MERLIN Properties Annual Report 2022

74 | Annual report | 2022 Climate change management and operational efficiency The Group’s environmental sustainability is a key aspect to ensure compliance with its objectives at all levels and to enhance its value creation, with active management of climate change and efficiency in the use of resources as key pillars. • Launch of the pathway to net zero carbon emissions. • Definition of decarbonisation targets and approval of these targets by the SBT. • Quantification of climate change risks and their integration into the Group’s risk management in accordance with TCFD. • Implementation of the green clause for leases. • Creation of the Biodiversity Policy. • Adherence to the SDGs. MILESTONES 2022 FUTURE OBJECTIVES • Creation of the Group’s own carbon sinks to offset residual emissions. • Gradual replacement of production equipment that uses fossil fuels. • Expansion of asset management systems to optimise energy consumption as much as possible. • Setting footprint limits in the construction phases (embodied carbon). CONVERTING DEBT INTO GREEN DEBT MERLIN counts with a 100% Green Financing Program under which all of its outstanding bonds are reclassified as green bonds, and has assumed a commitment to issue green bonds or other ESG bonds in the future. A Green Financing Framework has therefore been developed based on best practices with strict eligibility criteria including the following: • A•High levels of asset certification: LEED Gold or higher and BREEAM Excellent or higher. • Low carbon intensity emissions for buildings under operational control. • Investments to promote renewable energies and/or improve energy efficiency. The Framework has received positive feedback from Sustainalytics, which considers it to be in line with the four main components of the ICMA Green Bond Principles 2021 and LMA Green Lending Principles 2021 (1) . (1) ICMA: International Capital Market Association; LMA: Loan Market Association.