Responsible Investment Policy

July 2025

1.0 Introduction

1.1 Background

Verdion is a real estate investor, developer and asset manager, specialising in the industrial and logistics sector and operating across Europe. We develop high-specification facilities and strategic parks, and we buy, manage, and improve income-producing assets with potential for added value through technical innovation and development expertise.

Our areas of expertise include:

Investment management – we work with investment partners through joint ventures, co-mingled funds and separate accounts with the underlying objective of creating and managing assets that maximise returns. Our team combines investment insight with technical and development expertise to seek out new opportunities and unlock value.
Strategic parks – built in the most strategic locations, our parks bring forward speculative development opportunities offering speed to market, alongside built-to-suit warehousing for specialist capabilities like temperature control and storing hazardous goods. For us, a truly successful hub not only keeps goods flowing and businesses working smarter; it powers growth, creates taxes and jobs, and breathes new life into the local area.
Built-to-suit developments – occupiers’ specialist needs are complex, time-critical, and always unique. Whether they’re expanding an existing site or moving to new premises, we help companies from Amazon to BMW, and DHL to DeLaval, to achieve their business goals. Not just by designing cutting-edge facilities that perform to higher standards, but through the strong relationships we’ve built with suppliers and contractors who go the extra mile.
Speculative development – in a sector where speed to market is essential immediate availability can be a deciding factor. We develop speculatively on single sites and logistics parks, using our market insight to make forward-thinking decisions about what, when and where to build.
Asset management – we work with our partners for the long term, creating buildings designed for efficiency and durability, attracting occupiers whose businesses need highly efficient operations. And for investors seeking income streams with potential, we offer opportunities for active management supported by leading-edge logistics knowledge.

Verdion recognises its duty to incorporate Environmental, Social, and Governance (ESG) considerations into its operations. We believe that utilising ESG integration contributes to creating long-term value within our investments. This Responsible Investment Policy (RI Policy) affirms our dedication to ESG integration and outlines the application across our investment processes and operations.

Michael Hughes
CEO

1.2 Our ESG Vision

Environmental, Social and Governance (ESG) considerations are at the heart of our business. Working with respect for both the environment and the needs of stakeholders including occupiers, local communities and investor partners, we create and manage flexible, energy-efficient buildings designed and built to be best in class, and we commit to upholding high standards throughout the lifecycle of each asset. Our ESG focus drives positive impacts across our assets while delivering value to the broader range of stakeholders involved in our operations.

In 2022, we established our ESG Policy to set the foundation for our ESG commitments. The Executive Board has a clear focus on ensuring ESG commitments are embedded across our operations. ESG and climate resilience factors are integrated into our acquisition process. To drive sustainable development, we apply the Verdion Building Specification to all new projects under Verdion’s control. Every new-build development is designed with the goal of achieving a recognised sustainable building certification.

As we continue to integrate ESG across our investments, we are setting clear targets and action plans to ensure valuable progress towards our ESG Vision. We thrive on tackling the challenges with forward-looking and responsible approach to support sustainable growth. We are committed to integrating progressive solutions across our operations and investments.

1.3 Scope

1.3.1 Purpose

We are committed to integrating ESG considerations into our investment strategy. Through robust governance, we adhere to regulatory requirements and uphold sustainability standards with our activities. This Responsible Investment Policy demonstrates our responsible investment approach across our business and activities, ensuring consistency. This Responsible Investment Policy sets out our current consideration of ESG issues with respect to:

Investment decision-making: How sustainability risks are integrated into our investment decision-making process through the lifecycle of each investment; and
Operational choices: How we take ESG issues into account across our operations including in relation to our environmental impact, our social impact, and how we govern ourselves as a business. This includes consideration of how we work and the impact we deliver with and for all our stakeholders including investors, employees, funding partners, supply chain partners, regulators, tenants, consumers and communities.

1.3.2 Application

This RI Policy applies across Verdion’s investment strategy and its operations, covering all the geographies in which we operate. It is adapted to the specific characteristics of each market and investment strategy. Our RI Policy is in alignment with our corporate and fund-level ESG policies, ensuring a seamless integration of sustainability principles. It also complements individual portfolio’s ESG policies, objectives, and exclusion criteria where applicable.

Our RI Policy covers 100% of our €2.5 billion in assets under management (AUM), including the Verdion European Logistics Fund 1 (VELF1) and Verdion European Logistics Fund 2 (VELF2).

Verdion manages a range of investment mandates, including Verdion European Logistics Fund 1 (VELF1), Verdion European Logistics Fund 2 (VELF2), and selected separately managed accounts. ESG integration and disclosure practices vary by mandate, reflecting the investment strategy, lifecycle stage, and investor requirements. Specifically, while VELF1 does not currently disclose under the EU Sustainable Finance Disclosure Regulation (SFDR), VELF2 integrates ESG considerations more formally within its strategy. It is classified under SFDR Article 8, promoting environmental and social characteristics in its investment process. VELF2 also participates in annual GRESB reporting to benchmark sustainability performance and progress. It should be noted that, while Verdion endeavours to apply relevant ESG frameworks consistently, individual mandates may deviate from certain standards due to the stage in its investment lifecycle and the nature of its portfolio.

We review this Policy annually and may make updates to reflect evolving ESG trends, regulatory developments, and industry best practices. The ESG Committee and the investment teams are responsible for implementing the RI Policy, ensuring we meet the commitments and targets set within this document.

1.3.3 Frameworks

Verdion aligns with regulatory frameworks, sustainability accreditations, reporting standards, to ensure transparency, accountability, and market-leading ESG performance. We seek to adopt relevant accreditations and disclosures on ESG issues such as:

Regulatory Compliance: Equality Act 2010
Transparency & Reporting: GRESB, UNPRI, TCFD
Green Building Certifications: BREEAM, DGNB

1.3.4 Objectives

We are dedicated to minimising adverse environmental and social impacts while enhancing the value of our investments through responsible practices. Our responsible investment approach seeks to address the following objectives:

Ensuring consistent application of ESG principles across all investment and operational activities
Integrating ESG risks and opportunities across all stages of the investment lifecycle
Establishing ESG integration standards across all investment types, while allowing for tailored enhancements based on asset strategies
Safeguarding against material ESG risks by applying ESG criteria aligned with industry standards and best practices
Establishing procedures and guidelines for material ESG considerations tailored to our investments
Advancing our Net Zero Carbon commitments
Improving transparency and disclosure in governance and reporting

2.0 ESG Integration

We strive to make a positive impact on the issues with regards to ESG, and the potential to do this is always part of our ownership cycle from acquisition to sales. We understand the impact of ESG on the asset value and this is considered throughout the investment process. Our key focus is the integration of material ESG issues into the investment process to achieve aspired outcomes for our clients, communities, tenants, and stakeholders.

We set out below how sustainability risks are integrated into our investment decision-making process for Verdion-led projects and acquisitions through the lifecycle of each investment, and our commitments to enhancing this integration in future.

2.1 Origination, Due Diligence & Acquisition

Prior to recommending an investment opportunity, Verdion incorporates environmental considerations in its due diligence process in order to assess the present condition of the properties being acquired and to understand how this may be improved. These considerations include at a minimum:

Energy efficiency and scope for improvements
Scope for renewable energy generation
Resilience to climate change and extreme weather events
Site-specific environmental concerns, such as impact on green space and biodiversity

The outcomes of the due diligence and assessments are reviewed to evaluate the impact on the investment.
Furthermore, for discretionary fund mandates, Verdion plans to develop a framework for evaluating potential acquisitions across our ESG priorities (specified in 3.2 ESG Priorities) to:

Measure baseline performance;
Estimate potential real world performance outcomes and impact through our development / redevelopment / asset management activities;
Determine sustainability-related risks and opportunities including physical and transition climate risks and identify reasonable mitigation measures;
Assess alignment with the fund’s long-term climate targets;
More explicitly incorporate ESG considerations into investment decision-making, including at Investment Committee.

2.2 Development

Our occupiers expect high quality assets that meet their operating needs, including environmental efficiency, employee wellbeing and safety. We have therefore developed our own proprietary specification for the assets we develop. Where we can, we apply the Verdion Building Specification to all development and redevelopment opportunities, leveraging our technical expertise and innovation to create high-quality logistics buildings.

Our ability to influence the sustainability of the assets we develop and manage, including the extent to which we can integrate consideration of sustainability risk into the decision-making process, varies depending on the degree of discretion we have, as outlined below.

Verdion-led Projects: Where we have discretionary capital to invest on behalf of our investors, we seek to apply the Verdion Building Specification to all development and redevelopment opportunities, leveraging our technical expertise and innovation to create high-quality logistics buildings.
Occupier-led Projects: Some of the development projects we deliver are occupier-led. This means that the occupier influences the specification and design of the building. In these instances, while the developments will always at least meet the minimum local building standards, they may not meet all performance criteria of the Verdion Building Specification.

2.3 Asset Management

ESG matters form part of our asset performance updates, reported to investors on a regular basis and reviewed by our Investment Committee (for discretionary funds) and ESG Committee. We recommend initiatives to reduce the environmental footprint of assets and enhance their overall value, through focusing on improving operational efficiency both for occupiers and future purchasers. We also seek to implement green lease clauses wherever possible.

In addition, Verdion aims to explore the development of an enhanced asset management approach offering recommendations on improving performance – both qualitative and quantitative – across our ESG priorities, to include consideration of both accreditation scores and measurement of real-world outcomes. We plan to assess and review the use of new certification systems focused on real performance and employee wellbeing.

2.4 Reporting & Verification

ESG matters form part of Verdion’s asset performance updates, reported on a quarterly basis in asset management reports. For our discretionary funds, these reports are reviewed by the Investment Committee and the AIFM.

Verdion will continue to develop the reporting and monitoring of ESG matters and consider implementing a framework to deliver annual reports on the impact of our development and asset management activities across our ESG priorities. We will commit to enhancing the outcomes of reporting schemes such as GRESB and PRI.

To the extent possible, we also seek to apply these principles and measures of ESG integration when delivering on client-led projects.

2.5 Responsible Exit

Verdion takes into account the ESG credentials of potential purchasers when considering a sale.

3.0 Responsible Investment Guidelines

The Responsible Investment Guidelines in this section provide a structured framework for embedding sustainability across our investment strategies. By integrating ESG factors throughout the investment lifecycle, we aim to support asset performance and risk management, which includes identifying practical opportunities to enhance long-term asset value. As outlined in Section 2.0 (Integration), these guidelines apply to the entire lifecycle of investments. The Responsible Investment Guidelines provide clear steps for achieving specific ESG goals and outcomes. These include addressing ESG issues, exclusions, sustainability outcomes, climate change, human rights, and other systematic sustainability issues, including asset-class-specific guidelines.

Verdion’s responsible investment approach is informed by globally recognised frameworks that support best practice in ESG risk management and stakeholder engagement. These include the UN Sustainable Development Goals (SDGs), the UN Global Compact, the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, and the core principles of the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work and International Bill of Human Rights.

Specifically, the 3.1 Exclusion section reflects our adherence to minimum standards of responsible business conduct and are informed by the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, and the core principles of the International Labour Organisation (ILO) and International Bill of Human Rights; and the 3.2 ESG Priorities section is informed by the UN Sustainable Development Goals (SDGs) and serves as a guiding framework for systematic sustainability issues. While we do not claim full alignment or formal participation in all of these initiatives, we reference them as high-level benchmarks for promoting responsible business conduct across our business.

The section is divided into key subsections. 3.1 Exclusions define activities and sectors that are inconsistent with our sustainability commitments, particularly where engagement cannot mitigate harm or where global treaties mandate elimination. 3.2 ESG Priorities articulates the focus areas essential to advancing responsible practices within our investments. For development projects, 3.3 Sustainable Building Specifications outlines environmental criteria to enhance construction and operational sustainability. 3.4 Climate-Related Risks describes methodologies for assessing and managing the physical and transition risks associated with climate change. Finally, the 3.5 Striving for Impact section introduces a structured framework for continuous improvement through three core steps: setting measurable targets and defining outcomes, implementing robust processes to achieve them, and fostering continuous progress in alignment with evolving standards and best practices.

Through this comprehensive framework, we aim to integrate positive and negative screening processes, identify impactful opportunities, and uphold best practices that align with global sustainability objectives and regulatory requirements.

3.1 Exclusions

We are dedicated to conducting our activities responsibly and adhering to all applicable laws and regulations in the regions where we operate. We avoid investing in or knowingly engaging with entities involved in activities considered unacceptable, particularly from the perspective of human rights and the environment by us or our clients. As part of this commitment, implementing ‘mandatory exclusions’ serves as the initial step in our responsible investment process, with the specific exclusions detailed below.

Any person, or in any property which is owned (directly or indirectly) by any person, who is a Prohibited Sanctions Person or is domiciled, incorporated, has its primary listing in a country or region governed or controlled by a Prohibited Sanctions Person;
Any entity generates significant revenues or is primarily used for:
- (a) drug or human trafficking;
- (b) child labour;
- (c) human slavery;
- (d) illegal gambling;
- (e) endangered or protected substances;
- (f) the production of tobacco;
- (g) prostitution;
- (h) the distribution or production of pornography; and/or
- (i) the seeking of economic profit through violence, force, or fraudulent means
Parties that contribute to, or are in material breach of, UN conventions and declarations on human rights;
Parties that are found in breach of modern slavery disclosures;
Parties associated with, or convicted of, material or systematic bribery or corruption;
Parties involved in palm oil production not adhering to best practices (particularly regarding deforestation, land, and labour rights);
Parties consistently violating environmental protection regulations.

(each, a “Prohibited Activity” and the person undertaking the activity being a “Prohibited Person”).

This applies to any investment into any Property or real estate related investment where a Prohibited Person is a tenant, sub-tenant, licensee or occupier (either in whole or in part) but where the relevant Property is not used for any Prohibited Activity.

SFDR

Where aligned with the specific mandate, we will consider the effects of Principal Adverse Impacts (PAIs) relevant to the investment strategy, ensuring fund-specific alignment with the Sustainability Disclosure Requirements (SDR) and the Sustainable Finance Disclosure Regulation (SFDR).

For applicable funds, we will seek to limit exposure to the following mandatory real-estate-specific PAIs:

PAI 17: Exposure to fossil fuels through real estate assets (i.e., assets involved in the extraction, storage, transport, or manufacture of fossil fuels).
PAI 18: Exposure to energy-inefficient real estate assets (i.e., share of investments in energy-inefficient real estate assets)

Additionally, we will seek to limit exposure to other real estate-specific voluntary PAIs, provided they present material adverse impacts within our investments. These will include at least one of the following:

PAI 18: GHG emissions (i.e., assets with high greenhouse gas emissions per square meter).
PAI 19: Energy consumption intensity (i.e., assets with high energy consumption per square meter).
PAI 20: Waste production in operations (e.g., assets not equipped with facilities for waste sorting and not covered by a waste recovery or recycling contract).
PAI 21: Raw materials consumption for new construction or major renovations (i.e. share of raw building materials – excluding recovered, recycled, and bio-sourced – compared to the total weight of building materials).
PAI 22: Land artificialisation (i.e. share of non-vegetated surface area – surfaces that have not been vegetated in the ground, as well as on roofs, terraces, and walls – compared to the total surface area of the plots of all assets.

Beyond these PAIs, we may also apply voluntary exclusionary criteria for assets that present additional sustainability risks. These exclusions may include, but are not limited to:

Assets in areas severely exposed to physical climate risks, where mitigation is not economically viable.
Assets whose materials used in construction are considered significantly harmful to the environment, or materials that have well-known, cost-comparable low-carbon alternatives.
‘Stranded’ assets based on Carbon Risk Real Estate Monitor (CRREM) pathways or those with combustion appliances exceeding regulatory emissions limits.
Assets known to harm local ecosystems or reduce biodiversity.
Partners involved in the ownership, development or management of assets who are unwilling to align with Verdion’s ESG strategy and improvement plans.

3.2 ESG Priorities

This section outlines how we integrate responsible investment considerations across our organisation and activities, providing clear guidance and expectations for both internal and external stakeholders. These considerations have been shaped through stakeholder consultations, as well as analyses of tenant and investor trends. Our specialisation in the industrial and logistics asset class has been a key factor in tailoring our policy to align with sector-specific needs. These principles are applied throughout the investment lifecycle to guide decision-making processes. The holistic considerations for climate change, human rights and other systematic sustainability issues such as biodiversity form the foundation of the ESG priorities. We are dedicated to creating sustainability outcomes based on the defined ESG priorities framework.

During the investment research and due diligence process for acquisitions and developments, we actively pursue opportunities to enhance sustainability outcomes. We utilise our significant in-house technical expertise and additionally, we collaborate closely with environmental and technical advisors, on potential asset improvements. ESG priorities are also embedded in our operational activities, addressing environmental and social impacts alongside governance practices.

The ESG issues Verdion identifies as most relevant and material to its role as a real estate investor, developer, and asset manager, with a focus on the industrial and logistics sectors, are:

Environmental	Social	Governance
Net Zero Carbon Green space & biodiversity Resource efficiency Climate change resilience	Community engagement and social impact, and local charitable giving Tenant engagement Staff development & wellbeing Health & safety	Diversity, equity & inclusion Data gathering & reporting (transparency & disclosure) Verification Business ethics, culture & oversight Responsible supply chain Security (physical and cyber)

We strive to reflect the most relevant ESG factors depending on the asset type. Specific aspects and forms of ESG integration are tailored to each asset class depending on asset types, geographies, and investment strategies.

3.3 Sustainable Development

3.3.1 Sustainable Building Specification

Verdion develops buildings to a high standard and modern specification with sustainability criteria fully integrated into designs. Our occupiers expect high-quality assets that meet their operating needs, including environmental efficiency, employee wellbeing and safety. We have therefore developed our own proprietary specification for the assets we develop. Where we can, we apply the Verdion Standard Building Specification to all development and redevelopment opportunities, leveraging our technical expertise and innovation to create high-quality logistics buildings that can include the features below. Below are some of the elements the firm incorporates through its proprietary building specification:

Recycled and renewable materials – Photovoltaic cells and solar heating for renewable energy generation;
Air to water or geothermic heat pump systems;
Intelligent and energy-efficient lighting;
High-grade insulation;
Sustainable transport;
Bike shelters with electrical charging points;
Showers for drivers and staff;
Electric vehicle charging points;
Consideration of health and safety of occupiers.

Also, the following requirements are reviewed at the appropriate stage of new development projects in coordination with the technical team:

Adoption of sustainable site selection and land use practices by prioritising previously occupied or contaminated land for development, or low-value wildlife land, while safeguarding existing ecological features during construction. This is reviewed in the acquisition and planning stage. This includes:
- Locate projects within existing developed areas
- Protect, restore, and conserve habitats for native, threatened and endangered species
- Redevelop brownfield sites;
Sustainable building material selection in the design and procurement stage, by prioritising environmental and health product disclosure such as EPDs; and prioritising
- Locally extracted or recovered materials
- Materials and packaging that can easily be recycled
- Materials that disclose environmental impacts
- Rapidly renewable materials and recycled content materials
- Third-party certified wood-based materials and products
Quantitative Whole Life Cycle Assessment in the design stage, applying an appropriate methodology such as:
- One Click LCA
- Whole life carbon assessment for the built environment, RICS
- EN 15978
- EN 15804
- ISO 14040/44
- Or any other applicable methodologies such as BBCA Label (Bâtiment Bas Carbone), Embodied Carbon in Construction Calculator (EC3) Tool, GHG Protocol – Product Life Cycle Accounting and Reporting Standard, ISO 14025, The Carbon Smart Materials Palette®
Monitoring contractors’ compliance in the construction stage with ESG relevant requirements through methods such as:
- Contractor ESG training
- Contractors provide update reports on environmental and social aspects during construction
- Weekly/monthly (on-site) meetings and/or ad hoc site visits
Community engagement program in the pre-construction and construction stage for ESG-specific issues such as:
- Effective communication and process to address community concerns
- Employment creation in local communities
- Resilience, including assistance or support in case of disaster
Social-economic impact assessment in the planning and pre-construction stage such as:
- Local job creation
- Local income generated
Community impact monitoring in construction activities – a systematic process to monitor the impact of development projects on the local community during different stages of the project. The community impact monitoring process includes:
- Development and implementation of a risk mitigation plan
- Identification of nuisance and/or disruption risks
- Identification of stakeholders and impacted groups

3.3.2 Asset Accreditation

New build projects are designed and processed with the aim of achieving a high level of sustainable building certification, such as BREEAM New Construction ‘Very Good’ or DGNB New Construction ‘Gold’ accreditation.

3.3.3 Future Commitments

We are committed to continuously improving the Verdion Standard Building Specification to align with the highest standards from across all the jurisdictions in which we develop and manage assets (to the extent possible under local building standards) across our ESG priorities. We plan to enhance the Verdion Standard Building Specification to require best practice on a broad range of issues relevant to our ESG priorities, such as:

Reducing water consumption
Incorporating Circular Economy principles to reduce waste and enhance long-term value
Efficient use and ethical sourcing of materials
Increasing biodiversity
Biodiversity Net Gain Assessment (for assets located in the UK)

We focus on integrating Social Value delivery as a core part of large-scale new developments, including engagement with and consultation of local communities and authorities throughout the planning and development phase. Where appropriate to the scale of the development, we also work with our partners to develop mechanisms to provide skills, training and educational opportunities for the local community.

3.4 Climate-related Risks

Verdion recognises that climate-related risks are evolving alongside the physical and transitional factors that impact the investment industry. We integrate these risks and opportunities into our overall investment strategy to ensure resilience and long-term value creation.

3.4.1 Climate-related Risks Identification

Transition Risks

In line with Task Force on Climate-related Financial Disclosures (TCFD) guidance, we identify key transition risks as follows:

Policy and legal: Policy risks refer to the risks associated with and the financial impact of policy changes depending on the nature and timing of the policy change. Litigation or legal risks refer to climate-related litigation claims being brought before the courts by property owners, municipalities, states, insurers, shareholders, and public interest organisations.
Technology: Technology risks refer to the impacts or disruptions that can be brought by technological improvements or innovations that support the transition to a lower-carbon, energy-efficient economic system.
Market: Market risks refer to shifts in supply and demand for certain commodities, products, and services as climate-related risks and opportunities are increasingly considered.
Reputation: Reputation risks refer to those that are tied to changing customer or community perceptions of an organisation’s contribution to or detraction from the transition to a lower-carbon economy.

Physical Risks

Aligned with TCFD guidance, we identify physical climate risks as follows:

Acute: Acute physical risks refer to those that are event-driven, including increased severity of extreme weather events, such as cyclones, hurricanes, or floods.
Chronic: Chronic physical risks refer to longer-term shifts in climate patterns (e.g., sustained higher temperatures) that may cause sea level rise or chronic heat waves.

3.4.2 Climate-related Risks Assessment

The materiality of climate-related risks varies by asset class, location, and investment approach. Verdion incorporates climate risk assessment into its due diligence process across all investments, including acquisitions, developments, and significant renovations. This ensures that all assets undergo rigorous climate risk evaluation before investment decisions are made.

3.4.3 Time Horizons

Verdion applies a comprehensive time horizon to climate risk assessment, spanning:

Short-term (immediate to 5 years)
Medium-term (5–20 years)
Long-term (beyond 2050, extending to 2100)

By assessing risk exposure across multiple climate scenarios, Verdion ensures strategic resilience and adaptability in an evolving environmental landscape.

3.5 Striving for Impact

As real estate investors, we have both the responsibility and opportunity to drive a meaningful environmental and social impact. To enhance the impact of our funds, Verdion integrates environmental and social characteristics as a core part of our responsible investment approach. These characteristics are guided by our ESG priorities and sustainability outcomes but are carefully tailored to the objectives of each fund and mandate. We ensure positive sustainability outcomes for our investors and stakeholders over the long term by establishing clear commitments and tangible goals.

3.5.1 Focus areas for impact

We have identified areas of focus which are material to our operations and stakeholders. These include both holistic ESG factors and broader systematic sustainability issues, such as climate change, biodiversity and human rights. The whole list of our ESG priorities is specified in Section 3.2. The below is the broad scope of the areas that we focus on:

Holistic Environment, Social and Governance (ESG) aspects
Climate change
Net Zero Carbon
Human rights

3.5.2 Sustainability outcomes and targets

We aim to contribute to creating sustainability outcomes coherent to our investment activities. We are committed to acting on sustainability outcomes in alignment with global sustainability goals. Globally recognised frameworks are used to guide action on the areas of focus that we identified, such as:

EU Taxonomy
UN Sustainable Development Goals (SDGs) and targets
UN Guiding Principles on Business and Human Rights (UNGPs)
International Bill of Human Rights
UN Principles for Responsible Investment (PRI)
Task Force on Climate-related Financial Disclosures (TCFD)

Currently, we are in the process of setting detailed targets and outcomes for the identified focus areas. We aim to establish pertinent, measurable, and achievable targets that address the identified areas of focus. Targets will be intended to be met within the timeframe we set and incrementally in line with the short-term and long-term action plans.

Tailoring to Asset Classes Characteristics

As addressed in Section 1.1 Background, Verdion specialises in the industrial and logistics sector and operate across Europe. When setting targets and outcomes, we account for the physical, locational, social characteristics of the asset classes that we hold, including:

Geographical characteristics of assets
Investment strategy and objectives
Technical specifications
Tenant profiles and trends
Asset user and community needs

These considerations will be updated periodically to align with the evolving investment and/or portfolio strategies.

3.5.3 Action plans, implementation and measurement

As part of the process of setting targets, we are developing structured action plans that define:

Timelines and key milestones
Responsibilities for implementing
Tools and methodologies for implementations

Relevant metrics and data will be collected regularly to monitor the progress against the targets.

3.5.4 Monitoring and improvement

To uphold alignment with our targets, we will:

Monitor and report progress regularly, ensuring transparency.
Analyse and review outcomes, incorporating lessons learned into future targets.
Update investment strategies according to the insights and best practices.

Our ESG Committee will be responsible for overseeing the process, working in collaboration with key stakeholders to achieve our sustainability ambitions. The ESG governance structure and responsibilities for implementation are outlined in Section 4.0 (Implementation Procedure).

4.0 Net Zero Carbon

Verdion is committed to achieving Net Zero Carbon across its corporate operations and value chain before 2050, with an aspirational target of reaching this goal by 2040. Specifically, we are committed to achieving Net Zero Carbon for scope 1 and 2, and material scope 3 emissions (in accordance with the Greenhouse Gas Protocol of 2001) by 2050. This commitment applies to Verdion’s corporate activities and to the funds currently in operation. A more detailed timeline and action plan for implementation will follow the completion of full emissions scope development, with a focus on Scope 1 and 2 emissions, and a proportional assessment of Scope 3 categories where data access is feasible.

Verdion is dedicated to maintaining transparency and collaboration with stakeholders throughout its Net Zero Carbon journey. By adopting measurable actions and rigorous monitoring, we aim to create a sustainable and low-carbon future for our assets and the communities in which we operate. The below are the steps that we are preparing for Net Zero Carbon:

4.1 Baseline and Foundations

To build foundations in achieving Net Zero Carbon, we will conduct a value chain emissions accounting exercise to inform and prepare a Net Zero Carbon strategy. Verdion is committed to developing and implementing a robust data management strategy, including the rollout of smart metering systems. For all new developments, we will aim to conduct Life Cycle Assessments. We will initiate energy and carbon audits, and kickstart a programme focused on LED lighting upgrades and insulation retrofits. As part of this process, we aim to achieve the below:

90% of Gross Floor Area (GFA) covered by electricity and fuel meters.
Completion of energy audits for 90% of GFA (discretionary funds only).

Implementation across funds will be determined based on the emissions scope, data maturity, and ESG objectives defined for each individual mandate.

4.2 Target Setting

Our Net Zero Carbon targets will be strategically defined by carefully considering our operational control across the portfolio, particularly acknowledging the significant role and independent operations of our tenants in our logistics assets. We will establish corporate and fund-level Net Zero Carbon targets for 2035–2050, ideally aligned with Science-Based Targets initiative (SBTi) methodologies and tailored to individual mandates. This will include interim milestones to ensure accountability and measure progress. As part of this process, we aim to use the metric below:

Targets defined according to key performance indicators (KPIs), with a focus on carbon intensity (kgCO2/year/m2)

4.3 Implementation, Reporting, and Review

We annually report to GRESB for VELF2 and review progress towards targets. We continuously review and refine the technical roadmap to address emerging challenges and opportunities. We will implement measures to enhance energy efficiency, adopt fuel-switching technologies, and integrate renewable energy solutions.

5.0 ESG Governance

The holistic approach that we take in this Responsible Investment policy is supported and implemented by the ESG governance. The roles and responsibilities for setting, implementing, monitoring, and improving the guidelines and action plans set in this policy are specified in this section.

Verdion is an independent, management-owned business. As such, the Executive Board and the ESG Committee are responsible for establishing our values, priorities and commitments on ESG issues and overseeing the delivery of the ESG strategy. All employees will be made aware of this policy and will be expected to support its full and effective execution. We expect all staff to help drive the ESG agenda, bringing ideas and enthusiasm to fore and representing our values in all their interactions with our stakeholders. In order to support our employees to fulfil their responsibilities under this Policy, we will provide opportunities for all investment personnel to access internal and/or external training on ESG matters. Our ESG governance and their respective responsibilities are outlined below.

5.1 Governance Structure

We are embedding sustainability throughout our business strategy, policies, and governance. In line with our Responsible Investment Policy, we are expanding stewardship and ownership of our targets across the roles of our organisation. To further support the implementation of our RI Policy, we have set roles and responsibilities.

As well as the individual investment teams, the Senior Management team is responsible and accountable for overseeing and implementing this RI Policy. Role and responsibilities in assessing and managing climate-related risks and opportunities are described below:

5.1.1 ESG Committee

Responsible for reviewing annually and updating the provisions of this Policy;
Report outcomes of the Responsible Investment Policy;
Report progress to the Executive Board at regular meetings;
Liaise with internal Development/Investment/Asset Managers regarding the implementation of the ESG Strategy;
Ensure that sustainability due diligence has been adequately undertaken, which the Investment Committee then reviews to approve acquisitions;
Ensure that all new investments and activities align with the ESG Strategy and related policies;
Responsible for implementing ESG, Equalities, Diversity and Inclusion (EDI), and climate-related action plans.

5.1.2 ESG Committee Members

Simon Walter. Executive Director – Investment Management
Dominik Schäffer, Group Head of Asset Management
Tobias Heinz, Head of Technical Development – Germany

5.1.2 Executive Board / Investment Committee

Provide leadership in ratifying and implementing the Policy across the funds and asset classes;
Review the action plans and progress against targets and ensure the outcomes are in line with the industry standards;
If any aspect of the Policy is unclear in application, with the consent of the ESG Committee, is authorized to decide with due regard to commercial impacts.

5.1.3 Development / Investment / Asset Managers

It is the responsibility of the Managers to implement the contents of this Policy;
Make active investment decisions based on the responsible investment guidelines;
Responsible for providing asset level information for responsible investment decision-making.

5.2 Conflict of Interests

We recognise that conflicts of interest may arise within the context of exercising activities that responsible investment approach requires. We apply our responsible investment practices to all portfolios in a manner that ensures every aspect of business, investment and ESG objectives are met.

5.2.1 Identification

Our Development / Investment / Asset Managers are committed to the implementation of ESG integration and periodically review compliance with this policy. On the identification of material conflicts of interest arising from exercising our Responsible Investment Policy, the Managers will report to the ESG Committee for further management of the conflicts.

5.2.2 Management

The ESG Committee has responsibilities for overseeing the identification and management of conflicts. To prevent conflicts and to resolve matters successfully, the ESG Committee makes recommendations to the Executive Board based on:

Responsible Investment Policy;
Coordination with the Executive Board.

5.2.3 Monitoring and escalation

The Managers monitor and communicate ESG-related misconduct, penalties, incidents, accidents, or breaches against the codes of conduct/ethics to the ESG Committee. Once escalated, all the escalations will be fed and developed into conflict scenarios and reviewed regularly by the ESG Committee.

6.0 Stewardship

Stewardship is central to Verdion’s approach to enhancing the long-term financial, environmental, and social value of our investments. We practise active ownership, collaborating with various stakeholders to meet our sustainability targets. The ESG Committee oversees stakeholder engagement efforts, supported by our Managers.

6.1 Our Approach to Stewardship

Our stewardship activities prioritise material ESG factors relevant to our investments, which are outlined in Section 3.2. We also prioritise the entities and stakeholders based on the impact they can make on our ESG priorities. Specifically, we focus on collaborating with the key stakeholders who make direct impact on the environmental and social performance and outcomes in our investments, such as property managers, contractors, suppliers, and tenants. Our stewardship tools and activities include:

Negotiation with and monitoring of the stewardship actions of intermediaries in the investment chain (e.g. engagement with external contractors)
Engagement with industry groups

6.2 Implementation Procedures

We actively collaborate with contractors and suppliers to enhance our stewardship efforts. This includes providing relevant ESG guidelines within the scope of their services or sharing best practices and pooling resources to address ESG priorities.

6.2.1 Escalation

If initial stewardship approaches are unsuccessful at achieving our objectives, we increase engagement intensity to signal our concerns. In case of persistent non-compliance, we may consider divestment or exclusion for entities that fail to align with ESG principles despite multiple interventions.

6.2.2 Conflict of interest

We recognise that conflicts may occur where client or beneficiary interests differ from Verdion’s own interests. To mitigate this, we maintain robust governance processes, ensuring independent oversight of stewardship activities, and prioritising the best interests of clients and beneficiaries.

6.2.3 Communication

Stewardship efforts and progress are regularly communicated internally. The ESG Committee shares insights from stewardship efforts and integrates them into investment decision-making processes.

6.3 Selection, Appointment, and Monitoring of Property Managers

We have established a process to assess and monitor our Property Managers’ ESG commitments. Our selection and appointment procedures ensure Property Managers’ commitments and engagement on material ESG factors. Key considerations during the process include:

Assessing ESG track record and expertise to ensure alignment with our Responsible Investment Policy and ESG commitments.
Requesting documentation on responsible procurement practices, metering data management, and ESG policies.
Setting ESG and climate targets, incorporating related incentives.
Including contractual clauses covering energy, water, and waste data management in property agreements.

We work closely with our Property Managers to enhance ESG performance over time, monitoring the quantitative ESG targets and managing climate-related risks and opportunities. Our engagement objectives include:

Improving energy and emissions performance.
Collaborating with tenants on energy, water, and waste data sharing (e.g., green leases).
Engaging with tenants and local communities to promote ESG awareness and social value initiatives.
Providing ESG and climate-related training and workshops for tenants and service providers.

6.4 Contractors and Suppliers

We engage with responsible contractors and suppliers who align with our Responsible Investment Policy and the Verdion Sustainable Building Specification. For new developments and major renovations, we require:

Sustainable building materials.
Responsible construction practices.
Circular economy principles (e.g., reuse, recycling) to reduce our whole-life carbon footprint.
Environmental protection measures, including measures for air quality, surface water, and biodiversity.
Strict health and safety monitoring on construction sites.

We actively monitor our contractor and supplier compliance with our ESG requirements, ensuring continuous alignment with sustainability best practices.

7.0 Transparency & Reporting

7.1 Data Management

Verdion’s Development, Investment, and Asset Managers are responsible for collecting and managing pertinent data for internal and external reporting. We understand the importance of accuracy and reliability of data, as it forms the basis for analysis, strategizing, and identifying opportunities for improvements.

7.2 Reporting Frameworks

Verdion aligns with internationally recognised ESG reporting frameworks, aiming to become a market leader in ESG performance. The frameworks we currently report on and intend to report on include:

Global Real Estate Sustainability Benchmark (GRESB)
Principles for Responsible Investment (UNPRI)
Task Force on Climate-related Financial Disclosures (TCFD)
European Association for Investors in Non-Listed Real Estate Vehicles (INREV)

ESG integration and disclosure practices vary by investment mandate, reflecting the investment strategy, lifecycle stage, and investor requirements. It should be noted that, while Verdion endeavours to apply relevant ESG frameworks consistently, individual mandates may deviate from certain standards due to the stage in its investment lifecycle.

Current Reporting Efforts

Verdion is a UNPRI signatory and undertakes annual GRESB and UNPRI reporting.
We are actively preparing to report on TCFD and INREV frameworks.

These reporting frameworks help understand the key performance indicators used in the market and measure the impact of our responsible investment approach. We are committed to disclosing and improving our ESG performances through reporting. We are also committed to any regulatory reporting required in relation to ESG, such as to the Financial Conduct Authority (FCA). We remain agile to adapt to future legislation and regulatory changes.

Improvement plan for reporting framework performances

We strive to progress further in reporting schemes. After undertaking the annual reporting for GRESB and UNPRI, we report our progress to our Executive Board and identify areas to be further improved for the next submission. We are in progress of setting a short-term to mid-term improvement targets for GRESB and UNPRI.

7.3 Review of Responsible Investment Policy

Our Responsible Investment Policy will be reviewed annually by the ESG Committee and disclosed externally. This review will ensure that it keeps up to date with any developments within and outside the business and continues to be ambitious and relevant. The review will pay specific attention to the contents of the responsible investment guidelines updating them based as required.

8.0 Appendix: Glossary and Abbreviations

The section below outlines definitions, key terms, and acronyms used in the Policy and references to other codes and principles.

Biodiversity Net Gain (BNG): Biodiversity net gain (BNG) is a way of creating and improving natural habitats. BNG makes sure development has a measurably positive impact (‘net gain’) on biodiversity, compared to what was there before development. BNG was introduced as a legal requirement under the Environment Act 2021, with statutory implementation in England from January 2024.
BREEAM: Building Research Establishment Environmental Assessment Method, which is an internationally recognised sustainability assessment framework for buildings, infrastructure, and master planning projects.
DGNB: German Sustainable Building Council, which is an independent non-profit organisation promoting sustainable building practices.
ESG: Environmental, Social, and Governance
GHG emissions: Greenhouse gas (GHG) emissions, primarily from human activities, are the main driver of climate change.
GRESB: GRESB is the environmental, social and governance (ESG) benchmark for real assets.
INREV: INREV is the European Association for Investors in Non-Listed Real Estate Vehicles.
PAI (Principal Adverse Indicators): Negative, material, or potentially material effects on sustainability factors that result from, worsen, or are related to investment choices or advice performed by a legal entity. Examples include GHG emissions and carbon footprint.
Responsible Investment: The integration of environmental, social and corporate governance (ESG) considerations into investment management processes and ownership practices in the belief that these factors can have an impact on financial performance.
Responsible Investment Policy: Also referenced as “the RI Policy”, is the voluntary Policy document prepared by Verdion to inform its investment process, minimum exclusionary criteria, and implementation guidelines. The Policy is drafted per the Principles for Responsible Investment (PRI) guidelines for responsible investment.
SDGs: The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.
SDR: Sustainability Disclosure Requirements.
SFDR: Sustainable Financial Disclosure Regulation.
TCFD: Task Force on Climate-Related Financial Disclosures.
UN Global Compact Principles: UN-sponsored principles for organisations mandating that, at a minimum, they meet fundamental responsibilities in the areas of human rights, labour, environment, and anti-corruption.
UNPRI: United Nations Principles for Responsible Investment.