Simon Sustainability Report 2021

SIMON SUSTAINABILITY REPORT 2021

IDENTIFIED CLIMATE-RELATED RISKS & OPPORTUNITIES

Category

Time Horizon Identified Risks & Opportunities

Business Impacts & Responses

Policy & Regulation

Short-Term Potential and emerging regulations resulting from climate

We make our design and construction team aware of these risks. We put procedures in place to prioritize sustainable design and ensure our centers are designed to meet regulatory requirements. We use both passive and active design principles to accomplish this. We publicly disclose to GRESB and CDP and publish our annual sustainability report, showcasing our leadership position in energy management, and our approach to risk management and climate resiliency. We promote adoptions of building certifications that require energy efficiency, such as LEED. We have established property-level targets for energy efficiency, water usage, and recycling rates, which encourage capital allocation for low-carbon technologies. We conduct ongoing assessments of our energy efficiency and our renewable projects across our portfolio, both at corporate and shopping center locations.

considerations may limit Simon’s development capacity at certain locations (e.g., water, energy, or land use/zoning restrictions) and may impact Simon’s business and regular operating mechanisms. Changes in laws promoting more sustainable land-use practices due to climate change may also cause delays in development projects and increase costs.

Technology

Short-Term We seek opportunities to participate in programs and adopt

technologies that may facilitate a transition to a lower carbon footprint and reduce energy-related operating costs. As tenants’ preferences shift towards renewable energy sources, there is an increased expectation that landlords will offer renewable energy sources to tenants. An unsuccessful investment in renewable energy sourcing and technologies may put us at a financial disadvantage.

Legal

Short-Term Current and emerging regulation on climate-related issues brings legal risks related to monitoring, compliance, fines, and potential reputational damage. Property level development activities pose risks related to land, air, and water contamination. Medium-Term Growing investor preference to engage with companies that incorporate climate risk into investment decisions and increasing tenant interest in properties that incorporate climate change mitigation into the design and development of new projects. Lack of response to stakeholder preferences and failure to comply with regulations could create a reputational risk and potentially a competitive disadvantage which restricts our ability to attract and retain tenants.

In order to mitigate potential legal risks we conduct thorough environmental studies as part of our due diligence process prior to commencing development or redevelopment.

Market/ Reputation

We have been increasing our engagement strategy with general contractors and maintenance companies to ensure that we have the right partners who can help prepare us for managing climate-related risks and opportunities at our sites. We regularly engage in discussions with our top 10 tenants on sustainability topics in order to identify opportunities.

Operations

Short Medium Long-Term

With over 200 locations in 37 states, our operations are subject to extreme weather events, which can result in significant property damage and disrupt our business. Both may increase operational costs and reduce lease income.

Extreme weather events can have financial impacts such as increased operational costs and lost revenues due to business interruption.

We have adjusted our strategy related to physical risks to include business continuity plans and ongoing training for our employees on emergency preparation and safety in the case of extreme weather events.

Longer-term shifts in climate patterns are likely to increase average temperatures that will impact the energy requirements of our properties.

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ENVIRONMENT

CREATING SUSTAINABLE CENTERS

CUSTOMERS

COMMUNITIES

EMPLOYEES

APPENDIX