SEGRO

Carbon per million dollars of revenue. The legacy industry-standard reference (CDP, MSCI). Useful for cross-sector context, but distorted by margin — high-margin firms appear artificially efficient. Read alongside the operational and asset intensities for the full picture.

OpEx (operating expenditure) is the running cost of the business — staff, services, energy, materials. This shows how carbon-intensive operations are per million dollars of spend. Removes the margin distortion that revenue-based ratios introduce.

EVIC (Enterprise Value Including Cash) is the firm's total capital footprint — equity + debt + cash + minority interest. The EU's standard intensity measure (SFDR PAI 3) — answers: how much carbon does each million of capital deployed in this business produce?

PP&E (Property, Plant & Equipment) plus leased real-estate assets is the firm's physical infrastructure on the balance sheet. This shows the carbon intensity of that physical footprint — uses Scope 1+2+3 for consistency with the other headline intensities. Surfaces stranded-asset risk for asset-heavy firms.

Carbon per million dollars of physical infrastructure — PP&E plus leased real-estate, including upstream and downstream leased emissions (Scope 3 categories 8 + 13). The most complete view of physical-asset carbon intensity, relevant for REITs and infrastructure-heavy firms.

SEGRO continues to expand solar capacity across its portfolio through retrofitting onto existing assets, while installing photovoltaic arrays on almost all new developments. During 2025 added 22MW of installed solar capacity, taking the total to 145MW (2024: 123MW), 18MW of which was through retrofits onto existing buildings. Working with data centre customers who have made commitments to use only renewable energy by 2030.

SEGRO's SBTi-validated net-zero methodology allows for offsetting residual emissions with best practice carbon removals at the 2050 target year, accounting for a maximum of 10% of target emissions. The Group has not disclosed any current carbon removal purchases or credits; the removal strategy is positioned as a last-resort measure for residual emissions after deep operational and embodied carbon reductions are achieved.

• Energy efficiency improvements across standing portfolio

  SEGRO targets an Energy Performance Certificate (EPC) rating of B or better for all new construction and refurbishments. At end 2025, 81% of the portfolio had an EPC rating of B or better (2024: 76%). The Group replaces fossil fuel heating systems with efficient electrical heating and has an 80% reduction target in corporate and customer carbon intensity by 2034 versus 2023 baseline. SEGRO uses a powerful carbon reporting platform to manage thousands of gas and electricity datapoints across its controlled space.

• Reducing embodied carbon in new development programme

  SEGRO carries out third-party verified embodied carbon assessments for all development projects over 5,000 sq m under its Mandatory Sustainability Policy. Key steps include increasing use of low-carbon steel, cement replacements and timber (e.g. the Hamburg Neu Wulmstorf timber structure). The embodied carbon intensity of representative developments reduced 12% in 2025 to 280 kgCO2e/sq m, targeting a 58% reduction by 2034 vs 2023 baseline of 331 kgCO2e/sq m. SEGRO also designs embodied carbon out of buildings by changing layouts and geometries.

• Green finance framework linking capital raising to sustainable buildings

  SEGRO has an established Green Finance Framework complying with International Capital Market Association and Loan Market Association principles, setting out investment criteria for deploying and allocating proceeds of green finance instruments including energy-efficient and low-carbon buildings. When deciding to raise capital, consideration is given to whether the issue should fall under the Green Finance Framework (e.g. a Green Bond). An internal carbon price of £100 per tonne is applied to capex for environmental improvements, particularly solar PV retrofits.

• Embodied carbon reduction in development programme

  Reducing embodied carbon in the development programme is critical to improving the carbon footprint. SBTi approved updated targets aligned with the new 'Buildings Framework': near-term target to reduce embodied carbon by 58% by 2034 vs the 2023 baseline, and net-zero by 2050. Reduced embodied carbon intensity of developments by 12% to 280 kgCO2e/sq m in 2025 (2024: 318 kgCO2e/sq m). All eligible development completions accredited BREEAM 'Excellent' or 'Outstanding' (or local equivalent).

• Asset modernisation & EPC ratings improvement

  At end of 2025, 81% of the portfolio had an EPC rating of B or better (2024: 76%). Majority of portfolio is modern and already meets highest sustainability standards. Older assets in London held pending refurbishment/redevelopment, providing opportunity to add value while improving environmental performance.

• EPC B-or-better upgrades to improve building energy efficiency

  SEGRO targets an Energy Performance Certificate rating of B or better for all new developments and refurbishments. In 2024, 76% of the portfolio achieved EPC B or better (2023: 65%), up from 3% rated below E (2023: 3%). The estimated cost to upgrade the UK estate to EPC B or better is approximately £55 million by 2030. Refurbishment capex is factored into short-term budgets and the five-year Medium-Term Plan. This lever is directly linked to compliance with UK MEES regulations requiring EPC B by 2030.

• Operational energy decarbonisation: tenant renewable electricity and gas elimination

  The largest element of SEGRO's Scope 3 emissions is from customer use of buildings (Cat 13, 272,561 tCO2e in 2024, intensity 27.06 kgCO2e/sqm). SEGRO addresses this through mandatory green lease clauses requiring customers to procure zero-carbon electricity tariffs and share energy data. Gas-powered heating is removed when units become vacant or through negotiation. SEGRO also directly procures electricity for some customers. The SBTi-validated intensity target requires a 79.9% per m2 reduction by 2034 and 95.3% by 2050. At end-2024, 87% floor area data coverage was achieved against an 85% target.

• Embodied carbon reduction in new construction (Scope 3 Cat 2)

  Embodied carbon from buildings SEGRO develops represents 30-40% of its carbon footprint. All developments over 5,000 sqm must undergo externally verified LCA calculations using One Click LCA software, beginning at pre-design phase. In 2024 the average embodied carbon intensity was 318 kgCO2e/sqm (vs 353 in 2022 and 331 in 2023), a 4% reduction from the 2023 baseline of 329.89 kgCO2e/sqm. The SBTi-validated target requires a 57.9% per m2 reduction by 2034. Innovations include low-carbon concrete, timber structural elements, and electric arc furnace recycled steel. Annual embodied carbon targets are written into contractor briefs and verified by third parties.

• Fleet electrification to reduce Scope 1 and 2 vehicle emissions

  SEGRO has an SBTi-validated absolute target to reduce fleet-related Scope 1 and 2 emissions by 58.8% by 2034 from a 2023 baseline of 481.15 tCO2e. The plan is to transition company-owned vehicles to electric vehicles. In the 2024 reporting year, fleet emissions were 488 tCO2e, a slight increase of 2.42% relative to the base year. This target sits alongside the broader suite of Science-Based Targets.

• Building energy efficiency upgrades to comply with MEES and EPC standards

  SEGRO's Mandatory Sustainability Policy (introduced 2022) requires properties with an EPC below B to be upgraded when they become vacant. The estimated cost to upgrade the UK portfolio to EPC B-grade is £55 million by 2030. A programme is ongoing to achieve EPC C or better by 2027, and EPC B or better by 2030 across all UK assets. Every new development and major refurbishment targets BREEAM Excellent or better. These costs are factored into development appraisals and financial planning.

• Fossil-fuel heating replacement with efficient low-carbon electrical systems

  SEGRO's Mandatory Sustainability Policy requires all new buildings and refurbishments to incorporate fossil fuel-free space heating. The corporate carbon reduction strategy calls for replacing fossil fuel heating systems with efficient electrical heating (e.g. heat pumps) to electrify the portfolio and reduce natural gas use. Gas is the primary fuel across the standing portfolio, so electrification is a critical primary lever. Improving thermal performance of building envelopes is a complementary action.

• Embodied carbon reduction in new constructions via LCA-driven procurement

  All developments over 5,000 m² must comply with the Mandatory Sustainability Policy and undergo externally verified Life Cycle Assessment using One Click LCA at multiple RIBA design stages. SEGRO targets a 20% embodied carbon intensity reduction per m² by 2030 from its 2020 baseline. In 2023, average embodied carbon was 348 kgCO2e/m² (down from 391 in 2021 and 353 in 2022), representing a 13% improvement since the 2020 baseline. Contractors must contractually commit to LCA targets; non-compliant suppliers are deprioritised. An internal shadow carbon price of £100/tCO2e is applied to capital goods and upstream transport decisions.

• Gas elimination and transition to electric heating across SEGRO-controlled spaces

  SEGRO is removing natural gas provision at its sites wherever possible and rolling out efficient electrical heating systems. Scope 1 gas consumption in 2023 was 5,455 MWh (all non-renewable). The firm has committed to not invest in fossil fuel expansion and states it does not invest in new fossil fuel power plants, pipelines or buildings with inefficient energy systems. Transition from gas to electricity is a key dependency on customers eliminating gas heating in leased spaces.

• Gas removal and electrification of heating in vacant and re-let units

  Gas and electricity carbon emissions show gas at 16% and electricity at 84% of corporate and customer carbon. SEGRO is transitioning away from fossil fuel heating to efficient low-carbon electrical heat sources, including air source heat pumps and ground source heat and cold storage. Gas is being removed from units when they become vacant or through negotiation with customers. Mandatory Sustainability Policy encourages electrification or low-carbon alternatives across all refurbishments and new developments.

• EPC upgrade programme targeting entire portfolio B-rated or better by 2030

  65% of the portfolio held an EPC rating of B or better at end 2023 (2022: 58%), including 58% of the UK portfolio. The target is 100% of the portfolio at EPC B or better by 2030. Estimated cost to upgrade UK estate to B or better is approximately £66 million by 2030, largely absorbed in normal course refurbishment capex. SEGRO conducted a full EPC audit in 2023 and is commissioning refreshed EPCs. The first BREEAM Outstanding refurbishment in the London portfolio was achieved in 2023 (Greenford, EPC raised from C to A+).

• Embodied carbon reduction in development programme — LCA-based intensity target

  SEGRO targets a 20% reduction in embodied carbon intensity of new developments by 2030 vs a 2020 baseline of 400 kgCO2e/m². Average intensity in 2023 was 348 kgCO2e/m² (–13% vs baseline), three years ahead of plan. Life Cycle Assessments are mandated for all developments >5,000 m² with external specialist verification. Building Information Modelling is mandatory. SEGRO uses low-carbon concrete, timber and recycled steel beams. The Mandatory Sustainability Policy embeds BREEAM Excellent as minimum for all new builds >5,000 m².

• Tenant energy decarbonisation via green leases and customer data visibility

  Customer emissions (Scope 3 Cat 13 downstream leased assets) represent approximately 41% of SEGRO's total Scope 1–3 emissions, making tenant energy the dominant lever. SEGRO includes these in its SBTi-aligned target and has improved energy data visibility to 81% of floor area in 2023 (from 68% in 2022), deploying over 400 automatic meters. Green lease clauses on all new leases require customers to share energy data and procure certified renewable electricity. Corporate and customer emissions fell 19% vs 2020 baseline to 254,168 tCO2e. All employee variable pay is partly linked to this metric.

• Switching SEGRO-responsible electricity supply to zero-carbon tariffs

  SEGRO continuously migrates its own electricity supply contracts to zero-carbon tariffs across all geographies. In 2023, approximately 50% of the 785 tCO2e reduction in Scope 1&2 was attributed to this lever. Retail green electricity backed by Guarantees of Origin is procured country-by-country (UK, France, Germany, Poland, Czech, Italy, Netherlands, Spain). Market-based Scope 2 emissions fell from 2,088 tCO2e (2020 base) to 1,707 tCO2e (2023).

• Building energy efficiency upgrades (EPC B target)

  SEGRO aims for entire portfolio to be EPC rated 'B' or equivalent. At end-2022, 58% of portfolio had EPC B or better (2021: 55%, 2020: 49%), including 52% of UK portfolio (2021: 46%). UK MEES legislation requires minimum B rating by 2030. Estimated upgrade cost ~£82m by 2030, mostly absorbed within normal refurbishment capex. Refurbishments include LED lighting, solar panels, air source heat pumps and automatic metering.

• Embodied carbon reduction in developments

  Embodied carbon represents 41% of total emissions (273,402 tCO2e in 2022). SEGRO targets 20% reduction in embodied carbon intensity by 2030 vs 400 kgCO2e/sq m 2020 baseline; achieved 353 kgCO2e/sq m in 2022 (12% reduction). Mandates Building Information Modelling and Life Cycle Assessments on all projects >5,000 sq m. Uses low-carbon concrete, timber, recycled steel beams. Considers alternative layouts that are less carbon and material-intensive.

• Heat pump / electrification of building heating

  Transitioning away from heating spaces with fossil fuels to efficient low-carbon electrical heat sources such as heat pumps will be a key part of strategy going forwards. Poland's relatively high dependence on natural gas for customer use is a challenge. Mandatory Sustainability Policy aims to electrify portfolio or utilise low carbon alternatives like heat pumps to reduce natural gas use.

• Customer decarbonisation support through green leases and energy data visibility

  SEGRO uses green lease clauses to require customers to share energy usage data and, where possible, source energy via a renewable tariff. Customer energy data visibility reached 91% of portfolio by area in 2025 (up from 87%). The Group works closely with data centre customers who have committed to 100% renewable energy by 2030, and encourages all customers to procure certified renewable electricity. Corporate and customer combined emissions intensity fell 17% in 2025 to 20.0 kgCO2e/sq m, targeting 80% reduction by 2034.

• Green leases enabling tenant emissions visibility

  Green lease clauses require customers to provide energy usage data and, where possible, source energy via renewable tariffs. These clauses, alongside an increase in automatic meter feeds, have helped increase visibility of portfolio energy use to 91% in 2025 (2024: 87%), enabling more accurate Scope 3 reporting and identification of efficiency opportunities.

• Tenant (downstream leased asset) energy decarbonisation

  Corporate and customer emissions are the dominant Scope 3 category for SEGRO as a REIT. In 2025, achieved 17% reduction in corporate and customer carbon emission intensity (to 20 kgCO2e/sq m from restated 24 in 2024), largely from increased use of renewable and low-carbon energy across the portfolio, supported by ongoing rooftop solar installation. Working closely with tenants on their own net-zero journeys (e.g. data centre customers committed to 100% renewable energy by 2030). Green lease clauses and automatic meter feeds increased visibility of portfolio energy use to 91% (2024: 87%).

• Tenant energy reduction via green lease clauses and smart metering

  As the vast majority of SEGRO's Scope 3 emissions (53%) arise from customer energy use in leased spaces (Cat 13), SEGRO uses green lease clauses to mandate renewable energy procurement and require sharing of energy data. Over 500 automatic meter readers have been enabled to improve data visibility. All employees' variable compensation is linked to improving visibility of customer energy data. In France, legislation requires occupier disclosure. SEGRO works directly with customers, particularly data centre operators, to support their transition to 100% renewable electricity by 2030.

• Supply chain engagement on embodied carbon: contractor requirements and LCA compliance

  SEGRO has designed and rolled out a methodology requiring all contractors to conduct multiple LCA calculations at RIBA stages 1-4 throughout design and construction. Annual embodied carbon reduction targets are written into contractor briefing documentation. 100% of Tier 1 suppliers by procurement spend are required to comply; 76-99% are in compliance. Non-compliant suppliers are retained and engaged; those unable to demonstrate reductions are not preferred for future projects. SEGRO also engages 10 Tier 2 suppliers. The firm collaborates with contractors to find innovative building design and material specification solutions.

• Embodied carbon reduction in construction via low-carbon materials and design

  Embodied carbon from developments (Scope 3 Cat 2) represents 32% of total 2024 emissions. SEGRO's Mandatory Sustainability Policy requires lifecycle carbon assessments (LCA) for all eligible projects over 5,000 sq m and Building Information Modelling on all such projects. Average embodied carbon intensity was 318 kgCO2e/sq m in 2024 (2023: 331 kgCO2e/sq m), a 4% reduction. Key levers include use of timber, electric arc furnace / recycled steel, low-carbon concrete products, low-carbon building layouts and pre-cast concrete elements. The 2034 SBTi target is 58% reduction in intensity vs 2023 baseline (to 139 kgCO2e/sq m). All embodied carbon calculations are externally verified.

• Building energy efficiency upgrades (EPC B/BREEAM Excellent) for existing and new assets

  The Mandatory Sustainability Policy requires all new developments to achieve BREEAM Excellent or better (92% of 2023 completions achieved this). All acquisitions must have at least EPC B. Existing assets below EPC B must be upgraded upon vacancy. In 2023, SEGRO refurbished SEGRO Park Greenford from EPC C to EPC A achieving BREEAM Outstanding. Estimated cost to upgrade the UK portfolio to EPC B by 2030 is £66 million. By 2028, properties must have at least EPC C; by 2030, EPC B under UK MEES regulations. 99% of 2023 development completions achieved BREEAM Very Good or better under the Green Finance Framework.

• Supply chain embodied carbon reduction through contractor and supplier collaboration

  SEGRO works with contractors and material suppliers to reduce embodied carbon in developments through low-carbon materials procurement (low-carbon concrete, recycled steel, timber), optimised building layouts, and joint lifecycle assessment work. The corporate embodied carbon intensity target drives supplier innovation. All LCA calculations are externally verified. In 2024 SEGRO plans lifecycle assessments of infrastructure projects to improve data quality, and will explore capturing refurbishment projects under Cat 2.

• Tenant energy decarbonisation via green lease clauses and data sharing

  SEGRO's largest source of emissions is Scope 3 Cat 13 (downstream leased assets – tenant energy use), representing 251,058 tCO2e in 2023 vs 308,626 tCO2e in 2020. SEGRO addresses this through green lease clauses requiring customers to share energy data and commit to zero-carbon electricity tariffs. At end-2023, energy data visibility reached 81% of floorspace (vs a 73% target). 10% of floorspace was subject to the green lease clause. SEGRO also facilitates access to competitive renewable energy group procurement contracts in each region, enabling tenant switching.

• Electric vehicle charging and low-carbon logistics

  Mandatory Sustainability Policy requires installation of EV charging at minimum 20% of parking locations on new developments and refurbishments. Urban portfolio located on edges of major European cities enables electric vehicle delivery. Inner-city assets facilitate cargo bicycle delivery. Two UK Midlands big box parks have strategic rail freight interchange terminals enabling rail vs HGV transport.

• BREEAM Excellent certification on all new developments

  100% of 2022 development completions accredited BREEAM 'Very Good' (or local equivalent) or better, with 67% rated BREEAM 'Excellent' or above. New Mandatory Sustainability Policy requires BREEAM 'Excellent' or equivalent for all new developments over 5,000 sq m.

• Customer (downstream leased) energy decarbonisation via green leases

  Customer emissions from downstream leased assets account for ~40% of SEGRO's total Scope 1-3 footprint (268,227 tCO2e in 2022). SEGRO standardised green lease clauses in April 2022 requiring customers to share energy data and procure zero-carbon electricity tariffs. Over 200 customer meters were upgraded to automatic meters in 2022. Energy data visibility increased from 54% to 68% of floor area. Customer emissions are explicitly included in SEGRO's SBTi-aligned 42% reduction target.