Entra : ESG report 2023

ESG report 2023

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CONTENTS	ESG report	3		Appendices	78
	Introduction	3		GRI index	79
	Environment	16		EU Taxonomy report	86
	Social	44		TCFD reporting	95
	Governance	61		EPRA Sustainablility Performance Measures	96
	Auditor's report on the ESG report	75

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3 ESG report  |  Introduction	Contents |  ESG report Appendices

Introduction

Sustainable strategy and business model

Sustainability is fundamental to Entra's strategy and has been so for more than 15 years. Entra's ESG strategy and work is built on the precautionary principle and is focused on areas where Entra can have the greatest impact.

Environmental leadership is one of Entra's three strategic pillars, and its environment strategy is set to contribute to the world's carbon reduction targets whilst also focusing on the use of natural resources and circularity

To operate Entra's business and value chain in an ethical and sustainable manner is of key strategic importance and seen as a prerequisite for our license to operate

Social value, health, safety and wellbeing in the company's properties, clusters and communities is important and sensible from both a social and financial perspective

Through also investing in its culture and people, Entra continues to improve its business and competitive edge, as well as being able to seize opportunities emerging in its business environment

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Reporting standards and responses

To enable our stakeholders to compare and evaluate our reporting, we compile and align the ESG reporting for 2023 with four reporting frameworks: The EU Taxonomy, the European Public Real Estate Association Sustainability Best Practice Recommendations on Sustainability Reporting (EPRA sBPR), the Global Reporting Initiative Standards (GRI), and the Task Force on Climate-related Financial Disclosures (TCFD). Entra also reports separately to the Global Real Estate Sustainability Benchmark (GRESB). Entra has work ongoing in order to adapt its reporting to the Corporate Sustainability Reporting Directive (CSRD) during 2024.

The EU Taxonomy is a classification system that defines criteria for reporting on economic activities that are aligned with a net zero trajectory by 2050 and the broader environmental goals other than climate. The EPRA sBPR Guidelines provide

a consistent way of measuring sustainability performance for real estate companies and cover environmental, social and corporate governance categories. The GRI Standards, applicable to all industries, include both relevant disclosures for a range of

economic, environmental and social topics as well as reporting principles related to the reporting process. The TCFD framework provides for consistent climate-related financial risk disclosures. The EPRA, GRI and TCFD tables and references are included at the back of the annual report.

Entra achieved the EPRA Sustainability Gold Level also in 2023 and the Global Real Estate Sustainability Benchmark (GRESB) Five Star rating with a total score of 90.

Third party verification

Entra has engaged Deloitte to conduct a review and provide a "limited level of assurance" on Entra's ESG and EU Taxonomy reporting. The review is carried out in accordance with the assurance standard ISAE 3000 "Assurance Engagements other than Audits or Reviews of Historical Financial Information" established by the International Auditing and Assurance Standards Board. The auditor's conclusion and scope of work is presented in the Auditor's report, included on pages 119-121.

Contents |  ESG report Appendices

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5 ESG report  |  Introduction	Contents |  ESG report Appendices

Sustainability governance and organisation

The Board of Directors determines Entra's ESG strategy, priorities, targets and risk profile and reviews performance. Analysing materiality and stakeholder expectations is done annually, and the materiality analysis and ESG topics and targets for the coming year are determined. The Board follows up each ESG topic in individual in-depth business reviews with relevant business units at least once a year. These reviews also include ESG targets and KPIs which are then aggregated into company KPIs.

The CEO is responsible for implementing and following up the ESG strategy in Entra. Implementation is primarily handled in the individual business units and is reported to the CEO/ CFO through quarterly business reviews and in corporate management meetings. The CFO is responsible for the risk management framework, including climate related risks. Entra's risk management framework is structured to enable effective identification, evaluation and management of risk factors facing the company. Ownership and management of all key risks, including climate related risks, are assigned to the respective members of the corporate management who are responsible for implementing key risk mitigation plans.

Entra also has an ESG reporting unit with a separate responsibility to follow-up on ESG targets and actual performance. The figures are reported to Executive Management and Board of Directors on a regular basis and externally through the quarterly and annual report.

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6 ESG report  |  Introduction

Engaging with stakeholders

It is important for Entra to maintain an open, continuous and honest dialogue with its main stakeholders. Such dialogues build trusting relationships, better business intelligence, and enable Entra to continue to improve, enhance its reputation, and spur ideas for future business development.

Entra has a structured approach towards understanding and managing the company's impact on the environment and society, as well as stakeholder requirements and expectations.

Entra's stakeholder management procedure is summed up in the illustration to the right and provides a systematic approach towards:

• Understanding stakeholder requirements and expectations as well as specific opportunities and concerns about the business and its impact
• Implementing important requirements and expectations into our strategy, targets and operations

Entra's stakeholders

Employees

Entra's empolyees and

potential future employees

Real estate industry

Major real estate companies and other potential partners in the industry

Contents |  ESG report Appendices

Suppliers

Ranging from large construction companies to local businesses

	1.	Stakeholder mapping			Customers and end users
		and analysis			The tenants in our buildings as well
		Stakeholder			as potential future tenants
4. Implement		2.	Stakeholder
in strategy and		management
		interaction
targets		procedure
			Investors and lenders
					Current and potential shareholders
					and other providers of capital

3. Input analysis, determine materiality

Local communities	Regulatory and policy makers
Neighbourhood communities around	The bodies shaping tomorrow's
our buildings and selected clusters	regulations and policies

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7 ESG report  |  Introduction	Contents |  ESG report Appendices

Below is a summary of Entra's interaction with stakeholders in 2023, what the key topics have been as well as how the company responds to expectations and concerns.

Stakeholders groups	Engagement	Key topics 2023	Response
Employees	•	Manager-Employee dialogue	• Occupational health and safety	• Monitoring of employees' well-being through surveys
	• Senior management communication and dialogue	• Diversity, equality and inclusion	• Continued to follow up and improve our health and safety performance
	• Performance and goals with employee appraisals and feedback	• Workplace health and well-being	• Focus on work-life balance and well-being framework
	• Talent management and succession planning	• Development and career opportunities	• Established a modernized fundament for leadership in Entra, guiding leaders
	•	Employee surveys	• Leadership development and training	on behavior, expectations and skills necessary to perform in a leadership role
	• Knowledge sharing and teambuilding	• ICT systems and tools	• Updated leadership development program aimed at futured oriented
	•	Training and coaching	•	Employee satisfaction	competence and training on leadership skills
	•	Employer branding			• Individual career planning and development plans
	• Sponsorships and social engagement			• Focusing on diversity, equality and inclusion (DEI) trough training on skills
	• Engagement with trade unions and working environment committee			necessary for creating an inclusive workplace
	• Cultural events for aligning strategy, professional development and social
		interaction
	•	Outside work activities
Suppliers	•	Regular, direct dialogue	• Future business needs and deliveries	• Revied sustainable procurement terms & conditions
	•	Integrity due diligence	•	Responsible business conduct	• ESG due diligence of suppliers
	• Strategic collaboration and long-term relationships	• Technology and environmental solutions	• Human rights policies and compliance with the Transparency Act
	•	Tenders and negotiations	• Energy efficiency and environmental building qualities	• Workplace health and safety
	•	Supplier audits	• Accuracy and timely deliveries	• Risk mitigation
	•	Supplier ESG survey	•	Risk assessment
			•	Cost savings
Customers	•	Regular, direct dialogue	• Workplace strategies and how to use the office to enhance employee	• Established strategic customer advisory team for assisting with workplace
	•	Relationship management		engagement	strategies
	• Customer satisfaction surveys and feedback	• Flexible work and impact on how the office is used	• Give customers insight about office trends and how to create offices for the
	• Conferences and meetings with relevant office topics on the agenda	• Workplace health and well-being	future
	• Advisory services within workplace strategies, energy and	• Introducing products and services to meet customer needs	• Follow up customer satisfaction feedback and make sure that concrete action
		waste management	• Energy efficiency and environmental building qualities	is being taken to respond to customer needs
	• Customer service centre, with first- and second-line support

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Stakeholders groups	Engagement	Key topics 2023	Response
Investors and lenders	• Regular, direct dialogue	•	Strategy and priorities	• Communication on material strategic priorities
	• Quarterly and annual reporting and presentations	•	Operational and financial performance	• Communication on material events
	• Stock exchange releases, press releases and presentations	•	Shareholder return requirements	• Open and transparent reporting on financial, governance and sustainability
	• Roadshows, conferences and meetings	•	Balance sheet management, including asset disposals and dividends	strategy and performance
		•	Interest rate and credit margin hedging	• Communication on effects of changing macro fundamentals and effects on
		•	Availability and price of funding	property market, valuations and financial metrics
		•	Asset valuations	• Communication on risks and opportunities
		•	Macro impact, particularly from rising inflation and interest rates	• Continuously strengthening ESG reporting, introduction of quarterly ESG
		•	Office market dynamics	reporting, and focus on implementation of EU Taxonomy reporting and
		•	Construction cost and project profitability	preparations for CSRD
		• ESG expectations and performance
		•	Shareholders and governance
		•	Risks and uncertainties
Real Estate Industry	• Partnerships and joint ventures	•	Decarbonisation of the value chain	• Part of four JVs
	• Partnering in industry coalitions, visits, meetings and seminars	•	Green Building Council's Roadmap to 2050	• Building partnerships with real estate companies to drive more sustainable
		•	Market trends and outlook	solutions and investigate digitalisation initiatives
		•	Impact of new regulations	• Active engagement in industry associations, such as Norwegian Green Building
				Council and Norsk Eiendom
Regulatory and policy	• Meetings with politicians and policymakers	•	Real estate market and industry trends	• Setting Net Zero Carbon by 2030 target
makers	• Engagement in policy making processes	•	Climate regulations and implications for Entra	• EU Taxonomy alignment and reporting
	• Engagement in industry associations	•	Definition and adaptation of EU Taxonomy criteria in Norwegian market	• New energy standard scheme
	• Arranging/participating in conferences			• City development, urban planning and architectural quality principles
	• Participation in Oslo Municipality's "Business for climate"			• Building relations and collaborating with municipalities for sustainable use of
				resources in zoning plans and planning processes.

Local communities	• Neighborhood cooperation
	• Participation in planning processes
	• Direct dialogue with politicians, municipalities, and public agencies,
	both in general and on specific matters
	• Management and participation in various landlords collaborations in
	Oslo (Skøyen, Kvadraturen, Nedre Akerselva, Tullin and Bryn). Sandvika,
	Bergen and Trondheim. Several of these are organised in OMA (Oslo
	Metropolitan Area).

• Engaging in living and working conditions in the company's clusters and around its buildings
• Working to create safer and better local environments and to contribute to increased employment of disadvantaged groups
• Extended participation scheme related to the planning processes for Lilletorget and Bryn

• Sponsor of Church City Mission
• Co-operationwith social entrepreneurs such as Sisters in Business in certain buildings
• Participation in Nedre Akerselva Neighbourhood co-operation, a co-operation between a group of landowners to activate outdoor space make the area more attractive, lively and safe
• Preparation of knowledge-based targets and measures for social sustainability in the Lower Akerselva area

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Materiality analysis forming the basis for priorities

In 2022, Entra updated its materiality analysis and approach to materiality. This involved widening the mapping of impacts on the environment and society and strengthened the link of the materiality assessment to our stakeholder dialogue, strategy and risk processes and performance management. The analysis is based, among other things, on the ten principles of the Global Compact and the UN's sustainability goals. In 2023, the materiality analysis was reviewed by Entra's board and management, and during 2024, Entra will continue to further develop the materiality analysis as part of the work with implementing the Corporate Sustainability Reporting Directive (CSRD).

The annual materiality assessment was led by Entra's ESG function, discussed and concluded by senior management and approved by the Board. The material topics are areas where Entra and its stakeholders believe the company can make an important and sustainable impact. The topics are also believed to be important for future progress and long-term value creation. The outcome of the analysis and its main topics are illustrated to the right. The most important topics are summarised in the top right corner. These are areas of high importance for Entra, in terms of both their potential financial impact and as Entra's potential impact on people and environment. Other important topics are considered to be material to Entra either due to their potential financial impact or Entra's potential impact on people or environment.

Materiality analysis

High

• Diversity, equality and inclusion
• Human rights
• Nature and eco systems

Impact on people and environment

Low

Contents |  ESG report Appendices

• Climate change
• Employees and working conditions
• Energy use and green energy
• Ethics and integrity
• Health and safety
• Local communities and urban development
• Resources and circular economy
• Standards and new legislation

High

Financial impact

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Material topics and how Entra understands them: Impacts, Risks and Opportunities

Entra closely measures and seeks to reduce its risks and negative impacts, whilst also focusing on the opportunities arising from e.g., the green shift and new technology. Below is a summary of the material topics and Entra's understanding of the most relevant impacts, risks and opportunities.

			Link to the UN Sustainable
Impact	Risks	Opportunities	Development Goals

Climate	The real estate industry is referred to as the "40 per cent industry" as it
change	globally accounts for 40 per cent of carbon dioxide emissions. Of these
	emissions, 70 per cent are produced by building operations, while the
	remaining 30 per cent comes from construction.‌1
	Entra has an actual negative impact on climate change through
	greenhouse gas emissions in its own operations, its development
	projects and in the value chain. Entra can also have a potential impact
	on climate change through development of areas that have previously
	captured CO2 emissions.

Physical and transition risks from climate change may impact a building's operations and value. However, physical risk is not expected to have a material effect in the short and medium term. Physical risks are hazards caused by a changing climate, including both acute events, such as floods, fires, extreme heat, and storms, and chronic conditions, such as rising sea levels and increased average temperatures. Transition risks include changes in the economy, regulation, consumer behaviour, technology, and other human responses to climate change.

Entra is deeply committed to contributing to the net zero trajectory by	7	9	11	12	13

2050 as outlined in the European Green Deal. Entra can use its locations, building qualities, connections to utility systems, local footprints, and climate intelligence to improve asset values and potentially create new revenue streams.

Energy use	Around 77 per cent of Entra's carbon emissions in Scope 1 and 2 stem
and green	from the use of energy. Entra thus has an actual impact on energy
energy	consumption in its property portfolio and there are significant gains
	from working on improving energy performance, reducing energy
	consumption and, to some extent, from producing green energy in and
	around the company's buildings.

Production and use of energy is a significant contributor to global carbon emissions. The real estate sector stands for 40 per cent of European energy demand of which 80 per cent is derived from fossil fuels according to the UN‌2. In 2022, the war in Ukraine also showed the vulnerability of the international energy system. As a result, energy costs in 2022 and 2023 has been higher than previously seen in Norway.

Reducing energy consumption reduces Entra's carbon emissions	7	9	11	12	13

and has positive financial impact on Entra and its tenants through reduced energy costs. Improving building quality and reducing energy consumption has been an important part of Entra's environment strategy for more than 15 years, and the average energy consumption per square metre has been reduced by some 40 per cent over the last ten years. Entra furthermore has ambitious targets for energy use in its newbuild and major redevelopment projects. Building green energy sources such as solar panels is part of Entra's strategy and will be further implemented in the coming years.

1. 13 April 2022 | Climate Change, News, TCFD.
2. UN: 2022 Global Status Report for Buildings and Construction.

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