Prologis Capelin Distribution Center, Torrance, California. This LEED-Certified infill distribution center produces one megawatt of solar power, enough to power 141 homes.
Staying Ahead of Customer Needs
Long-standing Commitment
A message from our CEO
Dear Stakeholders,
Since the company’s inception, our forward-looking vision has pushed us to seek ways that keep us ahead of the evolving supply chain. Taking the long view, we have built a portfolio of strategically located assets that meet our customers’ needs and help to solve their pain points around location, energy and labor. The rise of e-commerce and demand for shorter delivery times have led customers to seek locations closer to end consumers. With increased customer interest in automation, we continue to identify and implement solutions to maximize energy efficiency. As these influences continue to shape our business strategy, they also continue to demonstrate the importance of environmental, social and governance (ESG) within that strategy.
Our future-focused approach to ESG not only enables us to be resilient in a dynamic world, but also demonstrates leadership across the global business community. This year, we were the top-ranked U.S. company and sixth overall on the 2019 Global 100 Most Sustainable Corporations in the World list published by Corporate Knights, announced at the World Economic Forum in Davos.
Hamid R. Moghadam, chairman and CEO
We are committed to demonstrating alignment on matters such as climate change, which are important to our customers, employees, investors and communities. In 2018, we became the first logistics real estate company with an approved Science Based Target (SBT) to reduce greenhouse gas (GHG) emissions. In our innovation center, Prologis Labs, we partner with our customers to test cutting-edge technologies. These new technologies, such as motion sensors and smart meters, improve the operating efficiency of our buildings while advancing our progress toward meeting our SBTs.
In 2018, we became the first logistics real estate company in the world to have a logistics building receive WELL Certification, which uses building design to further promote customer health and well-being. We also launched the Community Workforce Initiative (CWI) in three major markets (Los Angeles, Miami, Chicago). We are partnering with local workforce development organizations to provide training and job placement to underserved communities, while helping our customers build a talent pipeline in logistics. By bridging our customer needs with community needs through CWI, we generate value, growth and goodwill in communities strategic to our business.
At Prologis, ESG is good business—a part of our strategy since our beginning. A fundamental starting block is strong governance that provides oversight at all levels. As a testament to this, our governance program has been recognized by Green Street as the best in the REIT industry for 16 years in a row.
We are uniquely positioned. No other real estate company has the portfolio, scale or infrastructure to serve customers the way we can. Taking this vision forward, building on all that we have built, is what energizes me and our team around the world every day. I am excited for our future. As I look ahead, I know our long-standing commitment to ESG is a competitive differentiator that helps us better serve our customers, deliver value to our business and stay ahead of what’s next.
Sincerely,
Hamid R. Moghadam
Chairman and CEO, Prologis, Inc.
I know our long-standing commitment to ESG is a competitive differentiator that helps us better serve our customers, deliver value to our business and stay ahead of what’s next.
Hamid R. Moghadam, Chairman and Chief Executive Officer
Real estate operations
leases prime logistics facilities in global infill markets where our customers want to be
Development
builds the modern assets in centers of global trade—assets that are scarce and in demand by our customers.
Strategic capital
enables responsible growth in global markets, while earning asset management and incentive fees
Our Global Leadership
Scale augments efficiency.
- $87B
in assets under management (AUM) - 768 MSF
owned, managed or under development - 19
countries - 3,690
buildings
Partnership ensures enduring value.
- 5,100
customers - 800
multisite customers - 97.2%
global occupancy rate
Business model delivers results.
- 87.4%
five-year TSR1 - 558 bps
outperformance over MSCI US REIT Index over past five years - 57%
greater dividend CAGR than REIT average2 - 131%
increase in net earnings per share over the last five years - 61%
increase in Core FFO per share over the last five years3
Sustainability at a Glance
Our forward-looking approach to sustainable design, development, operations and culture delivers long-term value for our stakeholders.
Employees
- 98%
of employees completed engagement survey versus external benchmark of 70-80%1 - 100%
of employees have access to career training and education - 4
business days per employee per year to volunteer with charitable organizations
Customers
- 88%
of our top 25 customers rent our sustainably certified space, and 76% of our top 25 customers align with us in supporting the UN Sustainable Development Goals - 8.4%
higher retention rates with our top customers (covering 30% of our total square footage) that engage with us through our outreach programs
Environment2
- 186 MW
of total solar energy generating capacity - 374
sustainable building certifications in 18 countries - 42%
of total operating portfolio has cool or reflective roofing - 88%
of total operating portfolio has efficient lighting
Communities3
- 50,000+
volunteer hours - $13M
charitable contributions from the Prologis Foundation - $5M
of in-kind rent donated to local non-profit organizations through the Space for Good Program
2. Environmental totals across the portfolio as of December 31, 2018.
3. Figures calculated under the Communities section are aggregated from five years of data (2014-2018).
ESG Creates Value
As an industry leader, we show that not only does ESG benefit our communities and the environment, but it creates value for our customers, investors and other stakeholders and, in turn, grows our business.
Growth
Growth in brand value, customer loyalty and satisfaction, investor confidence, and employee and community relationships
CASBEE “A”-rated Prologis Osaka 5, Osaka, Japan
OUR MODERN, SUSTAINABLE BUILDING DESIGN AS A BRAND DIFFERENTIATOR
Sustainable Building Certifications
162% growth
53 MSF in 2014 to 139 MSF in 2018
13x greater
than S&P 500 REIT industry average1,2
Solar
65% growth
113 MW in 2014 to 186 MW in 2018
26x greater
than S&P 500 REIT industry average1,2
Productivity
Cost savings and value preservation through modern, efficient building design—staying ahead of our customers’ needs
LEED-certified Prologis Park Bonneuil, Bonneuil-sur-marne, France
ENERGY, WASTE AND WATER SAVINGS BENEFITING OUR CUSTOMERS
Up to 42%
estimated energy cost savings on average to customers3,4,5
79%
of construction waste (6,880 tons) recycled and diverted from landfills4,6
30-60%
average operational water savings4,5,6,7
Resilience
Smart governance of financial, operational and reputational risk, building trust among stakeholders
OSHA safety procedures at Prologis I-17 Logistics Center, Phoenix, Arizona
FINANCIAL RESILIENCE
Top REIT balance sheet (A3/A- credit rating)8
OPERATIONAL RESILIENCE
Leveraging scale and innovation to develop proprietary data modeling and tools, assessing risk, natural catastrophe factors and future disrupters impacting our industry
REPUTATIONAL RESILIENCE
Creating a culture where ESG is owned by everyone and all are empowered to do the right thing through company-wide communications and training on strategy, risk management and ethics
It was important to prove our commitment to sustainability through actions, rather than words—that’s why we chose to locate our main distribution center in a Prologis building.
Adam Hall, Head of Sustainability, Internet Fusion
About This Report
