Through our investment, asset and property management, forward funded development and corporate activities we look to minimise the environmental impact of our business.

PHP is committed to the principles of continuous improvement in managing environmental issues, including the reduction of pollution and emissions, the proper management and monitoring of waste, and compliance with environmental legislation and codes of practice.

Environmental and sustainability performance are integral elements of PHP’s approach to the acquisition and funding of new medical centres. PHP undertakes a detailed assessment of each location, looking at building efficiency and performance, enhanced service provision for the community and support for wider healthcare infrastructure.

As awareness of climate change risks increase, we are continually reviewing our approach to environmental due diligence and undertake detailed environmental and building surveys to assess environmental risks for each investment, including flooding, to ensure the risk is avoided or appropriate prevention measures are developed and deployed over time.

Energy efficiency is also considered through the due diligence process and all new acquisitions are now required to have an EPC of C or better, or be capable of remedial action to achieve the required rating in due course in which case costs involved are now integrated into the appraisal.

82%

of the portfolio has an EPC rating of “A-C”

We are committed to creating best-in-class primary care centres by focusing on the future needs of our occupiers and thereby ensuring we are creating sustainable buildings for the long term. Our asset and property management policy is to invest in the portfolio of properties to generate enduring occupier and patient appeal, which provide opportunities to improve rental values, the security and longevity of income, including limited risk short-cycle projects to improve the quality of assets. Through these asset and property management initiatives, we also aim to deliver energy efficiencies and source cleaner energy for our occupiers and their patients.

Due to the wide range of lease arrangements across the portfolio, PHP is responsible for energy supply to a limited number of properties. Where PHP is responsible for energy supply for use by occupiers, we are committed to procure only 100% renewable electricity by 2023.

Our newly launched Net Zero Carbon Framework (outlined on page 30) builds on this commitment, setting out our pathway to a net zero carbon portfolio by 2040. Asset and property management will play a key role in achieving this, with interim commitments for all properties to have an EPC rating of at least B and net zero carbon asset management by 2030. An overall 80% reduction in carbon emissions by 2035 will then lead to all assets operating with Net Zero emissions by 2040, ahead of the NHS’s commitment of 2045.

This will be achieved through a policy of replacing existing features with technology exhibiting high energy conservation credentials and by assessing, minimising and offsetting residual embodied carbon from asset management projects. We will also increase the amount of renewable electricity we generate on sites such as solar, heat pumps and other proven technologies. For existing properties that have gas heating we will replace these systems with electric or other renewable alternatives by 2035.

As we work through the portfolio over the coming years, refurbishing properties, it is our goal for every asset that is refurbished to have an EPC of at least B or have been raised by at least two grades and to achieve a BREEAM rating of Very Good (for extensions, conversions and fit outs).

Finally, we will engage, encourage and work with the NHS, HSE and our healthcare occupiers, collecting energy consumption data, including Display Energy Certificates (“DEC”) to help them transition to renewable electricity supplies and operate our buildings in the most efficient way. During 2021, we started this process and introduced a Green Memorandum of Understanding to help identify and prioritise the reduction of GHG emissions across the portfolio. We will continue to work with our occupiers regarding their ongoing environmental responsibilities and aim for all new leases entered into to include ESG requirements as standard

39

projects completed during 2020

100+

projects expected to commence over the next three years

Data sourced from Annual Report 2021

PHP together with its development partners are committed to promote the highest possible standards of environmental and social sustainability when designing and constructing new assets. As a minimum, it is our commitment that all new build developments in the UK must have a BREEAM rating of at least Excellent and Very Good for fit outs, refurbishments and rural or remote areas.

In Ireland, all new developments are built to a Building Energy Rating of A3, or better, and in accordance with nZEB (nearly Zero Energy Buildings) standards. Requirements are also in place for our development partners and contractors to ensure the implementation of responsible property development practices.

We are about to commence construction of PHP’s first two NZC developments in the first quarter of 2022.

As outlined in our new NZC Framework, we’re committed to ensuring by 2025, all new developments are net zero carbon. Operational energy and carbon will be minimised as far as possible, alongside on and offsite renewable energy provision.

Embodied carbon will be assessed and minimised and we will work with supply partners who are reducing their carbon impacts and providing low carbon products and materials. Residual carbon impacts will then be offset, via high quality carbon offsets.

100%

of the newly completed assets delivered in 2021 held an EPC with a rating of B or better