Climate governance
Combating climate change and incorporating sustainability as an integral part of our business strategy has become a priority for Fibra Danhos. The Technical Committee, our highest governance body, recognizes the importance of making sustainability and climate change core concerns in our operations. This involves managing the associated risks and seeing them as a business opportunity to support our growth strategy.

Under this approach, we can then define action lines to manage climate-related opportunities and risks and oversee their execution by the related business areas. The Technical Committee is responsible for authorizing and monitoring the climate strategy, along with the associated risks and opportunities. It relies on the ESG Committee and Department to ensure the long-term well-being of all stakeholders. Although the ESG Committee and the Technical Committee are in constant communication, results on climate-related risks and opportunities are formally presented each year in the Annual Integrated Report.

ESG Committee
The ESG Committee is the body responsible for overseeing sustainability-related risks and opportunities.

The responsibilities of the ESG Committee are as follows:

• Monitor risks and opportunities related to climate change and communicate them to the Technical Committee; also verify compliance with the Environmental Policy.
• Validate Fibra Danhos’ climate strategy, taking into consideration the risks and opportunities identified in the materiality analysis.
• Regularly review the monitoring reports by the internal ESG area.

The ESG Committee is composed of members of the Technical Committee and executive officers, who are experts in sustainability.

	TECHNICAL COMMITTEE MEMBER	EXECUTIVE DIRECTOR	SUSTAINABILITY EXPERTISE
Blanca Estela Canela Talancón			Risk analysis and management, regulatory compliance
Pilar María Aguilar Pariente			Energy sector, talent development, environmental and business social impact
Jorge Serrano Esponda			Risk analysis and management, regulatory compliance, cybersecurity and human capital
Jonathan Cherem Daniel			Energy efficiency, optimization of water consumption, environmental and social impact

The ESG department, which is responsible for applying and managing climate strategy, has the following responsibilities:

• Maintain direct communication with a member of the ESG Committee, through weekly meetings, to communicate progress against goals and objectives, and discuss the climate-related risks and opportunities involved in decision making.
• Comprehensively manage the different areas involved in the climate strategy, to monitor their progress against specific goals.
• Communicate public commitment to sustainability, community investment and impact management.

Oversight of targets and goals.
Although the goals for the main climate-related risks and opportunities are medium-term, they are organized into annual subgoals. The ESG department is responsible for preparing the annual plan to meet these goals, while the ESG Committee approves the plan and tracks it throughout the year. This tracking is done through weekly meetings with a member of the ESG Committee and the ESG Department. Progress against these goals is directly factored in to the ESG Department’s performance evaluation.

Parque Vía Vallejo

Climate governance structure

The ESG area plays a fundamental role in our operations, serving as a vital link for managing and communicating all aspects of our climate strategy between the ESG Committee and stakeholders.

Transition risks
In 2023, we updated our assessment of the risks of transition to a low-carbon economy for 100% of our portfolio. To perform this update, we used the Deep Decarbonization Pathway (DDP) scenario, whose goal is to demonstrate how countries can transform their economies by 2050 and achieve net zero emissions, in line with the Paris Agreement.

The DDP has a specific transition scenario for Mexico, which assumes political and regulatory, technological, behavioral, mobility, industrial and socioeconomic changes. Based on this update, we analyzed the potential impacts associated with climate-related transition risks in our portfolio.

Aware that these risks can have a considerable financial impact on our operations, we quantified one of the main risks: the introduction of new carbon taxes in Mexico City, the State of Mexico, and Puebla. These taxes were calculated based on the average carbon taxes applied in other states of Mexico and our current emissions. This risk could represent an annual cost of approximately $6 million in the short-term. This is a very clear example of why mitigating emissions in our operations is crucial to reducing the potential financial impacts related to the transition to a low-carbon economy. Therefore, one of our main goals for 2024 will be to work on quantifying the transition-related financial impacts listed.

Physical risks
To identify exposure to physical risks in 100% of our portfolio, we use a Software as a Service (SAAS) that, based on the geolocation of our properties and the climate projection scenarios proposed by European and international organizations, estimates the extent to which our portfolio is exposed to the physical impacts of climate change.

In the risk assessment, we distinguish between exposure and vulnerability (IPCC). Exposure indicates the propensity of an asset to be adversely affected by a natural hazard, due to its geographical location. Vulnerability refers to the predisposition of an asset to be adversely affected, due to its structural properties. This analysis covers the exposure score assessment methodology.

To assess the exposure risk of our portfolio, we use open source data, provided by reference institutions such as NASA, Copernicus Climate Data Store and WRI, among others. The SAAS allows us to use the most up-to-date datasets available, with global coverage and the highest resolution.

The analysis is also based on projections for the SSP2-4.5 and SSP58.5 trajectories, which are the most commonly used climate scenarios. In the medium term, these trajectories are roughly consistent with an increase in temperatures of 2.0°C and 2.4°C for the period 2041-2060, and 2.7°C and 4.4°C for the period 2081-2100. If the previously mentioned projections are not available, the analysis will take into account the IPCC RCP 4.5 and RCP8.5 scenarios.

In line with the Paris Agreement and European regulations, the assessment of climate-related risks is projected on a medium-term² time horizon for 2050 (i.e. 2041-2060).

2. For climate change impact analysis, the following time horizons were defined: short term: 1-14 years, medium term: 15-40 years, long term: 41 years and beyond.

Given the location of all our properties, drought. is the climate-related risk that has the potential to generate greater operational impacts on our properties. These operational impacts would come mainly from an increase in the cost of water supply as water becomes less available in the Mexico City Metropolitan Area. Based on the climate scenarios evaluated, we estimate that our operating expenses for water consumption could exceed MXN190 million by 2060, as water supply sources dwindle. Currently, eight of our properties have wastewater treatment plants, with which we were able to recirculate 53% of treated water in 2023.

The second most prominent climate-related risk is precipitation, Although our properties are exposed to very long periods of drought, when precipitation does occur it is very intense, which increases the likelihood of infrastructure damage and flooding. To mitigate this risk, all of our properties have rainwater gullies, which allow us to remove rainwater that reaches the properties through pumping systems.

Finally, heat waves represent a low-level climate-related risk, although it is one of those that could represent the greatest increase in the operating expenses of our properties, since the increase in temperature would result in the increased use of cooling systems and, therefore, higher electricity consumption. We estimate that, under this scenario, our electricity expenses for 2060, i.e. in the medium term, could increase by MXN546 million, using 2023 as the base year. With this in mind, one of our resilience initiatives to mitigate this risk consists of diversifying our energy matrix by sourcing electricity from distributed generation—solar panels—and joining the WPM, in order to reduce our electrical rates and thereby reduce the financial impact associated with the increase in temperature.

Regardless of the situation or weather phenomenon that our properties face, we have taken the necessary measures to address them promptly, with no notable impacts on our operations or those of our tenants.

Climate change opportunities and resilience strategies

Fibra Danhos considers taking advantage of climate-related opportunities to be indispensable for the long-term profitability of our business. In the same spirit, we want to lead the way towards sustainability and energy efficiency in our industry, turning our operations into a watershed for seizing these opportunities.

The opportunity to use resources efficiently can be quantified through recycling and the increased use and reuse of water treated by our WWTPs. We currently recycle about 13% of the waste generated. According to the Ministry of the Environment and Natural Resources’ estimate of the waste that can be recycled, we can still increase our percentage of recycled waste by 18.5%, which would generate an annual income of MXN1.5 million and avoid an additional 994 tCO2e a year. This also reduces the intensity of our use of resources as raw materials, as it encourages circular economy schemes.

Another opportunity in the efficient use of resources is the reuse of 100% of treated water.

We currently reuse 53% of the water we treat, although in several of the buildings with WWTP, we manage to reuse 100%.

We have four properties that do not reuse all the water they treat, so in 2024 we will analyze the cost of the necessary adaptations to reach 100% and decide whether this project is profitable in the short term.

Reducing the carbon intensity of energy consumption by diversifying our energy supply and sources would result in annual savings of MXN52.9 million. We plan to achieve this through the use of distributed generation installed in our buildings. This project is already underway and will be completed in 2024, avoiding the emission of 3,516.28 tCO2e per year. Diversifying our energy supply will also reduce energy expenses and market-based scope 2 emissions, as we are considering the supplier’s emission factor in our selection process.

According to a Cushman & Wakefield study, LEED-certified buildings command rents 11.1% higher than non-LEED certified buildings. Taking advantage of the climate-related opportunity of sustainable buildings would represent an income of MXN44.9 million annually and requires an investment of approximately MXN3 million every three years, the recommended time to obtain recertification.

Looking next at transition opportunities, based on DDP’s analysis of our sector, we consider the most significant of these to be economic growth, energy security, social development, and public health. In terms of economic growth, improving energy efficiency would reduce operating costs and lower GHG emissions. In terms of energy security, diversifying our energy supply would reduce dependence on the cost of oil and gas by increasing the percentage of renewable sources in our energy supplier’s generation mix.

Changes in infrastructure would improve quality of life for the general public and encourage social development. Finally, reducing dependence on fossil fuels would improve the quality of our country’s air, which would have a direct impact on people’s health, as would the incorporation of spaces that encourage physical activity in our buildings. In addition to this, we would encourage people to use more public transportation, given the strategic location of our properties.

Metrics and targets

Climate-related metrics

Scope 1 and 2 GHG emissions
We conducted our emissions inventory according to the recommendations of the Greenhouse Gas Protocol of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), using the operational control approach.

We used the emission factor published by the National Emissions Registry (RENE) on February 29, 2024, the heating powers published by the National Commission for the Efficient Use of Energy (CONUEE), the emission factors of the National Electric System (SEN), and the heating potentials of the Regulations and Secretarial Agreements of the Ministry of the Environment and Natural Resources (Semarnat).

Furthermore, the 27 kg of R-22 refrigerant gases we used generated 47.52 tCO2e of direct emissions.

We have reduced by 19% our scope 1 and 2 GHG emissions intensity since 2019.

*The reported scope 1, 2 and 3 emissions correspond to 100% of our portfolio; the GHGs included in the calculation were: CO2, CH4, N2O, HFCs and PFCs.

Scope 3 GHG emissions
Given the nature of our activities, measuring scope 3 emissions is extremely important to have a real mapping of our environmental impact and identify areas of opportunity for action. We mapped the impact of the fifteen scope 3 categories to establish their relevance and prioritize their measurement. Relevance was determined by applying the mapping suggested by the GHG Protocol, which weights each category according to its size, influence, risk, level of control and importance to stakeholders, among others. Based on this, we identified categories with an impact on our operations.