Redefine typically invests in existing brownfield buildings/properties. Also, the project is expected to refinance existing properties that have Green Star South Africa ratings that have design or operational features that made them more sustainable. Therefore, no land acquisition is expected for the project and thus PS5 (Land Acquisition and Involuntary Resettlement) is not applicable. The properties are mainly located in urban/peri-urban areas and also, retrofits/renovation and building improvements are planned for existing properties. Therefore, no impacts are expected on biodiversity and thus PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) is not applicable. Similarly, PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are also not applicable.                                                     

This is a Category B project according to IFC’s Environmental and Social Sustainability Policy as the project is expected to have limited adverse environmental and social risks and impacts that are few in number, short-term and site-specific, and can be avoided or mitigated by adhering to recognized performance standards, good international industry practice (GIIP) procedures, guidelines and design criteria as described in the following sections. 

Key E&S risks and issues associated this project are: (a) implementation of E&S screening and risk assessment processes for new assets (greenfield and brownfield); (b) E&S management systems and staffing to manage refurbishment and operation of assets in line with IFC Performance Standards (PSs); (c) assurance of fair, safe and healthy working conditions during refurbishment and operation including occupational health and safety (OHS) aspects; (d) structural, electrical and mechanical safety of the buildings programmed for renovation (d) construction phase risks and impacts including that related to contractor management, OHS, traffic, and community safety; (e) resource efficiency of assets (water, energy and materials efficiency); (f) the nature, extend and effectiveness of the life and fire safety systems of the buildings programmed for renovation; and (g) effectiveness of stakeholder engagement and community grievance mechanism.                                                  

Identification of E&S risks and impacts: Redefine has established ESG risk assessment and due diligence procedure for any new acquisitions, which includes requirements on environmental and social risk aspects. Also, Redefine has mentioned in its public disclosures that Human rights and community impact assessments will be performed in respect of property transactions, where appropriate, in future. Similarly, EPP has committed to identify ESG related risks in all new investments through ESG due diligence. Although most properties that Redefine and/or EPP are investing in are brownfield properties, it will be important to include risks envisaged in IFC PSs especially related to PS5 (on Land Acquisition and Involuntary Resettlement) in the due diligence/screening. Therefore, as per the ESAP, the due diligence/screening process will include review of potential properties for any risks of past/current involuntary resettlement associated with the land acquisition.

During operation of buildings, occupational health and safety risk assessments are conducted for the work to be performed  by the employees and employees are informed of these risks.

E&S Policy and Management Systems: Redefine has an ESG strategy and has provided details about this on its website (https://www.redefine.co.za/about-us/esg/strategy). Redefine has mentioned that United Nations (UN) Sustainable Development Goals (SDGs) are corner stone of their strategy. The company has set out priorities on environment (climate, water, waste, green buildings), social (human rights, human capital, diversity, inclusion and equity, stakeholder engagement, community and tenant well-being, health and safety) and governance (anti-bribery and corruption, internal governance, board governance and business continuity management) matters. Details on these priorities are provided on company’s website. Also, the company has documented and disclosed human rights policy, diversity, inclusion and equity as well as occupational, health and safety policies. Although the company does not have internationally certified health and safety management systems, company has internal procedures on occupational, health and safety (OHS) in line with the requirements of the OHS Act 85 of 1993 and various procedures linked to environmental and OHS management.

EPP also has a publicly disclosed ESG strategy (https://www.epp-poland.com/esg.html), which has similar focus areas. EPP also has a documented environmental policy. Also, EPP has implemented environmental and OHS management systems in line with the requirements of ISO 14001 and ISO 45001 requirements.

Separately, Redefine has a documented and publicly disclosed sustainable financing framework (SFF) (https://www.redefine.co.za/view-file/Sustainable-Finance-Framework.pdf) under which Redefine intends to issue programmatically use of proceed financial instruments such as green, social and/ or sustainability bonds and green and/or social loans. As per the SFF, the proceeds of such instruments will be utilised to fund assets/projects that would contribute to achieving specific objectives aligned to Redefine’s ESG Strategy and, in turn, the objectives of the UN SDGs. The framework defines types of investments to be considered under the proceeds of green/social/sustainability bonds issued by the company.

E&S Organization Capacity: Redefine has a social, ethics and transformation (SET) committee at board level, which approves and oversees the implementation and progress of the ESG strategy. Also, the company has a sustainability team which works cross-functional teams to ensure implementation of the ESG strategy. On a property level, facilities management teams are expected to implement various environmental and OHS measures in line with site -specific internal procedures and applicable legal requirements.

Additionally, other board committees have separate roles with respect to ESG strategy implementation. The investment committee considers ESG considerations in investment proposals tabled before it and oversees the company’s responsible investment journey. The risk, compliance and technology committee will oversee the integration of ESG-related risks within the company’s enterprise-wide risk management framework. The remuneration committee approves and monitors the performance of any ESG-related key performance indicators (KPIs) for members of executive management, in conjunction with the SET committee. The audit committee oversees the levels of assurance applied to ESG-related information (together with the SET committee), including the information put forward in the integrated reporting suite.

EPP also has a SET committee as well as a Sustainability Officer who works closely with the Redefine sustainability team.

Emergency Preparedness and Response: Life and fire safety related systems are procedures of the company are explained under PS4. Redefine’s properties have an emergency preparedness and response plan and procedural documents that include building evacuation procedures in case of potential emergencies, which are kept in the health and safety file by the facilities manager. Regular (biannual) fire drills are conducted at the properties. Also, facilities managers are trained on building incident management and response in emergency situations. Employees are also regularly trained on fire-fighting and emergency response. Similar systems have been implemented by EPP for their properties.

Monitoring and Review: Redefine has identified a number of ESG KPIs and monitors its performance against these KPIs at the property and company levels. Internally, the ESG performance is reviewed by the SET committee on a quarterly basis. The company publishes and discloses a ESG Sustainability Report (https://redefine.co.za/view-file/2021_ESG_report.pdf) as well as a SET committee report. Additionally, the company benchmarks its progress by participating in annual sustainability indices and benchmarks mentioned in its sustainability reports (e.g., CDP Climate, CDP Water and Dow Jones Sustainability Index). Regular OHS inspections are carried out internally by facilities management teams and an independent external agency conducts an OHS audit of the properties on a bi-annual basis.

Similarly, EPP publishes and discloses a ESG Sustainability Report (https://www.epp-poland.com/podglad,file,386_epp-esg-report.pdf) in accordance with Global Reporting Initiative standards. EPP also has identified KPIs and conducts independent audits on fire and elevator safety. Recently, EPP has hired an external agency to conduct independent OHS audits as well.

As of 2021, Redefine employed about 500 employees (including 55 temporary employees) whereas EPP employed about 220 employees.

Human Resource (HR) Policies and Procedures, Working Conditions and Terms of Employment: Redefine is a member of United Nations Global Compact (UNGC) since November 2020 and has thus committed to adhere to the principles of UNGC including abolition of child labor, elimination of forced and bonded labor, non-discrimination and freedom of association and collective bargaining. Redefine has documented HR policies including code of business conduct, human rights policy and employment equity policy. Under its human rights policy, Redefine is committed to applying fair and responsible remuneration principles to all employees as well as regulation of basic conditions of employment, such as working hours, leave, overtime payment and deductions in line with applicable labor laws. EPP also has a code of conduct and diversity policies. All Redefine employees have documented employment contracts with the company.

Non-discrimination: Both Redefine and EPP have written policies on diversity and thus have commitment to non-discrimination.

Freedom of Association: As part of its commitment to UNGC, Redefine recognizes workers’ freedom of association and right to collective bargaining in accordance with the local laws, as applicable.

Grievance Mechanism: Redefine has a whistle-blower hotline where people are allowed to report grievances anonymously. In addition to the hotline, people can report grievances to their line managers, other superiors and/or legal department.  Similarly, EPP provides multiple channels to its employees - Ask CEO, Ethics line and intranet.

Prevention of Child Labor and Forced Labor: Redefine is committed to abolition of child labor and elimination of forced labor as part of its UNGC commitments as well as under its human rights policy. The company has included these commitments in its publicly available supplier code of conduct as well.

Occupational, Health and Safety: Both Redefine and EPP have documented OHS policies and procedures.

As mentioned above, EPP has implemented an OHS management system certified as per ISO 45001 requirements. EPP has OHS procedures and conducts risk assessment of various works. Employees are informed about the risks related to the work performed through the OHS risk assessment. Health and safety training is conducted for each employee. All employees go through pre-employment and periodic health checks. EPP monitors accidents and incidents and the same are disclosed in the ESG sustainability reports. As per 2021 report, there were zero employee accidents in EPP properties.

Although Redefine does not have an internationally certified health and safety management system, it has implemented procedures in line with South Africa’s OHS Act along with certain additional requirements based on risk. An on-site work permit system has also been implemented and accidents/incidents are monitored. Redefine has reported that there were 5 incidents in FY2021 with 2 lost workdays due to these incidents.

As mentioned above, Redefine conducts regular internal as well as external/independent OHS audits for its properties. EPP has also hired an external agency to conduct such independent OHS audits.

Suppliers Code of Conduct and Third party workers: Redefine has a publicly disclosed supplier code of conduct (SCoC, https://www.redefine.co.za/view-file/supplier-code-of-conduct.pdf), which includes provisions on conduct towards employees; conduct towards the environment; conduct related to bribery and corruption; Ethical conduct; and disclosure and reporting to Redefine. The SCoC requires suppliers among other provisions to ensure no child labor, no forced labor and providing a safe and healthy workplace, which are IFC PS2 requirements as well for supply chain. As per SCoC, Redefine can conduct supplier risk assessments and can terminate the contract in case of non-compliance with the code. Similar to Redefine, in 2021, EPP has also prepared a SCoC and has a goal of all key suppliers signing the SCoC by 2025.

In terms of on-site OHS procedures, Redefine ensures that contractors are aware of potential hazards and sign an acknowledgement agreement. Also, contractors are expected to submit their permits and safe work method statements. Contractors sign a contract that sets out their roles and responsibilities as part of their supplier application pack and in line with the requirements of the OHS Act and keep their own health and safety records, especially on larger projects. 3 incidents were reported by Redefine for the period of September 2020 to August 2021 in the ESG Sustainability Reports.

Resource Efficiency: Redefine has clear climate goals and has committed to design buildings with long-term climate-related risks in mind and continue to explore opportunities to improve climate resilience throughout its portfolio. The company evaluates climate risks as guided by Task Force on Climate-related Financial Disclosures (TCFD). To meet its climate action goals, Redefine has committed to set science-based greenhouse gas (GHG) emissions targets by financial year 2023 that will be aimed at achieving long-term decarbonization objectives across its portfolio. 

Redefine has already implemented a number of measures for reduction of GHG footprint:

(a)   Developing and managing green buildings in line with guidelines of Green Building Council South Africa (GBCSA). As per 2021 ESG Sustainability Report, company has 123 Green Star SA certifications - 74% of the company’s office GLA and 21% of the overall GLA. The company has committed to construct office buildings with minimum 4-star rating as per GBCSA guidelines. Also, the company is looking at certification for its retail and industrial properties.

(b)   Use of environmentally friendly and low carbon footprint materials: Redefine is focusing on implementation of life cycle impact assessments and in the long term, measuring the embodied carbon of our activities and materials during the development phase of the life cycle of its properties.

(c)   Implementation of water efficiency measures: Redefine has focused on water footprint reduction through water consumption measurement (smart meters in a phased manner), leak detection, auditing of existing groundwater installations and boreholes, high-efficiency equipment retrofits, landscaping and irrigation solutions, wastewater treatment and recycling, and HVAC efficiency assessments. The company is also considering water audits in high-risk buildings.

(d)   Installation of solar photovoltaic (PV) panels: As of 2021, the company has installed solar PV capacity of 26.33 MWp, which generated about 6% of the total electricity consumption. A total of 1.31MW of this amount is no longer available due to sales of buildings, however, the company had a further confirmed pipeline of 19 additional installations adding 23.93 MWp to create a total capacity of 48.95 MWp .

The company disclosed its FY2021 GHG footprint which was about 37,600 tons of CO2 equivalent for Scope-1 (3300 tons) and Scope-2 (37300 tons) emissions. The project is expected to help reduce the GHG footprint through the retrofit/renovations of the properties which will include energy and / or water saving projects at some of the sites, in line with the Company’s environmental, social and governance strategy.

Similar to Redefine, EPP has climate goals and strategy including goals on reduction of carbon intensity and use of renewable energy for retail assets as well as the reduction of GHG footprint. The company has implemented the following measures:

(a)   Green building certification: EPP has obtained accreditation by BREEAM (Building Research Establishment’s Environmental Assessment Method) which approves that their infrastructure has been fully adjusted to the environmental and social needs. As of 31 December 2021, 100% of the offices and 43% of the shopping centres were accredited by the external accreditation body. Out of which, 83% of the office assets (138 661 m2 GLA) were accredited at “Excellent” level. Nine of EPP’s retail assets are certified by BREEAM at “Excellent” level in the scope of Asset Performance and 36% are certified at “Outstanding” in the scope of Building Management. EPP has a target for 2025 is to achieve BREEAM in Use certificates at “Very good” or ”Excellent” levels for all its retail assets.

(b)   Installation of LED lighting for its buildings

(c)   Installation of water saving taps

(d)   Sourcing of renewable energy for 100% of its offices.

EPP has disclosed its GHG footprint was about 47,900 tons of CO2 equivalent for Scope-1 (about 3,200 tons) and Scope-2 (about 44,700 tons) emissions.

Pollution Prevention: The Redefine and EPP properties mainly use electricity from the grid as the main source. Back-up diesel generators are used in case of power cuts in South African properties. Since usage of back-up generators is typically limited and emissions are not regulated, currently, no emission testing is being conducted. As per the ESAP, the company will ensure that for any regular use (500 hour/year or more) of any emission sources, emissions will be tested at least on an annual basis to ensure compliance with the World Bank Group (WBG) Environment, Health and Safety (EHS) Guidelines.

The wastewater is discharged into the municipal sewage collection and treatment systems.

Waste Management: Most of the waste generated from the properties is non-hazardous. Waste segregation is implemented at the properties. Both Redefine and EPP monitor and disclose waste generation and disposal quantities in the sustainability reports. Also, both Redefine and EPP are working on increasing the sorting of recyclable wastes in order to reduce waste going to landfills. The disposal of waste generated during retrofits/renovations/refurbishment of properties will be managed by the contractors in line with the Redefine and EPP guidelines in this regard.  

Considering that the project will involve retrofits/renovations/refurbishment within existing buildings, the impacts on neighbouring communities are not expected to be significant.

Life and Fire Safety (LFS) Systems: Redefine provides LFS systems for its properties in compliance with the local fire safety codes applicable in South Africa, which are one of the codes mentioned as internationally recognized LFS codes under the WBG EHS Guidelines. During the building design planning phase, a fire engineer is employed to draft the LFS master plans for the development and their submission to the local municipality for approval prior to any construction being undertaken. Life and Fire Safety professional also signs of on progress of implementation of the LFS master plan during construction. The Life and Fire professional conducts a review as part of the property completion test at the time of life and fire safety systems testing and commissioning and certifies that construction of these systems has been carried out in accordance with the accepted design. Further, review and maintenance of property LFS systems is part of the OHS audits conducted regularly by the independent agency. Similarly, EPP provides appropriate LFS systems as per the applicable national building codes and conducts regular independent fire safety audits. As part of the retrofits/renovations/refurbishment of existing buildings, a Life and Fire Safety professional will conduct a complete life and fire safety review of existing buildings scheduled for renovation. The findings and recommendations of the review will be used as the basis to establish the scope of work of a Corrective Action Plan and a time frame for implementing the changes. 

Also, as part of the retrofits/renovations/refurbishment of existing buildings, a suitably qualified professional will review structural safety in line with the national building codes and standards.

Security forces: Redefine hires private contractors for providing security for its properties. Redefine’s external security consultants conduct a security assessment for each of the individual properties.  The company has taken a goal of providing specialised trainings to security personnel to manage conflict in a way that respects human rights, avoiding the use of unlawful behaviour and only utilising force only for preventive and defensive purposes in proportion to the nature and extend of the treat. As per the ESAP, similarly training will be designed and implemented by EPP for security personnel guided by good international practice in relation to dispute resolution and proportionate use of force only for preventive and defensive purpose. 

As mentioned above, both Redefine and EPP disclose E&S information through their ESG Sustainability Reports. Also, as social is one of the pillars of the ESG Strategy, communities have been identified as one of the stakeholders. Redefine and EPP describe their stakeholder engagement activities in the ESG Sustainability Reports including the corporate social responsibility activities.   

For community grievance reporting, Redefine has its customer care center details on its website and also has a whistleblower line with a phone number and email. Redefine has also secured services of Whistle Blowers (Pty) Ltd. Anonymous reports can be submitted by fax, e-mail or online from the website: www.whistleblowing.co.za. Any reports received through the hotline are considered in line with South African legislation regarding protected disclosures as well as the Redefine Whistleblower policy, accessible on our public website.

Considering the corporate nature of the investment, Suguna will disclose this ESRS and the ESAP at the following address:

Redefine Properties Limited

155 West Street, Sandown

Sandton, Johannesburg, 2196

South Africa.

Any queries and/or comments about the project may be directed to:

Ntobeko Nyawo

Chief Financial Officer

Redefine Properties Limited

Phone: +27112830080

Email: ntobekon@redefine.co.za