162 STRATEGICALLY ADVANCING SUSTAINABILITY REPORT Screening of Suppliers Since FY2019, we have maintained direct management of our Singapore portfolio, working with a diverse network of local repair & maintenance suppliers to deliver exceptional service to our tenants. To maintain high standards, we implement rigorous vendor screening through our due diligence process. This begins at the initial engagement phase, where potential suppliers must acknowledge and comply with our Green Procurement Policy and undergo our vendor tender prequalification assessment. Only approved vendors who successfully complete this evaluation are included in our Green Procurement Compliance List and are eligible to participate in tenders or Request for Quotations. Our supply chain management system operates on two fundamental principles: regulatory compliance and ethical conduct. All suppliers and vendors must adhere to applicable laws and regulations while maintaining business practices that align with our internal Code of Conduct and Business Ethics. More information on these requirements is available at https://www.esr.com/environmental-social-governance/. To ensure ongoing compliance, we implement a systematic contract renewal assessment process. Our evaluation includes: 1. Verification of continued adherence to our Green Procurement Policy 2. Review of operational policies and procedures 3. Assessment of process documentation 4. Recognition of newly acquired sustainability certifications For vendors who fall short of our requirements, we provide a structured improvement period, allowing them to enhance their practices before their next contract renewal. However, persistent non-compliance results in removal from our approved vendor list and disqualification from future tender participation. These assessments are conducted either by our internal Contracts and Procurement team or by independent third-party evaluators. MATERIAL TOPIC: SUPPLY CHAIN MANAGEMENT Target Time Horizon 2024 Performance Updated 100.0% compliance of applicable Singapore vendors (Repair & Maintenance Service) with Green Procurement Policy by FY2028 Medium Term 25.0% of total applicable Singapore vendors met the Green Procurement Policy with other vendors identified to meet the policy requirement going forward Impact of Supply Chain Management to Stakeholders For REITs, strategic supply chain management delivers multiple benefits across operations and sustainability. Inadequate management can result in environmental degradation, unsustainable resource consumption, worker exploitation, and disruption to local communities. We believe that well-managed supply chains not only minimise operational and reputational risks through reliable material sourcing and ethical practices but also accelerate project completion timelines, driving business growth. When executed thoughtfully, optimisation of procurement and logistics processes can substantially reduce waste generation and carbon emissions. Additionally, adherence to social legislation ensures fair labour standards throughout the supply chain. How We Manage Our Supply Chain To address the social and environmental implications of our operational practices throughout our applicable supply chain, we first developed and published our Green Procurement Policy in FY2021. This framework, which aligns with ESR Group’s Supplier Code of Conduct and its Sustainable Procurement Policy references Singapore authority guidelines such as the BCA Green Mark Certification and the Singapore Green Building Council database, serves as the foundation for implementing sustainable practices across our applicable supply chain network. In 2024, we established the detailed scope and evaluation criteria for this policy, ensuring all vendors providing goods and services to our property management division, including contractors engaged in development activities for ESR-REIT, comply with these standards. Full policy details are accessible on our website at https://www.esrreit.com.sg/sustainability_corporate_policies.html.
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