Corporate Social Responsibility Report 2020 2020 has demonstrated the benefits of diversification and the resistance of MERLIN Properties’ business model. 01 Letter from the Vice-Chairman and Chief Executive Officer 04 Corporate Social 02 03 The leading MERLIN Responsibility commercial real Properties’ Report 2020 estate company strategy in the Iberian Peninsula 08 12 04 05 Main milestones Responsible for the year governance model 16 30 06 07 Value creation Sustainability for stakeholders in the portfolio 50 86 APPENDIX I Breakdown of the 08 environmental performance About reporting scope the report 150 132 4 | Corporate Social Responsibility Report | 2020 Dear Shareholder, As we look back at the events that have unfolded since the beginning of the pandemic, we at MERLIN Properties (hereinafter, "MERLIN" or the "Company") have never been more convinced of the importance of sustainability management as a driver of shared value creation for the Company and its stakeholders. We are therefore pleased to present this Corporate Social Responsibility Report (hereinafter, the "Report"), where we take stock of our performance in 2020 from an economic, environmental, social and governance perspective and look at the challenges we face in each one of these areas moving forward. As in previous years, this Report was prepared Ismael Clemente according to the reporting standards of the Global Reporting Initiative and the EPRA's Sustainability Best Practice (sBPR) recommendations. Based on those reporting standards, this publication includes information identified as material for the Company, based on the sustainability information needs of our stakeholders and especially our investors, who are increasingly aware of the key role that sustainability plays in an organization’s good performance. Good financial performance is critical to ensure Letter from the generation of sustainable shared value over time. In this respect, our Company managed to the Vice-Chairman withstand the challenges we faced last year, by far, which demonstrates the resilience and solvency and Chief Executive of our business model and the advantages of our diversified portfolio. This is evident from the key Officer financial and operating metrics, which remained in line with those of previous years. Our strength as a leading and diversified REIT has also enabled us to implement a policy of incentives for our retail clients, particularly affected by closures and restrictions on footfall at shopping centers. In response to the new challenges facing the Real Estate sector, in 2020 we also implemented innovative and sustainable initiatives to satisfy the needs of our users and customers. Particularly noteworthy in this regard is the launch of MERLIN Hub Madrid Norte, comprising 33 office assets with an area of 330,000 sqm in the NBA (New Business Area) on the A-1. This initiative involves the integrated management of assets in close proximity, offering services that improve quality of | 5 life and user experience in areas such as mobility, initiative at the national and even the European innovation, technology, flexibility, sustainability level within our sector, in terms of the sheer and community-building. magnitude (more than 4 million square meters of assets), and the different types of buildings Also in line with these new trends, at MERLIN we involved. The number of assets certified to these remain committed to Flex Space as a key aspect standards continued to increase in 2020, so that that supplements and reinforces our offering by the end of the year 81% of our office, logistics in the office market through our LOOM brand. and shopping center assets in terms of GAV (Gross As we continued to open new LOOM spaces, Asset Value) were LEED or BREEAM certified. in 2020 we also created a range of new flexible Moreover, great strides were also made in the solutions adapted to the needs of each type of number of certifications in benchmark standards company, large companies and entrepreneurs, such as ISO 14001 and ISO 50001 Environmental SMEs and freelancers. Progress was also made Management Systems and AIS accessibility in 2020 on the implementation of technological certifications in 2020, and we will continue to and digitalization solutions for our asset portfolio, move in this direction in the coming years. another initiative that has our full support. Aside from continuing with the development of the We obtained excellent sustainability scores in initiatives arising from the Proptech Challenge, 2020. This was our third time participating in the in 2020 we certified our first offices with the GRESB survey, which specializes in REITS, we Wired Score seal, a leader in verifying the obtained a score of 78 points, which is above the quality, security, digital and telecommunications global and European average and higher than our resilience of buildings. Ours is the first Spanish peers’ scores. We participated in the CDP survey company to obtain this type of certification. for the first time in 2020, which evaluates the organization’s performance on climate change, One of the most important milestones in 2020 obtaining a "B", which is higher than the global in the environmental arena was the launch of and European average, and also higher than the a global initiative to promote the production average of our group of comparable companies. of photovoltaic solar power in the portfolios To strengthen our position in sustainability of office assets, logistics assets and shopping indexes, we plan to participate in the S&P DJSI/ centers. In the initial phase, we plan to install CSA international benchmark survey in the photovoltaic panels on 24 assets in what is one near future. of the most relevant initiatives of its kind being developed in Spain. On the social front, at MERLIN we mobilized our resources early on to provide solutions to Also in 2020 we continued to make improvements the challenging circumstances as they arose. In to the environmental performance of our 2020 the Company, together with our directors assets, implementing energy consumption and employees, donated eight robots for efficiency measures, especially in assets under mass COVID-19 testing, which were installed refurbishment. Worthy of note in the area of at different medical centers throughout Spain. sustainable mobility is the implementation of new MERLIN participated in several specific efforts pilot projects to promote sustainability in last- to benefit the communities in the areas near our mile logistics, which also benefits our customers' assets, such as donations of food and school operating efficiency. supplies by our shopping centers and our urban gardens at MERLIN Hub Madrid Norte, or the use Regarding the sustainable building certifications of space in our logistics assets in Sevilla ZAL to of our assets in particular, it is our goal over the store medical supplies. next two years to certify practically all of the assets in the Company's strategic portfolios In the corporate governance area, in 2020 we (offices, logistics assets and shopping centers) continued to work toward the highest levels to the most demanding international standards: of robustness in our governance model and LEED and BREEAM. We believe this is a unique compliance system. In addition to obtaining 6 | Corporate Social Responsibility Report | 2020 recertification in the UNE 19.601 compliance Committee, independent from the rest of the standard, in 2020 we adapted our risk model to Board of Directors' Committees, which would be reflect the circumstances, reinforcing the internal responsible for monitoring the progress of the audit activity to control the areas of greatest company’s different plans and initiatives in this risk in view of the restrictions imposed as a area. result of the pandemic. In addition, as part of our commitment to full transparency, there is now Looking to the future, we would also like extensive documentation describing all of the to highlight our firm commitment to the corporate governance policies in force published comprehensive transformation of the Azca on our website. complex, Madrid’s most important business district, as evidenced by the creation of We are aware that our stakeholders are Renazca in 2020. Under this initiative, the urban increasingly demanding a strong commitment development project which we plan to implement on the part of senior management to the in the coming years was recently selected. oversight of ESG (environmental, social and governance) aspects. As we have demonstrated In conclusion, I’d like to express my gratitude in a particularly prominent way in recent years, to all MERLIN executives and employees for at MERLIN we are firmly committed at all levels their collaboration and commitment in 2020, a of the organization to integrating sustainability challenging year to be sure, all of whom played into our strategy and decision-making. The a decisive role in the Company’s ability to retain company's governing bodies at the highest its position of leadership in the sector. There’s no levels have provided the decisive impetus to doubt that their collaboration will be key in the deliver excellent sustainability performance. To coming years to the successful development of continue making progress in this area, we’ve set our projects. a goal for the future to create a Sustainability | 7 The leading commercial real estate company 02 in the Iberian Peninsula MERLIN Properties Socimi S.A. (“MERLIN”, “MERLIN Properties”, or the “Company”) is the leading REIT in the Spanish real estate market and one of the most important listed companies in Spain. It has a robust and diversified portfolio of assets, comprising mainly of offices, high-quality logistics platforms and shopping centers in key locations throughout Spain and Portugal. | 9 2020 performance. Highlights MERLIN presents its fifth CSR Report prepared in accordance with Global Reporting Initiative (GRI) Standards Guidelines and the EPRA Sustainability Best Practice Recommendations (“EPRA sBPR”). In this report, the Company continues its transparency commitment to Stakeholders, informing them of its economic, environmental and social performance.