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