| 1. We will incorporate ESG issues into investment analysis and decision-making processes. |
Address ESG issues in investment policy statements
- All investments—including developments, acquisitions and dispositions—go through a rigorous evaluation process led by Prologis’ Investment Committee. The Investment Committee is continuously refreshed with a subset of senior leaders to ensure that diverse perspectives from across the business are integrated in our investment decision making process. Through the Investment Committee’s evaluation of every investment decision we formally consider ESG-related opportunities, risks and characteristics, including but not limited to: flood risks; exposure to risks from extreme weather or earthquakes; the potential to install solar; opportunities to upgrade to efficient LED lighting within acquired assets; and the proximity to available labor that would benefit our customers, just to name a few.
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Support development of ESG related tools, metrics and analyses
- Prologis publishes a number of key ESG metrics, including the proportion of the portfolio that has a sustainable building certification, the percentage of the portfolio utilizing LED lighting, the installed capacity of onsite solar installations, the percentage of the portfolio that has cool or reflective roofing, among others.
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Assess the capabilities of internal investment managers (regional operation and property management) to incorporate ESG issues
- Throughout the year, our Development and Real Estate & Customer Experience (RECX) teams continuously monitors our buildings for any health and safety risks, as well as potential exposure to climate-related risks. Furthermore, our teams pursue opportunities in improving the energy efficiency of our buildings through programs like Prologis Essentials LED.
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Ask investment service providers (such as financial analysts, consultants, brokers, research firms, or rating companies) to integrates ESG factors into evolving research and analysis
- Prologis responds to numerous third-party ESG evaluators (e.g. GRESB, DJSI, CDP, MSCI, Sustainalytics, etc.), helping them to understand how we integrate ESG into our business strategy.
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Encourage academic and other research on this theme
- Prologis’ research team conducts its own studies and partners with academic institutions on numerous topics related to ESG, including recent research on the environmental impacts of e-commerce compared to more traditional retail supply chains, the availability of logistics labor, and the impacts of the global pandemic on the logistics industry.
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Advocate ESG training for investment professionals
- As an industry leader in ESG, Prologis actively participates in webinars and other engagement forums with investment professionals to educate them on how ESG is engrained in our business. The engagement activities help investment professionals understand how ESG is part of our business and what are the leading ESG business practices in the real estate industry.
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| 2. We will be active owners and incorporate ESG issues into our ownership policies and practices |
Develop and disclose an active ownership policy consistent with the Principles
- Prologis has a comprehensive approach to ESG, as documented on the Sustainability section of the Prologis website, and in Prologis’ annual Sustainability Report. You can access Prologis’ ESG policy here and through the Sustainability page of our website.
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| Participate in the development of policy, regulation, and standard setting (such as promoting and protecting shareholder rights)
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Engage with companies on ESG issues / Participate in collaborative engagement initiatives
- Prologis engages in many professional affiliations and real estate industry organizations around ESG and other real estate topics, including: the Urban Land Institute (ULI), NAIOP, NAREIT, NAREIM, APRE, AIRE, Council of Foundations, DGNB, GRESB, UK Green Building Council, IREM, The Real Estate Roundtable and RILA.
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| 3. We will seek appropriate disclosure on ESG issues by the entities in which we invest. |
Ask for standardized reporting on ESG issues (using tools such as the Global Reporting Initiative)
- Since 2006, Prologis has issued an annual sustainability report that is aligned with the Global Reporting Initiative (GRI) Standards. Prologis participates as a member of the GRI Community to help in developing updates and new reporting standards.
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Ask for ESG issues to be integrated within annual financial reports
- ESG information is integrated in Prologis annual proxy statement, 10-K and Annual Report.
- Within Prologis’ annual sustainability report, there are disclosures regarding the company’s alignment with the Sustainable Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD). Alignment with these frameworks is also demonstrated in the responses to CDP, GRESB, DJSI and other third-party assessments.
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Ask for information from companies regarding adoption of/adherence to relevant norms, standards, codes of conduct or international initiatives (such as the UN Global Compact)
- Prologis has aligned its ESG goals with the UN Sustainable Development Goals (UN SDGs): Goal 7 Affordable and Clean Energy; Goal 8 Decent Work and Economic Growth; Goal 9 Industry, Innovation and Infrastructure; Goal 13 Climate Action; and Goal 17 Partnerships for the Goals.
- Prologis maintains a robust Supplier Code of Conduct that details expectations around adherence with anti-corruption practices, labor regulations, safety performance, as well as environmental regulations. All suppliers go through a pre-qualification evaluation where they must report on insurance coverage, safety programs, financial stability, quality systems, terms and conditions, sustainability, Supplier Code of Conduct and regulatory compliance.
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| 4. We will promote acceptance and implementation of the Principles within the investment industry. |
Include Principles related requirements in requests for proposals (RFPs)
- Prologis maintains a robust Supplier Code of Conduct that details expectations around adherence with anti-corruption practices, labor regulations, safety performance, as well as environmental regulations.
- Prologis also has a policy and goal to have 100% of new development and redevelopment (by number of projects) achieve sustainable building certification.
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Revisit relationships with service providers that fail to meet ESG expectations
- Prologis’ HR department has evaluated its third-party service providers and partners to ensure they have goals that support and meet Prologis’ commitment to promoting inclusion and diversity in our business and the real estate industry.
- Key risk management practices around health and safety include a new Global Safety Standard within our development contracts, which ensures the contractors we select maintain safety records that are at or above industry average.
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Align investment mandates, monitoring procedures, performance indicators and incentive structures accordingly (for example, ensure investment management processes reflect long-term time horizons when appropriate)
- All Prologis employees have inclusion and diversity considered as part of their annual bonus metric. Other employees that are more directly engaged in activities related to ESG KPIs have other ESG-related targets tied to their performance-based bonus metrics.
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Support the development of tools for benchmarking ESG integration
- Prologis has been a contributor to the GRESB assessment since it was established. GRESB serves as one of the most commonly used and effective tools for benchmarking among real estate companies the ESG management and governance, as well as asset-level performance relative to ESG metrics.
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Support regulatory or policy developments that enable implementation of the Principles
- Prologis promotes ESG by participating in and leading various industry trade groups, such as the Urban Land Institute (ULI), NAIOP, NAREIT, NAREIM, APRE, AIRE, Council of Foundations, DGNB, GRESB, UK Green Building Council, IREM, The Real Estate Roundtable and RILA.
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| 5. We will work together to enhance our effectiveness in implementing the Principles. |
Support/participate in networks and information platforms to share tools, pool resources and make use of investor reporting as a source of learning / Develop or support appropriate collaborative initiatives
- Prologis participates in a number of third-party evaluation platforms on the topic of ESG, including GRESB, DJSI, CDP, the Corporate Knights Global 100 Most Sustainable Corporations, and others.
- Additionally, Prologis directly engages with other real estate owners on the topic of ESG in NAREIT’s Real Estate Sustainability Committee (RESC), the Urban Land Institute’s (ULI’s) Greenprint Performance Committee, and the Real Estate Roundtable’s Sustainability Policy Advisory Committee (SPAC), among others.
- Since 2006, Prologis has issued an annual ESG/sustainability report that is aligned with the Global Reporting Initiative (GRI) framework and Standards. Prologis participates as a member of the GRI Community to help in developing updates and new reporting standards.
- Within Prologis’ annual sustainability report, there are disclosures regarding the company’s alignment with the Sustainable Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD). Alignment with these frameworks is also demonstrated in the responses to CDP, GRESB, DJSI and other third-party assessments.
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| 6. We will each report on our activities and progress towards implementing the Principles. |
Disclose how ESG issues are integrated within investment practices
- As it pertains to Prologis’ assets, Prologis also has a policy and goal to have 100% of new development and redevelopment (by number of projects) achieve sustainable building certification.
- All investments—including developments, acquisitions and dispositions—go through a rigorous evaluation process led by Prologis’ Investment Committee. The Investment Committee is continuously refreshed with a subset of senior leaders to ensure that diverse perspectives from across the business are integrated in our investment decision making process. Through the Investment Committee’s evaluation of every investment decision we formally consider ESG-related opportunities, risks and characteristics, including but not limited to: flood risks; exposure to risks from extreme weather or earthquakes; the potential to install solar; opportunities to upgrade to efficient LED lighting within acquired assets; and the proximity to available labor that would benefit our customers, just to name a few.
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Disclose what is required from service providers in relation to the Principles
- Prologis maintains a robust Supplier Code of Conduct that details expectations around adherence with anti-corruption practices, labor regulations, safety performance, as well as environmental regulations.
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Communicate with beneficiaries about ESG issues and the Principles
- Prologis considers that sustainability risks are relevant to the returns of the funds under management and has therefore implemented a policy in respect of the integration of such sustainability risks in its investment decision making-process. We detail our approach to identifying and managing these sustainability risks within our disclosure in accordance with Articles 3(1), 4(1)a and 5 of the EU Sustainable Finance Disclosure Regulation (2019/2088).
- Prologis’ strategic capital and investor relations groups have regular meetings with private and public investors where ESG is a common theme. Furthermore, we respond to due diligence questionnaires that increasingly have ESG as a topic for evaluation.
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Make use of reporting to raise awareness among a broader group of stakeholders
- Prologis primarily uses its annual sustainability report to communicate and raise awareness on ESG topics with a variety of stakeholders. Additionally, Prologis includes ESG discussions in its proxy statement, Annual Report and 10-K. Finally, Prologis also responds to a number of other third-party evaluators and benchmarks of ESG governance and performance, including GRESB, DJSI, CDP, MSCI, Sustainalytics, ISS, FTSE4Good, and others.
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