Second-Party Opinion Download

Sustainalytics is of the opinion that the H&R REIT Green Financing Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2021. This assessment is based on the following:

USE OF PROCEEDS

The eligible categories for the use of proceeds – Green Buildings, Energy and Resource Efficiency, Renewable Energy, Clean Transportation, Climate Change Adaptation, Pollution Prevention & Control – are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDG 7, 11, and 12.

PROJECT EVALUATION AND SELECTION

H&R’s internal process for evaluating and selecting projects is managed by the Company’s Green Financing Working Committee (“GFWC”), chaired by the President and comprises senior members from the finance, sustainability, operations, development and legal teams. The GFWC will meet at least annually to evaluate all eligible projects. Additionally, the Framework states that the GFWC will be responsible for the assessment and mitigation of environmental and social risks associated with eligible projects. Sustainalytics considers the project selection process in line with market practice.

MANAGEMENT OF PROCEEDS

H&R’s process for management of proceeds is supervised by the GFWC, and the Company intends to fully allocate proceeds within 36 months of issuance. Pending allocation, the Company may invest unallocated proceeds to repay debt or temporarily invest, in cash or cash equivalents, in accordance with the Company’s general liquidity management processes and no association with carbon-intense assets or activities. This is in line with market practice.

REPORTING

H&R intends to report on the allocation of proceeds on its website on an annual basis until full allocation. The allocation reporting will include the total amount of proceeds allocated to eligible assets, remaining balance of any unallocated funds, and the proportion of proceeds used for financing and refinancing. In addition, H&R REIT is committed to reporting on relevant quantitative and qualitative impact metrics. Sustainalytics views H&R’s allocation and impact reporting as aligned with market practice.