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Morguard Corporation MORGUARD CORPORATION SUSTAINABILITY REPORT 2017 DETAILED RESULTS OF SUSTAINABLE MORGUARD MORGUARD 2017 SUSTAINABILITY REPORT TABLE OF CONTENTS EXECUTIVE STATEMENT ....................................................................................................................................... 1 PROFILE .................................................................................................................................................................. 2 OUR SUSTAINABILITY STRATEGY ........................................................................................................................ 4 OUR 2035 LONG-TERM OBJECTIVES ................................................................................................................... 5 OUR VOICE – ADVOCATING FOR SUSTAINABLE REAL ESTATE ....................................................................... 6 OUR STAKEHOLDERS AND MATERIALITY ........................................................................................................... 6 COMMITMENT TO EXTERNAL INITIATIVES .......................................................................................................... 8 RESPONSIBLE PROPERTY INVESTMENT – SUSTAINABILITY ADVISER TO OUR CLIENTS ........................... 9 REACHING NET ZERO – PARTNERING TO ACHIEVE SUSTAINABLE BUILDINGS .......................................... 10 GREEN BUILDING CERTIFICATIONS .................................................................................................................. 11 INNOVATION – BENCHMARKING AND RENEWABLES ...................................................................................... 14 ENERGY CONSUMPTION – CANADIAN OFFICE AND RETAIL PROPERTIES .................................................. 17 GREENHOUSE GASES AND CARBON EMISSIONS – CANADIAN OFFICE AND RETAIL PROPERTIES ......... 18 WATER CONSUMPTION – CANADIAN OFFICE AND RETAIL PROPERTIES .................................................... 21 WASTE PERFORMANCE – CANADIAN OFFICE AND RETAIL PROPERTIES.................................................... 22 SUSTAINABLE DEVELOPMENT – BUILDING AND SUPPORTING OUR COMMUNITIES .................................. 25 CHARITY PROGRAMS – SUPPORTING OUR COMMUNITIES ........................................................................... 28 RESPONSIBLE EMPLOYER – EMPOWERING OUR PEOPLE ............................................................................ 30 CODE OF CONDUCT, EQUAL OPPORTUNITY AND DISCRIMINATION ............................................................ 30 EMPLOYMENT COMPENSATION AND BENEFITS .............................................................................................. 35 COLLECTIVE AGREEMENTS ............................................................................................................................... 35 TRAINING AND PROFESSIONAL DEVELOPMENT ............................................................................................. 38 TRAINING............................................................................................................................................................... 39 PERFORMANCE REVIEWS .................................................................................................................................. 40 OUR SUSTAINABLE HOUSE – LEADING BY EXAMPLE ..................................................................................... 41 GREENING OUR OFFICES ................................................................................................................................... 41 ENVIRONMENTAL POLICIES AND PROCEDURES – ENVIROLINK ................................................................... 41 LAND CONTAMINATION, REMEDIATION, AND COMPLIANCE .......................................................................... 42 RESPONSIBLE GOVERNANCE ............................................................................................................................ 43 APPENDIX A – GLOSSARY................................................................................................................................... 44 APPENDIX B – BUILDING PERFORMANCE – WEATHER AND OCCUPANCY MODEL ..................................... 45 APPENDIX C – GRI CONTENT INDEX ................................................................................................................. 46 MORGUARD.COM MORGUARD 2017 SUSTAINABILITY REPORT EXECUTIVE STATEMENT As the guardian of millions of square feet of commercial real estate across North America, Morguard recognizes our responsibility to ensure that sustainability gets ingrained at the ground floor. By integrating the principles of sustainability into our real estate business, we not only drive long-term value for our shareholders, clients, tenants and employees – we create better places for people to work, shop and live. In 2017, Sustainable Morguard, our company-wide sustainability program, delivered significant improvements across key environmental, social and governance indicators. This continued progress was a direct result of collaborative engagement between Morguard and our stakeholders – clients, employees, shareholders, tenants and members of our communities. We continued to see direct, positive results of our actions in 2017, with meaningful reductions in energy, water and waste at our properties. Our employees continued to exceed expectations and make major contributions to the communities in which we operate. And Morguard continued to earn recognition for its achievements, including the quality of its buildings and the health and safety record of the Company. We regularly review Sustainable Morguard to ensure that it is on track. In early 2017, we completed a new materiality assessment and the recommendations, along with the continuing feedback from our stakeholders, will continue to guide our future sustainability initiatives. On behalf of our Directors, I thank all those involved in Sustainable Morguard for their commitment and energy. I look forward to continuing our progress in the years ahead. Sincerely, K. RAI SAHI Chairman and Chief Executive Officer Morguard Corporation MORGUARD.COM MORGUARD 2017 SUSTAINABILITY REPORT PROFILE Morguard Corporation (“Morguard”) is a fully integrated North American real estate organization, with 1,465 employees and total real estate assets owned and under management valued at $15.4 billion. As a real estate owner, manager and developer, we recognize our responsibility to help build a sustainable future and strive to have a positive impact on the environment, the communities where we operate and the long term value of our properties. REPORT SCOPE AND BOUNDARY Morguard’s 2017 Annual Sustainability Report provides transparent information on activities and management strategies for owned and managed real estate assets in Canada and in the United States. Property performance metrics are focused on our office and retail properties where we have the most significant operational control. Although we acquired and disposed of assets during the reporting period, property performance metrics in this report only reflect the properties that were operational during the entire reporting period. This report was prepared in accordance with the Core option of the 2016 Global Reporting Initiative (“GRI”) Standard sustainability reporting guidelines, including the Construction and Real Estate Sector Supplement (“CRESS”). External quality assurance of our building performance data is provided by a third party, however formal assurance of the contents of this report was not sought. Morguard also publishes a separate 2017 Sustainability Highlights report that summarizes achievements and profiles specific initiatives and properties. This report, once issued, can be found at morguard.com. All information is presented as at December 31, 2017, unless otherwise indicated. ORGANIZATIONAL PROFILE Morguard is primarily a real estate investment company whose principal activities include the acquisition, development and ownership of multi-suite residential, commercial and hotel properties. Morguard is also one of Canada’s premier real estate investment advisers and management companies, representing major institutional and private investors. The Company’s common shares are publicly traded and listed on the Toronto Stock Exchange (“TSX”) under the symbol “MRC”. The Company’s goal is to accumulate a portfolio of high-quality real estate assets and then deliver the benefits of such real estate ownership to its stakeholders. Morguard’s real estate strategy is to acquire a diversified portfolio of real estate assets both for its own accounts and for its institutional clients. The Company’s cash flows are well diversified given the revenue earned from its management and advisory services platform, the Company’s corporately owned assets, and the distributions received from its investment in Morguard Real Estate Investment Trust, Morguard North American Residential Real Estate Investment Trust and Temple Hotels Inc. Diversification of the portfolio, by both asset type and geographic location, serves to reduce investment risk. The Company will divest itself of non-core assets when proceeds can be reinvested to improve returns. A primary element of the Company’s business strategy is to generate stable and increasing cash flow and asset value by improving the performance of its real estate investment portfolio and by acquiring or developing real estate properties in sound economic markets. The Company, through
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