Federal Realty Investment Trust : Sustainability

Sustainability Policy

This policy is reviewed and updated annually

Most recent update: December 2023

Table of Contents
Introduction	3
Five Key Pillars to our Sustainability Program	3
United Nations Sustainable Development Goals	4
Our Environmental Management System	4
Reporting Frameworks	5
Stakeholder Engagement	6
Materiality Assessment	7
Advance Decarbonization	8
Scope 1 & 2 GHG Emissions Management Strategies	8
Our Goals:	8
Reduction Strategies:	8
Scope 3 GHG Emissions Management Strategies	9
Tenant Emissions	9
Waste Management	10
Employee Commuting and Business Travel	10
Development and Construction	11
Strengthen Resilience	12
Identifying Climate Related Risks	12
Governance of Climate Risk Management	12
Physical Risk	13
Transition Risk	13
Climate Related Opportunities	13
Managing Climate Related Risks	14
Investment in Our Assets and Disaster Preparedness	14
Incorporating Resilience into Design and Construction	14
Preservation and Protection of Natural Resources	14

Federal Realty Investment Trust | 909 Rose Ave., Suite 200, N. Bethesda, MD 20852 | 301.998.8100 | federalrealty.com

Biodiversity	15
Connect Communities	16
Sustainable Economic Impact	16
Connecting the Community	16
Empower Teams	17
The Federal Realty Principles	17
Team Member Engagement	17
Annual Engagement Survey	17
Diversity Equity and Inclusion	18
Learning & Development	18
Benefits	19
Recognition	19
Health & Wellness	19
Govern Responsibly	20

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com

Introduction

Federal Realty is a recognized leader in the ownership, operation and redevelopment of high-quality retail- based properties located primarily in major coastal markets from Washington, D.C. to Boston as well as San Francisco and Los Angeles. Founded in 1962, Federal Realty's mission is to deliver long-term, sustainable growth through investing in communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland and Assembly Row in Somerville, Massachusetts. These unique and vibrant environments that combine shopping, dining, living and working provide a destination experience valued by their respective communities.

Please refer to our website for more information.

Our mission is supported by the sustainability principles that we use to manage all aspects of our investments from concept to execution. We believe that sustainability not only helps us be a better business, but it is our business.

Five Key Pillars to our Sustainability Program

Sustainability Mission Statement:Our mission is to secure our place as leaders in sustainable community- based real estate. Our sustainability mission supports our overall corporate mission and objectives as part of our disciplined approach to investing and operational excellence that leads to better results for all stakeholders.

Advance	Manage potential financial exposure of transitioning real estate assets to a
Decarbonization:	low carbon economy by decarbonizing our portfolio.
Strengthen	Minimize financial impact to our real estate assets from increased frequency
resilience:	and severity of weather events and depletion of natural resources.
Connect	Foster loyalty and connection to communities around our properties to
communities:	drive long-term property and community success.
Empower	Attract, develop and retain the best talent with diverse perspectives to
Teams:	best position us to deliver strong long-term results.
Govern	Implement and maintain a framework of controls to grow portfolio value
Responsibly:	while managing risk.

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com

United Nations Sustainable Development Goals

Federal Realty's sustainability efforts are guided by the United Nations Sustainable Development Goals (UNSDGs). We have focused our efforts on specific UNSDGs where our business can have the most impact, and our employees advance these goals through the valuable work we do every day.

Alignment of UNSDGs with our sustainability program can be found throughout this policy, and our latest sustainability report.

Our Environmental Management System

Our program is structured under an environmental management system that is aligned with ISO 14001. This is an iterative process designed for continuous performance improvement with responsibility for execution spread throughout the organization.

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com

Reporting Frameworks

We are committed to providing our stakeholders with information on our sustainability initiatives and progress towards achieving the goals we set. We are committed to responding to these voluntary disclosures, and in alignment with these frameworks on an annual basis, until such time that they are no longer in alignment with our business.

Frameworks that guide our reporting:

Global Reporting Initiative	Task Force on Climate Related	Sustainability Accounting
	Financial Disclosures	Standards Board

Voluntary disclosures we participate in:

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com

Stakeholder Engagement

We engage with all stakeholders about sustainability topics on an ongoing basis; at least several times a year. The table below outlines more specific information on our sustainability engagement strategies, which are expanded upon throughout this policy and in our sustainability report and other disclosures.

Stakeholder	Engagement Approach	Topics of Discussion
Group
Employees	•	One-on-one discussions
	•	Annual engagement surveys
	• Divisional review of engagement	Relevant sustainability related
		survey results	regulations that impact
	• Employee training through Learn at	employee job function,
		FRIT program and hands on	corporate sustainability
		experience	priorities and activities,
	• Quarterly all employee meetings	respect in the workplace,
	• Formal reporting mechanisms for	giving and volunteerism,
		issues of fraud, harassment, etc	physical and mental well ess,
	• Regular updates on MyFederal, the
		company intranet	programs, retirement and
		bene�its programs, training
	• Recognition and reward through the	�inancial wellness, and more.
		"Find A Better Way" award
	• Regular health and wellness events
Board of Trustees	•	Dedicated time and/or materials to	Physical and transition climate
		sustainability updates at every Board	risk exposure, updates on
		meeting, which happen quarterly, and	relevant legislation, progress
		interim updates and engagement as	on GHG reduction targets,
		needed	industry updates, and more.
Tenants	•	Direct in person interaction between
		our property teams and tenants; we
		engage with 100% of our tenants each	Energy, emissions, water,
		year	wast	mat rials, building
	• Social media posts and interactions	iciency,
	•	Email and written communication	performance, property events
	•	ef�		economic
		Green box standards distribution	and initiatives, and more.
	• Tenant manual for construction and
		design
Shareholders	•	One-on-one interactions with	Corporate governance;
		individuals and institutions via phone,
		meeting, and/or email	transparency/reporting;
		energy, water, waste, and GHG
	• Interaction facilitated via convening
	emissions performance;
		industry associations
		limate r sks and management
	• Information sharing via various
	strategies; building
		disclosures including sustainability
		report, GRESB response, Proxy	initiatives; and more.
		statement, etc.
		certi�ications; social
Vendors	•	Regular check ins to ensure contract	Procurement practices,
		requirements are met	compliance, anti-corruption,
			occupational health & safety,

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com

	•	Collaboration to advance	materials, energy, water,
		sustainability initiatives	waste, GHG emissions,
	• Monitor compliance with the	building ef�iciency, and more.
		sustainability -
		performed by an
		through checksspeci�ic requirements
		independent third party, regular
		meetings / checks performed by
		Federal Realty employees and
		property/asset managers, service
		provider sustainability training and
		self-assessments
	• Implementation of supplier code of
		conduct
Local communities	•	Direct dialogues with towns, cities,	Local events, orporate and
		planning boards, citizen groups, etc.	property-
	•	Participation in city meetings	lity initiatives,
		sustainabspeci�ic
	• Collaboration around events and	energy, GHG emissions, water,
		serving the needs of the community
	•	Resilience planning	health & wellness, onsite
	waste, building certi�ications,
			renewables, transportation, EV
			charging, and more.
Shopping Center	•	Social media	Local events, orporate and
Customers	•	Direct interactions at properties	property-
			lity initiatives,
			sustainabspeci�ic
			energy, GHG emissions, water,
			health & wellness, onsite
			waste, building certi�ications,
			renewables, transportation, EV
			charging, and more.

Materiality Assessment

Federal Realty conducted a materiality assessment where we surveyed key stakeholders about sustainability related issues and their relative importance to them as a stakeholder, and to the business to assess double materiality. Key stakeholders included investors, tenants, and employees.

We frequently communicate and engage with these stakeholders, as described above, to continually assess materiality of these issues and topics. The topics identified as most material are reflected in our five key pillars: advance decarbonization, strengthen resilience, connect communities, and govern responsibly.

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com

Advance Decarbonization

Objective: Manage potential financial exposure of transitioning real estate assets to a low carbon economy by decarbonizing our portfolio.

UNSDGs:

Scope 1 & 2 GHG Emissions Management Strategies

Our Goals:

• Reduce Scope 1 & 2 market-based GHG emissions by 46% by 2030 compared to 2019 baseline; approved by the Science Based Target initiative
• Reduce like-for-like landlord controlled electric consumption by 15% by 2025, compared to a 2019 baseline
• Achieve net zero emission for Scope 1 & 2 emissions by 2050
• Please see our latest sustainability report for progress against these goals.

Reduc�on Strategies:

Energy Efficiency

Federal Realty is committed to improving the energy efficiency of our properties, as we understand this is the lever that has the most meaningful impact on our Scope 1 & 2 GHG emissions.

Since our primary asset type is open-air shopping centers, the largest contributor to landlord-controlled electric consumption at our assets, is exterior lighting. As such, we require LED lighting on all new development and redevelopment projects and have an objective to upgrade 100% of our shopping center landlord-controlled lighting to 100% LED. We also identify opportunities for lighting upgrades and other energy efficiency improvements during the due diligence process when we acquire new operating assets. A budget for necessary upgrades is then incorporated into the underwriting and capital planning for that

asset once it is acquired.
Additionally, we implement the following strategies:
•	Install ENERGY STAR rated, ef�icient HVAC units
•	Track the energy consumption at all of our properties on at least a monthly basis,
•	Maintain equipment to preserve ef�iciency levels and extend use of life
•
Utilize timers and o her cont ols on energy consuming equipm nt to minimize runtimes

• Maintain proper setpoints and lighting levels for vacant spaces

Onsite SOLAR Generation

Federal Realty was an early adopter of onsite solar, with the first array installed in 2012. Today, we fully own 14.3 MW of generating capacity at 28 of our shopping centers. Identifying additional locations to

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com

expand our solar energy production capabilities is a routine part of managing our operating portfolio and of evaluating new assets for acquisition and development. The electricity generated on these arrays is primarily used on-site, either in common areas or by tenants. In a few cases, the system is designed to send all produced electricity back to the grid, benefiting the broader utility network.

Green Power Procurement

To further reduce our market-based emissions, we leverage our strategic locations in deregulated energy markets to procure electricity from third-party suppliers to source energy from renewable or zero carbon sources. This green-focused procurement strategy has been part of our energy procurement practices since 2011. We work with a third-party to regularly evaluate new opportunities to expand or maintain our green power procurement scope, including the evaluation of new acquisitions and new development projects as they are brought online.

Scope 3 GHG Emissions Management Strategies

Scope 3 indirect emissions represent the largest portion of our company's total carbon footprint. Our Scope 3 strategy is focused on measuring and reducing emissions that are most material to our operations. This includes tenant emissions, emissions from waste at our properties, and emissions generated by employee business travel and commuting. We are currently evaluating a way to accurately measure and reduce emissions associated with development and construction.

Tenant Emissions

We employ a number of strategies to help our tenants reduce emissions from their operations at our properties.

Building Out Tenant Spaces

When designing and constructing the space for our tenants, whether retail, office, or residential, we rely on our Green BoxTM standards that were first developed in 2008. These standards set out criteria for ways in which the space can be designed and constructed to maximize energy efficiency and otherwise reduce emissions and impact on the environment. Key criteria in our commercial Green BoxTM standards that apply to retail and office spaces include LED lighting, high efficiency HVAC units, sustainable material selection, and low VOC paints. These criteria are supplemented by our Green BoxTM standards for residential units to include energy efficient appliances and water efficient bathroom and kitchen fixtures. Our design and construction standards and tenant handbook provide additional recommendations for tenants to operate their spaces more efficiently.

Green Lease Language

Federal Realty has been recognized as a Green Lease Leader Gold status since 2018.

Numerous provisions in our leases are designed to ensure alignment between Federal Realty and our tenants on sustainability objectives and investments, including data collection, submetering, and cost- sharing. We regularly update our lease language to ensure that both our company and our tenants are prepared for potential impacts of local building energy performance standards that are being adopted by a number of jurisdictions.

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com

Solar Power Purchase Agreements

Where possible, we provide tenants with the opportunity to purchase solar power directly from the rooftop at the property where they lease space. This option helps support the financial investment to install the solar array, provides tenants a means to achieve their own emissions goals, and reduces overall emissions of the property.

Green Power Procurement

Tenants whose energy consumption is on a utility account that is owned by Federal Realty can benefit from our corporate initiative to procure green power, contributing to an increase in the tenant's use of green power.

Waste Management

Waste management, whether at our operating properties or as part of our design and construction activities, is essential to our resilience as it works to preserve natural resources and minimize negative effects of pollution and emissions.

Operating Assets

At our operating properties we actively manage our waste streams through methods that include:

• Using right-sized equipment to reduce number of pickups,
• Host recycling property-wide recycling,
• Educating tenants and property teams on waste management,
• Coordinating waste management efforts with tenants,
• Collaborating with local restaurants to reduce food waste and collect and recycle fryer oil,
• Partner with tenants to offer composting, and
• Hosting book and clothing bins for donations of used items to promote recycling and reuse.

Design and Construction

All design and construction projects will divert at least 75% of construction waste from the landfill. No matter the scale of the construction project, we place a high priority on smart use of building materials and diversion of construction waste and debris from landfills. Our tenant construction team is aggressively managing the reuse of materials as we turn over spaces to new tenants. Some of the reuse practices employed include reuse of hardwood flooring and equipment, donating furniture to local causes, and replanting landscaping that is displaced by a tenant during buildout to other locations on the property.

Employee Commu�ng and Business Travel

A small portion of our Scope 3 emissions comes from employee business travel and commuting. Efforts to minimize our footprint in this category include utilizing teleconferencing capabilities in lieu of in-person meetings to reduce travel, positioning our largest offices within blocks of major public transit stops, and providing team members with the ability to work from home - all of which benefit our emissions footprint while supporting employee retention.

Federal Realty Investment Trust | 909 Rose Avenue Suite 200 North Bethesda, MD | 301-998-8100| federalrealty.com