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SustainabilityInvestor & Analyst event 2 July 2020

Introduction Simon Carter, CFO

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Agenda

15.00 Introduction Simon Carter, CFO

15.10 Environmental Commitments Juliette Morgan, Head of Sustainable Development Matt Webster, Head of Smart & Sustainable Buildings

15.30 Transition Fund & Indices Cressida Curtis, Head of Corporate Affairs & Sustainability

15.40 Sustainable Finance James Pinkstone, Treasury

15.45 Questions

16.00 Social Commitments Anna Devlet, Head of Community

16.10 1 Triton Square Tim Downes, Regent’s Place Development

16.20 Conclusion & Questions Simon Carter, CFO

16.30 End

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2020 Sustainability Targets – key achievements • Strong track record of Sustainability at

British Land

• 2020 targets achieved or exceeded– 73% reduction in carbon intensity (scope 1 and 2)

vs 2009 baseline (target: 55%)

– 55% reduction in landlord energy intensity vs 2009 baseline (target: 55%)

– 1,745 people supported into jobs through Bright Lights, our skills and employment programme (target: 1,700)

• More challenging but excellent progress – 96% electricity purchased from renewable

sources (target: 100%)

– 94% progress on our Local Charter (target: 100%)

Young Readers, Ealing

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Shaping our 2030 Strategy • Clear focus on accelerating our progress

– Reflecting increased urgency across our stakeholder groups

• Alignment with corporate purpose – Not a separate workstream – business as usual

• Learnings from our 2020 programme – Refined our focus to two key areas where we can

have the biggest impact

• Best in class Sustainability – Guided by UN Sustainable Development Goals

– Learning from other leading companies Broadgate Connect

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New 2030 Environmental Commitments

[more appropriate pic]

• Net zero carbon portfolio by 2030– All future developments to be net zero embodied

carbon

– 50% less embodied carbon on all major developments by 2030

– 75% less operational carbon across our portfolio by 2030

• Transition fund established – From 2020 we will assume an internal carbon

price of £60 per tonne for new developments

– This will fund the offsetting of embodied emissions associated with developments through accredited offset schemes

– The remaining amount will be paid into the Transition Fund to finance retrofitting of standing portfolio, including R&D

100 Liverpool Street

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New 2030 Social Commitments • Place based approach

– Partner with local stakeholders

– Education and employment partnerships at each place

– Underpinned by our Local Charter, comprising 5 key commitments to local communities

• Piloting our approach at three locations, building on successful partnership model at Regent’s Place and Fort Kinnaird

Tree Shepherd, Canada Water

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Our approach is driven by customer demand • Environmental

– Companies signing up to science based targets has doubled since 2010 driving demand for more sustainable real estate

– Research from JLL demonstrates that buildings rated BREEAM Outstanding or Excellent generally achieve a premium of 10% in Central London compared to prime buildings without a rating

– Average vacancy rate in buildings rated BREEAM outstanding or Excellent of 7% vs. 20% for a building rated Very Good, 24 months post completion

• Social – Ability to make a social contribution increasingly

important to employees

– Creates loyalty, binding occupiers to places Norton Folgate

Environmental Commitments Juliette MorganMatt Webster

Building Construction Building Use End of building life

EmbodiedMaterials & processing

Manufacturing & transportation

Fit-out, maintenance & refurbishment

Circular economy (materials re-use)

Operational Efficient designEnergy use

Renewable energyDeconstruction

Net Zero: Reducing carbon emissions and offsetting remaining emissions through accredited schemes

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Net Zero carbon portfolio requires a whole life carbon approach to reduce embodied & operational emissions

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We have made good progress to reduce embodied carbon in development & improve operational efficiency

Embodied

Operational

Past Present: Good Present: Great

>1100 kgCO2e/m2 <800 kgCO2e/m2 2030 Target: <500 kgCO2e/m2

>225 kWh/m2/year <170 kWh/m2/year 2030 Target: 55 kWh/m2/year

The Leadenhall

(>1500 kgCO2e/m2)

Norton Folgate

(c.560 kgCO2e/m2)

100 Liverpool Street (c.350

kgCO2e/m2)

Meadowhall

(2009, >300 kWh/m2/year)

Meadowhall

(Today, c.150 kWh/m2/year)

2/3 Finsbury Avenue

(55 kWh/m2/year)

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Minimising operational carbon will require investment in retrofits & use of renewables

Today

k to

nnes

/ C

O2e

Tenant’s plans

Grid decarbonisation

Retrofits

Renewables

75% reduction in operational carbon achievable through decarbonisation of the grid, complemented by retrofits, energy management and renewable energy

2030<£1m p.a. offset cost

Energy management

Concept Design Commissioning & Procurement Construction Operation

(incl. maintenance) End of Life

Embodied carbon reduction should focus on early stages of development process

Ability to influence whole life-cycle carbon

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Substantial embodied emissions from the Leadenhall building, largely from materials

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c.92,000 tonnes of embodied carbon

84%Generated by materials

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Floor Wall Foundation Framing Columns

Concrete is the largest contributor to embodied carbon, especially in flooring and walls

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Concrete Steel Glass Timber StainlessSteel

Stone

Rebar

SteelConcrete

Embodied Carbon (Kg CO2e, k)Embodied energy (GJ)

1 Triton

A pragmatic and progressive approach to adopting new materials

Now• Re-used / recycled materials• Concrete & steel

manufactured using low carbon processes

1 Short-Medium Term• Cross-laminated timber• Ashcrete, hempcrete

2 Longer Term• Bamboo; Mycellium• Requires R&D and increased

public profile

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Circular economy – Circular Offset

Buildings

R&D

Timber/ Bamboo

Building Materials

Offset Payment

Low carbon cement substitute High efficiency thermal heat wheel

pumpsRecycled & refurbished facade

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Opportunity to build on existing progress and deliver 1 Triton Square as an embodied carbon net zero building

Item Value

Total Embodied Carbon 21,150 tonnes

Assumed Price of Carbon £60/tonne

Mitigation Cost to Deliver Triton Square as Net Zero £1.3m

0.8% of Total Construction CostsTrialing new innovations…

0.3% of Net Development Value

Exceeded minimum sustainability standards at 1 Triton Square

EmbodiedSignificant retention structure

Supply chain engagement

448 kg/CO2e/m2

embodied in construction

OperationalOperational performance prediction

BREEAM Outstanding; EPC A (Offices)

Green Energy

Low upfront payment to get 1 Triton Square to Net Zero

Pathway to net zero

2022/3Achieve scope 1 and 2 SBTitargets met – REGO / PPAs

2025Review strategy at interim stage

Embodied carbon 750 kg C02/m2

2029Commence design of new strategy

2030Begin annual offset of portfolio

emissions – BBP target

75% reduction in carbon emissions across the portfolio

50% reduction in embodied carbon emissions to <500kg/C02e/m2

UKGBC 2030 targets achieved.

2022Asset audits complete

2020Launch transition fund

Developments net zero

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Transition Fund Cressida Curtis

21,150tonnes CO2e-£60/tonne Internal price of carbon-£1.3m mitigation payment

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In practice: 1 Triton Square

Retrofits, loans and R&D will help to reduce 2030 emissions and therefore future offset payments, and generate Net Positive impacts in the long term

£0.4m offset payment

Other developments contributing1

1 Includes 100 Liverpool Street, Norton Folgate, 1 Broadgate, 5 Kingdom Street, Phase 1 at Canada Water

£0.9m payment into fund

£5m p.a. Green Loans from BL

£5.3m payment

Net Zero BuildingsHigher rents & faster leasingFirmer values

Transition Fund

Retrofit of Standing Portfolio• Lower energy costs• Climate resilience• Firmer values

Customers / service charge loans• Lower energy costs• Closer customer relationships

Research & development• Lower carbon costs

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Environmental leadership – GRESB performance vs peers

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British LandPeer average

Management Policy & disclosure

Risks & opportunities

Monitoring & EMS

Performance indicators

Building certifications

Stakeholder engagement

Construction & renovation

Top quintile

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2019 Performance

Indices Performance and Responsible Business

MSCI disclaimer available http://www.britishland.com/sustainability/performance/benchmarks

Global Real Estate Sustainability Benchmark

2019: Green star for 10th year

FTSE4Good2019: 98th percentile

Sustainalytics ESG Ratings

2019: 96th percentile

Carbon Disclosure Project2019: B2018: A-

EPRA Sustainability Reporting Awards

2019: Gold for 8th year

MSCI ESG Ratings2019: AAA rating

Responsible business commitments

Other benchmarks and awards

Promoting diversity & inclusion

Against modern slavery

Mandating prompt payment

Integrating wellbeing

Championing responsible employment

Sustainable Finance James Pinkstone

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Sustainable Finance Framework

• Aligned with the UN Sustainable Development Goals

• Our Sustainable Portfolio will primarily comprise of Green Buildings, but will also include Other Sustainable Projects, as detailed in the framework

• We may raise Sustainable, Green and/or Social finance in an amount up to the value of the Sustainable Portfolio

• We will develop the framework as best practice emerges

Sustainable FinanceSustainability Linked Loan

• £450m Sustainability-Linked RCF

• Margin adjustments based on performance against 2 KPIs

• Incentivises our sustainable behaviour

QuestionsSimon Carter, CFO

Social Commitments Anna Devlet

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Covid-19 demonstrated our strong local connections • Community Investment Fund

– Established in 2008

– Now provides more than £1.3m funding pa for local initiatives

• Refocused to provide targeted support– Provided expert strategic advice to community

partners through the Cass Business School

– Supporting partner organisations address local employment and employability concerns

– Provided equipment to help community partners work from home

– Providing books and activity packs to vulnerable families

– Connecting occupiers with local volunteering opportunities

Julie Hutchinson, ELBA

“British Land is helping to cushion the impact of Covid-19, reinforcing support for people we have placed into jobs, connecting them to new opportunities and delivering training so they are resilient for the future”

Our long term investment strategy, track record, networks and local teams, give us a unique position

Place BasedApproach

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Our priorities for social engagement

License to Operate

Planning / Development

Customer

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Created an effective platform, but need to build on successes to amplify benefits & respond to external focus

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Hybrid Approach

Underway at Canada Water and Regent’s Place

Next: Three different pilots, across the country

Place-based Initiatives

Centralised Framework

Delivery: Focusing on where we can make the biggest impact

Understanding local context

Common themes Focused actions KPIs

• Review existing progress

• Engaging with stakeholders to understand their priorities

• Work at different levels: local, regional, national

• Roll out customer & supplier networks

• Undertake responsible procurement review

• Identify three clear priorities for local communities (case by case)

• Framework provided by our Local Charter

• Identified key areas: education, upskilling & reskilling, employment

• Providing support to help people be more resilient in future

• Working with existing local teams

• No. of partners involved

• No. of beneficiaries• No. of education

initiatives• No. of employment

initiatives

Builds on the strong relationships we have developed over the past 10 years working in partnership to create positive local impacts

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What does better look like?

CustomersBespoke connections &

programmes tailored to themAmplified local impact

Part of a vibrant community

CommunityAmplified benefits for local people

Greater value from pooled resourcesLocal influence over decisions

Closer customer relationshipsVibrant places that meet customer needs

Positive interactions with local peopleEmpowered employees

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Conclusion and Q&ASimon Carter, CFO