CREATING VALUE TOGETHER CSR REPORT 2010

Transcription

1 CREATING VALUE TOGETHER CSR REPORT 2010

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3 3 CONTENTS HIGHLIGHTS PUTTING CONSUMERS FIRST 24 WHO WE ARE 6 ROOTED IN SOCIETY 28 KEY ELEMENTS OF OUR STRATEGY 8 LEADERSHIP IN OUR CULTURE 32 PERFORMANCE HIGHLIGHTS 10 SUSTAINABILITY IN OUR OPERATIONS 36 STATEMENTS OF THE MANAGEMENT BOARD 11 CREATING SUSTAINABLE CENTRES 40 ABOUT THIS REPORT 14 WE ARE AT THE DAWN OF A NEW ERA 44 CSR STRATEGY, GOVERNANCE AND ENGAGEMENT 16 TARGETS SHIFTING INTO A HIGHER GEAR 20 DEFINITIONS 51 HOW WE ENGAGE AND INFORM OUR STAKEHOLDERS 22 ADDRESSES AND OTHER INFO 52

4 CORIO CSR REPORT HIGHLIGHTS 2010 MARCH MAY JULY Corio acquires an operational and development portfolio in Germany. The portfolio includes Forum Duisburg, with a BREEAM Very Good rating and winner of the ICSC Resource Award in Centrum Galerie Dresden (pictured), the first European shopping centre with a BREEAM Excellent rating, is also part of this portfolio. APRIL Corio publishes a separate report on CSR for the first time. Corio adds a female member to the Management Board: Francine Zijlstra takes the position of Chief Operating Officer. JUNE Corio participates in the international research programme of the Sustainable Investment in Real Estate Centre (s-i-r-e), which was initiated by the Royal Institution of Chartered Surveyors (RICS) together with Kingston University London and Krems Danube University. It is the first empirical study to explore the measurable impact of sustainability characteristics on the financial performance of retail properties in Europe. AUGUST The inaugural meeting for founding members of ISA (the International Sustainability Alliance), a global network of leading real estate organisations dedicated to achieving a more sustainable built environment takes place. Together with the ISA, Corio developed KPIs which will provide the basis for benchmarking our environmental performance. Corio is one of the founding partners of ISA. Corio Nederland organises its second Summer Night Event, a roundtable with top ten tenants on CSR. As a member of the United Nations (UN) Global Compact, Corio reported on the implementation of the ten UN Principles by means of a Communication on Progress. It also included the Millennium Development Goals.

5 5 SEPTEMBER NOVEMBER Corio is included in the Dow Jones Sustainability World Index. An international Corio CSR meeting is held in Forum Duisburg. During this meeting we officially launch the Corio CSR performance management system. Corio s shopping centre Tarsu in Tarsus, Turkey, receives a BREEAM Very Good certificate. Corio is ranked 12 th in the Carbon Disclosure Project out of 60 Dutch companies. Corio was included in the ASPI (Advanced Sustainable Performance Indices) register. OCTOBER DECEMBER Performance management at corio Manual for Managers and employees The Corio HR Performance Management System is finalised for all Corio employees and ready to be implemented in The International Leadership Academy in Istanbul, founded by Save the Children, in collaboration with Youth for Habitat, WALD and UCLG and supported by Corio, goes live. In Corio Italia a Great Place To Work survey is carried out amongst over 100 companies. Corio ranks 35 th in that list.

6 CORIO CSR REPORT WHO WE ARE Corio is a retail property company. Our core business is to select, invest in, develop, redevelop and manage shopping centres in Europe. Our mission is to create favourite meeting places: sustainable centres where people meet up, spend their time off, and shop; places they want to keep coming back to. OUR AMBITION Our vision is to create sustainable places where people like to meet. First and foremost, Corio believes shopping centres can and should perform an important social role. Our vision of a shopping centre is of a meeting place where individuals can relax, socialise, feel at home and be inspired. We are convinced that the creation of appealing and successful shopping centres, when managed properly, will generate greater economic activity. In doing so, we recognise the importance of being alert to the changing demands of people in the catchment area and the need to adapt quickly to their demands. To be successful, we believe our centres should be sustainable in every respect: situational (location), conceptual, aesthetic, social, environmental and financial. We create to adapt. OUR STRATEGY Creating Favourite Meeting Places Shopping centres that are dominant in their catchment area Local+ and hands-on management Critical mass in each of our home markets A strong focus on stable markets (82% of portfolio value) Corporate Social Responsibility as an important pillar Solid financial structure Predominantly located downtown, transit-oriented and at the heart of large communities EUROPE S 3RD LARGEST LISTED RETAIL PROPERTY COMPANY Value operational portfolio 6.9 billion Pipeline investment 3.0 billion Assets under management 9.9 billion Gross rental income million Market capitalisation 4.4 billion Listed on Euronext in Amsterdam Headquarters located in Utrecht, The Netherlands

7 7 GEOGRAPHIC SPREAD SECTOR SPREAD PIPELINE SPREAD Netherlands 27% France 26% Italy 20% Spain/Portugal 10% Germany 9% Turkey 8% Retail 96% Offices 4% Industrial 0.2% Netherlands 34% France 4% Italy 30% Spain 1% Germany 26% Turkey 5% STRUCTURE OF CORIO SUPERVISORY BOARD BAS VOS CHAIRMAN ROBERT VAN DER MEER VICE CHAIRMAN WIM BORGDORFF DERK DOIJER GOBERT BEIJER INVESTOR RELATIONS HUMAN RESOURCES MANAGEMENT CORPORATE PR & COMMUNICATIONS INVESTMENT STRATEGY & RESEARCH CORPORATE SOCIAL RESPONSIBILITY MANAGEMENT BOARD GERARD GROENER CEO BEN VAN DER KLIFT CFO FREDERIC FONTAINE CDO FRANCINE ZIJLSTRA COO LEGAL/COMPLIANCE RISK MANAGEMENT TREASURY FINANCE & CONTROL TAX INFORMATION MANAGEMENT ACQUISITION DEVELOPMENT CEO CFO COO LEASING CENTRE MANAGEMENT OFFICE SUPPORT BUSINESS SUPPORT

8 CORIO CSR REPORT KEY ELEMENTS OF OUR STRATEGY OUR CENTRES ARE DOMINANT IN THEIR CATCHMENT AREA We own and manage shopping centres that are perceived as leading within their respective markets. This enables us to draw large numbers of consumers from their catchment area. Dominance strengthens our position in our relations with retailers, local authorities and consumers. OUR MANAGEMENT MODEL IS DECENTRALISED: LOCAL+ Our management approach, which we call local+, gives substantial latitude to the local Business Units in each home market, whose in-depth local knowledge they apply to their markets, supported by professional support, operational frameworks and financing from central headquarters. MANAGEMENT, LETTING AND DEVELOPMENT IS DONE HANDS-ON, IN-HOUSE Management, letting and development are performed in-house. This enables us to stay in close contact with the shopping centres, retailers and consumers in the catchment areas. This closeness enhances Corio s ability to react quickly and appropriately to changes in consumer preferences. Local management and operating teams are closely involved in the operations of their shopping centre. Reviews of shopping centres operations are generally conducted every month on the basis of a number of key performance indicators. Each shopping centre s competitiveness and ability to draw consumers in its catchment area is thus assessed and monitored regularly, enabling any corrective measures to be taken in a timely way. CRITICAL MASS IN EACH HOME MARKET TO SUPPORT PROFES- SIONAL IN-HOUSE MANAGEMENT Corio only enters a new home market if it sees potential to achieve critical mass, based on the size and number of participants in the market. Critical mass enables Corio to maintain and reinforce its position in its home markets. It makes Corio an attractive partner for retailers from outside Europe, and facilitates the expansion of retailers within Europe. IN SOURCING OF DEVELOPMENT ACTIVITIES Corio manages property development activities in-house. This enables us to control risks and product quality more effectively and run a more profitable business. We expect our in-house development activities to boost our overall profit margin. Corio will develop a site only when the land has been fully secured and zoning is in place. Construction costs are always capped, before the start of construction, to avoid the risk of budget overruns.

9 9 OPTIMISING PROFITABLE GROWTH THROUGH AN ACTIVE ACQUI SI- TION AND DISPOSAL POLICY Corio pursues an active policy on acquisitions and disposals, to support the portfolio s quality and realise value on a continuous basis. EXPOSURE TO EMERGING MARKETS LESS THAN 20% Corio s retail property portfolio is geographically diversified across regions whose markets are in various stages of development. While stable mature markets and growth markets will continue to account for the bulk of the portfolio, Corio aims to grow its share of activities in the emerging markets to no more than 20% of total investments, with a maximum of 10% per geographic region. This split is aimed at maintaining profitable growth and a sound risk-return profile. LEADERSHIP WITHIN CORIO Leadership is all about having a great idea, engaging people to believe in your idea and getting the idea realised. Leadership is not merely a management skill, it is an attitude which we cherish and develop in our people. We believe that more than ever, our success will depend on leadership that focuses on talent: talent as a description of certain skills people excel in, and not as a description of an employee. Leadership is finding that talent, deploying it in the best way and giving it room to flourish. Corio recognises the fact that skills are more important than knowledge. Skills such as communication combined with knowledge such as law and finance and consumer needs. Attitude, and passion are becoming more important than experience. Having an open mind and being receptive to things are very important in the evolving Corio culture. We find it essential that our people, throughout Europe, share important values and competencies and feel that they belong to a truly exciting, professional and leading company. A place where they can make a difference, where they can develop themselves and their environment. No matter where their office is located, employees should feel that Corio is their Favourite Working Place. EFFECTIVE RISK MANAGEMENT Effective operational and financial risk management is underpinned by monthly key performance indicator reporting, monthly country CEO meetings, and quarterly management and financial reporting by the different Business Units. We use an integrated model for strategic, operational and financial risk management

10 CORIO CSR REPORT PERFORMANCE HIGHLIGHTS TOTAL CORIO Holding Netherlands France Italy Spain/Portugal Germany Turkey Total Gross rental income ( million) Property operating expenses ( million) Net rental income ( million) Administrative expenses ( million) Audit fee ( thousands) 1,758 Total portfolio value retail incl. associates ( million) 1, , , ,234.9* * Including Bulgaria ( 12.7 million) RETAIL Holding Netherlands France Italy Spain/Portugal Germany Turkey Total Annualised rent ( million) Rent per square metres per year ( /m 2 ) No. Shopping centres Leasable floor area (x 1,000 m 2 ) ,736.2 Retail contracts 2,140 1, ,047 Operational portfolio value incl. assoc. ( million) 1, , , ,637.5 Occupancy rate (% financial) PIPELINE Holding Netherlands France Italy Spain/Portugal Germany Turkey Total Total pipeline (re)developments ( million) 1, ,038.3 Committed pipeline (re)developments ( million) ,182.1 Committed pipeline added on completion (x 1,000 m 2 ) HUMAN RESOURCE Holding Netherlands France Italy Spain/Portugal Germany Turkey Total Employees female (headcount) NA Employees male (headcount) NA Managers female (% of total managers per unit) NA Managers male (% of total managers per unit) NA Absenteeism (% of total working days) NA Employee turnover (%) NA ENVIRONMENTAL DATA RETAIL Holding Netherlands France Italy Spain/Portugal Germany Turkey Total Electricity intensity (KWh/m 2 ) NA Carbon intensity (CO 2/m 2 ) NA

11 STATEMENTS OF THE MANAGEMENT BOARD 11 LOOKING TO THE NEXT YEARS, WE SINGLED OUT THREE MAIN AREAS FOR ACTION: CSR MANAGEMENT, REACHING FOR ZERO AND SPREADING OUR ROOTS. G.H.W. GROENER (GERARD, 1958) Chief Executive Officer and chairman of the Management Board Corporate Social Responsibility (CSR) has become an integral part of the way we do business. It is part of our strategy, decision-making and everyday work. We came a long way in a short time. It is our nature to create a long-term view and sustain value creation. We started CSR as a separate discipline in 2007, researching, inventorying and discovered many things, part of our business, were already in line with CSR objectives. In 2009 we issued our first CSR report and only a year later, in 2010, we were included in the world most credible indices: the Dow Jones Sustainability Index World (DJSI) and the Advanced Sustainability Performance Index (ASPI). ACHIEVEMENTS IN 2010 Next to the inclusion in the DJSI and ASPI, Corio was ranked 12 th in a group of 60 Dutch companies in the Carbon Disclosure Project 2010 Netherlands report. The leadership we established, focused on developing human capital and based on our corporate values, has been implemented in a new code of conduct. We obtained ratings from BREEAM both on development projects and on projects in use, ranging from Good to Excellent. LOOKING FORWARD The success of our centres, in all aspects, will depend on our ability to respond to changing consumer demands and performing beyond their expectations. Those consumer demands primarily come from the catchment areas in which our centres are embedded. It is therefore that we put much emphasis on spreading our roots, into that local community, learning what that community is all about and enriching the lives of our consumers, using that knowledge. To expand this shared value approach further we have initiated a collaboration with the department of business economics of the Erasmus University, Rotterdam (The Netherlands). To further improve the implementation of our CSR strategy, measures and results, within our organisation a specific CSR-management program has been set up. Even though CSR is formalised both at holding and local level, it has to become more and more part of people s passion, beliefs and therefore everyday s (working) life. Surveys, research and connecting to local stakeholders such as authorities, schools, sports clubs, etc are essential. In that sense we find that, much like our own convincement, people are getting more and more conscious of the environment and the impact we can have. Reaching for Zero anticipates on that, ahead of expected European regulations. It prepares the company to tackle these challenges. With the dedication of our people based on our company s vision and values we can make it onto the next CSR-gear for the benefit of all stakeholders.

12 STATEMENTS OF THE MANAGEMENT BOARD 12 B.A. VAN DER KLIFT (BEN, 1959) Chief Financial Officer and member of the Management Board F.Y.M.M. FONTAINE (FREDERIC, 1958) Chief Development Officer and member of the Management Board Chief Executive Officer of Corio France As a business we have a responsibility towards all stakeholders, including shareholders, who invested their funds into our business. We ensure our economic sustainability both today and in the future by investing in the social development of the communities we operate in and in the sustainable development of our centres. This shared value perspective will provide new catalysts for economic growth and the next wave of innovation and productivity. In the process of redeveloping our existing shopping centres we focus on adding value by revitalising them. To do this, we believe in preserving the existing soul of a centre while improving and breathing new life into it. When we build a new centre, we always keep in mind that it will be inherited by future generations. We ensure that the centres are able to deal with the flexibility this demands. All our developments strive to adapt to the needs of individuals, now and in the future.

13 STATEMENTS OF THE MANAGEMENT BOARD 13 AS CONSUMERS INCREASINGLY PLAY A CENTRAL ROLE IN SOCIETY, THEY ARE ALSO CENTRAL TO OUR BUSINESS STRATEGY. F.J. ZIJLSTRA (FRANCINE, 1963) Chief 0perating Officer and member of the Management Board OUR START Looking back to when we began to incorporate Corporate Social Responsibility (CSR) into our activities, I am proud to see how our management and performance has progressed so rapidly and yet organically. We successfully linked our CSR strategy to our company goals and found that CSR is an essential driver in realising our mission of creating Favourite Meeting Places; it creates stronger shopping centres. By proactively engaging with our stakeholders we are not only able to respond effectively to their expectations but we are able to create value together, both for society and for Corio. Corporations are in a powerful position to make a positive impact on society. We must therefore integrate social causes into our everyday business. Shared value will reinforce Corio s unique strategic positioning in creating Favourite Meeting Places. LOOKING FORWARD As a retail property company, we need to look beyond the obvious, beyond the here and now. Examining future trends such as urbanisation, demographic shifts, sustainability, and the changing expectations and role of consumers will increasingly influence us in everything we do. We believe in adapting to the changes taking place and to anticipating what lies ahead of us. As consumers increasingly play a central role in society, they are also central to our business strategy. Catering to people in urban environments requires a local, dedicated approach to the products, services and campaigns that fulfil the needs of our stakeholders. Integrating CSR into our operational dashboard, will help us to think out of the box and to create new sustainable partnerships that will help make our centres Favourite Meeting Places. WHERE WE ARE NOW Through extensive research, it became evident that consumers and business partners value social and environmental performance. Corio lives up to that expectation by offering more and more transparency in our use of resources, by integrating sustainability in design, construction and management of our assets, and by investing in our communities with a focus on employment, entrepreneurship and education. These areas are closely linked to our business success and the ones that we can have a maximum positive impact on. Our employees play a central role to further embedding CSR into Corio. Their mindset and engagement are essential in achieving our goals. Leadership is a central theme in our approach to talent development and retention, now and for years to come. Innovative and lasting partnerships with suppliers, tenants and authorities are emerging, realising benefits for all stakeholders.

14 CORIO CSR REPORT ABOUT THIS REPORT HOW TO READ THIS REPORT Corio s CSR Reporting cycle is annual and is aligned with our financial reporting cycle. The data and information presented in this report relate to the financial year beginning at 1 January 2010 and ending at 31 December It should be read together with the Annual Report & Accounts of This CSR report is intended as a tool for discussions with stakeholders, whose confidence and trust we want to retain and strengthen. We see it as an opportunity to identify the areas where we can add value for our stakeholders. This is our second seperate CSR report and has been written in accordance with the GRI 3 guidelines. This overarching standard is appropriate for our business: it can be used as a benchmark, both internally and externally and will be the basic structure to keep track of our year-to-year improvement. The GRI Index table with references to the applicable pages in this report or other reference documents are available as a separate document online ( In this report we first of all set out the importance of CSR within Corio s strategy and then describe how we have embedded this strategy into the organisation and relevant networks. Finally we have included a chapter for each strategic CSR topic, thus ensuring that the most relevant issues are covered extensively. Each topic is illustrated by an example from one or more Business Units. CRITERIA We have this CSR report live up to the following criteria: RELIABILITY The information and processes used in the preparation of this report are gathered, recorded, compiled, analyzed and disclosed in a way that could be subject to examination and that establishes the quality and materiality of the information. We have done this in the preparation for the audit we have planned for CLARITY Information has been made available in a manner that is understandable and accessible to stakeholders using the report, as we have used the GRI 3 guidelines for reporting. These guidelines are internationally accepted as a benchmark. We therefore refer to the GRI table online for illustrations as regards content. BALANCE The report reflects positive and negative aspects of Corio s performance to enable a reasoned assessment of our overall performance. We list our performance of 2010, including highlights, but also issues we need to work on; translated into concrete targets. COMPARABILITY Issues and information is selected, compiled, and reported consistently, which enables our readers to analyze changes in the organization s performance over time, and could support analysis relative to other organizations. ACCURACY The reported information is in our view sufficient accurate and detailed for our readers to assess the reporting organization s performance. TIMELINESS We give insight in the reporting cycle (in this chapter), which occurs on a regular schedule and the information is available in time for stakeholders to make informed decisions. SCOPE In terms of scope, this report reviews all our CSR related business activities, including the investment, (re)development and management of our shopping centres. It also covers key aspects of our economic, environmental and social performance in relation to our five key topics that have been identified in our CSR Strategy. Unless stated otherwise, the calculations and performance data mentioned in this report: include all of Corio s operations in its five out of six home markets: the Netherlands, France, Italy, Spain and Turkey. The centres of Corio Deutschland have not been in portfolio for the whole of 2010 and have therefor not been included in this report; include the shopping centres that have been in portfolio for the full twelve months of 2010; include the service areas of centres where we have management control: where we can make a difference; include shopping centres in our operational portfolio, larger than 5,000 m 2 ; include electricity use of covered parking garages. M 2 of these garages have not been taken into account as this would compromise the reliability of the intensity (KWh/m 2 ) exclude the impact of tenants, except for the shopping centres for which we have such data available. INFORMATION SYSTEMS We use a company-wide Environmental Information System that contains data on energy use, water use and waste. The energy usage allows for breakdowns of: purchased electricity, sustainable electricity, heating fuel, district heating, self-generated sustainable electricity and gas. The water use categories are: drinking water, grey water and sewage water. The waste is reported on by origin: glass, paper/ cardboard, oil/fat, organic waste, hazardous waste and refuse (which

15 15 is the only component sent to landfill). With this information system we can benchmark our data within Corio. Anticipating on an external assurance audit in future years, we have incorporated an internal assurance tool in the Environmental Information System. This will enhance access to comprehensive data for analysis, benchmarking and Key Performance Indicators (KPIs) and will simplify reporting under GRI. Our HR data is gathered through a specific questionnaire about our international workforce. ANNUAL REPORTING CYCLE Resulting from our environmental and social data gathering, we have a consolidated data set, ready to be reported on and to be incorporated into CSR management. The reporting cycle as below will be repeated four times from 2011 onwards. Measuring our effect on people and planet Analysis of data by company own specialists COVERAGE TABLE 2008 (%) 2009 (%) 2010 (%) Corio Nederland Corio France Corio Italia Corio España Corio Türkiye These are the shopping centres that are reported on as percentage of total shopping centres that meet all requirements under CSR scope as mentioned above. CONTACT We welcome any feedback from readers on this report. We look forward to drawing on your valuable suggestions to improve the way we approach and manage CSR. For any questions about this report or information found online, you can contact us via telephone and csr@nl.corio-eu.com. Other contact information can be found on the last page of this report. Target and action plan setting Internal and external benchmarking Report on data Data review by data owners

16 CORIO CSR REPORT CSR STRATEGY, GOVERNANCE AND ENGAGEMENT IN THIS CHAPTER Key topics P 17 Key performance indicators P 18 CSR management within Corio P 18 Affiliations and partnerships P 19 Stages in our CSR strategy P 20 Stakeholder engagement P 22 CSR policy Corporate Governance statements Legal structure CSR risks and opportunities NOT REPORTED We do not cover topics that: have already been addressed in previous reports we cannot influence through management do not significantly impact our business STRATEGY Corporate Social Responsibility is a central part of how we do business. As a developer, owner and operator of retail property, we have a responsibility towards our stakeholders. Towards consumers and visitors, in providing them a safe and healthy environment, where they can relax, connect and get inspired. Towards the people who live around our centres, by minimising our impact on the environment and maximising our impact on the social and economic development of society. Towards our employees, by providing them a sound working environment, where they can get the best out of themselves. By operating efficiently and effectively, we provide businesses that operate in our centres a sustainable and attractive environment, where they can be successful. It is by creating value for these stakeholders that we create value for our shareholders. Up until 2009 we based our CSR strategy on five CSR pillars, mainly reflecting material areas and stakeholders: Community, Employees, Tenants, Suppliers and Environment. To bring focus to our approach and make it more company specific, we identified five key topics. By actively engaging with our stakeholders on the following key topics, we can create synergy, innovation and therefore value, together. The key topics are elaborated on the next page. We have defined a long-term goal (with a five-year horizon) and a mid-term goal (in three years time).

17 17 KEY TOPICS PUTTING CONSUMERS FIRST Long-term goal: To enable, engage with and inspire consumers to enrich their lives, make responsible purchasing choices and reduce the impact on the environment. Mid-term goal: To monitor and translate the results of consumer behaviour into the daily management of our shopping centres. Rationale: Consumers and visitors are what we are all about. We strive to create Favourite Meeting Places where they can feel comfortable and happy and want to come back to, again and again. This ambition is both an aspiration and a responsibility. ROOTED IN SOCIETY Long-term goal: To enhance community development by providing lasting social and economic opportunities. Mid-term goal: To measure the Social Return on Investment and make it part of our company strategy. Rationale: Our centres play an important social and economic role in the community, not only as a place to meet but also as a source of Employment, Education and Entrepreneurship: the Triple-E scope. There is a strong connection between the social and economic development of the communities we are rooted in and the vitality of our centres. A targeted community investment approach is bound to create value both for society and for Corio; the more embedded our centres are in society, the better. LEADERSHIP IN OUR CULTURE Long-term goal: To foster a culture of leadership that emphasises the connection between trust and transparency and where freedom and accountability go hand in hand. Mid-term goal: To uphold our company values and maintain a leadership style that preserves these anchors of our culture. Rationale: Our people are our future and future leaders need to be developed and inspired continuously. We are therefore implementing a group-wide HR management approach that incorporates Corio s core values: team play, empathic, inspiring, reliable and daring. SUSTAINABILITY IN OUR OPERATIONS Long-term goal: To realise the sustainability potential of our portfolio through partnerships with tenants and suppliers. Mid-term goal: To manage our shopping centres in such a way that our environmental impact is minimised and the collaboration with our partners is maximised. Rationale: To us sustainability means finding the balance in the integration of social, environmental and economic quality. Partnering with our tenants and suppliers is conditional on achieving this. We focus on resource efficiency, reduction of CO 2 emissions and pro moting wellbeing within our centres. By developing Green Leases together with our tenants and co-creating workable and inno vative solutions with our suppliers, we are working to realise the sustainability potential of our portfolio. CREATING SUSTAINABLE CENTRES Long-term goal: To create flexible, futureproof and viable centres. Mid-term goal: To integrate sustainability fully in the design and (re) development of our centres. Rationale: Corio ensures its economic sustainability by investing in the ecological and social development of its centres. We strive for BREEAM Good ratings as a minimum for all our redevelopment and BREEAM Very good for development projects.

18 CORIO CSR REPORT MANAGEMENT CSR is integrated both within the local Business Unit and Corporate Management Board responsibilities. Recognising the importance of CSR at the strategic level, the Chief Operating Officer is directly responsible for CSR. In addition, Corio recently created a position for a Head of CSR at the corporate level. The head of CSR reports to the COO. To ensure alignment with other disciplines on the corporate level, a CSR steering committee chaired by the COO meets six times a year and is made up of representatives from compliance, legal, human resources, and risk management. The committee ensures our adherence to the UN Global Compact standards and to practices related to sustainability. It also advises on the implementation of policies and procedures and acts as a sounding board for specific CSR topics. Every Business Unit has a CSR committee that consists of managers from various disciplines that are responsible for the execution of our CSR strategy. The committees monitor and report on the performance of CSR initiatives and implement strategy into the operational processes and organisational structure of the Business Units. They also integrate CSR objectives into the profiles and responsibilities of employees. As of 2011, CSR is tied to the formal appraisal procedure of every employee. Since 2008, an international CSR meeting is organised at least once a year together with local CSR committee members, the CSR department at the group level and the COO. At this meeting, CSR strategy and tactics are explained, new insights are shared and best practices are exchanged. MONITORING AND REPORTING KEY TOPICS AND MAIN KPI S In 2010, CSR was further integrated into our operations, decisionmaking and management processes. We fully integrated CSR criteria into strategic business plans for existing assets and investment proposals both for acquisitions and (re) developments. To monitor CSR performance throughout our organisation, we defined our main KPI s, which will form the basis of our quarterly and annual measurement and management reporting as of PUTTING CONSUMERS FIRST To ensure we remain alert to consumer demands and trends, we ask consumers their opinions on a regular basis. We integrate the findings into our day-to-day management. Consumer needs are also integrated into the design of our centres. We include consumer wellbeing criteria into our quality assessments of existing assets and investment proposals. We start performance tracking by measuring the percentage of shopping centres that survey consumers yearly (KPI 1). This is, however the first stage of our performance management KPI setting. The next step is to measure consumer satisfaction levels throughout our portfolio in a consistent manner. This adaptation of KPI 1 is to be implemented in The second KPI relates to our quality assessments and the outcomes of this yearly recurring exercise. Once a year, all Business Units are asked to assess every shopping centre in terms of quality regarding design aspects. We integrated CSR criteria into this quality assessment rating in 2010 and will be able to measure CSR scores of each and every centre starting in This score is our second KPI. ROOTED IN SOCIETY We are developing a Social Return on Investment methodology. This will make our impact on society s health and wellbeing measurable and manageable. To reach our mid-term goal, we have launched a series of initiatives that promote Education, Employment and Entrepreneurship. The programme, which we call the 3Es, will also measure the benefits of projects initiated by our Business Units within that scope. Our KPI is: the number of projects initiated in operational centres within the 3E scope. As soon as we have defined a SROI methodology, SROI will become the KPI for this key topic. LEADERSHIP IN OUR CULTURE We measure three elements we find essential to assess our workforce: sick leave/absenteeism, employee turnover and gender diversity. Other criteria such as fairness of remuneration and training hours per employee are measured as well, but are not within our chosen set of main KPIs. Our KPIs are: % absenteeism, employee turnover and diversity in our workforce on management level. SUSTAINABILITY IN OUR OPERATIONS In defining KPIs for assessing the sustainability in our operations, we had a lot to choose from. Water, waste, energy and biodiversity are all very important issues. Electricity is the biggest contributor to our carbon emissions total. If we achieve energy-efficient centres, we can minimise carbon emissions. The key to achieving energy efficiency lies in working closely together with tenants. Our main KPIs are: the level of electricity intensity (kwh/m 2 ), carbon emissions intensity (tonnes CO 2 /m 2 ), the percentage of Green Leases signed as part of all new contracts, and the percentage of green clauses signed to regular contracts with suppliers. CREATING SUSTAINABLE CENTRES More than 70% of the assets under management consist of existing assets. However, our pipeline of developments and redevelopments is important for the future. They provide an opportunity to integrate sustainability right from the start, from the conceptual phase, to the design and construction. We targetted BREEAM Good as the minimum level for all new developments and BREEAM Very Good for redevelopments. Collaboration with our main suppliers in this process is essential in achieving this target. We therefore measure the percentage of suppliers that have signed the Corio code of conduct. The next step is to measure levels of compliance with the code, by measuring the number of breaches of the code. Our KPIs are: The percentage of BREEAM Good certificates or higher as part of all (re)developments, the percentage of suppliers who have signed the code of conduct.

19 19 CSR RISKS Corio has a structured, pro-active risk management framework and focuses on material strategic, operational, compliance and financial reporting risks. The business units and the holding company go through a systematic process of identifying and evaluating risks and controls and, where necessary, improving the way in which risks are managed. We identify these material risks for CSR: Management risks: Corio s sustainability targets are set centrally and reviewed regularly together with the Business Units to ensure that they are feasible and realistic but also meet our company objectives. Corio s decentralised business model allows the Business Units to execute strategy in accordance with local requirements, which is a mitigating factor. Regulatory risks are managed by monitoring changes in relevant legislation and tenant/sector demands on CSR. Corio strives to run its business in compliance with current (and future) laws and regulations and in a transparent way. We are conscious of the economic benefits of greater environmental efficiency and thus take advantage of any available subsidies and generally seek to reduce operating costs where possible. Physical risks: These are taken into account as part of the investment decision and decisions on the insurance coverage. For existing shopping centres, where possible adjustments are made to meet the changing demands of tenants and visitors as a result of climate change. Social risks: Corio is aware of the impact a CSR policy can have on investors, consumers, tenants, employees and other stakeholders and therefore communicates this in order to manage perceptions and expectations. AFFILIATIONS AND PARTNERSHIPS ACTIVITIES AND RESULTS IN 2010: Corio became a founding member of the International Sustainability Alliance (ISA), a global network of real estate organisations dedicated to achieving a more sustainable built environment. Together with the ISA, Corio is creating a benchmarking tool to measure the performance and environmental impact of existing commercial buildings. Corio is collaborating in academic research, such as the international research programme of the Sustainable Investment in Real Estate Centre (s-i-r-e), which was initiated by RICS, together with Kingston University London and Krems Danube University. This project is the first empirical study to explore the measurable impact of sustainability characteristics on the financial performance of retail properties in Europe. Corio is collaborating with Erasmus University in Rotterdam to develop a Social Return on Investment measurement methodology specifically designed to quantify the value Corio creates for society. Corio is a member of the International Council of Shopping Centers (ICSC), the European Public Real Estate Association (EPRA) and Urban Land Institute (ULI) and cooperates with these associations in CSR. As a member of the UN Global Compact we issued an annual Communication on Progress in August 2010, which included a public disclosure to stakeholders on progress made in implementing the ten principles of the United Nations (UN) Global Compact, and in supporting the broader UN Millennium Development Goals. Corio and Save the Children have a partnership whose goal is to create an International Leadership Academy in Istanbul. The Academy was unofficially opened in 2010 after which train-thetrainer courses started. The official opening will be in spring 2011.

20 CORIO CSR REPORT SHIFTING INTO A HIGHER GEAR THE FOLLOWING STAGES OF ACTIVITY AND GENERAL MILESTONES ALONG OUR CSR JOURNEY ARE REPRESENTED AS GEARS* COMPLY Reactive Compliance Public relations Philanthropy PARTNER, ENGAGEMENT We have several criteria of this stage already in place, but want to fully reach it in the medium term (next three years). 1 3 Engagement CSR embedded in all processes and systems Two-way stakeholder engagement Public private partnerships SHARED VALUE Awareness Measuring and managing environmental impact Eco efficiency Risk management 2 4 VOLUNTEER, RAISING AWARENESS We relate this stage to our current situation and will focus in 2011 on consolidating this stage and entering into the next phase. INTEGRATE, COMMITMENT This is our long term ambition (next five years). Commitment Wider societal expectations Multi-sector alliances in stakeholder engagement * Based upon SustainAbility s Corporate Responsibility Gearbox framework as outlined in its report for the UN Global Compact Office entitled Gearing Up