Sustainability-Related Disclosure 
FDR PEAF I SCA SICAV-RAIF (the “Feeder”)
Legal entity identifier: 213800OIJZZMS5CAW122

Capitalised terms used herein but not otherwise defined will have the meaning given in the confidential offering memorandum of the Feeder (the “Memorandum”).

1    Summary

The Feeder promotes environmental characteristics within the meaning of Article 8 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (“SFDR”) but does not have as its objective sustainable investment within the meaning of Article 9 of SFDR.

The Feeder promotes environmental characteristics by investing all of its assets in Prologis Europe Agility Fund I SCSp (the "Master Fund") in a master-feeder structure. The Master Fund in turn promotes the following environmental characteristics:

  1. Energy efficiency through the installation of LED lighting in real estate investments of the Master Fund;
  2. The growth of renewable energy capacity through installation of solar ready roofs in new development projects of the Master Fund; and
  3. Sustainable practices in the development of real estate investments of the Master Fund, through pursuit of sustainable building certifications for all Eligible Projects (as defined below),

The Manager, acting as manager of the Master Fund, will incorporate the Environmental Characteristics through its sourcing and investment approach by, among other things, identifying real estate assets to acquire where there are development and redevelopment opportunities in respect of which it will consider whether design, cost and commercial considerations allow for (i) the installation of LED lighting, (ii) the installation of solar ready roofs and (iii) the pursuit of a sustainable building certification.

The Manager invests all of the Feeder’s assets into the Master Fund in a master-feeder structure. The Master Fund will in turn invest a minimum proportion of 65% of its total assets in real estate investments used to attain any of the Environmental Characteristics. However, this minimum proportion may not be met during any ramp-up or wind-down phase of the Master Fund.

To assess, measure and monitor the attainment of the Environmental Characteristics promoted by the Master Fund, the Manager, acting as manager of the Master Fund, will use the following core sustainability indicators:

  1. Percentage of total Master Fund portfolio coverage (based on sqm) with LED lighting installed;
  2. Percentage of new development projects (based on number of projects) of the Master Fund with solar ready roofing installed; and
    1. Percentage of all Eligible Projects (based on number of projects) of the Master Fund that:
      are in the process of achieving a sustainable building certification;
    2. have achieved a sustainable building certification.

The Master Fund leverages Prologis’ internal global property database along with support from local external consultants, where needed, to capture data related to LED lighting, solar ready roofing and sustainable building certifications. Data quality is reviewed by the Master Fund's management team and Prologis’ sustainability team.

In general, as the Master Fund’s management team and Prologis’ development team will have direct oversight over the development or redevelopment of all of the Master Fund’s real estate investments, and the Manager will implement measures to ensure data quality, the Manager does not expect that any of the limitations to its calculation methodologies or data will affect the Environmental Characteristics promoted by the Master Fund.  

As part of the due diligence process for all acquisitions, the Master Fund will assess energy use and environmental impacts and evaluate opportunities to incorporate Environmental Characteristics into the investment.

Although the Manager, acting as the manager of the Master Fund, and Prologis may engage, on a case-by-case basis, with key stakeholders in local communities during project development of the Master Fund’s real estate investments in relation to environmental and social matters, such engagement is not part of the Master Fund’s environmental or social investment strategy.

A reference benchmark has not been designated for the purpose of attaining the Environmental Characteristics promoted by the Feeder of the Master Fund.

A translation of this Summary section into an official language of relevant EU Member States will be made available to investors upon request.

2    No sustainable investment objective

This financial product promotes environmental or social characteristics but does not have as its objective sustainable investment.

3    Environmental or social characteristics of the financial product

The Feeder promotes the following environmental characteristics by investing all of its assets in the Master Fund in a master-feeder structure. The Master Fund in turn promotes the following environmental characteristics:

  1. Energy efficiency through the installation of LED lighting in real estate investments of the Master Fund;
  2. The growth of renewable energy capacity through installation of solar ready roofs in new development projects of the Master Fund; and
  3. Sustainable practices in the development of real estate investments of the Master Fund, through pursuit of sustainable building certifications for all new constructions developed by the Master Fund, excluding expansions under 100,000 square feet and build-to-suit projects (“Eligible Projects”),

(together, the "Environmental Characteristics" and each, an “Environmental Characteristic”).

4    Investment strategy

The Feeder invests all of its assets in the Master Fund and the Environmental Characteristics are incorporated at the Master Fund level. The Manager, acting as manager of the Master Fund, will incorporate the Environmental Characteristics through its sourcing and investment approach by, among other things, identifying real estate assets to acquire where there are development and redevelopment opportunities in respect of which it will consider whether design, cost and commercial considerations allow for (i) the installation of LED lighting, (ii) the installation of solar ready roofs and (iii) the pursuit of a sustainable building certification.

4.1    Sustainable Building Certifications

In June 2021, Prologis committed that every eligible new development project approved by its Investment Committee will achieve a sustainable building certification. A project typically receives a certification once built and stabilised. However, due to customer requirements and/or the limitations of certain co-development agreements, a small number of projects will be ineligible to receive a sustainable building certification. As such, the Master Fund’s binding commitment with respect to pursuing sustainable building certifications only applies to Eligible Projects.  

The Master Fund may also acquire assets that are not newly built. For all acquisitions, the Master Fund will assess energy use and environmental impacts and evaluate opportunities to incorporate Environmental Characteristics into the investment.

4.2    Binding Elements of Investment Strategy

The investment strategy is decided at the level of the Master Fund. The binding elements of the investment strategy of the Master Fund are:

For real estate investments

  • Installation of LED lighting

For new development projects only

  • Installation of solar ready roofs

For Eligible Projects only

  • Pursuing a sustainable building certification within a reasonable period once the project is built and stabilised

4.3    Assessment of Good Governance Practices

As the Feeder invests all of its assets in the Master Fund in a master-feeder structure and the Master Fund invests in real estate assets, the assessment of good governance practices in relation to investee companies is not directly applicable.

Nonetheless, Prologis and the Manager, acting as manger of the Master Fund, will ensure that good governance practices are followed by setting clear expectations with respect to transparency and accountability around sustainability aspects of the Master Fund's portfolio towards the Feeder's and the Master Fund's investors. Prologis and the Manager promote high standards of ethics and governance as key elements of success. All Prologis personnel are subject to the Prologis Code of Ethics and Business Conduct, published on the Prologis website. Furthermore, all of the Master Fund's suppliers will be subject to the Prologis Supplier Code of Conduct. Each year, Prologis employees and board members are required to complete ethics training. Prologis also provides training on its Code of Ethics and Business Conduct, Foreign Corrupt Practices Act, harassment, and insider trading.

 

5    Proportion of investments

5.1    Minimum Proportion of Investments used to attain the Environmental Characteristics

Graphic supporting the SFDR website disclosure

 

The Manager invests all of the Feeder's assets into the Master Fund in a master-feeder structure. The Master Fund will in turn invest a minimum proportion of 65% of its total assets in real estate investments used to attain any of the Environmental Characteristics. However, this minimum proportion may not be met during any ramp-up or wind-down phase of the Master Fund.

Up to 35% of the Master Fund’s total assets may be in "#2 Other" investments, which may include:

  1. investments in liquid assets (such as ancillary liquid assets, derivatives for hedging purposes, bank deposits and money market instruments) held for the purposes of servicing the day-to-day requirements of the Master Fund. Due to the neutral nature of these assets, they are not subject to any minimum environmental or social safeguards; and
  2. real estate investments not used to attain any of the Environmental Characteristics. While all new constructions developed by the Master Fund are expected to attain one or more of the Environmental Characteristics, the Master Fund may, where the Manager, acting as the manager of the Master Fund, considers it to be in the best interests of the Master Fund's Investors, invest in an asset that is not expected to attain any of the Environmental Characteristics, such as for example redevelopment opportunities where the existing asset does not support a commercially viable option to incorporate any of the Environmental Characteristics. These investments will not be subject to minimum environmental and social safeguards; however, the Master Fund will still apply the same good governance procedures as described above under “What is the policy to assess good governance practices of the investee companies?“

Neither the Feeder nor the the Master Fund commits to making a minimum proportion of Sustainable Investments.

5.2    Use of Derivatives to attain the Environmental or Social Characteristics

Derivatives will not be used to attain the Environmental Characteristics promoted by the Feeder or the Master Fund.

5.3    Types of Exposure to Entities

The Feeder invests all of its assets to the Master Fund. The Master Fund may invest directly or indirectly in real estate investments through intermediate holding companies.

 

6    Monitoring of environmental characteristics

The Manager, acting as manager of the Master Fund, will use the sustainability indicators set out below under 7 “Methodologies” to measure the attainment of the Environmental Characteristics. The related internal and external control mechanisms are described below under 8.2 “Data quality”.

The monitoring of the Master Fund’s sustainability indicators by the Manager is part of Prologis’ global level tracking of LED lighting, solar ready roofing and sustainability building certifications. In particular, Prologis has, at a global level, set public goals related to LED lighting in 2016 and public goals related to sustainable building certifications in 2021.

7    Methodologies

To assess, measure and monitor the attainment of the Environmental Characteristics promoted by the Master Fund, the Manager, acting as manager of the Master Fund, will use the following core sustainability indicators::

  1. Percentage of the total Master Fund portfolio coverage (based on sqm) with LED lighting installed;
  2. Percentage of new development projects (based on number of projects) of the Master Fund with solar ready roofing installed; and
  3. Percentage of all Eligible Projects (based on number of projects) of the Master Fund that:
    1. are in the process of achieving a sustainable building certification;
    2. have achieved a sustainable building certification.

The periodic report of the Feeder will also disclose the percentage of all Master Fund real estate investments which are (i) new development projects and (ii) Eligible Projects, respectively (in each case, based on number of projects).

8    Data sources and processing

8.1    Data sources

For new developments, the Master Fund will follow its sustainable building design specifications for Eligible Projects. The Master Fund will track LED lighting and solar ready roofing installation in Prologis’ global property database. For the pursuit of sustainable building certifications, the Master Fund engages with local consultants, where needed, to submit the required documentation to apply for the relevant certification. The Master Fund manually tracks sustainable building certifications with proof of certification received and timeline to expire or renew (as applicable).

With respect to existing properties that are acquired by the Master Fund, the Master Fund will track LED lighting at property and unit-level and will track solar ready roofing and existing sustainable building certifications at the property level and will include these metrics in Prologis’ global property database.

8.2    Data quality

The Master Fund requires documentation to be uploaded in Prologis’ global property database and within Prologis’ ESG reporting system to support the review of data quality.

KPIs associated with solar ready roofing are calculated and reviewed annually. KPIs associated with LED lighting and sustainable building certifications are calculated on a quarterly basis and reviewed by the Master Fund’s and Prologis’ accounting and sustainability teams. The KPIs associated with LED lighting and sustainable building certifications are published in Prologis’ annual 10-K and in Prologis’ annual Global Impact and Sustainability report. Prologis receives limited assurance over the LED and sustainable building certification metrics within Prologis’ Global Impact and Sustainability Report.

8.3    Data processing

The Master Fund leverages Prologis’ internal global property database along with support from local external consultants, where needed, to capture data related to LED lighting, solar ready roofing and sustainable building certifications. Data quality is reviewed by the Master Fund's management team and Prologis’ sustainability team.

8.4    Estimated data

In general, it is not expected that any sustainability indicator data will be estimated. If, however, any estimated data is used in reporting of the Master Fund's sustainability indicator data in the Feeder's periodic reports, the proportion of estimated data will be disclosed.

 

9    Limitations to methodologies and data

In respect of LED lighting installed, only office and warehouse space is measured and as such, a small part of the floor area (for example, mezzanine space) will be excluded. However, since this will only relate to a small part of the total floor area, the impact would be minor. In addition, the LED tracking process is dependent on the local teams’ operational efficiency and procedures and there could be a possibility of underreporting the numbers for a particular quarter if an LED conversion is not entered into Prologis’ systems on a timely basis. Periodic checks on the installed LED lighting are carried out, so any increase or decrease would be identified, reducing the chances of error.

In respect of solar ready roofing for acquired properties, property condition assessments conducted may not include sufficient documentation to support the conclusion of existing solar ready roofing, potentially leading to an incorrect determination. In respect of solar ready roofing for developed properties, incorrect or incomplete data uploaded to Prologis’ global property database could lead to inaccuracies.

In respect of sustainable building certifications for acquired properties, documentation for existing certifications may be unavailable or not provided in a timely manner, leading to delays of data inclusion in a reporting period. In respect of sustainable building certifications for Eligible Projects, long lead-times in jurisdictions processing applications could lead to properties not receiving certification receipts before developed properties are sold.

For all Environmental Characteristics tracked, Prologis maintains global processes for KPI calculation and documentation. Data in respect of LED lighting and sustainable building certifications is reviewed quarterly, and data in respect of solar ready roofing is reviewed annually, to ensure that any errors are detected and remediated in a timely manner.

In general, as the Master Fund’s management team and Prologis’ development team will have direct oversight over the development or redevelopment of all of the Master Fund’s real estate investments, and the Manager will implement measures to ensure data quality as described under 8.2 “Data quality” above, the Manager does not expect that any of the limitations described above will affect the Environmental Characteristics promoted by the Master Fund.  

10    Due diligence

Each investment made by the Master Fund will be subject to the overall policy direction of Prologis’ Investment Committee, a cross-functional and geographically diverse executive body within Prologis that analyses investment opportunities and determines which to pursue. All assets acquired by the Master Fund must comply with the Master Fund’s Investment Guidelines (unless otherwise approved by the Investor Advisory Committee) and must be approved by both the Prologis Investment Committee and the Manager, acting as the manager of the Master Fund. The stages of the investment process are highly integrated, with Investment Committee and the Master Fund's management team reviewing milestones at critical points in the process.

As part of this process, the Master Fund undertakes structured due diligence to assess, and where appropriate, mitigate or solve, physical, environmental and other potential risks associated with each potential investment. External due diligence providers and consultants will be engaged and consulted as required.

For all acquisitions, the Master Fund will assess energy use and environmental impacts and evaluate opportunities to incorporate Environmental Characteristics into the investment.

11    Engagement policies

Although the Manager, acting as the manager of the Master Fund, and Prologis may engage, on a case-by-case basis, with key stakeholders in local communities during project development of the Master Fund’s real estate investments in relation to environmental and social matters, such engagement is not part of the Master Fund’s environmental or social investment strategy.

12    Designated reference benchmark

A reference benchmark has not been designated for the purpose of attaining the Environmental Characteristics promoted by the Feeder of the Master Fund.