Institutional Real Estate, Inc.

2 ESG Means Business "As part of a pension plan, we take a long-term view on all investment decisions," says Neate. "Providing premium office space with leading sustainability technologies main- tains our leadership position, drives net operating income and helps fulfill our pension payment obligations. Our com- mitment to leading the industry in sustainability practices has also helped us continue to lead in occupant comfort, which in turn keeps our customers happy and our buildings well leased." Nowadays, with a proliferation of green building stan- dards for real estate owners to adopt — LEED, BOMA Best, BREEAM, etc. — certification has become mandatory for a building to achieve class A status. "It's a negative if you don't do it because so many buildings are LEED certified," says Tom Enger, a manag- ing director with UBS Asset Management, Real Estate & Private Markets. "Our customers have told us they want to be located in buildings that are smart, sustainable and service focused — their employees have told us the same. So in the war for talent, being in a great building is a meaningful advantage," says Neate. "The business case is a natural for us, which is why each of smart, sustainable and service focused are important parts of our business model." "Sustainable real estate can meet premiere tenant demands supporting their attraction and retention, while focusing on initiatives that decrease ongoing operational expenses. The business case is very strong," agrees Debo- rah Ng, director – strategy and risk, head of responsible investing, with the Ontario Teachers' Pension Plan. Real estate has become an example of the benefits of ESG integration. Ng notes the clear relationship, for the real estate sector, between sustainable practices and outperfor- mance, backed by a fairly long history of research and evi- dence. This empirical evidence can help drive or support activity in other areas of a pension plan's ESG process. Enger notes commercial real estate's sustainability is very quantifiable compared with other asset classes: "There are property-level scorecards with Energy Star and LEED certifica- tion, and there are fund-level score sheets with GRESB, but they don't really have anything comparable for equities or bonds." Real estate has become an example of the benefits of ESG integration. Deborah Ng of the Ontario Teachers' Pension Plan notes the clear relationship, for the real estate sector, between sustainable practices and outperformance, backed by a fairly long history of research and evidence. This empirical evidence can help drive or support activity in other areas of a pension plan's ESG process. A LEADER IN BUILD-TO-CORE AND SUSTAINABILITY At National, we believe sustainable development and management practices help realize long-term investment value through more efficient operations and better building environments for our tenants. National is a proud member of GRESB and USGBC ® FOCUSED STRATEGY | ENDURING RESULTS WWW.NATADVISORS.COM The Bloc in Los Angeles, CA is LEED Silver ® certified Ad FINAL.indd 1 3/16/2017 3:00:16 PM

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• ESG means business