Climate strategy

Climate governance

Combating climate change has become an integral part of our business strategy and a priority for Fibra Danhos. From our highest governance body, the Technical Committee, we also recognize 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, including those related to climate change.

The responsibilities of the ESG Committee about climate strategy management are as follows:

• Monitor risks and opportunities related to climate change and communicate them to the Technical Committee.
• 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.

To guarantee that sustainable and climate-related criteria are applied at every level of the organization, the ESG Committee is composed of members of the Technical Committee and executive officers, who are sustainability experts.

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.

Metrics

Fibra Danhos has prepared a greenhouse gas (GHG) emissions inventory according to the recommendations of the GHG Protocol of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), using the operational control approach.

Scope 1 and 2 GHG emissions

The emission factors and calorific values used to calculate Scope 1 emissions were those published by SEMARNAT’s National Emissions Registry (RENE) and the National Commission for the Efficient Use of Energy (CONUEE), respectively.

For Scope 2 emissions, we used the emission factor of the National Electricity System (SEN) established by the Energy Regulatory Commission and SEMARNAT.

The global warming potentials (GWP) used were taken from the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC).

GHG EMISSIONS tCO2e
	2024	2019
Scope 1	200.08	125.50
Scope 2	22,517.93	27,215.68
Total	22,718.01	27,341.18

Scope 3 GHG emissions

Last year, we mapped the impact of the fifteen scope 3 categories to establish their relevance and prioritize their measurement. The mapping gave us the basis on which to estimate the emissions associated with the categories that have a direct impact within our operations in 2024. With this, we can identify in greater detail the impact of our value chain, and areas of opportunity for mitigation actions.

3-3, IF-RE-450a.1, IF-RE-450a.2

Physical risks

Identifying climate-related physical risks in our portfolio has been a cornerstone of our efforts to seek operating resilience. To do so, we use a Software as a Service (SAAS) that estimates the extent to which our portfolio is exposed to the physical impacts of climate change, based on the following variables:

• The geolocation of our properties
• Shared socioeconomic pathways (SSP), which are climate scenarios that consider socioeconomic development in their projections.
• A medium-term horizon (2041-2060)
• Climate data based on phase 6 of the Coupled Model Intercomparison Project Phase 6 (CMIP6).

In the risk assessment, we determine how likely it is that an asset may be affected by climate change (exposure) as well as its predisposition to be adversely affected by climate change due to its structural properties (vulnerability).

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 RCP 8.5 scenarios. In line with the Paris Agreement and European regulations, the assessment of climate-related risks is projected on a medium-term time horizon for 2050 (i.e. 2041-2060).

As for risk, the SAAS assigns an exposure level between 0 (zero risk) and 5 (very high risk). A score of 5 out of 5 means that the asset is as exposed as the most exposed 20% of the continent’s population considered in an SSP2-4.5 scenario. A score of 4 out of 5 means that the asset is as exposed as the 60th to 80th percentiles of that group, and so on. A score of 0 out of 5 means virtually no risk.

Through these four steps, we are building a solid, long-term strategy that not only benefits our company but also helps build a more sustainable future for all.

Because all of our properties are located in areas of high water stress, drought is the physical climate-related risk with the greatest potential to affect our operations. Persistent drought may obligate us to rely on other sources of water supply outside the municipal network, which would represent a significant increase in water supply costs as a result of the decrease in water availability in the Metropolitan Zone of Mexico City. Based on the climate scenarios evaluated, and considering the availability of withdrawal sources in recent years, we expect to become increasingly dependent on delivery by water tanker trucks in the medium term. Our estimates project that these water purchases could exceed MXN160 million by 2060, as supply sources dwindle.

To begin dealing with this challenge, eight of our properties currently have wastewater treatment plants, with which we were able to recirculate 88% of treated water in 2024. We also began evaluating new water treatment technologies to increase the amount we reuse. The cost associated with this upgrade is estimated at about MXN80 million.

Due to the impacts of climate change, in recent years there has been an increase in wildfires, mainly in areas close to forests. During our climate-related risk assessment update, we found that four of our properties had an exposure rating of medium, in which the direct impact would consist of infrastructure damage. In the rest of the portfolio, the wildfire risk is similar to the risk related to rainfall, with a low exposure level.

Also, 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, avoiding accumulations of water.

Finally, heat waves and extreme winds represent low-level climate-related risks. Although we do not foresee significant operational and financial impacts from these risks, we do consider it necessary to evaluate them in order to have the right action plans in place. Heat waves could raise 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. In our most recent analysis of the financial impact of this risk we estimated that, under this scenario, our electricity expenses for 2060, i.e. in the medium term, could increase by MXN560 million over the base year 2023. With this in mind, one of our resilience initiatives to mitigate this risk consists of diversifying our energy matrix by using renewable sources and smart energy storage systems, which are currently present in our portfolio. This would reduce the financial impact of a temperature increase. With regard to extreme winds, given the infrastructure of our properties, we have not identified any potentially significant operational and financial consequences.

For our entire portfolio, since our beginnings, we have taken to promptly address climate-related phenomena, with no notable impacts on our operations or those of our tenants.

Transition risks

We have identified the risks we face in the transition toward a low-carbon economy by using 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 specific transition scenarios for various countries. In Mexico’s case, it assumes political and regulatory, technological, mobility, industrial and socioeconomic changes. Based on this information, 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 given the speed at which they evolve, particularly those relating to regulatory aspects, we found that stricter laws on the installation of distributed generation (solar panels) on our properties as one of the main risks because of the considerable economic implications involved. Although federal installed capacity limits on distributed generation have been increased, as of the date of this report, the new rules and their implications are not entirely clear. We believe that several of the items currently subsidized in the current provisions—such as the installation of bidirectional meters and the non-requirement for smart energy storage systems—could change, which would increase the investment costs of installation. This risk could imply an additional cost of approximately MXN5 million in the short term, as we would have to increase renewable energy generation on our properties. While this risk and its impact are significant, we know that mitigating our emissions is important, particularly those associated with electricity consumption. So although we will seek ways to mitigate this risk, it should not prevent us from increasing the installed renewable energy capacity at our properties.

Climate-related opportunities and resilience strategies

Fibra Danhos considers taking advantage of climate-related opportunities to be indispensable for the long-term profitability of the business. This presents an opportunity for us to offer our tenants resource-efficient, resilient spaces for their operations. Based on scenarios for quantifying physical and transition risks, we have identified three main categories of opportunities related to climate change:

Tomando en cuenta los escenarios para identificar los riesgos físicos y de transición, hemos determinado tres principales categorías de oportunidades relacionadas con el cambio climático:

• Products and services
• Resource efficiency
• Carbon intensity of energy consumption

Our products and services are the spaces and properties we lease to our tenants. Properties that have earned sustainability certifications command higher rents than those without them. Specifically, rental rates in LEED-certified buildings run up to 11.1% higher than properties without this distinction. In 2024, we updated the cost of this opportunity considering those office buildings that do not yet have LEED O+M certification. Taking advantage of this opportunity would bring in additional annual revenues of MXN26.6 million. This would require an approximate investment of MXN2.4 million in obtaining certification for office properties not yet certified.

Opportunities related to resource efficiency can be grouped into various categories. First, although we currently reuse 20% of the waste we generate, according to SEMARNAT’s Basic Diagnosis of Comprehensive Waste Management, we still have 11.6% margin for reuse of inorganic waste. Added to this is the opportunity to partner with different actors in the value chain to transform organic waste into compost or inputs for different industries. By taking advantage of these opportunities, we could generate annual savings of close to MXN3.2 million and reduce our scope 3 emissions by around 2,500 tCO2e. This would promote the circular economy, reducing the amount of waste sent to landfills.

Another opportunity identified in resource efficiency is the possibility of mitigating our carbon intensity by increasing the supply of renewable energy. Currently, the installed distributed generation capacity in our portfolio covers 20% of our annual electricity consumption. The goal is to increase this in the short term, generating additional savings of around MXN13 million per year.

In 2024, we invested more than MXN77 million pesos in initiatives related to renewable energy.

With regard to transition opportunities in Mexico, based on the DDP scenario, these are concentrated in four main areas: energy security, economic growth, social development, and public health. These categories served as the basis for updating the opportunities for transition to a low-carbon economy in 2024.

The opportunity linked to energy security is consistent with what was outlined above: by diversifying our electricity supply to incorporate sources that do not depend on fossil fuels, we strengthen our resilience in the face of shortages and rising energy prices.

We have also identified a new area of opportunity within the category of energy security: the increased use of electric vehicles and chargers. To keep up with this trend, Fibra Danhos will work on installing more electric chargers in our properties in order to make this service more available to visitors. This initiative will support the transition to electric mobility in the Mexico City and Puebla metropolitan areas.

By taking advantage of climate-related opportunities, we can create value for our various stakeholders and benefit the communities in which we operate, strengthening their resilience and generating projects that assist them in transitioning toward a low-carbon economy.