Assura : Mar24 Sustainability Disclosures v2

Assura plc ESG Disclosures

Assura plc

ESG Disclosures

Relating to the year ending March 2024 Published May 2024

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Assura plc ESG Disclosures

ESG Committee Chair

Investing in our long-term future

ESG, Sustainability, Social Impact

These phrases and words are often interchanged to refer to how we approach this constantly evolving area.

For Assura, this is more than a standalone area of our business - it is fundamental to our long-term prospects:

• Our buildings house medical professionals that provide essential services to society.
• Investing in technology, both energy efficient advancements and in customer service delivery, means our buildings meet the long-term needs of occupiers and patients.
• Minimising our carbon footprint limits our impact on the environment and reduces the running costs of our occupiers.
• Investing in our people means we remain an attractive employer to high quality individuals that push the boundaries in our space.

Our plans continue to evolve. Building on strong progress over the last few years and

following engagement with a range of stakeholders, we now launch our refreshed ESG strategy, The Bigger Picture.

Explained more fully later in this report, this refresh doesn't change what we are doing. Instead, it gives us a lens through which to view our decision-making, in the context of The Bigger Picture, broken down into the three pillars of Healthy Environment, Healthy Communities and Healthy Business.

Alongside this, we are pleased to be reporting on a year of strong progress against the KPIs under each pillar, as introduced on page 4 of this report.

Despite the challenging macro-environment, we retain our ambitions to maximise the positive impact we can have in the communities in which we operate, with stretching targets over the coming years.

We look forward to updating you on progress.

Noel Gordon

ESG Committee Chair

May 2024

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Assura plc ESG Disclosures
Content
The Bigger Picture	4
UN Sustainable Development Goals	6
Healthy Environment
Net Zero Carbon Pathway	7
Existing properties	10
Developments	17
Healthy Communities
Community impact	21
Suppliers	27
Healthy Business
Assura team members	29
Customers	38
Greenhouse gas emissions	40
EPRA sustainability disclosures	41

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Assura plc ESG Disclosures

The Bigger Picture

Our goal is to become the number one listed property business for long-term social impact and sustainability and to have a net zero carbon portfolio by 2040.

The nature of the challenges we face today means our long-term commercial success will be driven by our performance delivering social impact and sustainability. This is at the heart of everything we do.

ESG, social impact, sustainability, CSR. These phrases and words are often interchanged to refer to how we approach this constantly evolving area.

For Assura, this is more than a standalone area of our business - it is fundamental to our long-term prospects:

• Our buildings house medical professionals that provide essential services to society.
• Investing in technology, both energy efficient advancements and in customer service delivery, means our buildings meet the long-term needs of occupiers and patients.

• Minimising our carbon footprint limits our impact on the environment and reduces the running costs of our occupiers.
• Investing in our people means we remain an attractive employer to high quality individuals that push the boundaries in our space.

Our plans continue to evolve. Building on strong progress over the last few years and following engagement with a range of stakeholders, we now launch our refreshed ESG strategy, The Bigger Picture.

This refresh doesn't change what we are doing. Instead, it gives us a lens through which to view our decision-making, in the context of The Bigger Picture, broken down into the three pillars of Healthy Environment, Healthy Communities and Healthy Business, all supported by three main targets or areas of focus that prioritise what we are doing.

Despite the challenging macro-environment, we retain our ambitions to maximise the positive impact we can have in the communities in which we operate with stretching targets over the coming years.

Healthy	Healthy	Healthy
Environment	Communities	Business

We want to be net zero carbon across our portfolio by 2040. This means reducing the amount of energy used in our buildings and offsetting anything we can't reduce.

TARGETS

We are committed to maximising our positive impact in the communities surrounding our buildings.

TARGETS

A sound, ethical approach to how we engage and operate with all our stakeholders underpins our business model.

TARGETS

55kWh/m2		£3.50		>80%
Portfolio EUI		Social value generated per £1 invested		Customer satisfaction survey
100%		>750 hours	>75%
Net zero carbon developments		Team volunteering hours per year		Employee satisfaction survey
100%	75%	10%
EPC B or better		Spend with suppliers signed up to our charter		Ethnically diverse workforce by 2027	4

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Assura plc ESG Disclosures

The Bigger Picture

2023/2024 progress

Healthy

Environment

PRIORITIES

• Reduced energy usage intensity
• NZC developments
• EPC ratings

2023/2024 HIGHLIGHTS

45 projects delivered

1.9m kWh saved

66% EPC B or better

Healthy

Communities

PRIORITIES

• Social value generated
• Sustainable supply chain
• Team volunteering

2023/2024 HIGHLIGHTS

5 new buildings delivered to benefit communities

£3.40 of social value generated from every £1 donated

Healthy

Business

PRIORITIES

• Customer satisfaction
• Employee engagement
• Equality, Diversity & Inclusivity

2023/2024 HIGHLIGHTS

11th consecutive year of dividend growth

Top 10 FTSE Women in Business

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Assura plc ESG Disclosures

Alignment with UN SDGs

The table below highlights how some of our key activities align with the UN Sustainable Development Goals ("UN SDGs")

UN SDG	Example of Assura's actions	UN SDG	Example of Assura's actions
	Provide high quality, accessible buildings that bring		Produced our publicly available 'Designing for
	health care providers into the heart of the
		Everyone' toolkit in partnership with The University
	community
		of Worcester and Dimensions to ensure our
	We have invested £2m in health improving projects
	buildings are accessible as possible removing
	that benefit the communities surrounding our
		barriers to accessing healthcare
	buildings
		Working towards All Equals Charter status which is a
 We are supporting strategic partnerships in key ICS
	comprehensive framework ensuring we will reduce
	areas with the aim of improving integration and
		inequality for protected and marginalised groups
	ultimately population health
		 Aiming to incorporate green transport plans for all
 Named one of the UK's top ten performers in the		new developments
	prestigious FTSE Women Leaders Review 2023,		Support the use of our land and vacant space for
	recognised as one of the top 10 performers overall		community activity such as community gardens,
	and at the top of our sector		social prescribing activity space, wellbeing spaces
			for those working in the building
 Large scale role out of solar panel and air source		Developed our Net Zero design guide and made it
	heat pump installations making the running costs of		publicly available to support others to adopt this
	our buildings as affordable as possible, creating		best practice approach
	clean energy and reducing our emissions		Signatory of the World Green Building Council Net
 Where energy purchase is within our control,		Zero Buildings Commitment & Better Buildings
	ensure that we use green energy suppliers		Partnership

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Assura plc ESG Disclosures

Net Zero Carbon Pathway

Long-term plan to achieve net zero across our portfolio

First published in the 2023 Annual Report, the adjacent chart illustrates what is required to achieve our ambitious plan to achieve net zero carbon across our estate by 2040 - ahead of the NHS' own target date of 2045.

To create this, we collected energy data on our vast estate and commissioned net zero carbon audits on a representative sample.

We then used UK Green Building Council guidance to create appropriate 'Paris-Proof' reduction targets and are currently in the process of having these verified by the Science-Based Target initiative ("SBTi").

A key part of achieving these goals is ensuring we get an appropriate return on investment - we are seeking higher levels of rents, using our pilot projects to illustrate the benefits to our customers, and exploring other initiatives such as on site renewable energy under Power Purchase Agreements ("PPA") or completing works alongside lease re-gears and asset enhancement projects.

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Assura plc ESG Disclosures

Healthy Environment

We deliver new premises which limit their impact on the environment and upgrade the energy efficiency of existing buildings.

Our Net Zero Carbon Design Guide sets ambitious targets for both our existing portfolio and new developments to advance our environmental progress for the benefit of all stakeholders under the Healthy Environment pillar of The Bigger Picture. This is all part of our vision for healthcare spaces that lead for a sustainable future, helping our customers through buildings that are cheaper to run and facilitate achievement of their own net zero carbon targets.

Our environmental strategy is fundamental to what we do:

• Ensuring our developments meet the needs of our customers: GPs, the NHS, the HSE, private providers and the communities they serve, whilst ensuring a focus on carbon reduction.
• Helping our customers reduce their energy consumption.
• Driving value in our portfolio through sustainability-linked asset enhancements giving us extended leases or increased income.

But we also want to go a lot further. We're targeting net zero carbon for our whole portfolio by 2040, with an interim reduction target for 2030.

Sustainability actions are ingrained throughout our team:

Investment: sustainability and social impact is a key element of the investment criteria, with the Net Zero Carbon Pathway factored into decision making of any acquisition.

Portfolio management: Our environmental improvement programme is central to individual property strategies and in all asset enhancements we seek to improve energy efficiency.

Development: The continual evolution of sector-leading development designs enable us to advance our strong BREEAM track record by creating a Net Zero Carbon Design Guide.

Governance

Overall responsibility for progress against our environmental targets rests with the CEO, Jonathan Murphy.

Progress against the ambitions and pledges is overseen by the Social Impact and Sustainability Steering Group with regular reporting to both the Executive Committee and the Board-level ESG Committee. In particular, sustainability efforts are led by our Director of Sustainability and Projects.

ESG policy

We have in place an ESG policy (full copy available in the Corporate Governance section of our website) which is reviewed on an annual basis by the Board. The policy sets out the commitment we make in addressing environmental risks in the work we carry out, working with suppliers and partners to promote environmentally friendly behaviours, and maintaining our ISO 14001 Environmental Management System certification.

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Assura plc ESG Disclosures

Healthy Environment

2024 key actions and progress

• Moved on site two additional net zero carbon developments at Winchester and Bury St Edmunds (operational carbon only).
• All developments completed hit BREEAM targets of "Very Good" or better.
• 45 sustainability capital projects delivered to reduce energy consumption by 1.9 million kWh per year (Mar-23: 0.9 million).
• Portfolio now 66% EPC B or better (Mar-23: 53%).
• TCFD disclosures refreshed through evaluation of risk register and scenario analysis.

2025 priorities

• All on site developments using our Net Zero Carbon Design Guide.
• Utilise sustainability initiatives on all asset enhancement and regear opportunities.
• Analysis of portfolio-wide energy consumption to identify highest/lowest efficiency properties for tenant engagement activities to drive kWh reductions.
• Begin roll out of commercial photo-voltaic solution on our properties.

Healthy

Environment

Main KPIs

EPC - % area of portfolio EPC B or better

66%	2024
53%	2023
	Net zero carbon developments on site
38%	2024
18%	2023
Portfolio EUI
	156 kWh/m2	2024
	162 kWh/m2	2023
	Additional sustainability metrics
	Energy saved from projects delivered
	1.9m kWh	2024
	0.9m kWh	2023

Energy date - % area of portfolio which we have energy data

60%2024

55%2023

"Achieving net zero is

about working

collaboratively - helping our occupiers to reduce consumption and then brining in the right specialists who can advise on technology to introduce."

Paul Warwick

Director - Sustainability and Projects

Renewable sourced energy

82% 2024

83% 2023

BREEAM ratings on completed developments

100% 2024

100% 2023

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Assura plc ESG Disclosures

Our environmental impact

Existing properties

As a landlord of a large portfolio, our ability to influence the energy consumed in our buildings comes through improving the fabric of the buildings and specifically providing more efficient heating, lighting and ventilation systems for our customers.

A key focus for our approach to net zero carbon has been to understand how energy is used across our portfolio - both collecting the energy data for as many properties as possible and the interventions required to reduce consumption to achieve our net zero carbon ambitions.

We have successfully obtained data on 360 properties (60% by area). This has allowed us to understand the energy usage intensity ("EUI") across our portfolio and convert this into absolute energy reduction targets (using UK Green Building Council guidance for a Paris- proof 1.5ºC reduction scenario). The priority is to drive down energy consumption, through asset enhancement initiatives and tenant engagement, only relying on green tariffs or appropriate schemes to offset the residual carbon emissions as a last resort.

We have also completed 56 net zero carbon audits (15% by area). This allowed us to understand, across an appropriate cross section of our portfolio, the necessary interventions to achieve our targets. These are primarily removing any gas supplied into our buildings (installing air source heat pumps) and maximising on site renewables generated (using photo-voltaic panels). However, it is just as important to make sure energy is not being wasted on site - so the first step for most buildings is to work with the occupiers to identify quick wins in each property (i.e. using sensors, switching off equipment when not in use) - following the appropriate energy reduction hierarchy. This approach is outlined in our net zero carbon pathway on page 7.

Improving the EPC ratings of our properties to at least a B is a key stepping-stone on our net zero carbon journey, albeit we aim to ensure there is an appropriate return on our capital where possible (combining with asset enhancement or regear) and also ensuring that the EPC works do not conflict with net zero aspirations (i.e. replacement of gas boiler with a more efficient one is counter intuitive).

In 2021 we completed our assessment of the EPC ratings across our portfolio and estimated the cost of the improvement works, being in the range £25-30 million across the portfolio.

Over the past three years, we have completed 45 improvement projects, primarily upgrading lighting in buildings, spending £4.6 million to date with the costs coming in line with our expectations. We also completed eight energy efficient upgrades in the past 12 months alongside asset enhancement capital projects, combining LED lighting with air source heatpump and PV panel installations.

For the majority of our portfolio, customers purchase energy directly from utility companies. For these properties, our portfolio management team meets regularly with the customers to understand their needs and concerns around energy usage and works with them to identify energy saving opportunities.

In respect of 51 properties (9% of portfolio), we purchase utilities on behalf of the customers which are recharged, usually through a service charge. In these buildings, energy consumption is dictated by the customer, but we are generally in more frequent discussions with these customers to drive down energy consumption. Energy procured by Assura on behalf of customers is via a 100% renewably sourced tariff, and we are exploring maximising the use of electricity produced on site through PV panels.

Our standard leases include green lease clauses that allow us to request data on energy usage, to gain access to make energy performance improvements and to prevent customer works on our buildings that negatively impact the energy performance. We continue to review our standard lease clauses and whether further advancements would be appropriate for our customers.

Table 1

Absolute deduction	2022 baseline	March 2024	2023 target -	2040 target -
targets	actuals	25% reduction	66% reduction
kWh	117m	115m	88m	40m
EUI (kWh/m2)	162	156	122	55
Carbon (kgCO2/m2)	31	29	23	Net Zero

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