2023-24 ESG Report
This report describes the performance of Prologis’ portfolio as of December 31, 2023: approximately 1.2 billion square feet of properties and development projects that we owned or had investments in, on a wholly owned basis or through co-investment ventures.
2023-24 ESG Report
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Prologis Chicago 10 Mural, Chicago, Illinois. Contents 3 Letter from our Co-Founder, Chairman and CEO 31 Our Inspired People About this report 32 Employee engagement This report describes the performance of Prologis’ portfolio 4 Letter from our Chief Energy and Sustainability Officer 34 Diversity, equity, inclusion and belonging as of December 31, 2023: approximately 1.2 billion square feet 36 Employee health and safety of properties and development projects that we owned or had 5 Overview of Our Business investments in, on a wholly owned basis or through co-investment ventures. This report also describes the 10 co-investment vehicles 6 Prologis at a glance 37 Resilient Communities in our Strategic Capital business. We include some highlights from 9 Goals and progress 38 Stakeholder engagement early 2024. 10 Net-zero update 39 Economic and social impact This report focuses on the topics identified by our 2024 ESG 12 Awards and recognitions 42 Community involvement materiality assessment, and was prepared in accordance with the 13 Ahead of What’s Next 44 Appendix Global Reporting Initiative (GRI) Universal Standards 2021 and 14 What makes us different? 45 Performance data aligns with the Sustainability Accounting Standards Board (SASB) 2023 Real Estate Standards; the Task Force on Climate-related 16 Governance and ethics 46 Assurance statement Financial Disclosures (TCFD); and the Greenhouse Gas Protocol. 20 Supply chain responsibility 48 ESG materiality assessment LRQA, Inc. has provided limited assurance using the AA1000 49 GRI index AccountAbility Principles (AA1000AP 2018). 21 Sustainable Logistics 58 SASB disclosure We welcome comments and encourage feedback. Please email 22 Climate strategy 61 TCFD disclosure [email protected] . 24 Driving sustainable operations 65 Forward-looking statements 27 Siting, design and construction 66 Glossary and definitions On our cover: Prologis Cajamar mural, Cajamar, Brazil. Murals can improve the local quality of life and help our customers attract and retain workers. 2
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Prologis 2023-24 ESG Report I’ve said this many times, and it remains This ESG report describes our 2023 performance, outlines true: At Prologis, we focus on and invest our continuing priorities and shows where we are headed. in environmental, social and governance In the past year: b ecause it makes good business sense. − We achieved more than 500 megawatts (MW) of installed solar and energy storage capacity. More efficient buildings with features such as solar, energy − Our net-zero goal was validated by the Science Based storage and electric vehicle charging bring our customers a Targets initiative. range of benefits. These services and features also enhance − Prologis employees gave more than 16,400 hours of their the value of our real estate, a priority for our investors. All of time to community organizations. this will help us achieve net-zero greenhouse gas emissions − We announced a $3 million donation to Morehouse by 2040. College to create an endowed fund for the new Morehouse Real Estate Institute (MREI). We’re also creating social and community value through the jobs we support and from the economic value we create — These and many other highlights are a source of pride for more than 1 million people work under a Prologis roof every our people and demonstrate our continuing commitment to day. As a long-term owner, we value long-term relationships leadership — in our industry and beyond. with the people in the communities where we do business. That means we listen and respond to their feedback and Driven by our innovative employees, guided by our create programs and partnerships, such as the Morehouse customers’ priorities and aligned around a clear vision, we We set bold targets College Real Estate Institute, PARKlife and Space for Good. look forward to the future with tremendous optimism. and base our decisions Our focus on good governance goes back to our founding Thank you for your interest in – and engagement with – some 40 years ago. Our culture is a key driver, as is our Prologis. We welcome your input and ideas. on data. drive to stay ahead of what’s next. Our policies, systems and processes encourage integrity, accountability and sound Sincerely, decision-making across our company. We spend significant time and effort fostering a culture of inclusion and belonging, Hamid R. Moghadam which we believe helps us attract and retain the talent we need to implement our business plan. Finally, we set bold Hamid R. Moghadam targets and base our decisions on data. When we know Co-Founder, Chairman and CEO how our buildings are being used, we can better serve our customers. This remains a continuing area of focus. 3
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Prologis 2023-24 ESG Report At Prologis, we are driven by a powerful purpose: to empower a thriving future for our customers, communities and the planet. We recognize our impact and are committed to addressing emissions from our operations and value chain Our unique scale allows to lead in decarbonization and sustainable logistics. us to drive meaningful As Prologis' chief energy and sustainability officer, my mission is to turn our commitment change across the into reality by leading our customers as their partner in decarbonization, supporting the communities we serve and delivering strong results for our shareholders. entire supply chain. O ur unique scale allows us to drive meaningful change across the entire supply chain. This ESG report serves as a roadmap for our journey toward resilient and responsible operations. D riving Decarbonization: Partnering for a Net-Zero Future Susan Uthayakumar We are deeply committed to addressing emissions across our operations and value chain. We see ourselves as a decarbonization partner for our customers and utilities. By providing innovative and sustainable warehousing solutions, we empower customers to achieve their Our employees are a driving force behind our success, contributing over 16,400 volunteer environmental goals. We collaborate with utilities to support their clean energy initiatives, hours in 2023 and propelling us towards our goal of 75,000 hours by 2025. Through our working together towards a more sustainable future. Community Workforce Initiative, we trained nearly 8,800 individuals in 2023, addressing the logistics talent gap while creating economic opportunities in the communities we call home. Technology and Innovation: Catalysts for Sustainability Technology and innovation are at the forefront of our sustainability strategy. We made The road ahead demands continued innovation and collaboration. But with a shared vision and significant progress toward our goal of 1 gigawatt (GW) of installed solar and storage unwavering commitment, we will create a more sustainable future, not just for ourselves, but for capacity by 2025, reaching over 500 MW in 2023. Our Prologis Mobility program charged generations to come. We look forward to making further progress on our goals, together. 22% of California's registered Class 8 electric trucks at our sites and has electrified over 2 million miles of clean transportation. We are constantly identifying and implementing new Sincerely, technologies to further decarbonize our operations and push the boundaries of sustainability within our industry. Beyond the Building: Building Strong Communities We remain steadfast in our commitment to transparency, continuous improvement and a Susan Uthayakumar culture of sustainability, both within Prologis and in the communities where we do business. Chief Energy and Sustainability Officer 4
Overview of Our Business
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Prologis at a glance Prologis is the global leader in logistics real estate. Our more than 5,600 facilities serve some 6,700 customers in key global and regional markets. Through the Prologis Essentials platform, we help our customers address their operations and energy + sustainability needs. Our Global Portfolio By the Numbers 6,700 1.2 BSF customers of space in 19 countries $219B 8,630-acre U.S. assets under land bank 803 MSF Europe management (AUM) 3,877 Buildings 242 MSF 1,112 Buildings Asia 10 2.8% Other 114 MSF investment vehicles of the world’s GDP flows Americas 283 Buildings through our Strategic through our buildings Capital business each year 83 MSF 341 Buildings #65 ~2,570 on the S&P 500 Index employees around the world A3/A 53 credit ratings 1 net promoter score 2 1. From Moody’s and S&P, respectively. A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. 2. Net Promoter Score (NPS) is an indicator of customer loyalty, ranging from -100 to +100. A higher score is desirable. 6
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Vision, mission and values Our vision is "enduring excellence." Our mission is to be the leading logistics real estate company in terms of customer Well-planned logistics service, employee engagement, financial performance and balance sheet strength. Our core values are Integrity, real estate reduces Mentorship, Passion, Accountability, Courage and environmental impacts, Teamwork (IMPACT). creates social benefits, Strategy reduces risks and increases We develop, own, lease and manage properties in the world’s most vibrant centers of trade and commerce: markets that revenue opportunities. have high growth potential and are difficult to penetrate. By implementing this strategy, we make the global supply chain stronger and more efficient. This is consistent with environmental, social and governance principles: Efficient and well-planned logistics real estate reduces environmental impacts, creates social and economic − Weighted average net effective rent change of 61.2%; open-ended funds, five private joint ventures and two benefits, reduces risks to our business, and increases and Prologis-sponsored publicly traded funds, each with a track revenue and recruitment opportunities. − Occupancy of 98% at year-end. record of delivering industry-leading, risk-adjusted returns with a superior investor experience. At year-end 2023, Real estate operations Our 8,630-acre land bank can support an estimated $40B these vehicles comprised approximately 40% of our assets Our real estate operations include capital deployment, of future development. It allows us to build at the right time under management (AUM). development and leasing. Put simply, we determine how and in the right locations, optimizing the value we create for best to invest in properties; we develop or improve those our shareholders. Prologis Essentials properties; and then we lease them out to customers in With our Prologis Essentials platform, we address some need of logistics space. In 2023, we achieved: Strategic Capital of the most critical challenges facing our customers − $1B in acquisitions covering nearly 7 MSF across Our strategic capital business gives institutional by providing solutions in operations and energy + s ix countries; investors a unique opportunity to co-invest in the Prologis sustainability. With Essentials, our customers can maximize − $3.63B of development starts; platform. We operate 10 co-investment vehicles: three the value of the warehouse from day one. 7
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Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Year in review Record revenue We earned a company record of $8.02B in revenue in 2023, driven by the strength of our portfolio and Forty years young business model. Prologis teams around the world celebrated our 40th anniversary as each of our six regions received $40,000 from the Prologis Foundation to donate to nonprofits of their choice. Targeted growth We announced an agreement to acquire nearly 14 MSF of industrial properties from real estate funds affiliated with Blackstone for $3.1B. Renewable energy We surpassed 500 MW of installed solar and storage capacity across our portfolio. 1 Industry leadership GROUNDBREAKERS, our signature thought leadership forum, focused on global supply chain opportunities in energy transition, workforce transformation and artificial World’s first intelligence. It received approximately 775,000 views Our Eindhoven DC4 warehouse in the worldwide, making it one of the premiere supply chain Netherlands received a Zero Carbon events in the world. Certification from the International Living Future Institute (ILFI), a first for an industrial building. Diversity in real estate The Prologis Foundation announced a $3M donation to Morehouse College to create an endowed fund for the new Community service Morehouse Real Estate Institute (MREI). Our employees donated more than 16,400 hours to community organizations in 2023, including more than 10,800 hours on our 11th annual IMPACT Day, a record number of hours for our annual global day of service. 1. Across our owned and managed portfolio. 8
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Goals and progress GOAL 2023 PROGRESS STATUS Our goals demonstrate ambition, create accountability and drive integration with our business strategy. They are Net-zero emissions. Achieve net-zero greenhouse gas emissions Reduced Scope 1 emissions by 25%, Scope 2 aligned with the following targets within the UN Sustainable across our value chain by 2040 from a 2019 baseline. This goal has emissions by 99%, 1 and Scope 3 emissions by 29% On track Development Goals (SDGs): been validated by the Science Based Targets initiative. from our 2019 baseline. Renewable energy. Achieve 1 GW of installed solar and storage Our Renewable energy, Building capacity by 2025. Achieved 506 MW of installed capacity. 2 On track certifications and LED lighting goals are aligned with UNSDGs 7 and 9: − Reliance on clean fuels and technology; Building certifications. Achieve a sustainable certification for Achieved, or in progress of achieving, sustainable On track − Renewable energy consumption; and every eligible 3 new development and redevelopment. building certifications for 96% of eligible 3 projects. − CO 2 emissions per unit of value added . LED lighting. Install LED lighting across 100% of new Achieved LED lighting across 74% of our portfolio. developments and redevelopments each year and across 80% We will begin reporting on LED lighting in new On track o f our portfolio by 2025. 4 developments in our 2025 ESG report. 4 Workforce inclusion. Achieve two DEIB certifications by 2025: Completed a baseline assessment and submitted Our Logistics workforce training and Management Leadership for Tomorrow’s “Black Equity at Work” initial goals for the certification process. On track Workforce inclusion goals are aligned with a nd “Hispanic Equity at Work.” UNSDG 10: Community engagement. Achieve 75,000 hours of volunteer time − Growth rate of household income; supporting our local communities around the globe by 2025 (2019 Donated 16,400 hours in 2023, bringing our total to On track − Population living below median income; and baseline). approximately 54,500 hours donated since 2019. − Population experiencing discrimination . Logistics workforce training. Train 25,000 people in logistics by Trained 8,760 people in 2023, reaching 29,700 Our Net-zero emissions goal is aligned with 2025 (2018 baseline) through our Community Workforce Initiative. people by year-end 2023 and achieving our goal Achieved two years early. UNSDG 13: − Total annual greenhouse gas emissions. Ethics. Train 100% of our employees in ethics each year. 100% of our employees completed ethics training. Achieved 1. Market based, achieved through the purchase of RECs. 2. Across our owned and managed portfolio. 3. Includes projects approved from June 2021. Due to customer requirements and/or the limitations of certain co-development agreements, a small number of projects are ineligible to receive a sustainable building certification. 4. We have updated our LED lighting goal to allow time to convert newly acquired properties to LED. Across our owned and managed operating properties. Data from a portfolio of properties acquired in June 2023 will be included in our 2024-25 ESG report. 9
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Net-zero update In June 2022, we made a commitment to achieve net-zero greenhouse Progress gas emissions across our value chain (Scopes 1, 2 and 3) by 2040. In early 2024, the Science Based Targets initiative (SBTi) validated this Scope 1 and 2 – Operational Emissions: commitment, along with our near-term (2030) targets: to reduce Scope 1 and 2 emissions by 90% and Scope 3 emissions by 27.5%. Our baseline We’re working to electrify the Prologis fleet, with a goal of 100% by year-end 2030. This will year for all targets is 2019. 1 help us reduce emissions from mobile fuels. Our goal represents a significant opportunity to serve our customers We purchase renewable energy credits (RECs) to cover 100% of our annual office electricity. in new ways, as many of them are also working to decarbonize their This has helped us achieve zero emissions from office electricity. operations and value chains. Scope 1 and 2 emissions represent approximately 0.2%—and Scope 3 Scope 3 – Supply Chain Emissions: emissions represent approximately 99.8%—of our total emissions. We complete life cycle assessments (LCAs) to determine the embodied and operational emissions of every new development. Detail on emissions performance and our climate strategy can be found in Sustainable Logistics . We participate in a wide range of industry partnerships and collaborations (see Climate Strategy for examples) to identify ways to reduce emissions from our supply chain. This will help us reduce embodied carbon emissions, including from the production of concrete and steel. Timeline 2022 2025 2030 2040 Scope 3 – Leased Asset Emissions: We have more than 500 MW of solar and storage capacity across our portfolio. When this energy is used by our customers, we reduce our emissions from downstream leased assets (emissions from the energy our customers purchase and use). Committed to Deploy 1 Achieve a 90% net zero and GW of solar reduction in We implemented net-zero-ready building design standards for 60% of new builds in 2023, with a goal launched key and storage Scope 1 and 2 to reach 100% in 2024. Net-zero-ready building design standards include solar-ready roofs, efficient partnerships capacity emissions LED lighting and, where feasible, electric heat pumps in place of natural gas-fired heating systems. Achieve a 27.5% Achieve net-zero reduction in emissions across Scope 3 emissions Scopes 1, 2 and 3 We’ve installed efficient LED lighting across 74% of our portfolio , 2 also reducing emissions from downstream leased assets (emissions from the energy our customers purchase and use). 1. The target boundary includes land-related emissions and removals from bioenergy feedstocks. 2. Across our owned and managed operating properties. Does not include a portfolio of properties acquired in June 2023. 10
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Achieving net zero at distribution centers As we work to achieve net-zero emissions by 2040, we expect an increasing percentage of our portfolio will include sustainable features. Onsite Solar Energy Efficiency LED Lighting Energy Monitoring Electrification Battery Storage Building Certifications EV Charging and Building Management Embodied Carbon and Low Global-Warming- Offsite Power Fleet Electrification Systems & Smart Metering Energy Solutions Potential Refrigerants Purchase Agreements 11
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Awards and recognitions The following is a selection of recent ESG-related awards and recognitions. Dow Jones Sustainability World Index 100 Most Sustainable Companies in Industrial “Leader in the Light” – 2023 (Top 10% globally) – Prologis and Nippon the World – 2024 ( 12th consecutive year) Prologis REIT – 2023 Investor CARE Award (Gold) – 2022 Green Star Recognition – Prologis and seven of our co-investment vehicles – 2023 Leadership Award – 2022 ESG Rating of “A” 1 Regional Sector Leader in the Americas – Prologis – 2023 #1 in Real Estate – 2023 ISS Corporate ESG Rating of “Prime” 1 Leading REIT in Corporate Governance (21st consecutive year) – 2023 Organizational Leadership Award – 2023 #2 for Onsite Solar Generation "A-" rating on Climate Change Capacity (U.S.) – 2022 Response – 2023 All-American Executive Team Rankings World's Most Admired Companies – REIT Sector – #1 CEO, #1 CFO, #1 IR 2024 10 Most Sustainable REITs – 2023 Professional, #1 in IR, #1 in ESG – 2023 1. As of January 2024. 12
Ahead of What’s Next Prologis works to stay ahead of what’s next. Using both our scale and our role in the global supply chain, we promote innovation and demonstrate leadership in ESG. $200M Since 2016, Prologis Ventures has invested approximately $200M in 45 companies to drive innovation in logistics. 100 We hosted nearly 100 customer appreciation events across our portfolio. 5 years in a row We were included in the Dow Jones Sustainability World Index for the fifth year in a row for ESG performance among the top 10% of companies globally. 10% 10% of our 2023 employee bonus scorecard was linked to ESG metrics. 13
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix What makes us different? Prologis combines the spirit of a startup with the resources of a seasoned business. We pilot and implement a wide range of solutions for our customers. We encourage our employees to “simplify and sprint” and to “fail fast.” And we participate in—and contribute to—the communities where we do business. Our “3Cs” have been developed based on decades of experience. They describe what we value and how we work: Customer Centricity Change through Innovation and Operational Excellence Culture and Talent Thought Leadership At our annual GROUNDBREAKERS forum, we discuss key trends in logistics Customer focus with leaders from our industry and We learn about the challenges our customers are facing – and work to address them: beyond. The 2023 edition focused − Our Customer Led Solutions group builds a customized experience for major customers on opportunities in energy transition, through strategic account management, which includes a partnership with the Prologis workforce and artificial intelligence and Essentials team to drive scalable solutions across operations and energy + sustainability. received more than 775,000 views from − Customer Led Innovation improves day-to-day customer interactions with a dual focus on around the world. In connection with the event, Prologis also convened an energy real estate and creating value across the supply chain. and sustainability leadership roundtable − Customer Led Development ensures consistency across our global platform, while with 80 key customers, utility executives streamlining the build-to-suit process for targeted multi-market customers. and partners to discuss cross-sector challenges and identify opportunities for In 2023, we hosted nearly 100 customer appreciation events where we connected with our collective action on decarbonization. customers to thank them for trusting us with their logistics real estate needs. Examples include an appreciation caravan in Japan that reached more than 3,400 customers; a biodiversity To further understand customer sentiment, we conduct customer experience surveys on event in France that focused on native bees; and a cultural showcase event in China with a rolling basis. In 2023, we achieved a net promoter score of 53 on a scale of -100 to 100, Sichuan opera face-changing and Chinese shadow puppetry. indicating very strong customer loyalty. 14
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Prologis Ventures Global Insights and Research Multiple Differentiators Define Since its launch in 2016, Prologis Ventures has invested Our in-house Global Insights and Research team analyzes One Unique Business approximately $200M in 45 early- and growth-stage proprietary or third-party data and complex market drivers to: companies across three main verticals: supply chain − Establish a dependable view on the economy and the transformation; digital buildings and infrastructure; and logistics real estate sector; real estate and construction. Recent Ventures investments, − Develop methodologies that help us make informed which focus on energy or ESG related topics, include: investment decisions about markets and properties; − Produce white papers, trend reports and outlooks to Terminal Industries , a yard visibility inform our leaders and our investors on factors that platform that allows customers to influence real estate performance. report and reduce truck dwell time at The team’s latest work is available on prologis.com . the gate, lowering overall emissions. Data centricity and governance Early investments in technology and our access to vast Trove , a recommerce operating proprietary and public data pools provide actionable insights system that helps retailers develop that drive optimization and competitive advantage for resale programs that keep pre-loved Prologis and our customers. Our focus on innovating through items out of landfills. data analytics and digitization is central to the success of our critical operations: developing new properties, managing our Relay , a tech-enabled delivery facilities, introducing innovative solutions and delivering a network that accelerates high-quality customer experience. e-commerce parcel delivery and reduces overall miles traveled. Data centricity is also critical to our work in environmental, social and governance. During 2023, we made investments Solarcycle , a solar panel recycling in new systems and processes to increase data coverage company that uses a proprietary and drive increased automation of data collection across process to extract up to 95% of the our global portfolio. This included new systems for energy materials in a solar panel, addressing and carbon data management, stakeholder and regulatory both end-of-life and supply chain issues tracking and ESG reporting. We also continued to challenges. increase the implementation of smart meters, Internet of things (we now have more than 100,000 sensors across our portfolio that stream real-time data and enable decision automation) and other building technologies. 15
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Governance and ethics Our culture, policies, systems and processes guide how of climate change risks and performance against our ESG Board Diversity 1 we do business: We focus on serving our customers and goals, including our net-zero goal. In 2023, climate- or encourage integrity, accountability and sound decision- energy-related matters were on the agenda at every Gender Ethnic and Geographic making. We set ambitious goals and base decisions on meeting of both the Board Governance and Nomination Asian/Asian data—a continuing area of focus. Committee and the full board. Other board committees American/ provide oversight on relevant ESG topics: Women West Asian/ African Board oversight − Our Audit Committee oversees the development of 27% Middle Eastern American 18% 9% The Prologis board of directors serves our stockholders’ data systems and disclosures to comply with emerging best interests, sets company strategy and provides regulation. independent and experienced oversight. The board has four − Our Talent and Compensation Committee oversees standing committees: human capital development and diversity, equity, − Audit Committee inclusion and belonging (DEIB) performance, initiatives − Board Governance and Nomination Committee and related risks. − Talent and Compensation Committee − Executive Committee The Prologis board believes that diversity promotes robust Men White/Caucasian discussion and the consideration of a range of viewpoints. 73% 73% Ninety-one percent of the members of our board qualify Our board governance guidelines state: as independent, according to the principles and standards Number of Directors established by the New York Stock Exchange. Our latest In any formal search for new directors, the Board by years of tenure Proxy Statement describes the rights and responsibilities of Governance and Nomination Committee will consider, our lead independent director and provides detail on each and will instruct any third-party search firm to include, 0-6 Years board member’s qualifications and experience, including the candidates from diverse backgrounds, including in its 6-13 Years fact that two of our board members have experience with initial list both gender and racial/ethnic diversity. climate, energy or ESG. 13 Years By committee charter, the Board Governance and Nomination Committee oversees ESG matters and updates 7 new directors the full board on ESG developments, including management in the last nine years 1. As of May 10, 2024. 16
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Ethics, compliance and human rights and investigated 12 ethics helpline inquiries and took We hold our employees and board members to the corrective action, as appropriate. highest ethical standards and seek to do business with customers and business partners who share our values. Prologis’ chief legal officer and general counsel, chief We describe our expectations for suppliers in Supply Chain human resources officer, chief financial officer and chief Responsibility. compliance officer sit on our Ethics Committee. This committee provides ethics-related advice and guidance Our ethics and compliance program reflects our to employees, investigates reported incidents of potential commitment to integrity. Each year, every active employee noncompliance and reports any significant concerns to the acknowledges their understanding of our Code of Ethics Audit Committee of our board of directors in accordance and Business Conduct (“The Code”) and completes with The Code and the Audit Committee Charter. training on topics covered in The Code. The Code has been translated into 15 languages and covers a range of topics, We are committed to operating our business in an ethical including our Anti-Corruption and FCPA Policy; our Insider manner that respects human rights . This includes surveying Trading Policy; equal employment; nondiscrimination; suppliers about their human rights practices, consistent antitrust and fair dealing; political activities and with our Supplier Code of Conduct . Our Global Human contributions; conflicts of interest; bribery; retaliation; and Rights Policy outlines our commitment to: discrimination and harassment. Non-U.S. employees receive − Fair hiring, compensation and promotion. We are committed to special training on—and our internal audit group conducts − Prevent the use of child and indentured or forced labor, an annual audit of—FCPA compliance. including in our supply chain. operating our business − Maintain a safe and healthy work environment. Employees and other stakeholders may report any ethical − Follow all applicable laws and regulations that govern in an ethical manner that issue or concern to their supervisor, their supervisor’s working hours, guarantee fair and equal compensation, supervisor, human resources, the ethics and compliance and protect the right to collective bargaining and respects human rights. team, any member of the Ethics Committee or the ethics freedom of association. helpline . The helpline is operated by a third party; is available 24 hours a day, seven days a week; and includes Our Ethics and Compliance and ESG departments are options for reporting from any of the 19 countries where we responsible for this policy and for tracking emerging issues do business. Prologis maintains a policy of anti-retaliation and regulations. We are not aware of any significant human against anyone who reports a concern in good faith or rights issues that occurred in 2023. participates in an investigation. In 2023, Prologis received 17
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Risk management risk scenarios. We review our cybersecurity posture A Tool for Evaluating Climate Risk Effective risk management can help us achieve strong through regular participation in a third-party security Our climate risk tool helps us evaluate risks and opportunities business outcomes. Our risk assessment processes include benchmarking survey. Our IT infrastructure is externally across our portfolio. scenario testing, audit controls, probabilistic modeling and audited as part of our Sarbanes Oxley audit process, The tool uses data from a leading global reinsurer and includes input from third-party experts. Risk assessment findings are and our controls include information security standards a range of natural hazard factors and three GHG emissions reported to the executive committee, audit committee and following the NIST Framework. Our Information Security trajectories. It helps Prologis leaders assess the potential board of directors. Policy includes mandatory annual training for all impacts of more extreme climate conditions, including more employees. To our knowledge, no material information frequent and intense natural disasters. Through our use of this We use a global risk management framework to identify, security or privacy incidents occurred in 2023. tool, we can be more strategic in how we improve our assets to assess and manage risks facing our company and industry. make them more resilient. Examples include: − Climate risk : Before we acquire land or buildings, we In 2023, we incorporated assessment of future climate risk − Investment Committee : All material capital deployment evaluate vulnerability to natural hazards and climate risks hazards into our investment committee process. This expands as part of our due diligence process. In 2023, across our on the current assessment of natural hazards already being (development, acquisitions and dispositions) is subject portfolio, there were 73 instances when natural hazard performed by looking at storm, flood and heat exposures at a to review by our Investment Committee, which evaluates events resulted in insurance claims. These included timeframe of 2050 using IPCC's RCP4.5 scenario as our base investment considerations as well as environmental case. This assessment increases awareness among our capital matters; natural hazard exposures; and legal and windstorms, severe storms and extreme cold weather. deployment teams of possible future hazards and allows us to regulatory considerations. Our CEO and chairman, Our planning and risk mitigation measures protected consider potential risk mitigation measures in conjunction with president, CFO, chief investment officer (CIO), chief our customers’ business continuity: Only three of these our investment decisions. customer officer (CCO) and other senior leaders serve on events led to business-continuity-insured damage in this committee. excess of $500,000. − Cybersecurity : We use robust and constantly More Information on risk can be found in the “Risk Factors” changing measures to defend against emerging cyber section of our 10-K and in the Appendix of this report. 18
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix ESG governance ESG Governance Creates Accountability and Drives Action ESG at Prologis is not a separate program or initiative. Instead, it is integrated into our business strategy, processes and KPIs, with robust data management and By charter, our Governance and Nomination Committee multiple systems to track our performance. Integrated ESG Board of Directors oversees ESG. Other board committees oversee related issues, reduces risk, improves efficiency, differentiates our brand as appropriate. and expands revenue and talent-recruitment opportunities. It influences the way we design, build and operate distribution centers. This includes providing our customers with services, such as renewable energy, electric vehicle charging and workforce development. Our ESG Policy and Our chief energy and sustainability officer reports to our president and sits the Stakeholder Engagement section of this report provide Executive Team on our Executive Committee. Through our Investment Committee process, additional detail. we assess the ESG profile and net-zero alignment of every investment. A periodic ESG materiality assessment informs our ESG reporting and the priorities of the Global ESG team. The senior leaders who comprise our Global ESG Steering Committee provide strategic direction and guidance, ensuring our ESG efforts are aligned with business Our Global ESG Office is responsible for integrating ESG into our priorities. Please see the appendix for our most recent ESG Global ESG Office business strategy, processes and KPIs. This includes convening materiality assessment . our Global ESG Steering Committee and collaborating across In 2023, ESG performance represented 10% of our bonus departments to improve systems, policies and processes. scorecard. Environmental metrics included solar and storage installed capacity, LED lighting and sustainable building certifications. Social metrics included culture, At Prologis, ESG is everyone’s business. talent and inclusion scores, the number of new participants in our Community Workforce Initiative and employee volunteer hours in our communities. Governance metrics included third-party assessments of our corporate governance performance. Please see our latest Proxy Statement for detail on our performance in these areas. Our Global Leaders Regional ESG Leaders Prologis Employees 2024 bonus scorecard will include similar ESG metrics to and Committees 2023 and will continue to represent 10% of the scorecard. 19
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Supply chain responsibility We work to manage and mitigate risk in our supply chain. Our Vendor Optimization team evaluates opex vendor performance in the U.S. across four metrics: customer Our procurement spend is divided into three categories: satisfaction, Prologis satisfaction (including adherence opex, capex and development. Opex (operational to our Supplier Code of Conduct), responsiveness to expenses) includes the services we need to operate our customer tickets and compliance with service-level distribution centers and offices. Capex (capital expenses) agreements. In 2023, based on these metrics, we includes expenses related to maintaining and improving reviewed and refined this vendor pool to improve quality our properties. Development includes the goods and and achieve significant operational cost savings. services we need to grow our business — to develop and build properties. Our Supplier Code of Conduct outlines our expectations for supplier practices, including ESG-related practices and We purchase goods and services directly from our tier the use and conduct of subcontractors. Suppliers must: 1 suppliers who, in turn, purchase goods and services − Prohibit the use of involuntary and child labor. from our tier 2 suppliers. Language in our purchasing and − Provide a safe and healthy work environment, free of engineering, procurement and construction agreements discrimination and harassment. Significant Procurement Categories states that suppliers must not procure, incorporate or utilize any part or equipment that is manufactured from − Reduce energy and water consumption and implement − General contractors – the companies that build and upgrade any country or region suspected of using — or known waste-minimization programs. our distribution centers. (We select general contractors to use — forced or child labor. Tier 1 suppliers are based on competitive pricing, past performance and responsible for tier 2 supplier compliance. An independent third party evaluates and screens safety performance. All our contractors are required to be potential suppliers based on their adherence to our approved in Avetta, a third-party safety prequalification and standards, including their responses to ESG questions on compliance program.) Our procurement team leverages Prologis’ scale to secure topics such as sustainable sourcing and human rights, in − Steel joists and decking – crucial to warehouse favorable pricing and lead times while mitigating supply our standard RFP. construction chain risk. We pass this value on to our customers. As − Electrical and lighting – used in both construction an example, in 2023 we selected a new vendor for dock For our approach and performance on employee and and operations equipment to reduce costs, increase the availability of contractor safety, please see Employee health and safety . − Roofing systems – our new construction standards specify For information on our approach to supplier diversity, that roofs be solar ready replacement equipment and improve lead times. Also in − Heating and cooling systems – including the maintenance 2023, we sourced 30-year solar-ready roofing, switchgear please see Diversity, equity, inclusion and belonging . of these systems and heat pumps at below-market prices and improved − Facilities management services – landscaping, snow lead times, in support of our net-zero goal. removal, paving, painting and more 20
Sustainable Logistics Our customers are interested in operating more efficiently—and in reducing their energy use and emissions. We provide them with a range of solutions, including renewable energy, energy storage and mobility infrastructure. 2040 Our goal to achieve net-zero emissions by 2040 has been validated by the Science Based Targets initiative. >500 MW We achieved more than 500 MW of solar and storage capacity in 2023, halfway to our goal of 1 GW by 2025. $9.9B Since 2018, we’ve issued 29 green bonds worth $9.9B to help fund green building design and innovation. 2M We have provided 2 million miles worth of EV truck- charging services.
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Climate strategy As the global leader in logistics real estate, our climate strategy is to site, develop and operate our buildings with efficiency in mind. We create additional emissions reductions through our operations and energy + sustainability solutions. Our goal to achieve net-zero emissions by 2040 demonstrates our ambition. This goal includes Scopes 1, 2 and 3 emissions and has been validated by the Science Based Targets initiative. Collaborating on Climate Our path to net zero includes tackling some big challenges. MIT’s Climate & Sustainability Consortium Climate Group’s EV100+ and RE100 are Innovation and collaboration will be key. In 2023, our is an academic and industry group industry groups working to accelerate development teams piloted a range of solutions, including the working to develop and implement large- the industry’s transition to zero-emission use of recyclable modular building materials, mass timber and scale climate solutions, including in medium- and heavy-duty vehicles and stronger lower-carbon concrete. And by collaborating with transportation, value chain resilience and increase the use of renewable energy. industry and academic organizations, we can accelerate our low-carbon building materials. industry’s progress and ramp up our impact: The Climate Pledge is a cross-sector ZEROGrid Initiative is building a new community launched by Prologis’ customer framework to accelerate the transition to Amazon to develop and implement a reliable and affordable zero-emissions decarbonization strategies and measure electric grid. and report on results. 22
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Greenhouse gas emissions In 2023, 99.8% of Prologis emissions were Scope 3, with approximately 69% from customer energy use in our buildings and 31% from construction and operations. Just 0.2% of our emissions were Scope 1 and 2: emissions from our own operations and emissions from our energy use. For detail on how we are working to reduce our emissions, please see our Net-Zero update . 2023 GHG Emissions 1 Emissions Sources, Scope 1 and 2 Emissions Performance, Scope 1 and 2 (market-based) (market-based) Metric tons CO 2 e Scope 1 – fugitive Scope 2 – indirect Scope 1 Our Scope 1 emissions increased by 36% from 3.7% purchased energy 2022 to 2023, as corporate jet travel returned to Scope 1 and 2 Emissions: 0.3% 8,100 7, 8 7 9 Scope 2 pre-pandemic levels, and were 25% below our 2019 Scope 1 – stationary baseline. We're working to electrify our fleet and are 0.2% 10% 6,025 investigating the use of sustainable aviation fuel to of total 6,063 reduce our Scope 1 emissions. Scope 1 – mobile 4,458 Our Scope 2 emissions remained consistent from 86% 2,653 2,362 2022 to 2023 and were 99% below our 2019 baseline. 2,451 We purchase RECs to account for our purchased 2019 20 21 22 23 electricity (Scope 2 market-based). Emissions Sources, Scope 3 Emissions Performance, Scope 3 (location-based) (location-based) Million metric tons CO 2 e Purchased Goods and Services Our Scope 3 emissions declined from 2022 to 2023 Scope 3 5% 5.43 5.09 by 9% and were 29% below our 2019 baseline. Our Emissions: 4.51 4.22 data indicate this is due to decreases in development Capital 3.84 activity and in customer consumption of both 99.8% Goods Downstream electricity and natural gas. We continue to work to of total 25% Leased improve data quality for our Scope 3 emissions, Assets 69% including by improving data coverage to reduce reliance on estimates and updating emissions factors and methodology to reflect evolving standards. 2019 20 21 22 23 1. Based on improved data quality and alignment with SBTi, we have updated our emissions methodology and historical data. We now include updated emissions factors; more precise fleet- and office-related emissions data; and Scope 1 and Scope 2 emissions from fugitive refrigerants and chilled water. We now exclude energy related spend from purchased goods and services. Additionally, across all years, we now exclude as immaterial: FERA (indirect emissions associated with the production, transmission and delivery of fuels and energy we purchased), employee commuting, business travel and emissions from properties outside of our owned and managed operating properties and development portfolio. 2. We have purchased RECs to account for our purchased electricity since 2019. For 2019-2021, we include emissions from offices included in the Duke acquisition, per GHG Protocol requirements. For 2022 and 2023, our Scope 2 emissions were 7 and 17 metric tons of CO2e, respectively. 3. Total does not add up to 100% due to rounding. Excludes upstream leased assets at 0.001%. 23
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Driving sustainable operations Through the Prologis Essentials platform, we provide our improves our access to our customers’ utility data, which we customers with operations and energy + sustainability can use to help our customers reduce their energy use and Growth in Solar and Storage Capacity solutions. These solutions can reduce our customers’ operating costs. Approximately 35% of leases across our MW of solar and storage capacity emissions, costs and environmental impact—and can help portfolio are Clear Leases, an increase from approximately them achieve their sustainability goals. 31% at year-end 2022. At year-end 2023, we had more than 1,000 500 MW of solar and storage capacity from approximately Our work in siting, design and construction also supports 425 buildings in 16 countries. 1 That’s enough to power more customer sustainability. This includes sustainable build-to- than 85,000 typical U.S. homes. suit, building certifications and other solutions. 506 We also offer our solar and energy storage resources to 405 Energy local communities through our community solar program. 212 252 285 We build, operate and maintain rooftop solar and energy In 2023, this included projects in various stages in Illinois, storage systems to meet the needs of our customers, Maryland, New Jersey and Oregon. We also started including to reduce their GHG emissions. This includes construction in Southern California on projects that will 2019 20 21 22 23 24F 25F onsite and offsite solutions. The Prologis Clear Lease® provide 5 MW of solar generation capacity to Clean Power is critical to our work in this area. Clear Lease language Alliance, a local utility provider. protects our ability to add rooftop solar to a building. It also Solar + Storage Satisfaction A brand-new speculative building in Northern installation of two solar and two energy storage California provided an opportunity to bring in a key projects, totaling 1.75 MW and 1.11 MWh of retail customer, but the customer had one request: generating capacity and storage, respectively. that the building include onsite solar and energy storage to support their GHG reduction goals. Follow through and attention to detail were critical as we worked to expedite permitting, install Because this was a new site, the energy team at equipment and commence operation. Prologis Essentials took an innovative approach. They analyzed the customer’s energy consumption The resulting project demonstrates Prologis’ ability profile at other locations to estimate how much to integrate clean energy and deliver sustainability energy would be needed at this site. They verified solutions for our customers. this estimate with the customer and then began 1. Within our owned and managed portfolio. 24
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Mobility Many Prologis customers are transitioning their fleets to low- or zero-emissions vehicles. Prologis Mobility provides expertise and critical infrastructure through a range of solutions: − Hubs – subscription-based fleet charging at dedicated sites along common routes and near key locations. − Depots – onsite fleet charging at warehouses for drayage, last-mile delivery, yard tractors, forklifts and more. − Workplace Charging – passenger vehicle charging for distribution center employees. At year-end 2022, some 22% of the registered Class 8 EV trucks in California had charged at Prologis sites. At year-end 2023, we had provided enough EV charging to our customers to enable approximately 2 million miles of EV truck travel. By 2030, to better support the fleet needs of our customers, we aim to achieve 900 MW of EV charging capacity at a network of charging locations across our Building a 9 MW Heavy-Duty Truck Charging Project portfolio. At this scale, we will be able to help local utilities In late 2023 and early 2024, Prologis created North America’s largest heavy-duty truck charging project in Torrance, California. The improve grid resilience through vehicle-to-grid and load project is capable of using hydrogen as a fuel source and features innovative microgrid technology, up to 9 MW of EV charging capacity management services. (enough to charge nearly 100 trucks) and 18 MWh of energy storage. The project is one of the largest EV charging projects of its kind in the world, with best-in-class operational flexibility (provided via six 1.5 MW microgrids). It was delivered at an extraordinary pace, thanks, in large part, to a strong partnership with the Los Angeles Department of Water and Power, the City of Los Angeles and SoCalGas. This project is a testament to the power of collaboration and innovation, strategic partnerships, pioneering technology and forward- thinking approaches. It represents a new standard for electrified logistics hubs. 25
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Sustainability solutions With our sustainability solutions offering, we serve our Growth in LED Lighting customers by tackling enterprise-level logistics challenges %, owned and managed operating properties 1 beyond those covered by our energy or mobility teams. These include: 80% − LED lighting 71% 74% − Smart-building technologies − Power purchase agreements (PPAs) and RECs 57% − EnergyStar certification 42% Our customers can upgrade to LED lighting with no upfront 33% capital costs. They can reduce their lighting-related energy use by approximately 60%-80% and enjoy the benefits 2019 20 21 22 23 24F 25F of better illumination: improved safety, productivity and employee satisfaction. At year-end 2023, we had installed LED lighting across 74% of our owned and managed operating properties. 1 For detail on our LED lighting goal, Through the use of PPAs and RECs , our customers can see Goals and Progress . reduce the emissions associated with their energy use. For information on sustainable building design and green Our smart-building technologies include sensor-controlled financing, please see Siting, design and construction . smart meters (controlled by a mobile app) to help our customers manage their utility consumption and analyze Electricity consumption at modern distribution centers their facility operations. In many cases, this includes the is likely to increase with the addition of automation and ability to control temperature, humidity and pressure levels. EV-charging services. We help our customers optimize LED lighting installation at Irwindale Distribution Center, We also offer microgrids to provide resilience and control to energy efficiency, which can result in a building receiving an Irwindale, California. customers for whom reliability is critical. EnergyStar certification . 1. Does not include a portfolio of properties acquired in June 2023. 26
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Siting, design and construction We locate, design and build our distribution centers in a way that helps maximize efficiency and minimize impact. Green Financing Siting Prologis and our co-investment ventures in Europe, Japan, Mexico and the U.S. A distribution center’s location is a key aspect of sustainable logistics. Siting our buildings near major metropolitan have issued 29 green bonds and 12 green private placements of debt since 2018. These bonds and private placements attract environmentally conscious areas helps our customers shorten delivery routes and reduce delivery times and related emissions. The investors from around the world. sustainability benefits of smart siting cannot be overstated. We describe our approach to project permitting and In 2024, we updated our Green Financing Framework to align with the latest stakeholder engagement in Resilient Communities . global standards: The Green Bond Principles 2021, administered by the International Capital Market Association, and the Green Loan Principles 2023, Design and construction administered by the Loan Market Association. We also updated the types of We follow circular design principles (e.g., reduce, reuse, refurbish, recycle) in new construction, where feasible. We projects eligible for the use of proceeds, including the following categories: report contractor-provided waste data on our ESG data page . In some cases, we use a digital material passport to Green Buildings; Renewable Energy; Energy Efficiency; Clean Transportation; catalog materials and components used, making it easier to reuse them at the end of the building’s life. and Circular Economy and Pollution Prevention & Control. Our green financing efforts also include our global line of credit (GLOC), our We reduce embodied carbon through the use of the latest construction technologies and materials, including Yen revolver and additional sustainability linked lines of credit and term loans mass timber, flexible office walls and lower-carbon concrete and steel. We intend to increase our use of these that support the operations of the FIBRA, PELF and USLF. Our GLOC key materials and leverage our significant purchasing power to encourage innovation. See Innovation in New performance indicators include sustainably certified space and onsite solar Development for examples. generation/storage capacity. At year-end 2023, these figures were 287 MSF and 506 MW, respectively. Our design standards require that buildings be rooftop-solar ready, have LED lighting and have heat pumps Prologis is also a signatory to the UN Principles for Responsible Investment (PRI). where feasible. We complete a life cycle assessment of the GHG impacts of every new building. We aim to achieve carbon-neutral construction by 2025 through our purchase of high-quality carbon offsets. Our offset strategy is based on the principles of additionality (mitigation or removal would not otherwise have occurred); co-location (in same geographic region as our operations); and ESG co-benefits (local social and environmental benefit beyond emissions reduction). We require offsets to have been verified by Gold Standard, Voluntary Carbon Standard(VCS)/Verra, Climate Action Reserve and/or American Carbon Registry. Each of these registries has been accepted by one or more of the following third parties: ILFI, The Task Force on Scaling Voluntary Carbon Markets and/or California’s Cap and Trade program. In 2023, we retired, or utilized, offsets to account for approximately 60% of our construction-related GHG emissions. Rooftop solar installations, Prologis Park Sendai-Izumi 2, Sendai City, Miyagi, Japan. 27
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Building certifications Innovation in New Development We have committed that every eligible new construction or redevelopment project that has The Prologis team that manages new development projects is always on the lookout for ways to been approved by our investment committee from June 2021 will achieve a sustainable make Prologis buildings better. Ideas come from new development employees as well as from certification. At year-end 2023, this included 54 projects, 22 of which had achieved a regional teams. The team has piloted many innovative ideas, including: certification and 32 of which were in the process of achieving a certification. A building can − The Falkbuilt prefabricated wall system, where walls and cladding are fabricated offsite using achieve a sustainable certification once it is built and stabilized (substantially occupied). recycled aluminum and MDF. The walls can be easily reconfigured as tenant needs change, reducing waste and the need for demolition and rework. This product has been installed on 10 Some 23% of our 1.2 BSF owned and projects, with more in the pipeline. managed portfolio has received a Sustainable Building Certifications − OptiPave, a synthetic-fiber-reinforced exterior concrete paving system that allows for the sustainable certification. These include concrete thickness to be significantly reduced and can achieve a 20%-40% reduction in A development can achieve a sustainable embodied carbon compared to baseline pavement. This solution has been piloted on three EnergyStar, LEED, BREEAM, CASBEE, DGNB certification once it has been built and stabilized. projects to date. and WELL. They measure a range of factors, − Pozzotive, a company that uses recycled glass to produce a powder that replaces cement in including site selection; building materials; concrete. This innovation has been piloted on one project and can achieve a reduction of as much biodiversity; energy and water efficiency; MSF as 50% in embodied carbon. and indoor environmental quality. Nearly 400 25% The bottom line: Prologis is always looking for ways to improve our buildings. Our culture of one-third of the space leased by our 25 % of portfolio certified innovation and the hard work and creative thinking of our employees make this possible. largest customers is sustainably certified. 20% 300 Our focus on achieving sustainable 15% certifications does not constrain our 200 acquisition strategy. We operate a newly Certified area acquired building in an efficient manner (MSF) 10% and seek a sustainable certification if we 100 redevelop the property. 5% For additional building certification data, 0 0 please see our ESG data page . 2019 20 21 22 23 28
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Sustainable Distribution Centers Prologis distribution centers offer a wide range of sustainable features (detailed below). As we continue toward net-zero emissions by 2040, we expect an increasing percentage of our portfolio will include these features. Rooftop solar Support for biodiversity Lower-carbon EV charging We are the #2 company Prologis RFI DIRFT in the UK construction materials At a distribution center in the U.S. for solar includes a Prologis-funded Our development teams in New York, we added and storage capacity, 193-acre nature reserve have piloted a range charging capacity to according to SEIA, with with extensive wetland of solutions, including support 60 EV route more than 500 MW across habitat that supports a wide the use of recyclable trucks, making the our global portfolio. range of birds, including modular building customer’s fleet at this short-eared owls, little materials, mass timber facility 100% electrified. ringed plovers, curlews and stronger lower- and wigeons; great crested carbon concrete. newts; a population of bats; and a rare breed of sheep. Geothermal energy Sustainable building Construction Electrification Prologis Park Moissy certificates circularity At our Perris DC 6 and II DC1 in Paris relies Through the purchase of Some 95% of the waste Perris DC 8 buildings in on design efficiencies, renewable energy and from the construction of Southern California, we rooftop solar, purchased the use of LED lighting, our Dutra RJ Building 100 use electric heat pumps renewable energy and heat pumps and insulating in Brazil was reused or for heating and cooling borehole geothermal exterior metal “sandwich” recycled. instead of natural energy storage for panels, Inagawa I is the gas-powered climate heating, cooling and first Japanese property control systems. power. in our portfolio to be ZEB certified (zero emissions). 29
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Responsible water use Biodiversity Twenty Types of Trees We are committed to responsible water use and water A typical distribution center has a minimal impact on At our Mitry II DC1 building in Paris, we’re planting a management practices. biodiversity. This is due, in part, to our strategy of locating Miyawaki forest. distribution centers in urban locations where biodiversity The Miyawaki method was developed decades ago as During construction, surface water runoff is managed impacts are negligible. a way to spur a quicker maturing native forest. At Mitry according to local regulations (in the U.S., it is governed DC1, this means we’re planting 20 to 25 different types of by a Stormwater Pollution and Prevention Plan). Once Although we have minimal impact, we support biodiversity native trees specifically selected to speed the process of a building is complete, surface water runoff flows where feasible, as detailed in our ESG Policy . This ecological succession and growth. As an added benefit, this through systems designed to applicable civil engineering includes enhancing landscaping and adjacent habitat forest should eventually require little to no maintenance. As standards. Although we do not track water used in with native plants to support native wildlife, including you might expect, higher levels of biodiversity have been construction, we require general contractors to reduce hedgehogs, bees, bats, insects, newts and birds, recorded in Miyawaki forests because more diverse trees support more diverse wildlife. waste; to reduce energy and water consumption; and to including short-eared owls, little ringed plovers, curlews The outcome is designed to benefit the environment, comply with federal, state and local laws and regulations, and wigeons. Consistent with the biodiversity practices of our customers and the surrounding community: a next- including those related to water quality and availability. many customers in the United Kingdom, we help protect level PARKlife™ project with measurable and meaningful biodiversity-rich rainforest in Peru and Papua New Guinea biodiversity impact. We also work to reduce water consumption during through a partnership with Cool Earth. operation of our buildings. More than half of the properties in our portfolio are in areas of high or extremely Where required, we perform an Environmental Impact high water stress. Customers are responsible for their use Assessment (EIA) as part of the project permitting and discharge of water during their lease. To help them process. We follow local environmental laws and minimize their water use, we install smart pump kits, high regulations during construction. Some developments efficiency fixtures and native plants. In California, we’ve improve environmental health and biodiversity by removed all ornamental and non-functional turf grasses removing historic contaminants from the soil and water from most of our properties, replacing them with drought- that might negatively impact biodiversity. tolerant vegetation. This has reduced water usage at these properties by an estimated 50%. Data for water consumption in our offices may be found on our ESG Data page . 30
Our Inspired People Our people are the key to our success. They contribute to our communities and create value for our customers and investors. They work to build an inclusive workplace and innovate to create the future. 88% We achieved an 88% employee engagement survey score. +6% and +9% We improved the diversity of our senior leadership team, with increases of 6% and 9% for women (globally) and people of color (U.S. only), respectively, since renewing our focus on diversity in 2021. $3M In October, we announced a $3 million Prologis Foundation donation to Morehouse College to create an endowed fund for the new Morehouse Real Estate Institute (MREI). 13,600 Our employees completed more than 13,600 hours of company-provided or -sponsored training.
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Employee engagement Our employees are the foundation of our business. They Employee Benefits Employee Engagement 2023 create new ways to better serve our customers and help us stay ahead of what’s next. We offer a range of benefits, depending on location: − Life, medical, disability, dental, vision and identify theft Prologis We create a world-class employee experience with insurance. Score Engagement Survey 88% competitive compensation and performance-based − Paid time off, bereavement time off, parental and incentives; support for diversity, equity, inclusion and partner leave and company-sponsored volunteer time. belonging (DEIB); challenging professional development − Telemedicine, including virtual exercise and physical +8% therapy services. opportunities; and best-in-class collaborative office space. − An employee assistance program and a mental health Financial Each year, every employee receives two performance services program. Services Engagement Survey 80% reviews and professional development support. − Fertility/surrogacy and adoption assistance and Sector Score counseling. (average) According to our 2023 employee engagement survey, 88% of − Flexible spending and health savings accounts. our employees are engaged based on their responses to the − Backup childcare assistance. − Free or subsidized public transit passes, which help five statements that comprise our engagement driver index, reduce greenhouse gas emissions from commuting. including "I am proud to work for this company," which scores − Health and financial wellness coaching. at 95%. Our overall engagement score compares favorably − Pension and/or 401(K) benefits. Our CEO approval rating was with the financial services sector average of 80%. We analyze − Tuition reimbursement for continuing education. 95%, and 91% of our employees survey results for significant differences based on age group, gender, management level, race/ethnicity, nationality/country said they would recommend of origin or cultural background. to work on improving the third area: “how we share Prologis to a friend. knowledge across business lines.” (Our score remained Based on survey results, company leaders create employee consistent at 68%.) engagement action plans and incorporate them into their goals. In 2023, we improved year-over-year survey results In 2023, our regrettable turnover was 1.0% and our non- in two of our three lowest-scoring areas: “manageable regrettable turnover was 8.4%. As of December 31, 2023, our workload” (from 67% to 72%) and “employees rewarded CEO approval rating on Glassdoor was 95%, and 91% of our for performance” (from 64% to 70%). In 2024, we continue employees said they would recommend Prologis to a friend. 1. Regrettable turnover is defined as “eligible for rehire in the same role.” Non-regrettable turnover is defined as “ineligible for rehire in the same role.” 32
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Talent acquisition, learning and development In 2023, Prologis spent approximately $1,900 We recruit talented employees with varied experiences and per employee on learning and development, and viewpoints and create opportunities for them to learn and employees completed more than 13,600 hours of develop. Our goal is to have the right people in the right training (not including required compliance, ethics roles at the right times in their careers. Our culture is key. and information security training), a year-over-year We are committed to DEIB and try to create a workplace increase from three to five hours per employee. where employees feel that they can take risks; simplify and This was due, in part, to expanded new employee sprint; and fail fast. Members of our executive committee orientation sessions. directly participate in new employee orientations and speak about the importance of our company culture. Through BetterUp and the Prologis Mentorship Connect programs, we match mentors and mentees Prologis employee learning and development includes based on shared needs and interests. This includes training on: both experienced and early career mentors and − Prologis’ core competencies and traits. mentees. More than 300 Prologis employees − Business fundamentals, including the fundamentals of participate in the program. real estate. − Leadership, presentation skills, effective communication For additional examples of our workforce and time management. development, including internships and college/ − Manager-related skills, including performance university partnerships, please see Diversity, Equity, management, career development, mentoring and DEIB Inclusion and Belonging . in a workplace setting. 33
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Diversity, equity, inclusion and belonging DEIB is important to our mission to be the leading Workforce Diversity 1 logistics real estate company. Our workforce should look like the communities where we do business, and our Women (companywide) People of Color (U.S.) priorities should reflect the needs of those communities. Our DEIB strategy is supported by three pillars: people, Total Workforce Total Workforce 34% procurement and philanthropy. Our Global DEIB Steering 51% 50% 50% 49% 50% 32% 32% Committee guides this strategy, and our CEO is a 28% 29% signatory to CEO Action for Diversity & Inclusion . 29% 47% 45% 46% 44% 45% 25% 27% People Managers 23% 24% We recognize the importance of inclusion and diverse Managers representation at every level of our organization. We partner with organizations—including Urban Land 15% Institute , NAIOP , NAREIT and Management Leadership Senior Leaders 23% for Tomorrow —to stay informed of workforce trends, 20% 8% Senior Leaders 9% identify areas of opportunity and expand our pool of 16% 17% 17% 6% 6% candidates. As an example, Prologis leaders mentor members of under-represented groups at annual NAIOP I-CON conferences and participate in the organization’s 2019 20 21 22 23 2019 20 21 22 23 “Inclusion in Commercial Real Estate” scholarship program. More than 75 mentees have graduated from the program, and 15 students received scholarships at the most recent conference. In 2024, we continue to work to improve representation bonus and long-term incentives, and was reviewed by at our senior leadership level. Additional information may our executive committee and board of directors. Results At year-end 2023, 50% of our employees, 45% of our be found in our EEO-1 report, Bloomberg Gender Equality indicate that after controlling for relevant factors, women managers and 23% of our senior leaders were women. At Index and ESG Data page . (globally) and people of color (in the U.S.) were paid within year-end 2023, 34% of our U.S. employees, 29% of our +/-3% of their male and white peers. If we find differences U.S. managers and 15% of our U.S.-based senior leaders In 2024, we retained a third party to conduct our annual in compensation not explained by relevant job factors, we were people of color. pay equity analysis. This analysis included base salary, adjust compensation accordingly. 1. "Managers" includes managers, directors and vice presidents. "Senior leaders" includes those at or above the senior vice president level. 34
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix An inclusive work environment fosters innovation and Our CEO’s statement of support for supplier diversity may allows everyone to do their best work. Our DEIB offerings be found on our website . Prospective suppliers, whether include training resources, cultural awareness campaigns diverse or not, may register through our supplier portal. At and celebrations such as Asian Heritage Month, Black year-end 2023, we had more than 500 diverse suppliers History Month, Hispanic/Latin-American Heritage Month, in our active supplier database. For additional information, Pride Month and Women's History Month. Prologis provides please see Supply Chain Responsibility . dedicated funding and staffing resources to support our five employee resource groups (ERGs): the Asian Leadership Philanthropy Network, the Black Industrial Leadership Network, Hispanic/ Giving back to the communities where we work, including Latinx Organization for Leadership and Advancement, diverse communities, is an important part of our social Leadership Empowerment Alliance at Prologis (women) impact. This includes building diversity within our industry: and the Prologis Pride Network (LGBTQIA+). In 2023, each According to the U.S. Bureau of Labor Statistics, only 10% of ERG doubled in size and ERG-sponsored webinars drew real estate professionals and 5% of real estate brokers are an average audience of more than 400 employees. DEIB- Black. focused questions in our biannual employee engagement survey measure our progress in building an inclusive work In 2023, Prologis announced a $3 million Prologis Foundation environment. We analyze full engagement survey results donation to Morehouse College to create an endowed Prologis announced a $3 million Prologis Foundation donation to for significant differences based on age group, gender, fund for the new Morehouse Real Estate Institute (MREI). Morehouse College to create an endowed fund for the new Morehouse management level, race/ethnicity, nationality/country of This donation will expand opportunities for students from Real Estate Institute (MREI). origin or cultural background. Morehouse College, Spelman College and Clark Atlanta University, three Atlanta-area historically Black colleges Procurement and universities (HBCUs). Students will be able to learn In 2023, we launched a supplier diversity initiative to about commercial real estate and prepare for careers in It is our hope that through this partnership, and by encourage diverse-owned businesses (BIPOC, women, the industry. The institute will also connect students with maintaining diversity as a priority in our philanthropy, we veteran, disabled and LGBTQIA+) to bid on Prologis internship and entrepreneurship opportunities. can be a catalyst for change. We believe our industry will business; to make our supply chain more resilient; and be stronger and more resilient with a workforce that more to support our customers’ supplier diversity efforts. We Prologis leaders will contribute their time to MREI through closely reflects the diversity of the communities we serve. established a baseline for diverse supplier spend to guest lectures, specialized workshops, site tours and guide our diverse supplier strategy and capacity building on-campus training programs. To launch this ongoing In addition to the MREI donation, the Prologis Foundation efforts. And in 2024, we are comparing this baseline to relationship, leaders from across the U.S. joined Hamid also worked closely with our ERGs in 2023 to identify and that of our peers. We also engaged with the National Moghadam, our co-founder, chairman and CEO, for the donate approximately $100,000 to nonprofit organizations Minority Supplier Diversity Council to learn and share best kickoff event, where they provided guidance on course serving ERG communities. For additional information on practices in supplier diversity. curriculum and shared career advice with students. corporate giving, please see Community Involvement . 35
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Employee health and safety Safety is a high priority at Prologis. Our Employee Lost Time National Safety Awareness Month safety program is overseen by a global Injury Frequency (U.S. only) In honor of National Safety Awareness Month in June, our Inland Empire team held a first-of-its- safety committee of senior executives from Number of injuries per 1 million hours worked kind event at The Merrill Commerce Center in Ontario, California. Some 300 local employees and relevant functions. This committee meets contractors attended. quarterly; identifies and implements best 5 As one of the largest projects in Prologis history, the Merrill Commerce Center serves as a great practices and standards; and facilitates example of what safety success looks like. The event included: employee and contractor training. − Short talks about safety awareness by company leaders and general contractors 4 − Lunch at a food truck market for all participants For building construction and renovation, − Raffles and giveaways. our design guidelines require safety Jim Thornton, Prologis director of Construction Safety, noted, “Events like this go a long way in features—such as anchor points, 3 differentiating us from other owners and developers and show that we really care about the health railings and skylight screens—at every and safety of the workers on our project sites. I was struck by the energy from the workers during development site around the world. We the event, showing that they really appreciated the recognition for the hard work.” require our contractor partners, worldwide, 2 Moving forward, the team plans to host similar safety events at project sites throughout the region to provide a competent full-time safety 1.34 and beyond. professional on all projects while hazardous 1.1 0.94 work, such as trenching and work at 1 0.68 0.67 heights, is taking place. We also require our contractor partners to perform a weekly job site safety survey — and we require 0 that our development managers complete 2019 20 21 22 23 a monthly safety survey — on every active project. Once a building is complete, we work to maintain a safe work environment: Every maintenance technician in the U.S. safety concern using our anonymous is required to complete the OSHA 10-hour third-party-administered safety helpline: safety training. 1-833-SAFE-PLD in the U.S. and Canada. In 2023, we had no employee work-related Prologis employees, contractor employees fatalities and received no calls to the and anyone else may report a job-site safety hotline. 36
Resilient Communities Logistics real estate drives economic development and fosters resilient communities. We work in partnership with local leaders and organizations to provide job training programs; promote community health and safety; and enhance park and transit infrastructure. 1.1M Approximately 1.1 million people work under a Prologis roof every day. 29,700 Through our Community Workforce Initiative, we trained 8,760 people in 2023, reaching 29,700 people by year-end 2023 and achieving our goal for this program two years early. 40 years Prologis teams around the world celebrated our 40th anniversary, and each of our six regions received $40,000 from the Prologis Foundation to donate to nonprofits of their choice. 16,400 Our employees donated more than 16,400 hours to community organizations.
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Stakeholder engagement We are more effective when we incorporate ideas and input from our stakeholders. The social impact section of our ESG Policy describes our approach. We engage with our employees through webinars, intranet storytelling and interactive town hall meetings. We aim to create a people-first culture that prioritizes well-being and connects Prologis employees around the world in an authentic, fun and human way. During project planning and development, we work closely with city staff to align our projects with applicable ordinances, regulations and guidelines. As appropriate, we engage with community members to learn about community needs and find ways to help address them. Depending on the project, this can include face-to-face meetings, presentations and community workshops. We also participate in community organizations and volunteer with local Laying the Groundwork: Community Engagement Done Right nonprofits in the communities where we do business. As a long-term owner, Prologis is part of the fabric of the community. We recognize that community We work closely with policymakers to strengthen the supply chain, improve sustainability and engagement is most successful when it is consistent and authentic. advance our core business objectives. This includes working to advance positive economic The Prologis team in Japan provides a good example of this approach. They reach out to the full range development, smart land use planning, rooftop solar, battery storage and mobility policy. of stakeholders, including local residents, landowners, government agencies, neighboring companies, customers and warehouse workers. Their engagement is consistent, often beginning years prior to land acquisition, and continues through entitlement (permitting) and on to construction and operation. In December 2023, our senior leaders provided an in-depth view of Prologis’ market position to Community engagement in Japan takes many forms, allowing each stakeholder many different more than 1,000 investors and analysts during our Investor Forum in New York City. From May opportunities to learn about a project and share their ideas. These include town hall meetings, 2023 to March 2024, we engaged with shareholders representing 71% 1 of the shares held by property tours, individual meetings with elected leaders, urban planning meetings, participation in our 100 largest shareholders, or 56% of total outstanding shares. In response to their feedback local and regional economic councils, hosting or sponsoring local events, warehouse tours for local over the years, we have made enhancements to our executive compensation and corporate elementary students and disaster response demonstrations and trainings. As one example, the Japan governance. For more detail, please see our most recent Proxy Statement . team put together a contest for local children to design the artwork that will be displayed on the side of the Prologis shuttle bus. During warehouse operation, the Japan team works to create community value, including by running job training programs; conducting emergency response drills; maintaining PARKlife spaces; and even operating public convenience stores and dining spaces. The outcome, in most cases, is that local stakeholders see the benefit of having a Prologis warehouse nearby—and Prologis and Prologis customers enjoy a positive and productive relationship with the local community. 1. Calculated by outstanding shares of common stock of our top 100 stockholders. Our top 100 stockholders hold 79% of our outstanding shares. 38
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Economic and social impact Logistics real estate drives economic development and supports the needs By locating our logistics facilities close to urban centers, we create $2.7T of surrounding communities. A 2022 study by the independent advisory economic and social value through shorter delivery routes, reduced firm Oxford Economics determined that $2.7T in goods flow through our greenhouse gas emissions and next-day or even same-day delivery of in goods flow through our distribution centers each year. This represents 2.8% of global GDP and 4.0% the crucial goods and services, including food and medicine, that local distribution centers each year of the GDP for the 19 countries where we do business. Some 1.1 million residents and businesses need. people work under a Prologis roof each day. Oxford Economics will be updating their study in the second half of 2024. Prologis is committed to openness and transparency regarding taxes, 2.8% an important aspect of our economic impact. Our global head of tax of global GDP As a long-term owner, we value long-term relationships with the people in is responsible for our tax policies and procedures. We comply with all the communities where we do business. Our goal is to be the logistics facility applicable rules and regulations and report current and deferred domestic provider of choice by creating value not only for our customers, but also for and international tax liabilities in our Form 10-K . Our tax planning is aligned the communities where we operate. As an example, in the United Kingdom with our commercial business activities. 4.0% in 2023, according to the Social Value Portal, five Prologis projects provided more than $28M of local social and economic value, including but not limited Community safety of the GDP for the 19 to indirect local spending; training and apprenticeships; and 68 construction Protecting health and safety is a key part of our commitment to the countries where we do and logistics jobs. communities where we operate. business Prologis leases require customers to comply with all applicable laws and regulations in their operations and occupancy. We conduct financial 1.1 M due diligence on a customer before entering into a lease agreement and people work under a Prologis then work closely with the customer during the lease. Once leased, the roof each day customer has exclusive possession and control of the premises under the terms of the lease as well as under tenant-landlord law. When we become aware of conditions that might impact community safety, we notify relevant authorities and take appropriate action, including seeking to evict the customer if warranted by the circumstances and permitted by applicable law. If a community safety incident occurs at or near a Prologis property, we work with the customer to mitigate and minimize the community impact. 39
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Logistics skills training Transparency Trendsetter With Prologis’ custom workforce solutions, we address our In 2023, Prologis was named a “Trendsetter customers’ need for logistics talent and create economic in Political Disclosure and Accountability” 92.9 opportunity in the communities where we do business. by Center for Political Accountability with out of 100 on a score of 92.9 out of 100 points on the the CPA-Zicklin − Prologis Learning Academy – In collaboration with CPA-Zicklin Index of Corporate Political Index local workforce development experts, our academy Disclosure and Accountability . provides skill-building training and education for a Our political participation policy prohibits the use of corporate variety of positions in warehousing, distribution and funds or assets to support U.S. federal or state candidates logistics. or political parties without the prior approval of our Ethics − Community Workforce Initiative (CWI) – CWI Committee. leverages digital learning and development tools to Prologis Mexico launched several PARKlife initiatives, including new We engage with policymakers through our membership in trade level up a customer’s logistics workforce and place sports and recreation areas with multi-use courts, fields and barbecues. associations, including NAREIT and the California Chamber of Commerce . We post annual lobbying expenditures, including trained individuals in logistics jobs. We’ve trained I n 2023, Prologis Mexico launched several PARKlife initiatives. the total amount paid in trade association membership fees, to approximately 29,700 people with this program since our website . We have informed major U.S. trade associations its inception in 2018. They installed free little libraries at 25 locations; opened and relevant 501(c)(4) organizations that they are prohibited − Training and Certification – Our training and logistics new sports and recreation areas in Mexico City; and hosted from using any Prologis funds to support any U.S. federal or programs provide basic workforce skills, upskilling two soccer tournaments in Monterrey that drew hundreds of state candidate or political party. The governance committee customers’ employees. With PARKlife, Prologis Mexico can help of our board of directors receives an annual update on our and certification opportunities and individualized provide needed resources to serve our customers’ employees public policy priorities, lobbying expenditures and payments to placement support. The online courses leverage the trade associations. latest technologies, including virtual reality tools, to as well as the broader community. enhance the learning experience. Space for Good PARKlife™ Through our Space for Good program, we donate rent- At some logistics centers, we create PARKlife spaces to free space in unoccupied parts of our logistics buildings to improve the local quality of life and help our customers charitable organizations that provide short-term community attract and retain workers. Examples of PARKlife include services such as disaster relief. In 2023, in response to a range green spaces, sports facilities, fitness trails, job training of crises around the world, we donated some 2.1 MSF worth centers and other community features. PARKlife murals nearly $5M of in-kind rent to 25 charities. (Since 2019, we've and other artwork, created in partnership with local artists, donated nearly 6 MSF worth approximately $24M in in-kind brighten the walls of our distribution centers, bringing a rent.) As an example, following the devastating earthquake that touch of whimsy, a different perspective or a refreshing struck Turkey and Syria in early 2023, Prologis Spain provided visual break from the day to day. warehouse space in Prologis Park Coslada to organize goods for delivery to the disaster zone. 40
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix The Hub at DIRFT: Centre for Logistics Training The Hub at DIRFT (The Hub) is a nearly 10,000 square foot building in Northampton, UK. The facility provides amenities for the Prologis distribution centre and the local community. It also hosts the Prologis Warehousing and Logistics Training Programme (PWLTP). PWLTP is designed to provide young people with the skills they need to start a career in logistics and a pathway to employment in the sector. This creates value to our customers, providing them with a pool of skilled workers. The program recently started delivering inclusive apprenticeship and training for individuals with special educational needs and disabilities. To help inspire and educate local kids about the logistics sector as part of National Careers Week, Prologis UK welcomed 160 students to The Hub in 2023. S t udents between ages 11 and 14 from six schools were treated to a highly interactive day with different learning experiences on topics such as packaging, technology and automation. Activities included: − Tour : To help bring the work to life, students could tour an operating GXO warehouse and a rail terminal operation. − Networking : The students were given the opportunity to speed network with a range of logistics operators and trade associations, allowing them to hear directly from industry professionals about their roles. − Problem solving : Students were given practical problems they needed to solve throughout the course of the day, including what to consider when shipping products (e.g., fastest, cheapest, most sustainable). As a continuation of Prologis’ community outreach work, the activities were specifically designed to raise awareness about the exciting career opportunities that the sector and our customers have to offer, especially in Central England where logistics companies are a key employer. 41
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Community involvement We focus our community giving and volunteering in three The Prologis Foundation helps local communities thrive areas: education, the environment and community support. by supporting economic, educational and environmental Charitable and Volunteer Contributions In 2023, we made significant progress toward our goal, causes and organizations. In 2023, Prologis and the Prologis established in 2019, to donate 75,000 hours to community Foundation made approximately $8 million in contributions 2019 2020 2021 2022 2023 organizations by 2025: Employees donated 16,400 hours in to community organizations around the world. This included 2023 to reach approximately 54,500 hours. a $3 million Foundation donation to create an endowed Charitable fund for the new Morehouse Real Estate Institute (MREI) to contributions On IMPACT Day, our annual global day of service, we close expand career opportunities in commercial real estate for (million USD) $2.30 $8.20 $4.70 $6.48 $7. 9 2 our offices and encourage every employee to volunteer students of Morehouse College, Spelman College and Clark Employee with a local organization. In addition, every employee Atlanta University. (See Diversity, Equity, Inclusion and volunteer time receives 32 paid hours per year to volunteer with nonprofit Belonging for more.) Additionally in 2023, the Foundation (hours) 11,872 4,428 7, 3 2 4 14,557 16,406 organizations in their community, subject to manager provided $356,000 in matching funds through the approval. As an additional benefit, employees can turn company’s Matching Gifts and Dollars for Doers programs service hours performed outside of working hours into a to support employee giving and volunteering. financial contribution from the Prologis Foundation through our Dollars for Doers program. Foundation Funds 40th Festivities In connection with Prologis’ 40th anniversary, the Prologis − The San Leandro Education Foundation in Northern Foundation granted $240,000 in funds, $40,000 per region (U.S. California, an organization that helps high school students East, U.S. Central, U.S. West, Europe, Latin America, Asia), to prepare for and land paid part-time summer internships. charitable organizations across the globe. With guidance from − Banco de Alimentos Associacao Civil in Brazil, which helps the Foundation, organizations were chosen by regional leaders, meet the needs of local families, beyond providing basic ensuring the grants made the biggest impact in their local food baskets. communities. These included: − The Kinderhilfezentrum Düsseldorf , a children’s welfare center, which has been taking care of young people in need − Rocking the Boat , which teaches children in the Bronx of support for more than 50 years. ( New York) the art of wooden boat building, rowing, sailing and − Yahaba Yurikago and the Tokai Social Welfare Program, ecological preservation along the Bronx River. organizations in Japan that provide child care/parenting − Generation One in Houston, Texas, which helps tackle support and services to all age groups. childhood education in Houston’s roughest neighborhoods. − Beijing Meet Charity Foundation in Beijing, China, which − Birmingham Children’s Hospital Charity in the United Kingdom. focuses on providing funds for the health and education o f children. 42
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix IMPACT Day IMPACT Day 2023 saw Prologis employees donating more than 10,800 hours to local organizations, including Build with Love (Amsterdam), The Food Project at Ingalls School Farm (Boston), Zero Waste Farm (China), Cuddles Foundation (India), Jardín de Niños Rodolfo Morales (Mexico), Leybourne Grange Riding Centre for the Disabled (United Kingdom) and Habitat for Humanity (19 projects around the world). Since 2015, Prologis volunteers have worked on 119 Habitat for Humanity homes and community revitalization projects to help provide families and individuals with affordable housing. On IMPACT Day 2023, more than 250 employees participated in 19 Habitat for Humanity projects in three countries, supporting local homeownership and helping to revitalize neighborhoods in the communities where we do business. 43
Appendix
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Performance data 2019 2020 2021 2022 2023 Our Business Revenue (dollars in billions) $3.33 $4.44 $4.76 $5.97 $8.02 Assets under management (dollars in billions) $118 $148 $215 $196 $219 Square footage of real estate portfolio (MSF) 814 984 1,001 1,213 1,242 Number of buildings (owned and managed portfolio) 3,840 4,703 4,735 5,495 5,613 Number of customers 5,000 5,500 5,800 6,600 6,700 Global occupancy rate at year-end 97% 96% 98% 98% 98% Global customer retention rate 79% 77% 74% 78% 74% Number of employees 1,713 1,945 2,053 2,466 2, 5 74 Environment 1 Scope 1 and 2 GHG emissions (mtCO 2 e—market based) 10,753 10,241 8,476 4,465 6,081 Scope 1 and 2 GHG emissions (mtCO 2 e—location based) 13,493 12,869 11,135 6,498 8,302 Scope 3 GHG emissions (mtCO 2 e—location based) 5,429,592 5,094,320 4,514,735 4,215,247 3,841,252 Energy consumption (MWh) 18,708 22,786 20,671 9,831 9,967 Total renewable energy purchased or generated for our operations (MWh) 72 72 214 346 765 Solar and storage capacity (in MW) 2 212 252 285 405 506 Area of sustainably certified space (million square feet) 145 170 195 235 287 LED lighting (% of owned and managed operating properties) 3 33% 42% 57% 71% 74% Social & Governance Women in global workforce 51% 50% 50% 49% 50% People of color in U.S. workforce 28% 29% 32% 32% 34% People trained through Community Workforce Initiative 4 597 4,036 6,809 10,119 8,760 Employee volunteer hours 11,872 4,428 7, 3 2 4 14,557 16,406 Charitable giving (dollars in millions) $2.30 $8.20 $4.70 $6.48 $ 7. 9 2 Employee ethics training completed 100% 100% 100% 100% 100% Employee lost time injury frequency rate (U.S. only, per 1 million hours worked) 1.10 0.94 1.34 0.68 0.67 1. Based on improved data quality and alignment with SBTi, we have updated our emissions methodology and historical data. We now include updated emissions factors; more precise fleet- and office-related emissions data; and Scope 1 and Scope 2 emissions from fugitive refrigerants and chilled water. We now exclude energy related spend from purchased goods and services. Additionally, across all years, we now exclude as immaterial: FERA (indirect emissions associated with the production, transmission and delivery of fuels and energy we purchased), employee commuting, business travel and emissions from properties outside of our owned and managed operating properties and development portfolio. 2. Across our owned and managed portfolio. 3. Across our owned and managed operating properties. Data from a portfolio of properties acquired in June 2023 will be included in our 2024-25 ESG report. 4. Historical data has been updated. 2020-2023 data includes participants in online program only. 45
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Assurance statement Our full assurance statement and GHG emissions validation statement are available on our ESG data page. - . (+'$)".+ $!$ .*0- ) ""- " / / +*$)/.- ! - ) $)/# +*-/Ѷ - .+ &$)"2$/#& 4+ *+' - .+*).$ ' !*- *(+$'$)"/# / ) - !/$)"/# +*-/Ѹ ) ) + ) )/..0- ) / / ( )/ - $)/ -1$ 2$)" ( ( -.*!/# 3 0/$1 *(($// Ѷ. )$*-( ) " ( )/Ѷ ) 1 -$*0.*/# --*' .2$/#$)/# *(+ )4 41$-/0 '( /$)".ѵ ' /$)"/*Prologis’ )1$-*)( )/ 'Ѷ* $ ' ) *1 -) ) +*-/!*- ' ) - -спст . -1 /$*). 0-/# -* . -1 /$*). ) !$) $)".Ѷ( 0-$)"/# ..0- ) )" " ( )/Ѷ - ѷ #$...0- ) / / ( )/# . )+- + - !*--*'*"$.Ѷ ) ѵҗ-*'*"$.Ҙ$) *- ) 2$/#*0- *)/- / 0/$.$)/ ) • / & #*' -$) '0.$1$/4ѷ !*-/# - -.*!/#$. +*-/ѵ are not aware of any stakeholder groups that have been excluded from Prologis’ stakeholder engagement +-* ..ѵ -*'*"$. - !- .# /# спрц ./ & #*' - )" " ( )/ +-* .. $) спрш ) ) *0- " . !0-/# - -(.*!)" " ( )/ )" " ( )/*! 3/ -) './ & #*' -./*.0++*-/- .0'/.ѵ# +-* ..$. $ ))$ ' ) 2 . 3+ / /* *(+' / 2 . *(($..$*) 4 -*'*"$. /* +-*1$ $) + ) )/ ..0- ) *) $/. спст )1$-*)( )/ 'Ѷ * $ ' ) " $)$)спсрѵ0 /*'$($/ - .*0- .Ѷ-*'*"$. *) 0 / /# спср- 1$ 2 4 )" "$)"$)/ -) './ & #*' -. *1 -) ) җҘ +*-/җ/# - +*-/Ҙ/* (* - / ' 1 '*! ..0- ) ) ( / -$ '$/4*!/# +-*! ..$*) '%0 " ( )/*! $) '0 $)" /#*. 2#* # 1 $- / *)/ / 2$/# -*'*"$. 3/ -) ' ./ & #*' -.ѵ ( / -$ '$/4 .. ..( )/ 2 . the verifier using AccountAbility’s AA 1000AS (v3), where the scope was a Type 2 engagement. *) 0 / $)спст/# /$) '0 */#$)/ -) ' ) 3/ -) './ & #*' -.ѵ • / -$ '$/4ѷ Our assurance engagement covered Prologis’ global operations and activities and .+ $!$ ''4ѷ • 1 -$!$ *)!*-( ) 2$/#рппп *0)/ $'$/4-$) $+' .җрпппспрчҘѸ ) We are not aware of any material issues concerning Prologis’ sustainability performance that have been excluded !-*(/# +*-/ѵ# +*-/ *1 -. - )" *!+ -!*-( ) ѵ# +0 '$.# ))0 '- +*-/+-*1$ .#$"#'$"#/. • 1 '0 / /# 0- 4 ) - '$ $'$/4*! / ) $)!*-( /$*)ѵ *!& 4 *(+'$.#( )/. ) $)$/$ /$1 .ѵ +*-/$)"$. '.* *).$./ )/2$/# ) './ / - +*-/$)"ѵ • .+*).$1 ) ..ѷ Our assurance engagement excluded the data and information of Prologis’ suppliers, *)/- /*-. ) )4/#$- Ҋ+ -/$ . -*'*"$. )" " . - "0' -'4 2$/# $)/ -) ' ) 3/ -) ' ./ & #*' -.Ѷ 2$/# ) (+# .$. *) 0./*( -.ѵ + $!$ ( )/$*) $)/# - +*-/ѵ 3 (+' .*! - .+*).$1 ) .. $) спст $) '0 *)./-0 /$*) $- 0' -$/4Ѷ '*2 - - *) *)./-0 /$*) ( / -$ '. ) .0++*-/!*- $* $1 -.$/4ѵ ’s responsibility is only to Prologis. LR $. ' $(. )4'$ $'$/4*-- .+*).$ $'$/4/**/# -. . 3+' $) $)/# ) • '$ $'$/4ѷ footnote. Prologis’ responsibility is for collecting, aggregating, analysing and presenting all the data and information '$ 1 /# / /# -$/ -$ ++'$ - ++-*+-$ / ) .0!!$ $ )/ /* +-* 0 *).$./ )/Ѷ 0) $ . ) 2$/#$)/# - +*-/ ) !*-( $)/ $)$)" !! /$1 $)/ -) ' *)/-*'.*1 -/# .4./ (.!-*(2#$ #/# - +*-/$. -$1 ѵ '/$( / '4Ѷ/# - +*-/# . ) ++-*1 4Ѷ ) - ( $)./# - .+*).$ $'$/4*!-*'*"$.ѵ 0) -./ ) ' *)/ )/!*-/# ) 0. -ѵ • (+ /ѷ ’. *-- .+*) $)"- )#*0. . -$!$ /$*)..0- ) / / ( )/.#*0' - ! -- /*$) *)%0) /$*)2$/#/#$. -*'*"$s’"* '. ) ./- / "$ . - ( /0- ) $)'$) 2$/#+#$'*.*+#4ѵ (+ /. -*../# +-*+ -/4'$! 4 ' - ..0- ) / / ( )/ѵ *).$ - Ѷ$(+-*1 ( )/. - *(($// /*Ѷ+-*"- ..$.( .0- Ѷ ) ( /-$ . - - +*-/ ѵ2*+-*($) )/'$! 4 ' 3 (+' .$) '0 .*' - ) ѵ*)/$)0 /$*)$)/#$../- / "4$.. )$)"-*2$)"+-*($) ) *! # -"$)" ./ /$*). ) 3+ ) $)".*' - 4*) 2# //# 0$' $)"/ ) )/ )0/$'$5 ѵ*./- )/'4$(+ /$.$)!'0 ) /#-*0"# LRQA’s Opinion *)./-0 /$*) $- 0' -$/4 ) '*2 - - *) *)./-0 /$*)( / -$ '.ѵ . *) ’s approach nothing has come to our attention that would cause us to believe that -*'*"$.# .)*/Ѷ$) '' ( / -$ '- .+ /.ѷ • //# - ,0$- ( )/. *1 Ѹ LRQA’s / ) - .Ѷ*(+ / ) ) ) + ) ) • $. '*. 0- / ) - '$ ' + -!*-( ) / ) $)!*-( /$*) .)* --*-.*-*($..$*).2 - / / Ѹ ) ).0- ./# . ' /$*)*! ++-*+-$ / '4,0 '$!$ $) $1$ 0 '. . *)/# $-,0 '$!$ /$*).Ѷ/- $)$)" ) 3+ -$ ) ѵ • *1 - ''/# $..0 ./# / - $(+*-/ )//*/# ./ & #*' -. ) - -.*!/#$.- +*-/ѵ # *0/ *( *! ''1 -$!$ /$*) ) -/$!$ /$*) .. ..( )/.$./# )$)/ -) ''4- 1$ 2 4. )$*-( ) " ( )//* ).0- /# //# ++-* # ++'$ $.-$"*-*0. ) /- ).+ - )/ѵ # *+$)$*) 3+- .. $.!*-( *)/# .$.*! (* - / ' 1 '*! ..0- ) ) //# ( / -$ '$/4*!/# +-*! ..$*) ' # 1 -$!$ /$*) .. ..( )/ '*)"2$/# 1 -$!$ /$*)$./# *)'42*-&0) -/ & ) 4 !*--*'*"$. ) ..0 # %0 " ( )/*!/# 1 -$!$ -ѵ Note: The extent of evidence-gathering for a moderate assurance engagement is less than for a high assurance engagement. Moderate assurance * .)*/ *(+-*($. *0-$) + ) ) *-$(+ -/$ '$/4ѵ engagements focus on aggregated data rather than physically checking source data at sites. Consequently, the level of assurance obtained in a moderate /# assurance engagement is substantially lower than the assurance that would have been obtained had a high assurance engagement been performed. $") / ѷ 4рх Ѷспсу LRQA’s ++-* # LRQA’s assurance engagements are carried out in accordance with our verification procedure. Th !*''*2$)"/ .&./#*0"# ) - ѵ* &- /# 2 - 0) -/ & ) .+ -/*!/# 1$ ) " /# -$)"+-* ..!*-/#$. ..0- ) )" " ( )/ѷ • Assessing Prologis’ approach to stakeholder engagement to confirm that issues raised by stakeholders were captured -$!$ - *-- /'4ѵ $ /#$./#-*0"#$)/ -1$ 2.2$/#. )$*-( ) " ( )/ ) - 1$ 2*!+-* 0- . ) +-* .. .$)+' On behalf of Lloyd’s Register Quality Assurance, Inc. /*( ) " ./ & #*' - )" " ( )/ѵ чрп 1 )/#1 )0 Ѷ0$/ рррп 2*-&Ѷ 2*-&рппрш • Reviewing Prologis’ process for identifying and determining material issues to confirm that the right issues were - ! - ) ѷпппппушх included in their Report. We did this by independently reviewing Prologis’ internal materiality process, - 1$ 2$)" Ѷ$/. !!$'$ / . ) .0 .$ $ -$ .Ѷ ) /# $-- .+ /$1 *!!$ -.Ѷ (+'*4 .*- " )/. - Ѷ$) $1$ 0 ''4 ) *'' /$1 '4Ѷ- ! -- /*$)/#$. ' 0. .Ѿ Ѿѵ - +*-/.2-$// ) 4-*'*"$. ) $/.+ -./* ).0- /# /. /*-.+ $!$ $..0 .2 - $) '0 !*- *(+ - $'$/4Ѷ ..0( .)*- .+*).$ $'$/4 ) .# '')*/ '$ ' /* )4+ -.*)!*- )4'*..Ѷ ( " *- 3+ ). 0. 4- '$ ) *)/# $)!*-( /$*)*- 1$ $)/#$. * 0( )/ - ! - ) $)"/# '* ' +*-/$)" )$/$ /$1 җ Ҙ)$1 -. '/ ) - . ) *+$ Ҋ.+ $!$ / ) - . ) - ! - ) $)" *-#*2.* 1 -+-*1$ Ѷ0)' ../# /+ -.*)# ..$") *)/- /2$/#/# - ' 1 )/ )/$/4!*-/# +-*1$.$*)*!/#$.$)!*- ( /$*)*- 1$ ) $)/# / . )4 - .+*).$ $'$/4*-'$ $'$/4$. 3 '0.$1 '4*)/# / -(. ) *) $/$*).. /*0/$)/# / *)/- /ѵ 0./ $) $'$/4 *0)/$)"/ ) - .* - җҘ- ' ./ / . /*-./ ) - ѵ • Auditing Prologis’ data management systems to confirm that there were no significant errors, omissions or # )"'$.#1 -.$*)*!/#$...0- ) / / ( )/$./# *)'41 '$ 1 -.$*)ѵ ..0( .)*- .+*).$ $'$/4!*-1 -.$*)./- ).' / $)/**/# -' )"0 " .ѵ #$...0- ) / / ( )/$.*)'41 '$ 2# )+0 '$.# 2$/#/# +*-//*2#$ #$/- ! -.ѵ /( 4*)'4 - +-* 0 $)$/. )/$- /4ѵ ($../ / ( )/.$)/# +*-/ѵ $ /#$. 4ѷ *+4-$"#/Ҷ Ѷспсу 46
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix LRQA Independent Assurance Statement Table 1. Summary of Prologis’ GHG Emissions Data for CY 2023 Table 3.2 CY 2023 ESG Metrics by Entity and Funds Relating to Prologis’ Greenhouse Gas Emissions and Environmental, Social & Scope of GHG emissions Tonnes CO2e Funds and Entity Governance Metrics for the 2023 Calendar Year Scope 1 Direct GHG Emissions 6,063 Data Parameter PLD FIBRA NPR PBLV PCCLF PELF PELP USLF USLV Energy indirect GHG emissions (Location-based) 2,239 Onsite installed solar capacity 506 1 59 0.1 3 150 39 44 31 Scope 21 supported by storage (MW)1 This Assurance Statement has been prepared for Prologis, L.P. in accordance with our contract. Energy indirect electricity GHG emissions (Market-based) 0 Percentage of LED lighting 74% 81% 89% 77% 72% 81% 83% 66% 68% Energy indirect total GHG emissions (Market-based) 17 installed by area LRQA was commissioned by Prologis, L.P. (Prologis) to provide independent assurance of its greenhouse gas (GHG) Category 1 Purchased goods and services 202,491 Percentage of owned and 23% 85% 92% 70% 15% 36% 20% 10% 5% emissions inventory and its environmental, social and governance (ESG) metrics (“the Report”) for the Calendar Year Category 2 Capital goods 973,765 managed portfolio sustainability 2023 against the assurance criteria below to a limited level of assurance using LRQA’s verification procedure and ISO Category 3: Fuel and Energy Related Activities 1,941 certified by area 14064 - Part 3 for greenhouse gas emissions data. LRQA’s verification procedure is based on current best practise and is Note 1: Capacity in megawatts (MW) is expressed in terms of the peak capacity of the installed solar energy systems. in accordance with ISAE 3000 and ISAE 3410. Scope 3 Category 6: Business Travel 5,630 Category 7: Employee Commuting 2,921 LRQA’s Approach Our assurance engagement covered Prologis corporate operations and activities worldwide and specifically the Category 8 Upstream leased assets 57 LRQA’s assurance engagements are carried out in accordance with our verification procedure. The following tasks were following requirements: undertaken as part of the evidence gathering process for this assurance engagement: • Verifying conformance with: Category 13 Downstream leased assets2 2,664,938 • interviewing relevant employees of the organization responsible for managing GHG emissions and ESG data and • Prologis’ reporting methodologies for the selected datasets Category 15: Investments 2,752 records; • Corporate offices and GHG emissions from Prologis’ wholly-owned subsidiaries, Nippon Prologis Note 1: Scope 2 Location-based and Scope 2 Market-based are defined in the WRI/WBCSD GHG Protocol Scope 2 Guidance, 2015. • reviewing Prologis’ systems for collecting, recording and reporting data; Note 2: Scope 3 Category 13 includes all energy for Prologis tenant portfolio buildings. Properties from the following funds were included in the verification REIT and FIBRA Prologis, are included in the total emissions and also listed separately for CDP activities of Scope 3 Downstream Leased Assets: FIBRA Prologis (FIBRA); Nippon Prologis REIT, Inc. (NPR); PBLV; PCCLF; PELF; PELP; USLF; and USLV. • verifying direct and indirect GHG emissions and ESG data and records at an aggregated level for the calendar year reporting purposes. 2023; and • World Resources Institute / World Business Council for Sustainable Development Greenhouse Gas Table 2. REIT GHG Emissions Inventory for CY 2023 • reviewing Prologis’ Base Year recalculation policy and confirming that recalculation is not required at this time. Protocol: A corporate accounting and reporting standard, revised edition (otherwise referred to as the Scope of GHG emissions Tonnes CO2e WRI/WBCSD GHG Protocol) for the GHG data1. 1 Nippon Prologis REIT LRQA’s Standards, Competence and Independence • Evaluating the accuracy and reliability of data and information for only the selected indicators listed below: Scope 1 Nippon Prologis REIT Direct GHG Emissions 2 LRQA implements and maintains a comprehensive management system that meets accreditation requirements for ISO • Direct (Scope 1), Energy Indirect (Scope 2) and Other Indirect (Scope 3) GHG emissions; 2 14065 Greenhouse gases – Requirements for greenhouse gas validation and verification bodies for use in accreditation ▪ Scope 3 GHG emissions verified by LRQA only include Purchased Goods and Services, Capital Scope 2 Nippon Prologis REIT Energy Indirect GHG emissions (Location-based) 14 or other forms of recognition and ISO/IEC 17021 Conformity assessment – Requirements for bodies providing audit and 2 Goods, Fuel and Energy Related Activities, Business Travel, Employee Commuting, Upstream Nippon Prologis REIT Energy Indirect total GHG emissions (Market-based) 0 certification of management systems that are at least as demanding as the requirements of the International Standard Leased Assets, Downstream Leased Assets and Investments. FIBRA Prologis1 on Quality Control 1 and comply with the Code of Ethics for Professional Accountants issued by the International Ethics ▪ Properties from the following funds were included in the verification activities of Scope 3 Scope 1 FIBRA Prologis Direct Emissions 303 Standards Board for Accountants. Downstream Leased Assets: FIBRA Prologis (FIBRA); Nippon Prologis REIT, Inc. (NPR); PBLV; PCCLF; 2 PELF; PELP; USLF; and USLV. Scope 2 FIBRA Prologis Energy Indirect GHG emissions (Location-based) 188 LRQA ensures the selection of appropriately qualified individuals based on their qualifications, training and experience. 2 • ESG metrics including: FIBRA Prologis Energy Indirect total GHG emissions (Market-based) 0 The outcome of all verification and certification assessments is then internally reviewed by senior management to ▪ Site solar capacity, percentage of LED lighting installed by area, percentage of new developments Note 1: Nippon Prologis REIT (NPR) and FIBRA Prologis GHG emissions are included in the total Prologis emissions in Table 1 and are also listed separately in Table ensure that the approach applied is rigorous and transparent. that are sustainability certified or in the process of being certified (by building count), percentage 2 for CDP reporting purposes. Emissions for NPR only include those associated with Prologis REIT Management K.K. (PLDRM), NPR's Asset Manager as specified on of owned and managed portfolio (by area) that is sustainability certified, number of people NPR's Corporate Governance webpage. Scope 1 and 2 data reflects emissions from Prologis Mexico’s operations that are under FIBRA's operational control. Note 2: Scope 2, Location-based and Scope 2, Market-based are defined in the WRI/WBCSD GHG Protocol Scope 2 Guidance, 2015 trained through the Community Workforce Initiative since CY 2020, number of volunteer hours Signed Dated: May 25, 2024 since CY 2019, percentage of women in workforce and in senior leadership (globally), percentage Table 3.1 CY 2023 ESG Metrics of people of color in workforce and in senior leadership (U.S. only). Data Parameter Value Percentage of new developments that are sustainability certified or in the process of 96% LRQA’s responsibility is only to Prologis. LRQA disclaims any liability or responsibility to others as explained in the end being certified (by building count) Joycelyn Swamidoss footnote. Prologis’ responsibility is for collecting, aggregating, analysing and presenting all the data and information Number of people trained through the Community Workforce Initiative since CY 2020 29,724 LRQA Lead Verifier within the Report and for maintaining effective internal controls over the systems from which the Report is derived. Number of volunteer hours since CY 2019 54,587 On behalf of LRQA, Inc. Ultimately, the Report has been approved by, and remains the responsibility of Prologis. Percentage of women in workforce (globally) 50% 810 Seventh Avenue, Suite 1110, NY 10019 LRQA’s Opinion Percentage of women in senior leadership (globally) 23% LRQA reference: UQA00000496/6751384 Based on LRQA’s approach, nothing has come to our attention that would cause us to believe that Prologis has not, in Percentage of people of color in workforce (U.S. only) 34% LRQA Group Limited, its affiliates and subsidiaries, and their respective officers, employees or agents are, individually and collectively, referred to in all material respects: Percentage of people of color in senior leadership (U.S. only) 15% this clause as 'LRQA'. LRQA assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the • Met the requirements of the criteria listed above; and information or advice in this document or howsoever provided, unless that person has signed a contract with the relevant LRQA entity for the • Disclosed accurate and reliable performance data and information as summarized in Table 1 below. provision of this information or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out in that contract. 2 Note: The extent of evidence-gathering for a limited assurance engagement is less than for a reasonable assurance engagement. The English version of this Assurance Statement is the only valid version. LRQA assumes no responsibility for versions translated into other languages. The opinion expressed is formed on the basis of a limited level of assurance2 and at the materiality of the professional Limited assurance engagements focus on aggregated data rather than physically checking source data at sites. Consequently, the This Assurance Statement is only valid when published with the Report to which it refers. It may only be reproduced in its entirety. judgement of the verifier. level of assurance obtained in a limited assurance engagement is lower than the assurance that would have been obtained had a Copyright © LRQA, 2024. reasonable assurance engagement been performed. 1 http://www.ghgprotocol.org/ . . . Page 1 of 3 Page 2 of 3 Page 3 of 3 47
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix ESG materiality assessment In early 2024, we completed an ESG materiality assessment to identify key issues, TOPIC REPORT SECTION(S) risks and opportunities that might impact our business and our stakeholders. We Climate change and GHG emissions Net zero , Climate strategy used an AI-driven platform to analyze real estate industry-level data and regulations, applying Prologis-specific filters for geography, customers, suppliers and investors. Renewable energy and energy management Driving sustainable logistics We evaluated the initial ranking of issues, which consisted of separate numerical Data governance and information security What makes us different ; Governance and ethics scores for impacts on our business (outside-in) and stakeholders and the environment Business model resilience What makes us different (inside-out), making adjustments based on our knowledge of the current logistics real Employee diversity and inclusion Diversity, equity, inclusion and belonging estate business environment and our business model. The final list of material ESG Governance and ethics Governance and ethics topics, in order of importance, has been reviewed and approved by our Global ESG Steering Committee. Employee health and safety Employee health and safety Innovation and technology What makes us different Sustainable buildings Driving sustainable logistics ; Siting, design and construction Stakeholder engagement Stakeholder engagement Talent management Our inspired people Waste and water management and circularity Siting, design and construction Supply chain responsibility Supply chain responsibility Ecological Impacts Siting, design and construction Local social and economic impact Resilient communities Management of the legal and regulatory Governance and ethics ; Stakeholder engagement environment 48
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI index This report was prepared in accordance with the Global Reporting Initiative (GRI) Universal Standards 2021 and covers the topics identified in our most recent ESG materiality assessment. GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES GRI 2: General Disclosures 2021 2-1 2-1 Organizational details Prologis Inc. What We Do 2-2 2-2 Entities included in the organization’s ESG Report: About Prologis Prologis ESG sustainability reporting 2-3 2-3 Reporting period, frequency and contact point ESG Report: About this report Reports and Resources 2-4 2-4 Restatements of information ESG Report: Climate strategy; Greenhouse gas Assurance Page emissions; Assurance Statement 2-5 2-5 External assurance ESG Report: Assurance Statement Assurance Page 2-6 2-6 Activities, value chain and other business ESG Report: Sustainable Logistics ESG Policy relationships 2-7 2-7 Employees ESG Report: Our Inspired People; Inclusion & Human Rights Policy ; SEC diversity performance, Proxy Statement Filings 2-8 2-8 Workers who are not employees ESG Report: Our Inspired People 2-9 2-9 Governance structure and composition ESG Report: Ahead of What's Next, Proxy SEC Filings Statement 2-10 2-10 Nomination and selection of the highest Proxy Statement , SEC Filings SEC Filings governance body 2-11 2-11 Chair of the highest governance body Proxy Statement SEC Filings 2-12 2-12 Role of the highest governance body in Proxy Statement SEC Filings overseeing the management of impacts 2-13 2-13 Delegation of responsibility for managing ESG Report: Ahead of What's Next; Governance SEC Filings impacts 2-14 2-14 Role of the highest governance body in Proxy Statement SEC Filings sustainability reporting 2-15 2-15 Conflicts of interest ESG Report: Ethics, compliance and human rights Code of Ethics and Business Conduct 49
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES 2-16 2-16 Communication of critical concerns ESG Report: Employee Health and Safety Code of Ethics and Business Conduct 2-17 2-17 Collective knowledge of the highest Proxy Statement SEC Filings ; Annual Report governance body 2-18 2-18 Evaluation of the performance of the highest Proxy Statement SEC Filings governance body 2-19 2-19 Remuneration policies Proxy Statement SEC Filings 2-20 2-20 Process to determine remuneration Proxy Statement SEC Filings 2-21 2-21 Annual total compensation ratio Proxy Statement SEC Filings 2-22 2-22 Statement on sustainable development ESG Report: Letter from our Co-Founder, CEO ESG Policy ; Annual Report strategy and Chairman, and Chief Energy & Sustainability Officer 2-23 2-23 Policy commitments ESG Report: Ethics, compliance and human rights Code of Ethics and Business Conduct 2-24 2-24 Embedding policy commitments ESG Report: Ethics, compliance and human rights Code of Ethics and Business Conduct 2-25 2-25 Processes to remediate negative impacts ESG Report: Ahead of What's Next, Risk ESG Policy management 2-26 2-26 Mechanisms for seeking advice and raising ESG Report: Ethics, compliance and human rights Code of Ethics and Business concerns Conduct 2-27 2-27 Compliance with laws and regulations ESG Report: Ethics, compliance and human rights Code of Ethics and Business Conduct 2-28 2-28 Membership associations ESG Report: Awards and recognitions; Stakeholder Memberships and Associations engagement 2-29 2-29 Approach to stakeholder engagement ESG Report: Stakeholder engagement 2-30 2-30 Collective bargaining agreements ESG Report: Ethics, compliance and human rights Code of Ethics and Business Conduct MATERIAL TOPICS GRI 3: Material Topics 2021 3-1 3-1 Process to determine material topics ESG Report: ESG Materiality Assessment 3-2 3-2 List of material topics ESG Report: ESG Materiality Assessment 50
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES Economic performance GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 201: Economic Performance 201-1 201-1 Direct economic value generated and 10-K 2016 distributed 201-2 201-2 Financial implications and other risks and ESG Report: Risk Management opportunities due to climate change 201-3 201-3 Defined benefit plan obligations and other Proxy Statement retirement plans 201-4 201-4 Financial assistance received from the — Confidentiality constraints government Indirect economic impacts GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 203: Indirect Economic 203-1 203-1 Infrastructure investments and services ESG Report: Siting, design and construction Human Rights Policy Impacts 2016 supported 203-2 203-2 Significant indirect economic impacts ESG Report: Economic and social impact Human Rights Policy Procurement Practices GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 204: Procurement Practices 204-1 204-1 Proportion of spending on local suppliers — Information unavailable/ 2016 incomplete Anti-corruption GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 205: Anti-corruption 2016 205-1 205-1 Operations assessed for risks related to ESG Report: Ethics, compliance and human rights Code of Ethics and Business corruption Conduct 205-2 205-2 Communication and training about anti- ESG Report: Ethics, compliance and human rights Code of Ethics and Business corruption policies and procedures Conduct 205-3 205-3 Confirmed incidents of corruption and ESG Report: Ethics, compliance and human rights Code of Ethics and Business actions taken Conduct Anti-competitive behavior GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 206: Anti-competitive 206-1 206-1 Legal actions for anti-competitive behavior, ESG Report: Ethics, compliance and human rights Code of Ethics and Business Behavior anti-trust, and monopoly practices Conduct 51
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES Tax GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 207: Tax 2019 207-1 207-1 Approach to tax Proxy Statement 10-K 207-2 207-2 Tax governance, control, and risk Proxy Statement 10-K management Materials GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 301: Materials 2016 301-1 301-1 Materials used by weight or volume ESG Report: Siting, design and construction Additional data will be ESG Data Page available once LCAs are completed across our portfolio. 301-2 301-2 Recycled input materials used ESG Report: Siting, design and construction Additional data will be ESG Data Page available once LCAs are completed across our portfolio. 301-3 301-3 Reclaimed products and their packaging — Not applicable materials Energy GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 302: Energy 2016 302-1 302-1 Energy consumption within the organization ESG Report: Driving sustainable operations; SASB ESG Data Page disclosure 302-2 302-2 Energy consumption outside of the ESG Report: Driving sustainable operations; SASB ESG Data Page organization disclosure 302-3 302-3 Energy intensity ESG Report: Driving sustainable operations; SASB ESG Data Page disclosure 302-4 302-4 Reduction of energy consumption ESG Report: Driving sustainable operations; SASB ESG Data Page disclosure 302-5 302-5 Reductions in energy requirements of ESG Report: Driving sustainable operations; SASB ESG Data Page products and services disclosure 52
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES Water and effluents GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 303: Water and Effluents 2018 303-1 303-1 Interactions with water as a shared resource — Not applicable 303-2 303-2 Management of water discharge-related ESG Report: Siting, design and construction; SASB impacts disclosure 303-3 303-3 Water withdrawal — Not applicable 303-4 303-4 Water discharge — Not applicable 303-5 303-5 Water consumption ESG Report: Siting, design and construction; SASB ESG Data Page disclosure Biodiversity GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 304: Biodiversity 2016 304-1 304-1 Operational sites owned, leased, managed ESG Report: Biodiversity in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas 304-2 304-2 Significant impacts of activities, products ESG Report: Biodiversity and services on biodiversity 304-3 304-3 Habitats protected or restored ESG Report: Biodiversity 304-4 304-4 IUCN Red List species and national — Information unavailable/ conservation list species with habitats in areas incomplete affected by operations Emissions GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 305: Emissions 2016 305-1 305-1 Direct (Scope 1) GHG emissions ESG Report: Greenhouse gas emissions ESG Data Page 305-2 305-2 Energy indirect (Scope 2) GHG emissions ESG Report: Greenhouse gas emissions ESG Data Page 305-3 305-3 Other indirect (Scope 3) GHG emissions ESG Report: Greenhouse gas emissions ESG Data Page 305-4 305-4 GHG emissions intensity ESG Report: Greenhouse gas emissions ESG Data Page 305-5 305-5 Reduction of GHG emissions ESG Report: Greenhouse gas emissions ESG Data Page 305-6 305-6 Emissions of ozone-depleting substances — Information unavailable/ (ODS) incomplete 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), — Information unavailable/ and other significant air emissions incomplete 53
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES Waste GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 306: Waste 2020 306-1 306-1 Waste generation and significant waste- ESG Report: Siting, design and construction; ESG Data Page related impacts Building certification; SASB disclosure 306-2 306-2 Management of significant waste-related ESG Report: Siting, design and construction; ESG Data Page impacts Building certification; SASB disclosure 306-3 306-3 Waste generated ESG Data Page 306-4 306-4 Waste diverted from disposal ESG Data Page 306-5 306-5 Waste directed to disposal — Information unavailable/ incomplete Supplier environmental assessment GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 308: Supplier Environmental 308-1 308-1 New suppliers that were screened using ESG Report: Supply chain responsibility Assessment 2016 environmental criteria 308-2 308-2 Negative environmental impacts in the ESG Report: Collaborating on climate supply chain and actions taken Employment GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 401: Employment 2016 401-1 401-1 New employee hires and employee turnover ESG Report: Our Inspired People ESG Data Page 401-2 401-2 Benefits provided to full-time employees ESG Report: Employee Engagement ESG Data Page that are not provided to temporary or part-time employees 401-3 401-3 Parental leave ESG Report: Our Inspired People Labor/management relations GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 402: Labor/Management 402-1 402-1 Minimum notice periods regarding ESG Report: Stakeholder engagement Relations 2016 operational changes 54
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES Occupational health and safety GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 403: Occupational Health and 403-1 403-1 Occupational health and safety ESG Report: Employee health and safety; Resilient Code of Ethics and Business Safety 2018 management system Communities Conduct ; Human Rights Policy 403-2 403-2 Hazard identification, risk assessment, and ESG Report: Employee health and safety; Resilient Code of Ethics and Business incident investigation Communities Conduct ; Human Rights Policy 403-3 403-3 Occupational health services ESG Report: Employee health and safety; Resilient Code of Ethics and Business Communities Conduct 403-4 403-4 Worker participation, consultation, and ESG Report: Employee health and safety; Resilient Code of Ethics and Business communication on occupational health and safety Communities Conduct 403-5 403-5 Worker training on occupational health and ESG Report: Employee health and safety; Resilient Code of Ethics and Business safety Communities Conduct 403-6 403-6 Promotion of worker health ESG Report: Employee health and safety; Resilient Code of Ethics and Business Communities Conduct 403-7 403-7 Prevention and mitigation of occupational ESG Report: Employee health and safety; Resilient Code of Ethics and Business health and safety impacts directly linked by Communities Conduct business relationships 403-8 403-8 Workers covered by an occupational health ESG Report: Employee health and safety; Resilient Human Rights Policy ; Code of and safety management system Communities Ethics and Business Conduct 403-9 403-9 Work-related injuries ESG Report: Employee health and safety ESG Data Page 403-10 403-10 Work-related ill health ESG Report: Employee health and safety Training and education GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 404: Training and Education 404-1 404-1 Average hours of training per year per ESG Report: Our Inspired People 2016 employee 404-2 404-2 Programs for upgrading employee skills and ESG Report: Employee engagement transition assistance programs 404-3 404-3 Percentage of employees receiving regular ESG Report: Employee engagement performance and career development reviews 55
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES Diversity and equal opportunity GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 405: Diversity and Equal 405-1 405-1 Diversity of governance bodies and ESG Report: Ahead of What’s Next, Governance; SEC Filings Opportunity 2016 employees Diversity, equity, inclusion and belonging; Proxy Statement 405-2 405-2 Ratio of basic salary and remuneration of ESG Report: Diversity, equity, inclusion and women to men belonging Non-discrimination GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 406: Non-discrimination 2016 406-1 406-1 Incidents of discrimination and corrective ESG Report: Ethics, compliance and human rights actions taken Freedom of association and collective bargaining GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 407: Freedom of Association 407-1 407-1 Operations and suppliers in which the Code of Ethics and Business and Collective Bargaining 2016 right to freedom of association and collective Conduct bargaining may be at risk Forced or compulsory labor GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 409: Forced or Compulsory 409-1 409-1 Operations and suppliers at significant risk Human Rights Policy ; Supplier Labor 2016 for incidents of forced or compulsory labor Code of Conduct Local communities GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 413: Local Communities 2016 413-1 413-1 Operations with local community ESG Report: Economic and social impact Human Rights Policy engagement, impact assessments, and development programs 413-2 413-2 Operations with significant actual and ESG Report: Economic and social impact Human Rights Policy potential negative impacts on local communities 56
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix GRI STANDARD/OTHER SOURCE DISCLOSURE LOCATION OMISSION ADDITIONAL RESOURCES Supplier social assessment GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 414: Supplier Social 414-1 414-1 New suppliers that were screened using Supplier Code of Conduct Assessment 2016 social criteria 414-2 414-2 Negative social impacts in the supply chain Supplier Code of Conduct and actions taken Public Policy GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 415: Public Policy 2016 415-1 415-1 Political contributions ESG Report: Increasing political transparency; Code of Ethics and Business Transparency Trendsetter Conduct ; SEC Filings Customer health and safety GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 416: Customer Health and 416-1 416-1 Assessment of the health and safety impacts — Not applicable Safety 2016 of product and service categories 416-2 416-2 Incidents of non-compliance concerning ESG Report: Employee health and safety Code of Ethics and Business the health and safety impacts of products and Conduct ; SEC Filings services Customer privacy GRI 3: Material Topics 2021 3-3 3-3 Management of material topics ESG Report: ESG Materiality Assessment GRI 418: Customer Privacy 2016 418-1 418-1 Substantiated complaints concerning ESG Report: Ahead of What's Next, Risk Code of Ethics and Business breaches of customer privacy and losses of management; Proxy Statement Conduct ; SEC Filings customer data 57
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix SASB disclosure The following table contains our disclosure on the topics included in SASB’s Real Estate Standard (2023). Additional metrics may be found throughout our 2023-24 ESG Report. CODE ACCOUNTING METRIC PROLOGIS INFORMATION Energy Information IF-RE-130a.1 Energy consumption data coverage as a Energy consumption data coverage from the global Prologis operating portfolio as a percentage of floor area was equal to 65% in 2023. percentage of total floor area, by property subsector IF-RE-130a.2 (1) Total energy consumed by portfolio area From the portfolio with available energy data coverage from 2023, the following details pertain to energy: with data coverage, (2) percentage grid (1) The total energy consumption: 9,635,104 MWh electricity, and (3) percentage renewable, by (2) Percentage grid electricity: 61% property subsector (3) Percentage of electricity that is renewable (Logistics/Distribution Warehouse): 3% IF-RE-130a.3 Like-for-like percentage change in energy Like-for-like change in energy consumption for the global Prologis operating portfolio was a 16% decrease from 2022 to 2023. Our data consumption for the portfolio area with data indicates this is due to decreases in customer consumption of both electricity and natural gas. coverage, by property subsector IF-RE-130a.4 Percentage of eligible portfolio that (1) has an Prologis has a goal to certify 100% of eligible new developments and redevelopments approved from June 2021. These sustainable building energy rating and (2) is certified to ENERGY certification standards incorporate energy efficiency features, as well as other features for water efficiency, waste reduction, and others that STAR, by property subsector promote tenant health and well-being, to name a few. Prologis is exploring EnergyStar Certification as a sustainability solution for customers looking for certifications on energy efficiency. In certain regions like Europe, where Energy Performance Certificates (EPCs) are required to be maintained by various country requirements, we manage the EPCs to maintain local compliance. In 2023, we engaged a third party to complete an analysis of our EPC records across our European portfolio and established enhanced processes for managing EPCs moving forward. IF-RE-130a.5 Description of how building energy Prologis integrates energy and water reduction technologies into our new buildings as part or our goal approved from June 2021 to have management considerations are integrated into 100% of eligible new developments and redevelopments achieve sustainable building certification. These strategies ensure the resilience property investment analysis and operational and enduring value of our buildings, creating value for our customers and our company. In addition, Prologis has a customer-centric approach strategy focused on helping further the operational efficiency of our customers. We have energy, mobility and sustainability solutions available through our Essentials marketplace, which were significantly expanded in 2023. We also allocate a portion of our capital expenditure for existing buildings to LED lighting retrofits and other energy-saving technologies, water-saving features, cool roofing technology and solar installations. 58
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix CODE ACCOUNTING METRIC PROLOGIS INFORMATION Water Management IF-RE-140a.1 Water withdrawal data coverage as a Water withdrawals from logistics facilities are typically lower compared to other types of buildings, and thus less material than energy and percentage of (1) total floor area and (2) floor emissions. area in regions with High or Extremely High (1) For 2023, we report on data available on water consumption across a portion of our global offices. In 2023, we had water consumption Baseline Water Stress, by property sector reporting from 33 of our global corporate offices, with 5.58 million gallons consumed. We continue to work to improve data coverage. (2) Using the WRI Aqueduct dataset, we identified that more than half of the properties in our portfolio are in areas of high or extremely high water stress. Customers are responsible for their use and discharge of water during their lease. To help them minimize their water use, we install smart pump kits, high efficiency fixtures and native plants. In California, we’ve removed all ornamental and non-functional turf grasses from most of our properties, replacing them with drought tolerant vegetation. This has reduced water usage at these properties by an estimated 50%. Prologis is also using third-party data for mapping and evaluating physical climate risk exposure at the asset level through science-based climate scenarios. Based on the data of our physical climate risk assessments, we can proactively implement mitigation strategies that further the resilience of our global portfolio. This includes implementing site-specific mitigation measures, such as raising a property out of the base flood elevation and other measures to ensure the long-term resilience of our assets. IF-RE-140a.2 (1) Total water withdrawn by portfolio area with Using the WRI Aqueduct dataset, we identified that more than half of the properties in our portfolio are in areas of high or extremely high water data coverage and (2) percentage in regions stress. Customers are responsible for their use and discharge of water during their lease. To help them minimize their water use, we install with High or Extremely High Baseline Water smart pump kits, high efficiency fixtures and native plants. In California, we’ve removed all ornamental and non-functional turf grasses from Stress, by property sector most of our properties, replacing them with drought tolerant vegetation. This has reduced water usage at these properties by an estimated 50%. Prologis is also using third-party data for mapping and evaluating physical climate risk exposure at the asset level through science-based climate scenarios. Based on the data of our physical climate risk assessments, we can proactively implement mitigation strategies that further the resilience of our global portfolio. This includes implementing site-specific mitigation measures, such as raising a property out of the base flood elevation and other measures to ensure the long-term resilience of our assets. IF-RE-140a.3 Like-for-like percentage change in water Like-for-like change in water consumption was available for 15 offices that had both 2022 and 2023 data. From the water data provided by the withdrawn for portfolio area with data 15 offices with like-for-like data, there was a 12% decrease in water withdrawals from 2022 to 2023. coverage, by property sector IF-RE-140a.4 Description of water management risks and Even though logistics facilities typically have a lower water footprint compared to other types of buildings, we have adopted various sustainable discussion of strategies and practices to water management practices and technologies to minimize water use and the impact of our assets on water quality. Many of these efforts are mitigate those risks a result of pursuing sustainable building certifications for 100% of new developments and redevelopments globally. All of our water-related actions are project specific, taking into account the site's soil conditions, rainfall patterns, topography and infrastructure. Inside our buildings, we install low-flow toilets and motion-activated faucets to reduce consumption. Outside, we landscape using native plants that are adapted to the local climate and require limited additional watering. In California, we’ve removed all ornamental and non-functional turf grasses from most of our properties, replacing them with drought tolerant vegetation. This has reduced water usage at these properties by an estimated 50%. Several of our buildings also capture rainwater that is used when irrigation is required. We continually monitor the evolution of water- management technologies, seeking to pass cost savings on to our customers 59
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix CODE ACCOUNTING METRIC PROLOGIS INFORMATION Management of Tenant Sustainability Impacts IF-RE-410a.1 (1) Percentage of new leases that contain a Within the Prologis Clear Lease, we have adopted green lease language that seeks to better collaborate with our customers in sharing data, as well cost recovery clause for resource efficiency- as providing options to install systems that can help our customers to operate more efficiently and sustainably, such as solar. In the future, we may related capital improvements and (2) have more quantifiable metrics on the coverage of our portfolio with leases that specifically contain cost recovery clauses for resource efficiency- associated leased floor area, by property related capital improvements. At the end of 2023, approximately 35% of total leases globally were the Prologis Clear Lease, as measured by area. subsector In early 2024, Prologis was once again recognized as a Gold-level Green Lease Leader by the Green Lease Leaders program, which was developed by the Institute for Market Transformation (IMT) with support from the U.S. Department of Energy's Better Buildings Alliance. IF-RE-410a.2 Percentage of tenants that are separately During 2023, we made investments in new systems and processes to increase data coverage and drive increased automation of data collection metered or submetered for (1) grid electricity across our global portfolio. This included new systems for energy and carbon data management and expanding our global data gathering consumption and (2) water withdrawals, by systems while evaluating various solutions, including submeter systems for our various tenant spaces. Within the Prologis Clear Lease, we property subsector have adopted green lease language that seeks to better collaborate with our customers in sharing data, as well as providing options to install systems that can help our customers to operate more efficiently and sustainably. In the future, we may have more quantifiable metrics on the coverage for spaces that are using these types of metering systems. IF-RE-410a.3 Discussion of approach to measuring, During 2023, we made investments in new systems and processes to increase data coverage and drive increased automation of data collection incentivizing, and improving sustainability across our global portfolio. This included new systems for energy and carbon data management. Prologis Essentials LED is a program dedicated impacts of tenants to collaborating with customers to accelerate LED lighting upgrades that improve the operational efficiency of our customers' businesses and decrease customer energy consumption and associated emissions. 74% of our owned and managed operating properties, excluding a portfolio of properties acquired in June 2023, had LED lighting at the end of 2023. Our modern, efficient and resilient building design saves money for our customers and minimizes impacts on our communities. Our focus on urban locations allows our customers to meet consumer expectations around expedited delivery, while also reducing overall transportation emissions from shortened delivery distances. By incorporating ESG concepts into our lease agreements, deploying sustainability solutions through the Prologis Essentials Marketplace and providing our customers with information packets that include sustainable practices, Prologis improves the sustainability impacts of our customers. We monitor local benchmarking ordinances and work with our property management team to educate customers on how utility data collection can be automated, as well as emerging regulations like building energy performance standards (BEPS). Climate Change IF-RE-450a.1 Area of properties located in 100-year flood Using third-party data for mapping and evaluating physical climate risk exposure at the asset level through science-based climate scenarios, zones, by property subsector we can proactively implement mitigation strategies that further the resilience of our global portfolio. This includes implementing site-specific mitigation measures, such as raising a property out of the base flood elevation and other measures to ensure the long-term resilience of our assets. Disclosing a metric on the area of properties within 100-year flood zones would need additional context to understand the site- specific mitigation measures that have been put in place to lower the associated risk from the flood zone. We will continue to explore additional disclosure of this data in response to stakeholder feedback. IF-RE-450a.2 Description of climate change risk exposure Prologis takes a proactive approach to assessing natural hazards and climate exposures across our portfolio, including earthquakes, storms, analysis, degree of systematic portfolio floods and coastal exposure. Prologis’ Risk Management team is actively evaluating our portfolio exposure to ensure that we have sufficient exposure, and strategies for mitigating risks coverage and protection for our buildings, as well as using third-party data to look ahead and evaluate climate scenarios that may impact our properties in the future. These assessments allow us to determine the appropriate risk mitigation measures for our portfolio and plan for longer term trends. We take preventative measures to improve the resiliency of our buildings to promote business continuity in our customers’ operations. As a result of our long-term planning, resiliency measures implemented and diverse portfolio footprint, we believe impacts to our portfolio arising from climate change are well managed. 60
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix TCFD disclosure Prologis’ approach to identifying and managing For our SBT, we have received validation from the Science Dynamic Risk climate-related risks and opportunities aligns with the Based Targets initiative that our target to achieve net zero Oversight recommendations of the Task Force on Climate-related greenhouse gas emissions across our value chain (Scopes Process Financial Disclosures (TCFD) and encompasses: 1, 2 and 3) is aligned with a 1.5 degree Celsius scenario. Our − Dynamic risk management strategy focused on resilience updated SBT guides our transition to a low-carbon future by − Evaluating physical climate risk exposure at the asset reducing GHG emissions across our operations, portfolio of Board Risk level using science-based climate scenarios assets and throughout our value chain. Oversight Management Governance Framework − Following a Science Based Target (SBT) for determining The organization’s governance around climate-related risks GHG emissions reduction targets across Scopes 1, 2 and and opportunities. 3 emissions Prologis works to maintain portfolio resilience for its − Risk, including climate-related risks, are part of the Management customers and stakeholders. This commitment focuses Prologis board’s oversight responsibility. Board updates Executive Committee have focused on Prologis’ climate-related physical Oversight on acute, near-term risks such as hurricanes and flooding risk assessments, coastal risks, GHG reductions, the as well as longer-term risks resulting from the changing expansion of our sustainability offering for customers climate. We site, develop and maintain assets with a long- (e.g., solar installations, etc.), and new and emerging term ownership horizon in mind and a focus on delivering climate-related disclosure requirements. business continuity to our customers. Looking forward, we continue to work with third parties on climate-related Our chief legal officer and general counsel oversees the scenario analysis to evaluate the exposure of our global Risk Management team. Our chief energy and sustainability assets to physical, natural hazards across our portfolio, officer reports to the company president and oversees our and to ensure we continue to be prepared for changes Energy, Mobility, Sustainability and ESG teams, with broad in frequency and severity of extreme weather events. In support and engagement across the entire organization. addition to being a listed TCFD supporter and having TCFD- One example is our structured Investment Committee aligned public disclosures, we have strong engagement process, overseen by our Executive Committee, that requires from our executive team and board members in evaluating risks and ESG considerations, including the compliance climate-related risks through briefings by the ESG, of each proposed investment (above a certain threshold) Accounting and Risk Management groups, and a robust with our net-zero-ready building design standards for new program to track our efforts through metrics and targets. developments. 61
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Strategy and risk management − Products and services − Adaptation and mitigation activities The actual and potential impacts of climate-related risks and − Examples include Onsite Solar and Energy − Local and regional teams have a long track record opportunities on the organization’s businesses, strategy and Storage solutions to create resilience and reduce of adapting to regional natural hazards through financial planning. The processes used by the organization dependence on fossil fuel energy sources. robust disaster response plans that take various to identify, assess and manage climate-related risks. − Supply chain and/or value chain risks into consideration. These disaster response − Prologis is a long-term owner of logistics real − Prologis is supporting its customers in the plans are developed and maintained to make sure estate. This requires us to evaluate material risks transition to electric vehicles by incorporating that our assets remain resilient to climate-related and opportunities that may arise over short- (out to EV infrastructure into our new developments. We risks like flooding or extreme weather events. 2030), medium- (2030-2040) and long-term (2040- are also developing a turnkey solution to help − We implement site specific mitigation measures, 2050) time horizons, as well as risks that are acute customers transition to EVs within our existing some examples include: raising properties out of or chronic, including those associated with climate buildings, while also establishing collaborative the base flood elevation; increasing the thickness change. Evaluating risks and opportunities and the partnerships with local utilities. of roof materials in hail prone areas; and other potential financial implications ensures the resilience − Operations (including types of operations and measures to ensure the long-term resilience of our of our assets and of our customers’ operations. This location of facilities) assets to various natural hazards. evaluation also helps us identify opportunities to deliver − For various acute risks including storm damage and sustainable solutions to our customers. − Responsible investment practices advance green flooding, Prologis has a comprehensive insurance Our process for identifying and prioritizing risks & opportunities: design principles and mitigate environmental, program in place to transfer risk. Prologis utilizes a dynamic risk oversight process to identify, climate and other ESG risks. − Investment in research and development evaluate and manage risks across our enterprise, including − Our portfolio is diversified across multiple − The Prologis Ventures group is making investments ESG-related risks such as climate change. geographies in 19 countries, minimizing the material in various startups that are helping our customers By embedding ESG and risk management throughout risk to our portfolio from any one asset being to address ESG-related needs, including tools to the organization, Prologis evaluates the material risks exposed to a particular physical climate-related risk. help track and report the related emissions from and opportunities associated with climate change. − Using third-party data and internal tools for fleet vehicles in our customers’ operations. This can include risks from severe weather, flooding or evaluating physical climate risk exposure at − Our Risk Management team has sourced third- coastal risk, and opportunities with enhanced energy the asset level through science-based climate party data from one of the world’s largest efficiency products and renewable energy development. scenarios, we can proactively implement mitigation reinsurers, Munich RE, that allows us to map, score Our Investment Committee evaluates these risks and strategies that further the resilience of our owned and evaluate the exposure of our assets to current opportunities as part of the process it uses to assess a and managed portfolio. This includes implementing natural hazards and climate-related physical risks potential investment. site specific mitigation measures, such as raising a under the following climate-related scenarios (see − Prologis takes a proactive and customer centric property out of the base flood elevation, and taking following page): approach to mitigate our exposure to risks and create other measures to ensure the long-term resilience sustainable solutions that benefit our customers: of our assets. 62
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Representative Concentration Pathways (RCP) Effort-Outcomes Model Munich RE Location Risk Intelligence Examples of climate-related risks and opportunities TIME CLIMATE-RELATED CLIMATE-RELATED CLIMATE-RELATED HORIZONS PHYSICAL RISKS TRANSITION RISKS OPPORTUNITIES Short-Term Increased severity and Enhanced emission reporting and energy Opportunities from increased customer focus on sustainable building practices and efficiency solutions (Out to 2030) frequency of floods and benchmarking requirements (Policies & Laws) (Markets); LED upgrades (Resource Efficiency; Products & Services); Solar installations (Energy Sources; storms (Acute) Products & Services); High efficiency HVAC systems (Technology; Resource Efficiency; Products & Services); Green Bonds tied to sustainability initiatives (Products & Services; Markets) Medium-Term Increased heat stress Building performance standards and other upgrade Further renewable energy deployment (Energy Source); Customer fleet electrification (Technology; Markets; (2030-2040) requiring more cooling requirements (Policies & Laws; Resource Efficiency; Products & Services); Carbon storage in building materials (Technology) (Chronic) Technology; Products & Services) Long-Term Sea level rise/coastal risk Net-Zero building requirements (Policies & Laws; Building and supply chain electrification and resilience planning (Resource Efficiency; Energy Source; (2040-2050) (Chronic) Resource Efficiency; Energy Source; Technology; Technology; Products & Services) Products & Services) 63
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Metrics and targets Quantitative ESG bonus metrics in our 2023 bonus scorecard The metrics and targets used to assess and manage In 2023, ESG metrics again accounted for 10% of our bonus scorecard, including 4% for environmental/climate-related performance metrics relevant climate-related risks and opportunities. summarized in the table below. For 2024, ESG metrics will continue to comprise 10% of the bonus scorecard and will include targets for the − One of the primary metrics for assessing climate-related same three environmental metrics. risks and opportunities is Prologis’ SBT for reducing Scope 1, 2 and 3 GHG emissions. For our SBT, we have SUB-METRIC received validation of our net-zero target by the Science PERFORMANCE METRIC TARGET PERFORMANCE WEIGHTING SCORED 2023 Based Targets initiative, aligning our commitment with Solar and Storage Megawatts (MW) the ambition of a 1.5 degree Celsius scenario through a installed 1 535MW 2% 535MW commitment to net zero across our value chain (Scopes 1, 2 and 3) by 2040. % LED installed Across O&M Portfolio − In addition to measuring progress toward our SBT, (by area) 75% 1% 74% Prologis also measures progress towards enhancing % of New eligible Developments Certified the efficiency and sustainability of our assets. Metrics Sustainable (LEED or equivalent) 2 95% 1% 97% on numerous ESG-related initiatives were again incorporated into our 2023 bonus targets for all Prologis 1. Within our owned and managed portfolio. This includes approximately 20 megawatts related to properties that have been disposed of after the time of installation or assets that have been decommissioned and an acquired battery energy storage system with approximately 10 megawatts of capacity. employees and executives. In 2023, these included: 2. Due to customer requirements and/or the limitations of certain co-development agreements, a small number of projects are ineligible to receive a sustainable certification. − Solar and Storage Megawatts Installed − Percentage of LED Lighting Installed across our owned and managed operating properties (by area) − Percentage of New Developments Certified Sustainable (LEED or equivalent) Further information on our progress toward these targets can be found in our 2023-24 ESG Report and 2024 Proxy Statement. 64
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Forward-looking statements The statements in this report that are not historical facts Please refer to the “Risk Factors” set forth in our most are forward-looking statements. These forward-looking recent Annual Report on Form 10-K for a non-exhaustive statements are based on current expectations, estimates list of factors that could cause such forward-looking and projections about the industry and markets in which we statements to differ from actual results. The statements in operate as well as management’s beliefs and assumptions. this report are not intended to expand upon or modify the Such statements involve uncertainties that could significantly regulatory disclosures of Prologis Management II S.à r.l. impact our financial and/or operating results. Words such as or of our funds as found, for instance, in the SFDR ”goal,” “commits,” “expects,” “anticipates,” “intends,” “plans,” Annex II templates that are part of the pre-contractual “believes,” “seeks,” and “estimates,” including variations documentation of said funds and which include, among of such words and similar expressions, are intended to others, what we define as environmental and/ or social identify such forward-looking statements, which generally characteristics promoted for SFDR (EU 2019/2088) are not historical in nature. All statements that address purposes. Moreover, the statements in this report apply to operating performance, progress toward goals, events or Prologis as a whole and are not specific to our Strategic developments that we expect or anticipate will occur in the Capital business or to any one fund or regulated entity. future are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. 65
Letter s Overview Ahead of What’s Next Sustainable Logistics Our Inspired People Resilient Communities Appendix Glossary and definitions AUM: assets under management LEED: Leadership in Energy and Environmental Design Behind the meter: not connected to the local utility LGBTQIA+: lesbian, gay, bisexual, transgender or Biodiversity: variety of life transsexual, queer or questioning, intersex, asexual and all Carbon neutral: a state in which GHG emissions are offset other identities by removals Net zero: a state in which a company's Scope 1, 2 and Carbon offset: removal of GHG emissions 3 emissions have been reduced by at least 90% from a baseline year DEIB: diversity, equity, inclusion and belonging Operating portfolio: industrial properties in our Owned and Development portfolio: industrial and non-industrial Managed portfolio that have stabilized, excluding assets properties, yards and parking lots that are under held for sale development and properties that are developed but have Owned and managed portfolio: the consolidated properties not stabilized owned by our unconsolidated co-investment ventures, EEO: equal employment opportunity which we manage EHS: environmental, health and safety REC: renewable energy credit EPS: earnings per share REIT: real estate investment trust ERG: employee resource group SASB: Sustainability Accounting Standards Board ESG: environmental, social and governance SBTi: Science Based Targets initiative GHG: greenhouse gas emissions Stabilized: completed for one year or 90% occupied, GRESB: an assessment of the sustainability performance of whichever comes first real estate and infrastructure portfolios TCFD: Task Force on Climate-related Financial Disclosures ISO: International Organization for Standardization 66
Prologis 2023-24 ESG Report Prologis Pier 1, Bay 1 San Francisco, CA 94111 United States +1 415 394 9000 Eindhoven DC4, Eindhoven, Netherlands, www.prologis.com the world’s first industrial building to receive a Zero Carbon © Prologis, Inc. 2024 All rights reserved. Certification from the International Living Future Institute.