MERLIN Properties Annual Report 2022

MERLIN Properties | 73 3. Offset residual emissions 4. Reduce scope 3 emissions 5. Renewable energy • The Company has estimated the forest mass needed to be able to offset its footprint in 2028 (around 150 hectares). In the process of searching for a land plot that meets the necessary requirements to be able to carry out the project. Offsetting the unavoidable footprint through duly certified own initiatives focused on environmentally based solutions with a positive impact on local and/or underdeveloped communities. Engage tenants through green clauses in new leases and pioneering initiatives such as rent reduction for tenants if they certify that their operations are net zero. 100% renewable energy supply and photovoltaic power generation through the Project SUN, which consists of installing photovoltaic panels on the rooftops of the assets. • The Company has made significant progress in establishing a dialogue with our main tenants, which represent around 30% of the total surface area of the portfolio, to engage them in our net zero journey and to share data. On January 1st 2023, the new green clause came into force for all contracts, whereby all tenants who wish to benefit from a rent reduction will be required to share their consumption data through a technological platform. This green clause, which will be linked to the tenant’s credit risk, will incorporate a series of milestones which, if met, tenants will be able to benefit from a reduction in rent of up to 50 basis points. MILESTONES 2022 • Significant efforts have been made this year in executing the project, having carried out 19 projects representing an additional 10.9 MW in the year, which implies a total installed capacity of 11.9 MW. The new installations include 10 office assets, 4 logistics assets and 5 shopping centers. Following the completion of Phase I of the Project SUN, the peak installed capacity is expected to be 39.8 MW. Likewise, 100% of MERLIN’s assets under operational control consume renewable electricity with a guarantee of origin certificate. MILESTONES 2022 MILESTONES 2022