wealth38%2Sector specialists29%3Generalists26%4Brokers7%Board Engagement Investor feedback provided regularly to the Board by the Chief Executive Chair participated in half yearly and other roadshow meetings,attending five investor meetings during the year Board atte
179、nded the Annual General Meeting Board consulted with shareholders on the Companys Remuneration Policy proposalsLondonMetric Property Plc Responsible Business&ESG Report 202421Our investor relations framework The framework is set around our half yearly results,and at other times in response to ad hoc
180、 requests and where we undertake UK regional and overseas roadshows and investor conferences.Meetings and roadshows keep investors informed of the Companys performance and plans and allows them to ask questions.Specific topics discussed during the year included development and implementation of stra
181、tegy,financial and operational performance,the property market,the strength of our occupiers,our M&A transactions and other opportunities,our debt structure and ESG considerations.Shareholders are kept informed through results statements and other regulatory announcements.These are published on our
182、website,affording all shareholders full access to material information.The website also includes an investor relations section containing all RNS announcements,share price data,investor presentations,factsheets and Annual Reports.A live and on demand webcast of results and a CEO interview is posted
183、twice a year on our website.Individual shareholders can also raise questions directly at any time through a facility on the website.We complied with the European Single Electronic Format(ESEF)regulations for filing our Annual Report.We continue to offer a scrip dividend alternative to shareholders,w
184、hich enables them to opt for shares rather than cash with no dealing costs or stamp duty.This scheme was renewed for a further three years in 2022 and we continue to have good levels of take up.LXi merger investor activityOur merger with LXi required significant shareholder dialogue and we undertook
185、 75 meetings over the two-month period prior to merger completion in early March 2024.118 institutions and private wealth management companies were seen including a number of LXi only investors.75meetings heldThere was a significant overlap of registers and the transaction received overwhelming supp
186、ort from both sets of shareholders.The merger further diversified our investor base,introduced two new top 15 shareholders,and materially increased liquidity in our shares.118investors seenDebt investors and joint venturesWe continue to enjoy good relationships across the debt capital markets and co
187、ntinue to broaden our base of debt providers.In addition,we continue to enjoy strong relationships with our joint venture partners.Further information on our financing activity in the year is set out on page 53 of our Annual Report and Accounts 2024,including details on our sustainability-linked deb
188、t arrangements and also refinancing activity undertaken both on existing LondonMetric debt but also LXi debt facilities.Key investor activity in yearQ1Australian investors callsFull year results announcement/roadshowPrivate wealth meetings(Leeds&York)Conferences with EPRA,Kempen&Morgan StanleyUS roa
189、dshow(New York&Boston)Q2 Societe Generale conferenceEquity&Debt Site visit to DagenhamAd hoc analysts and investor meetingsQ3Shareholder consultation on remunerationPrivate wealth meetings(Bristol)Half year results announcement&roadshow,including discussions on CTPT mergerAmsterdam roadshowUBS inves
190、tor conferenceQ4 LXi merger investor meetingsBarclays investor conference Bank of America conference Citi investor conference(US)US roadshow(New York)Equity site visit to CrawleyLondonMetric Property Plc Responsible Business&ESG Report 202422CommunitiesWhy they are important to us Considering commun
191、ities local to our activities is an important part of our responsible Business approach to doing business and delivering our strategy.What is important to them Environmental and social impact of our activities Employment opportunities Investment into local infrastructureOutcomes153kCharitable giving
192、 in year,a 46%increase on 202372Charitable causes supported in yearWe recognise the importance of supporting our local communities and engaging with all local stakeholders.Our published Community Policy outlines our approach and we aim to maximise the local benefits of our activities through:Investi
193、ng in local infrastructure through regeneration and creation of fit for purpose buildings;Creating jobs during development and refurbishment,typically using local contractors and employment;Bringing in long term occupiers who create significant local employment;Partnering with local authorities and
194、councils;Engaging with local residents and communities,particularly during and post developments to ensure that they are fully involved;and Ongoing involvement in areas local to our properties by funding of local events and facilities and engaging with schools.Our Charity and Communities Working Gro
195、up implements charity giving and co-ordinates community involvement.We aim to allocate a minimum of 100,000 per year for charitable giving across four key areas:Specific causes identified at a corporate level;Charitable causes identified by employees with all employees able to nominate charities of
196、their choice or allocate funds to match their own charitable activity;and Occupier or asset related giving,supporting causes in conjunction with occupiers or near our local assets and developments.This year,under our banking arrangements an extra 48,000 was added to our charity budget as a result of
197、 us hitting our banking related ESG targets on our sustainability linked financings.How we engage with our communities Supporting local charities Encouraging local sourcing on projects Planning consultations Resident updates on projects Engagement with local authorities Supporting local occupier ini
198、tiativesBreakdown of charitable giving1231Corporate giving37%2Employee giving29%3Community giving34%Board engagement Participation in charitable events organised by LondonMetric Updates on charitable work Understanding of development related community matters through project updatesOur sustainabilit
199、y performanceResponsible Business and ESG reviewcontinuedLondonMetric Property Plc Responsible Business&ESG Report 202423Highlight charitable activity in the yearEmployee givingOver the year,the Company supported its employees charitable giving initiatives donating 44,448 across a wide range of char
200、ities including localised community initiatives.Employee charitable giving included supporting individuals personal charitable initiatives including endurance swimming and cycling events.During the year,employees also spent their own time volunteering at local foodbanks in their local communities.In
201、 addition,the Company has also supported its employees local communities with small donations to local community sport clubs.Corporate giving real estate ledWe continue to support LandAid,the property industry charity and contributed 10,000 to LandAid in the year,some of which related to employee gi
202、ving.Our participation in various LandAid initiatives means that we remain a Foundation Partner.This year we ran an internal step challenge for two weeks raising money to prevent youth homelessness bringing out the competitive side in everyone.89%of our employees participated in the Steptober event,
203、taking over 6 million steps for the challenge,over two weeks.Local communities giving and initiativesWe continue to support local communities where we have large investment exposure.In total we donated 51,612 to charities including foodbanks,the National Energy Action and defibrillators.As the cost
204、of living continues to put pressure on families,during the year we continued our contribution to foodbanks in communities local to our assets and people including in Kingston,Tyseley,Weymouth,Bedford and Dagenham.As part of our roll out of defibrillators across our properties,we installed eight defi
205、brillators in the year at a total cost of 28,012.See below for further details.Corporate giving wider initiativesThe Company supported global,national and local charities,supporting causes close to its heart.During the year,we donated 25,000 to Youth Beyond Borders who develop inclusive programmes f
206、or children form disadvantaged backgrounds.This six month programme will involve up to 100 young people from inner cities and take them on a transformational journey to end with a trail running race in the French Alps.In the previous year,we committed to install a number of defibrillators across our
207、 assets in conjunction with Fidum,one of managing agents.We installed eight defibrillators in the year at our sites in New Malden(pictured opposite),Weymouth,Dartford,Eastbourne,Hertford and London(x3).Total spend has been 28,012 and we have another three locations earmarked for additional defibrill
208、ators.LondonMetric Property Plc Responsible Business&ESG Report 202424Our sustainability performanceResponsible Business and ESG reviewcontinuedGovernance and complianceThe Board is committed to upholding high standards of corporate governance and Responsible Business is an important part of ensurin
209、g that we deliver on those high standards.OverviewBoard representation for Responsible BusinessMartin McGann,Finance Director,represents the Board at Responsible Business Working Group meetings and his remuneration is linked to the Company achieving certain Responsible Business related objectives.Po
210、licies and statementsThe Companys overall Responsible Business policy is available on its website along with other related documents including:The Responsible Business Working Groups terms of reference;Responsible Business targets;Full Responsible Business reports;Our approach to health and safety;C
211、ompliance and anti-corruption procedures;Responsible Procurement Policy;Community Policy;and Modern Slavery Act Statement.ConfirmationsThe Company confirms that no human rights concerns have arisen within its direct operations or supply chains and that it has not incurred any fines,penalties or sett
212、lements in relation to corruption.The Company continually reviews and updates all of these documents as required.Health and safety in focusResponsibility and proceduresThe Board is responsible for ensuring that appropriate health and safety procedures are in place.Mark Stirling,Asset Director,is res
213、ponsible for overseeing implementation of our procedures and reporting back to the Board.RP&P Management Ltd(RP&P)acts as our Corporate Health and Safety Advisor.H&S risks assessment and trainingWhere risks need to be assessed under a specific duty or regulation,we ensure that an assessment is carri
214、ed out and that all necessary actions are implemented.Health and safety training is carried out for employees and additional training is considered on a case by case basis.Health and safety policyOur policy is regularly reviewed and addresses three key areas of:I.Employment The policy ensures our em
215、ployees are offered a safe and healthy working environment.II.Construction Procedures and processes have been developed to ensure we comply with current legislation with a Project Manager,Principal Designer and Principal Contractor appointed on all projects to oversee,manage and monitor health and s
216、afety.III.Managed properties The majority of our assets are let on full repairing and insuring leases.For single occupier assets,the occupier is responsible for managing health and safety matters at the property and the wider estate.Where there are multiple occupiers on the same estate,we appoint a
217、Managing Agent to manage health and safety matters relating to common parts.The Managing Agent is responsible for ensuring health and safety assessments are completed and regularly reported back to us.Our contractor requirementsWe have implemented robust processes to ensure that our contractors upho
218、ld our high standards and minimise the environmental impact from developments.All of our contractors adhere to our Responsible Development Requirements checklist,which sets minimum requirements for our main developments on areas including:Health and safety;BREEAM Very Good or better standard(where a
219、ppropriate);Considerate Constructors Scheme compliance;Environmental impact monitoring;Management and reporting of progress;Promoting local employment opportunities;and Fair remuneration for workers.We continue to monitor compliance and look at ways of improving our contractors performance.During 20
220、24,as part of our annual contractor compliance audit,we met with Deeley Construction Limited,who are a medium sized contractor we typically engage for smaller Midlands based projects.Their Responsible Business policies and processes are very robust and their senior management has a highly active rol
221、e in all business activities.See page 20 for further details on our auditHealth and safety in 2024 Quarterly internal meetings Half yearly project audits on two sites Zero reportable incidents on projects Zero accident rate for employees No prosecutions or enforcements Health&safety policy reviewed
222、annuallyGovernanceLondonMetric Property Plc Responsible Business&ESG Report 202425LondonMetric has complied with the requirements of Listing Rule 9.8.6R by including its Task Force on Climate-Related Financial Disclosures(TCFD)Statement below.Our statement is consistent with the four overarching dis
223、closures and eight of the 11 specific disclosures,demonstrating our commitment to transparent and comprehensive climate-related reporting.LondonMetric is dedicated to enhancing its reporting practices year on year.Our focus areas will be on enhancing alignment in the three specific disclosures where
224、 we are not fully consistent with the recommendations,which include strengthening the financial quantification aspects of our disclosure(Strategy B and Strategy C),improving the measurement and coverage of Scope 3 emissions generated by our occupiers(Metrics&Targets B),and conducting a climate risk
225、assessment for our enlarged portfolio following the merger with LXi REIT Plc,which completed in March 2024.Below are all our climate-related financial disclosures,structured according to the four TCFD pillars.For the three specific disclosures where we may not fully align with the recommendations,we
226、 provide a clear rationale for any deviations and outline the steps we plan to take to address these gaps in future reporting.1.GovernanceA)Describe the boards oversight of climate-related risks and opportunities.The Board.assisted by the Audit Committee,provides oversight of the Companys Environmen
227、tal,Social,and Governance(ESG)matters and has overall responsibility for the risk management framework,which integrates climate-related risks and opportunities.The Senior Leadership Team(SLT)and the Companys Responsible Business Working Group(Working Group)are responsible for identifying and managin
228、g risks and opportunities related to climate-related issues,including implementing measures to address those risks and opportunities.LondonMetrics governance structure regarding climate risks and opportunities is summarised in Figure 1.For a description of the roles and responsibilities of the Board
229、 and its sub-committees,see pages 119 to 121 of the Governance section of the Annual Report.Process and frequency of information transfer and consideration of climate-related issues.The Board considers climate-related risks at a strategic level during Board meetings,ensuring that new and emerging ri
230、sks,including those that are climate-related,are identified and appropriate action is taken to remove or reduce their likelihood and impact.The Board typically meets six times a year,with ESG and climate-related risks addressed when necessary.The Audit Committee reviews the Company risk register(in
231、which climate-related risks are included)annually and provides assurance to the Board on the robustness of the systems in place for the identification,assessment,and mitigation of the principal risks.The Audit Committee is informed by the Working Group,which provides feedback on climate-related issu
232、es,facilitates proactive climate-related risk management and is a sub-committee of the Finance Committee.The Audit Committee meets six times a year,with ESG and climate-related risks addressed when necessary.The Board receives climate-related information on the Company through:1.Audit Committee upda
233、tes delivered by the Audit Committee on an annual basis;2.Board papers written by the SLT and delivered quarterly;3.ESG papers written by the Working Group at least annually;and4.Regular ad-hoc updates on specific matters-including investment and asset management initiatives,where environmental and
234、climate-related risks are addressed.Climate-related issues are considered by the Board and the Audit Committee when reviewing and guiding strategy,risk management,budgeting,performance,and spending.Board members are expected to identify and develop their own individual training needs,skills and know
235、ledge and ensure they are adequately informed about the Groups strategy,business,and responsibilities.They are encouraged to attend relevant seminars and conferences and receive technical update material from advisors and are offered training and guidance at the Companys expense.The Deloitte Academy
236、 is also available,which includes briefings on sustainability and climate.The Board is considered well-equipped to make climate-related decisions based on the above.Progress against targetsThe Audit Committee is responsible for monitoring and overseeing progress against climate-related objectives an
237、d targets,escalating matters to the Board as necessary.The Committee considers the Companys ESG performance against the KPIs shown in the Metrics and Targets section of this report(see Table 3).Additionally,in achieving the Companys strategy and overall corporate objectives,Executive Directors are e
238、ntitled to a bonus each year,with 10%of this bonus relating to achieving specified ESG objectives that are aligned with delivering the Companys ESG KPIs.Our sustainability performanceTCFD Recommendation and Alignment Page numbers in this TCFD Statement refer to our 2024 Report&Accounts which can be
239、found at Property Plc Responsible Business&ESG Report 2024261.Governance continuedB)Describe managements role in assessing and managing climate-related risks and opportunities.Certain members of the SLT and the Working Group are responsible for managing and monitoring climate-related risks.They repo
240、rt directly to the Audit Committee.This collaboration is led by the Head of Investor Relations and Sustainability and the Finance Director,who are members of the SLT and the Working Group and are ultimately responsible for implementing Responsible Business matters.The SLT is responsible for ongoing
241、risk identification,and the design,implementation,and maintenance of internal controls to mitigate identified risks.Certain members of the SLT attend the Investment,Asset Management and Finance sub-committees to ensure that climate-related issues are monitored and escalated where appropriate as well
242、 as to ensure that opportunities are considered and captured.These sub-committees typically meet every four to six weeks or more frequently,depending on business needs and activity.The Working Group supports the SLT in identifying wider climate-related risks by reporting on and escalating potential
243、risks.It also ensures the business is properly considering opportunities,with interaction at least on a weekly basis.The Working Group typically meets once a month.LondonMetric has recently become a member of the Better Building Partnership(BBP)and actively participates in BBPs activities,including
244、working groups,research projects,and knowledge sharing,thereby demonstrating a commitment to sustainability.LondonMetric also works with consultants at an asset level to identify sustainability risks and upgrade opportunities and employs the services of an ESG consultant at the corporate level to as
245、sist in its overall ESG strategy and implementation.Figure 1:LondonMetric Climate-Related Risk Governance StructureGovernance of climate-related risks and opportunitiesBoard of DirectorsAudit CommitteeSenior Leadership TeamInvestment CommitteeAsset Management CommitteeFinance CommitteeResponsible Bu
246、siness Working Group2.StrategyA)Describe the climate-related risks and opportunities the organisation has identified over the short,medium,and long term;and B)Describe the impact of climate-related risks and opportunities on the organisations businesses,strategy,and financial planning.When identifyi
247、ng risks and opportunities,we looked at the short term(1 2 years),medium term(3 9 years)and long term(10+years).In selecting time horizons,we considered the fact that climate-related issues often manifest over the medium and longer term.The time horizons are based on the profile of risks associated
248、with real estate asset lifecycles in line with the Climate Change Act.Identifying climate risks and opportunitiesAs part of the climate risk assessment carried out in 2022 by JLL,we identified our potential climate risks and opportunities.For a summary of the assessment,see page 61.Climate scenario
249、analysis was utilised to model our climate-related risks in two likely scenarios based on the Intergovernmental Panel on Climate Change(IPCC)Representative Concentration Pathways(IPCC RCP).The assessment tested a range of outcomes at the portfolio level under(i)the RCP4.5(stabilised emissions)and(ii
250、)RCP8.5(high emissions)climate scenarios up until 2100 to identify material risks.These scenarios represent a realistic range that emissions could reach,therefore informing financial planning.Each risk was assigned an overall Climate Risk Score based on a combination of two headline sub-categories:i
251、mpact and likelihood.Impact scoring considers overall business and financial impact,and the ease/cost of mitigation.Likelihood considers risk likelihood,frequency,duration of impact and how quickly the risk materialises.Overall Climate Risk Scores were calculated by multiplying the impact and likeli
252、hood scores(on a scale of 1-5),such that the minimum overall score is 1 and the maximum is 25.Based on each discrete climate risk plotted on an impact/likelihood matrix(with a score of 3 sitting in the middle of each axis),overall Climate Risk Scores of 9 or greater or which fall in the top risk qua
253、drant are considered material,suggesting a significant financial impact requiring appropriate management and mitigation.It was identified that transition risks are more prominent in the near term under the stabilised emission RCP4.5 scenario.Physical risks materialise in the largest severity over th
254、e longer term under the high-emission RCP8.5 scenario.Our sustainability performanceTCFD Recommendation and Alignment continuedLondonMetric Property Plc Responsible Business&ESG Report 2024272.Strategy continuedClimate risks under the two IPCC RCPs,both transition and physical,are summarised in Tabl
255、e 1,along with an assessment of potential financial impact and risk management and mitigation strategies.The table also highlights which of LondonMetrics wider strategic pillars are impacted by each risk(details on strategic pillars and priorities can be found on page 15 of the Annual Report).Follow
256、ing the merger with LXi,a broader climate risk assessment will be conducted next year across the enlarged portfolio.Table 1:Climate-related material risks with mitigation and financial impact(risk scores under the two IPCC RCPs shown in brackets)RiskTransition riskStrategic PillarManagement/Mitigati
257、onFinancial ImpactShort term(1-2 years)R1:Occupier/market demand(RCP 4.5 17.6;RCP 8.5 13.7)Occupier and market demand is shifting towards low or net zero carbon assets with embedded on-site climate resilience.Demand may also shift from certain geographies or sectors,while changing consumer preferenc
258、es could create occupier risk.Assets not meeting occupier needs or not let to resilient occupiers may not be considered desirable.Ongoing occupier engagement to understand their sustainability commitments,and business model resilience.Continue to improve buildings in conjunction with occupiers on le
259、ttings/lease extensions.Increased capital expenditure without income/value accretion.Lower occupancy levels due to a move away from less sustainable buildings,leading to reduced rental income.R2:Increased building standards/regulation(RCP 4.5 16.4;RCP 8.5 7.6)Increasing policy mandates in the built
260、environment that improve energy and resource efficiency and on-site climate resilience,may potentially result in significant capital expenditure costs to meet the new standards.The main risk concern is meeting Minimum Energy Efficiency Standards(MEES).Poor management of assets and EPC ratings could
261、result in illiquidity.Continued understanding of and alignment with the latest regulations required,building on asset-level plans to ensure compliance with standards or other appropriate actions such as disposals.Increasing costs to meet regulation falls on the Company as landlord.Asset values many
262、fall,and assets become less liquid with a brown discount priced in.Medium term(3 9 years)R3:Financial market impacts/access to capital(RCP 4.5 15.1;RCP 8.5 19.0)Market shifts in favour of low-carbon solutions and climate resilience as well as climate events impacting our portfolio could create a com
263、petitive risk,particularly with respect to meeting stakeholder expectations and access to the equity and debt markets.Low commitment to sustainability could affect investor perception.Continue to ensure our assets are fit for purpose and maintain high-level dialogue with investors on our commitment
264、to sustainability and climate resilience.Higher cost of equity and debt or even inability to refinance existing debt or raise capital for future opportunities.This would affect profitability and equity market rating.R4:Increased energy demand/costs(RCP 4.5 17.6;RCP 8.5 13.7)Changes to seasonal patte
265、rns,temperature extremes and carbon taxation each could increase the operational costs of buildings and impact the rental value of inefficient assets as occupiers seek lower operational costs and in-built energy resilience.Lack of sustainable initiatives increase occupiers operational costs.In conju
266、nction with occupiers,plan property energy performance reviews to assess interventions such as solar PV to help occupiers save energy costs and build energy supply resilience.The expense of asset interventions to lower occupiers operational costs falls increasingly on us as the landlord,affecting ou
267、r profitability and values.R5:Supply chain&resources(RCP 4.5 10.4;RCP 8.5 14.0)Physical impacts may cause widespread disruption to production within supply chains and resources,potentially resulting in business disruption and tenant default risk.Low understanding of occupier resilience could add ris
268、k.Occupier supply chain/business model reviews undertaken on acquisitions and key occupiers/sectors to assess resilience against disruption.Occupier and sector diversification was reviewed and assessed at a strategic level.Potential for occupiers to default on rent,which would impact profitability a
269、nd asset valuations.R6:Exposure to litigation(Risk score:RCP 4.5 9)Increased policy and legislation requirements to meet transition requirements of a low-carbon economy could create additional risks of legal action for breaches of compliance.Further tightening of legislation on MEES or UKs Net Zero
270、targets could add to the risk.Failure to meet legislation can lead to fines and reputational damage.See mitigation under R2 above.ESOS Phase 3 compliance work was undertaken to identify reduction opportunities across operational assets.Legal action and penalties.Reputational damage could lead to red
271、uced financing opportunities,such as higher costs of equity and debt.Long term(10+years)R7:Insurance challenges(RCP 4.5 10.9;RCP 8.5 14.0)Physical climate events or risks may cause the insurance industry to reassess premiums,which could rise or become difficult to secure.Assets in areas prone to cli
272、mate-related hazards would be affected most.Insurance is often a lender requirement,which could impact the ability to raise debt against assets located in higher-risk areas.Failure to own assets with low physical risk could increase premiums and risk of portfolio illiquidity.Continue to ensure exist
273、ing insurance policies provide adequate protection from climate-related risks and increase awareness of material physical risks across the portfolio with external advice to ensure appropriate action is taken.Increased premiums could increase our operating costs.Invalid insurance policies could resul
274、t in unpaid claims and expose the Company to material reinstatement costs.Where insurance products are withdrawn,this could increase the Companys risk profile.LondonMetric Property Plc Responsible Business&ESG Report 2024282.Strategy continuedRiskPhysical risksStrategic PillarManagement/MitigationFi
275、nancial ImpactLong term(10+years)R8:Flooding(coastal,fluvial)(Risk score:RCP 4.5 9.9;RCP 8.5 13.9)Rising sea levels threaten coastal regions with flooding,erosion,salinisation and permanent land loss;excessive rainfall or snow melt may cause rivers to exceed their capacity.Assets prone to flooding c
276、ould be less investible and desirable.During the acquisition process,flood risk assessments are conducted.Portfolio-wide reviews are undertaken every 3-4 years,and medium to high-risk assets are assessed for mitigation measures and/or exit strategies.2%of assets have high flood risk.We are increasin
277、gly focused on ensuring that occupiers maintain adequate attenuation and drainage to accommodate greater rainfall intensity.Assets with greater flood risk may become uninsurable,unsellable,and unlettable,which could impact the Companys profitability and asset values.Increased investment may be requi
278、red to address flooding risk.R9:Heavy rainfall&pluvial flooding(Risk score:RCP 4.5 8.4;RCP 8.5 13.3)There are increases in annual mean rainfall,where typically wet periods of the year see a further increase in daily rainfall.Heavy rainfall or rainfall over a prolonged period may lead to more regular
279、 pluvial flooding(surface water flooding)events.Assets prone to surface flooding could be less investible and desirable.R10:Heat stress(Risk score:RCP 4.5 12.8;RCP 8.5 16.6)Rising mean temperatures and extreme temperature highs put pressure on people and infrastructure and may increase the frequency
280、 of wildfires.Urban and other assets prone to heating up may be less marketable.We are increasingly focused on ensuring occupiers maintain properties to ensure fire risk is mitigated,tracking heat stress across assets and working with occupiers to assist them in minimising heat stress.Assets with po
281、or cooling systems that are at higher risk of heat stress may suffer from higher vacancy and the need for greater capital investment,which might affect profitability and asset valuations.R11:Extreme weather events(Risk score:RCP 4.5 13.1;RCP 8.5 17.1)Storms,heavy winds,heavy precipitation,droughts a
282、nd snow are more frequent and severe and can lead to stranded asset risk for at-risk assets.Assets susceptible to extreme weather could be less investible/desirable.In addition to previous climate risk assessments on assets,we will be undertaking further asset-level assessments to assess the portfol
283、ios resilience to extreme weather.Assets at greatest risk may become uninsurable and unlettable,which could impact profitability and asset values.Increased investment may be required to address extreme weather risks.Transition risks were distributed evenly across geographies.However,assets within th
284、e retail and office sectors are more likely to be impacted by these risks.Physical risks were found to be distributed across all sectors and geographies.Climate-related opportunitiesWhile the transition to a low-carbon economy presents significant risk,it also creates significant opportunities,allow
285、ing LondonMetric to gain a capital advantage through a focus on climate change mitigation and adaptation solutions.The assessment carried out by JLL concluded that transition opportunities are more prominent in the near term under the stabilised emission RCP4.5 scenario,while physical risk mitigatio
286、n opportunities arise under both RCP4.5 and RCP8.5 scenarios.Table 2 summarises the identified climate-related opportunities that are material to LondonMetric.Each opportunity is described,along with an assessment of potential financial impact.Opportunities are distributed evenly across geographies,
287、while the logistics sector,which represents majority of the LondonMetric portfolio,presents greater opportunities along with attractive yield costs.Our sustainability performanceTCFD Recommendation and Alignment continuedLondonMetric Property Plc Responsible Business&ESG Report 2024292.Strategy cont
288、inuedTable 2:Climate-related opportunities and financial impactOpportunityDescription of OpportunityFinancial Impact1.Securing a diverse range of premium tenants that have net zero carbon ambitionsBy attracting tenants with net zero carbon ambitions,the Company demonstrates a commitment to reducing
289、greenhouse gas emissions and contributing to climate change mitigation efforts.As market demand shifts and tenants become more sustainability aware,they will seek to occupy climate-resilient,sustainable buildings and avoid cheaper buildings with poorer sustainability credentials.Tenants may be willi
290、ng to pay green premiums on rent for better-quality assets,which would allow us to grow our rental income and profits and increase asset values.Higher-quality occupiers are more likely to collaborate on asset improvements or indeed self-fund improvements.2.Installing renewable technologyRoof space o
291、n our logistics assets lends itself well to solar PV,and charging occupiers additional rent to use the energy generated has the potential to generate attractive cost yields.Yields on cost vary,but typically,we achieve minimum yields of 8-9%.Whether we fund the installation or the occupiers self-fund
292、,adding solar PVs should enhance the assets value.3.Acquiring poorer quality assetsAs strong stewards of underinvested assets with the expertise and capital to improve buildings,we continue to see opportunities to acquire poorer-quality assets from less active investors,where we can make material im
293、provements and increase income and value.Discounted acquisition prices through the application of a brown discount.High initial investment cost but long term value appreciation through asset improvement.4.Improving our cost of capitalFurther improving our asset and business strategy on climate resil
294、ience should give us a competitive advantage through a more attractive cost of capital.Leveraging sustainable finance instruments(such as green bonds or sustainability-linked loans)should also help us tighten banking margins and diversify our sources of investment.Borrowing incentives such as lower
295、interest rates,longer loan terms or reduced fees could be accessed to enhance our lending arrangements.Integration of climate-related risks in financial planning and risk prioritisationA key aspect of LondonMetrics asset management strategy is sustainability performance improvement.As well as reduci
296、ng carbon emissions from the small number of assets where we have ongoing control,we are helping to improve assets under occupier control.Our focus is on resilience to climate change through maintenance,energy efficiency upgrades and the provision of renewable energy,mitigating both physical and tra
297、nsition risks.During our investment process,and on an ongoing basis,we assess flood risk along with building fabric and energy efficiency to understand the climate and carbon-related risks and costs involved in mitigation.Prior to the merger,a high-level review of the LXi portfolio was undertaken,wh
298、ich included flood risk analysis and energy efficiency.Over the next year,we will be conducting a more detailed asset-level review,which will inform the material impact on our NZC strategy and targets.With regards to MEES legislation compliance,the cost of bringing all our assets to an EPC rating of
299、 B was previously estimated by us in 2023 to be c.25 million.Further analysis is currently underway to understand the financial impact of improving the LXi assets,and we will provide an update on the enlarged portfolio next year.However,we do not expect MEES compliance to have a material business im
300、pact as the upgrade costs would,in most instances,either be offset through higher rents,paid for through normal occupier incentive arrangements or paid for by the occupier as part of their building upgrades.In 2021,we developed a Net Zero Carbon(NZC)strategy,where we set a target for net zero carbon
301、 for our operations(Scope 1&2 emissions)for the end of 2023,for our developments by 2030 and for our tenant emissions(Scope 3 emissions)by 2035.We were due to have progressed a Net Zero Pathway this year,but as a result of the LXi merger,we have paused this work to allow us time to consider the impa
302、ct of the merger on our NZC strategy and wider targets.We intend to reshape our NZC strategy over the next year.Notwithstanding the merger,we made further progress on our Strategy.We undertook net zero audits across 0.4 million sq ft,in addition to 2.5 million sq ft of audits obtained on the CTPT an
303、d LXi portfolios.In respect of operational target,our Scope 1 and 2 emissions will be Carbon Neutral for 2024,and we aim to be Net Zero no later than end of 2025.LondonMetric has completed CRREM analysis on its ten largest assets(excluding LXi assets),where it has available data,to determine strandi
304、ng risk and potential exposure to write-downs resulting from misalignment with the 1.5C pathway.High-level findings include:Three of these assets are already aligned with the CRREM 1.5 pathway or nearly 1.5 ready,mostly thanks to a combination of low gas usage and low intensity of the occupiers oper
305、ations.A further two are currently flagged as“not aligned to the 1.5 pathway”by CRREM but will have re-aligned with the 1.5 pathway by 2030 through the projected decarbonisation of the UK National grid.Emissions in the intervening period can be reduced by introducing/increasing solar PV capacity;and
306、 Across the five remaining assets,the focus will be on fully understanding building use through engagement with our occupiers.This will further inform which sites would benefit from a more in-depth net zero audit to understand key interventions needed for alignment.This analysis is being rolled out
307、across the wider portfolio,and we will utilise the initial analysis undertaken on LXis assets before the merger,which covered over 60%of their portfolio,to assist that work.As part of our strategy,we are collaborating with occupiers to assist with the mitigation of their own exposure to climate risk
308、s through measures such as greater adoption of green lease agreements and encouragement to improve the green credentials of buildings they lease from us,particularly on leasing or lease extension events.Whilst development is only a small part of our activities,we are focusing on enhancing the sustai
309、nability features of our developments by building to high standards and minimising upfront embodied carbon.Where we acquire assets with future redevelopment potential,embodied carbon offset costs are factored into our acquisition appraisals.These actions help future-proof our buildings and allow us
310、to take advantage of opportunities from the shift to a low-carbon economy by improving occupier contentment,rental values,and the value of our assets.LondonMetric Property Plc Responsible Business&ESG Report 2024302.Strategy continuedC)Describe the impact of climate-related risks and opportunities o
311、n the organisations businesses,strategy,and financial planning.Organisation resilienceAs part of the 2022 JLL risk assessment,an analysis of a representative selection of assets within the portfolio was used to assess the physical and transitional risk rating and inform key action recommendations fo
312、r the organisation.Those recommendations,alongside additional actions defined by LondonMetric,have been identified in Table 1.The findings of the report stated that LondonMetric is well-positioned to mitigate climate-related risks.Key findings identified were:LondonMetrics Net Zero Carbon Framework
313、and approach to asset improvement are well-developed and contribute towards mitigating less severe climate-related risks.However,there are some asset vulnerabilities,such as heat stress not being a current consideration and some assets being near or within areas susceptible to flooding;LondonMetric
314、could conduct portfolio-level climate risk modelling to better understand the impacts of climate risks and opportunities at an asset,asset type and geographic level.This will help determine which assets are most at risk and where to focus mitigation efforts;and By addressing the identified gaps in t
315、he TCFD gap analysis,LondonMetric can ensure that it has a robust governance structure,policies,and procedures in place to manage climate-related risks.A new assessment will be conducted over the next year to include the LXi assets to understand the wider portfolios climate resilience.Additionally,o
316、ur revised NZC strategy implementation will mitigate against several climate scenarios.To fully assess resilience,we plan to continue conducting CRREM analysis to quantify stranding risk.Our investment strategy is to be agile in response to shifting market conditions to ensure climate resilience.The
317、 Companys shift out of multi-let retail parks and offices into distribution assets and other long let assets with lower energy requirements means that the overall carbon footprint of our buildings is significantly lower today.Furthermore,our significant investment and disposal activity over recent y
318、ears,along with our ongoing upgrade work to buildings,has upscaled the environmental quality of our portfolio.Where we have acquired assets over recent years,principally in urban logistics,our approach has ensured that asset improvement is embedded in our business case and/or there is a high intrins
319、ic value of the land,which makes highly sustainable redevelopment or repurposing commercially attractive.The merger with LXi added some assets that dont fully align with this strategy,which we expect to address in the coming years.Currently consulted MEES regulation enhancements stipulate commercial
320、 properties would require an EPC rating of C or higher by 2027/28,and B or better by 2030(with some exemptions).As a result of this regulation,we continue to review our portfolio,as well as the recently acquired LXi assets,to understand which are at risk of not meeting the proposed regulation.Over t
321、he last 12 months alone,we have re-assessed the EPCs on 1.2 million sq ft of assets,and we continue to ensure that all assets have a plan and that a minimum EPC of B is achievable on new lettings,regears and refurbishments.It is the responsibility of the Working Group to remain informed about changi
322、ng regulations and share this with the Board to ensure the business assets remain compliant.3.Risk ManagementA)Describe the organisations processes for identifying and assessing climate-related risks.LondonMetrics overall risk management process is centred around the SLT,whose members are closely in
323、volved in day to day matters and have a breadth of operational experience.They support the process of identifying emerging risks and consider emerging climate-related risks that have the potential to impact the business and stakeholders adversely.These climate-related risks are then evaluated and mo
324、nitored along with the other risk categories through the SLT and Working Group meetings.Any significant emerging risks are raised and discussed at the Audit Committee and Board level.Climate-related risks come under the Responsible Business and Sustainability corporate risk,which has been identified
325、 as a principal risk to LondonMetric.Principal risks refer to risks that have the potential to cause material harm to operations and stakeholders and could affect the Companys ability to execute its strategic priorities or exceed the Boards risk appetite.We are currently assessing the risk impact of
326、 the merger with LXi,given the material shift in our portfolio composition.Our Triple Net Lease model,with full repair and insurance leases that are now materially longer in duration as a result of the merger,presents increased challenges as there is less scope for near term direct intervention by u
327、s to improve assets and reduce Scope 3 emissions.Instead,it places greater reliance on our occupiers environmental ambitions and their willingness to work in conjunction with us.However,we do not believe this to have materially increased our risk profile.Two climate-related risk exercises have previ
328、ously been conducted in parallel to gain a detailed understanding of exposure to risks.For a summary of the assessment,see page 61.One exercise was conducted at the portfolio level to assess portfolio resilience to these climate-related risks,while the second parallel exercise looked at the resilien
329、ce of certain representative portfolio assets.In assessing the risk at the portfolio level,an in-depth analysis of up-to-date,peer-reviewed scientific literature was conducted and was used to determine the frequency,duration,velocity and financial impacts of a range of potential climate-related risk
330、s.An overall likelihood and impact score was assigned to our business principal climate risks.A summary of our scoring on key risks under the different scenarios is shown in Table 1.At the asset-specific level,an in-depth review of representative assets characteristics and geographic location was co
331、nducted to determine resilience to physical and transition risks and identify where those assets are most at risk.The representative list of assets was based on the property type,construction year,and size,amongst other variables.Following LondonMetrics acquisition of LXi assets,a new climate risk a
332、ssessment is planned to include the acquired assets.Our sustainability performanceTCFD Recommendation and Alignment continuedLondonMetric Property Plc Responsible Business&ESG Report 2024313.Risk Management continuedB)Describe the organisations processes for identifying and assessing climate-related
333、 risks.The chart on page 91 of the Annual Report illustrates the probability and post-mitigation residual risk level of the Responsible Business Approach risk relative to the other principal risks that have been identified.Risks are categorised and prioritised in a manner consistent with the Boards risk dashboard,which it considers at each meeting.LondonMetric assesses regulatory risk on an ongoin
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