Environmental, Social, and Governance (ESG) Policy Statement
1. Introduction
At NNN REIT, we are committed to operating our business in a responsible and sustainable manner. This ESG policy outlines our dedication as a company to Environmental, Social, and Governance principles, which are fundamental to our long-term success.
2. Environmental Responsibility
Environmental Stewardship
The properties in NNN REIT’s portfolio are generally leased to our tenants under long-term triple net leases which gives our tenants exclusive control over the properties and the ability to institute site-level energy conservation and environmental management programs. NNN REIT’s tenants are overwhelmingly large companies with sophisticated conservation and sustainability programs. These programs limit the use of resources and limits the impact the use of our properties has on the environment; these programs include, but are not limited to, implementing green building and lighting standards, and recycling programs.
Generally our leases also require the tenants to fully comply with all environmental laws, rules and regulations, including any remediation requirements. Our risk management department actively monitors any environmental conditions on our properties to make sure that the tenants are meeting their obligations to remediate or remedy any open environmental matters. On all properties that NNN REIT acquires we obtain an environmental assessment from a licensed environmental consultant to understand any environmental risks and liabilities associated with a property and to ensure that the tenant will address any environmental issues on our properties.
When a new lease is entered into with a tenant we actively engage with them to promote good environmental practices on our properties, including discussions regarding the following:
- Environmental sustainability and recycling requirements;
- Energy efficiency requirements, including Energy Star requirements, and EPA Water Sense program requirements;
- Environmental conservation and green building requirements, in accordance with industry best practices;
- Energy, Emissions, and Water reporting requirements.
Climate Risk Preparedness
NNN REIT regularly monitors the status of impending natural disasters and the impact of such disasters on our properties. In most leases, NNN REIT’s tenants are required to carry full replacement cost coverage on all improvements located on our properties. For those properties located in a nationally designated flood zone, NNN REIT typically requires tenants to carry flood insurance pursuant to the federal flood insurance program. For those properties located in an area of high earthquake risk, NNN REIT typically requires tenants to carry earthquake insurance above what is typically covered in an extended coverage policy. In addition, NNN REIT also carries a contingent extended coverage policy on all of its properties which also provides coverage for certain casualty events, including fire and windstorm.
3. Social Responsibility
NNN REIT is committed to being a best-in-class employer for our associates, with a work environment that cultivates our associates and helps them grow and reach their potential not only in their chosen professions, but also in their personal lives.
Community Service and Partnerships
Since its founding, NNN REIT has been committed to being an active partner with charitable causes with the goal of helping the community become a better place to live and work for everyone. We encourage our associates to participate in volunteerism and to be actively involved in the betterment of the communities in which we live and work.
We organize and sponsor volunteer opportunities throughout the year and permit all associates to volunteer on work days during work hours at charities throughout our Central Florida Community.
Human Capital Development
NNN REIT’s success is dependent upon the dedication and hard work of our talented associates. NNN REIT encourages continued professional and personal development of all associates by providing hundreds of hours of in-person and online training opportunities that touch all aspects of our business. NNN REIT also has associate mentoring and training programs and formalized talent development programs at all levels of the Company. In addition we have a confidential Employee Engagement Survey administered by a third party, to help NNN REIT build upon strengths and identify opportunities for improvement.
Compensation
In order to support the Company’s mission and objectives, it is important to ensure our compensation plan attracts, retains and motivates the quality associates needed to achieve the goals of our shareholders. We design our compensation plan to attract and retain qualified associates, to motivate and encourage efficient and productive performance, and to recognize each associate’s unique contribution to the Company.
Benefits & Work-Life Balance
NNN REIT offers Healthcare coverage for employees and dependents in the form of two distinct medical plans with an HSA or FSA option, vision and dental.
Company paid benefits include, short and long-term disability, life insurance, long term care, AD&D, and an employee assistance program. Supplemental benefits are also available.
Additional perks include a Paid Time Off benefit of up to 3 weeks in an associate’s first year and 11 paid holidays.
4. Governance Practices
Corporate Governance
To help ensure that we meet our goal of operating at the highest ethical level, NNN REIT has adopted a set of Guiding Policies, which include our Corporate Governance Guidelines, Code of Business Conduct, and Whistleblower Policy; all of which are available on the company website. All associates are required to annually acknowledge that they have read and will comply with these policies, and all associates are trained on the Anti-Corruption Policy, the Code of Business Conduct, and the Human Rights Policy. In addition, NNN REIT annually reviews its policies to make sure the policies continue to effectively manage risks for the Company. The Board of Directors and the NNN REIT management team continually stress the importance of and place an emphasis on operating in accordance with best-in-class corporate governance standards.
5. Accountability and Reporting
We prohibit the use of all forms of forced labor, including, but not limited to prison labor, indentured labor, bonded labor, military labor, modern forms of slavery and any form of human trafficking. We also minimize risks by committing to work with well-established suppliers in our supply chain. We have a no tolerance policy for associates, suppliers and vendors in violation of our company standards regarding slavery and human trafficking and anyone in violation of those standards is subject to termination.
We are committed to reporting our ESG performance regularly to our stakeholders and shareholders. This includes:
- Regular ESG reports that detail our performance in key ESG metrics;
- Engaging with stakeholders on ESG matters including materiality and ESG metrics;
- Reporting the use of frameworks that are recognized as best practices when possible (i.e. GRI and SASB).
6. Review and Updates
This ESG policy will be reviewed periodically to ensure it remains aligned with our values and business practices. We will adapt and enhance our approach as necessary to address emerging ESG issues and stakeholder expectations.
By adopting this ESG policy, NNN REIT is committed to creating long-term value for all of our stakeholders, safeguarding the environment, and contributing positively to the communities in which we operate.