In 2020, we responded to the GRESB Resilience Module that evaluated our organization against the Task Force on Climate- Related Financial Disclosures (TCFD) criteria and our approach to climate-related social risks. Our GRESB Resilience Module received a score of 88 out of 100, compared to the global average of 68, demonstrating our commitment and implementation of the TCFD framework and climate resilience strategy. We regularly evaluate potential climate-related physical, social and transition risks defined by the TCFD to inform decisions to reduce exposure and potential risks.
CATEGORY
MANAGEMENT OF POTENTIAL IMPACT
Acute Weather Events Flooding, Hurricanes, Winter Storms, Extreme Temperatures
We have developed the Climate Change Adaptation and Resilience policy for standing investments and the Climate Change Risk Assessment Checklist to be completed during the due diligence process. The policy and checklist include assessments of potential physical risks such as power interruption, flooding, heat waves, hurricanes, and winter storms. The Geographic Concentration Risk is identified as a potential chronic risk, which acknowledges that natural disasters and long-term shifts in climate patterns such as sea level rise, could make a large portion of the portfolio non-operational or inaccessible. Due to the high-profile nature of our standing investments, we have identified physical security and terrorism as a potential Social Risk. Mitigation strategies employed by ESRT include a director of security at the Empire State Building, formal crisis management plans, in-person electronic surveillance at all entry points, active shooter trainings for employees and tenants, and Terrorism Reinsurance Act coverage that covers nuclear, biological, chemical or radiological weapon attacks. We perform annual indoor air quality (IAQ) testing at all standing investments to evaluate exposure and risks to human health. All IAQ tests are reviewed to ensure contaminants remain below the most stringent acceptable levels. For any assets that do not meet our performance thresholds, actions are taken to address and remediate issues. We have deployed active bipolar ionization air purification technology across one million square feet of our portfolio that neutralizes chemical compounds and neutralizes 99.92% of coronaviruses. We have firewall and penetration testing, cybersecurity insurance, internal employee trainings on safeguarding information, addition of VP of Information Security dedicated to cybersecurity, cyber training modules, and a continual assessment of new cybersecurity tools. We evaluate energy and climate legislation in regions and cities where we operate, including evaluating the compliance status with legislation concerning our carbon footprint and measuring the financial impact of energy and climate legislation including the NYC Climate Mobilization Act. We evaluate innovative technologies to help mitigate climate-related risks. These include advanced optimization and machine learning technologies, battery storage, renewable energy, lighting and controls, building management systems, equipment and tenant plug loads and controls.
Geographic Concentration Risk
Physical Security and Terrorism
Human Health
Cybersecurity
Policy Risks Energy and Climate Legislation
Technology Risks Capital Investments in Low-Carbon Technology
Market Risks Abrupt/unexpected changes in energy costs
We evaluate abrupt or unexpected changes in energy costs and market perceptions by investors. We plan long-term contracts for certainty, predictability, and risk mitigation on utility pricing.
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