Sustainability Report 2024

About this report

The HMC Capital Sustainability Report sets out our environmental, social and governance (ESG) strategy and a review of our performance for the financial year ended 30 June 2024. It demonstrates how we have applied our ESG strategy in addressing the sustainability issues identified as being material to our business and stakeholders. Our ESG strategy has been endorsed by the HMC Capital Board.

Data is as at 30 June 2024 unless otherwise stated.

This report has been prepared with reference to the Global Reporting Initiatives (GRI) Standards (2021). In future years we aim to align with sustainability reporting standards and guidance as set out by the International Sustainability Standards Board (ISSB) and Australian Accounting Standards Board (AASB).

Acknowledgement of Country

HMC Capital acknowledges the Traditional Custodians of Country throughout Australia and celebrates their diverse culture and connections to land, sea and community. We pay our respect to their Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples.

Contents

The financial year 2024 was a landmark year for HMC Capital, with our corporate strategy delivering significant growth and transforming our business.

We are building good momentum in delivering our ESG commitments to create long-term value for our investors and stakeholders.

This Sustainability Report outlines our achievements and progress during the year.

FY24 was a strong year for the Group. We established three new platforms - energy transition, private credit and digital infrastructure - aiming to capitalise on global megatrends; and built teams to lead their growth. These new growth platforms will reshape the Group's core business activities from FY25.

As we mark five years since our listing on the Australian Securities Exchange (ASX), we are proud of our progress in addressing the environmental, social and governance issues that matter most to our stakeholders.

Healthy Communities are the focus of our ESG framework, creating places where people have access to products, services and experiences to live healthy lives. The framework's six themes focus our efforts on the areas where HMC Capital can make a positive impact to the communities surrounding our assets and investments.

Our ambitions and efforts continue to contribute to healthy communities by servicing their needs through our network of assets; delivering lasting positive local social outcomes; and taking responsibility for our environmental impacts.

We have built solid momentum in the delivery of our sustainability program, moving the Group forward and further maturing our approach during the year.

Environment

We continue to make substantial progress in addressing our Climate Action and Green Future environmental impact themes. HMC Capital is committed to contributing to the transition to a low carbon economy, in line with our Climate Action theme.

We delivered our Emissions Roadmap commitments for FY24, 21% reduction in scope 1 and 2 carbon emissions across like-for-like assets compared to our FY22 baseline1, with an additional 9% reduction from surrender of Energy Savings Certificates (should they be applied to our Net Zero Emissions roadmap)2. Our Environmental Management System is also now in place at all feasible assets3. Together with the completion of the LED lighting roll-out4, these initiatives are enabling us to optimise energy use and building performance to reduce both emissions and costs. We have further progressed our solar roll-out, exceeding our FY24 target of 30% of feasible sites to have solar installed3, with further installation ongoing throughout FY25.

Our Green Future theme focuses on operating in a way that sustainably sources, consumes and manages resources. Pleasingly, we achieved an average 4.2 Star NABERS Energy and an average 5 Star NABERS Water rating for the portfolio this year5 - recognition of our continued efforts to use natural resources thoughtfully. This focus extends to our HomeCo Daily Needs REIT (HDN) development projects, with the South Nowra and Glenmore Park developments now submitted for

4 Star Green Star assessment in addition to the Mackay project targeting 4 Star Green Star rating submission in FY25.

Social

We aim to provide Australians with access to quality infrastructure that offers the services they need to live healthy lives. Our initiatives are delivered in partnership with local stakeholders in the communities surrounding our assets.

Connection focuses on addressing essential community needs related to health, wellness and daily services. Our Social Impact Framework guides the Group's investment and management decisions, which are informed by our responsible investment standards and community needs assessments.

During FY24, the HMC Foundation awarded its inaugural grants to three community organisations supporting young people. Our CommunityCo initiative's national partnership with Eat Up Australia provided 13,0006 sandwiches to vulnerable school children, made by our employees and customers.

Our Respect social theme is fundamental to our ability to create long-term value, and an area in which we continue to make good progress. We continued to meet or exceed our diversity target, with women making up 50% of our workforce and 53% of Independent Board Director positions across the Group.

The endorsement of our Reflect Reconciliation Action Plan by Reconciliation Australia was a highlight of the year. We acknowledge that we are just beginning our journey and look forward to learning from Aboriginal and Torres Strait Islander people and developing our approach in the years ahead.

Governance

HMC Capital is committed to ongoing, effective and transparent governance, with our efforts guided by our Accountability and Alignment governance themes. We strive for best practice governance and are pleased with our continued improvement.

Our Accountability theme ensures that we earn and keep stakeholder trust. We use ESG reporting frameworks to benchmark our transparency and performance. We were again recognised for our efforts during FY24, with HMC Capital receiving an 'AA' rating from MSCI ESG Ratings and HDN awarded 2024 ESG Regional Top-Rated Company by Morningstar Sustainalytics.

The Alignment governance theme seeks to embed sustainability into our business. Our strong governance framework underpins our business, investment and sustainability decisions and initiatives. It includes the Code of Conduct and our suite

of corporate governance policies to support individual accountability and effective, independent, responsible and transparent decision making that is in the best interests of our stakeholders. We are implementing recommendations to further strengthen our governance approach, following an independent review of our Board during FY23.

Looking Ahead

The year ahead is one for capitalising on opportunities through our expanded five-platform business. As we continue to grow, our sustainability efforts remain an important priority across all parts of the Group. Our strategic investment in StorEnergy, a specialist developer, owner and operator of utility-scale battery energy storage systems, shows the central role of sustainability for the Group's future.

Given the evolution of our business in FY25, in the coming year we expect to review our ESG framework to ensure it can support our sustainability ambitions in the years ahead. It remains vitally important to our ability to create long-term value for our investors and stakeholders.

We thank our employees, partners and stakeholders for their contributions to our sustainability initiatives during the year. We have much to be proud of and an exciting road ahead as we continue moving forward.

Strategic

Investments

HMC's Private Equity platform was established in August 2022 with the launch of HMC Capital Partners Fund I (HMCCP). HMCCP invests in ASX-listed companies where we help management teams and boards unlock value via improved capital allocation and portfolio management

Developer, owner and operator of large-scale Battery Energy Storage Systems (BESS) across Australia's National Electricity Market

Specialist North American based Digital Infrastructure asset manager with $0.7bn of AUM

Our ESG strategy was formulated following a thorough materiality assessment, which identified the most important environmental, social and governance topics in consultation with our stakeholders.

Given the recent expansion of our business activities, we plan to undertake a materiality assessment in FY25. This will inform a review of our ESG strategy to define our ambition and drive action across the Group's five platforms.

Healthy Communities

We create Healthy Communities by driving change across six impact themes: Climate Action, Green Future, Connection, Respect, Alignment and Accountability.

Our commitments frame how we view sustainability in our investment strategy and asset management approach. We report regularly against our commitments within each theme and will continue to develop our reporting as our approach matures into the future.

FY24 Highlights

Environment

Climate Action

Commitments

• Reduce carbon emissions and intensity
• Achieve environmentally efficient and resilient infrastructure
• Adopt renewable energy resources

FY24 Highlights

Social

Connection

Commitments

• Engage with communities to create connection and understanding
• Strengthen equitable access to essential products and services
• Provide safe spaces for communities

FY24 Highlights

Governance

Accountability

Commitments

• Robust and transparent sustainability-related governance standards and processes
• Hold strong and transparent relationships with investors
• Leverage business relationships to promote responsible business practices

FY24 Highlights

LTH A E H

Y

C

O

M

ENVIRONMENTAL

IMPACT

Connection

Green Future

Commitments

Respect

Commitments

• HDN awarded 2024 ESG Regional Top-Rated Company with Morningstar Sustainalytics
• HMC received a rating of 'AA' in the MSCI ESG Rating
• HDN issued its second Modern Slavery Statement

Alignment

Commitments

AlignmentAccountability

STRONG

GOVERNANCE

FY24 Highlights

• Achieved average 4.2 Star NABERS Energy and average 5 Star NABERS Water portfolio ratings4
• Commenced roll-out of new waste management process
• 4 Star Green Star rating now submitted for HDN's
  South Nowra and Glenmore Park developments

1 All achievements and targets are reported from a HMC Group level. Like-for-like asset dataset; a) Excludes assets where the tenant is responsible for electricity consumption and has complete operational control of the property; b) includes assets where we have a full data set for the FY22 baseline year and FY24 and have been held in the portfolio for the duration of both these periods; c) excludes assets that were held for sale, acquired and divested during FY24 and since FY22 baseline was formed, and assets that were developed post-FY22 (as FY22 baseline is not an accurate reflection of the consumption profile).

• ~2,900 Energy Savings Certificates (ESCs) surrendered through ESC scheme administrator
  (IPART).

• Sites that are classified as feasible include assets where we have operational control, and the building infrastructure and architecture is suitable for the proposed sustainability initiative (solar and/or EMS).

4 As at August 2024.

FY24 Highlights

• Received final endorsement from Reconciliation Australia and publicly released our Reflect
  Reconciliation Action Plan (RAP)
• Nil employee Lost Time Injuries
• Met our 50% gender diversity target across our entire organisation

5 Eat Up Australia as at 31 July 2024.

FY24 Highlights

• Exceeded 50% gender diversity target amongst Independent Board Director positions (53%)
• HMC Capital became a signatory of 40:40 Vision
• Completed an independent evaluation of the HMC Capital Board, with recommendations currently being implemented

Climate Action

HMC Capital is committed to contributing to Australia's transition to a low carbon economy.

The Climate Action environmental theme drives us to actively minimise carbon emissions by integrating climate considerations throughout our investment strategy - from acquisition due diligence to development design and construction, through to ongoing operations.

Three key areas that guide our efforts: transitioning the real assets we manage and control towards net zero carbon scope 1 and scope 2 emissions by 2028; considering environmental factors in the acquisition, development and maintenance of our assets; and seeking to responsibly adopt renewable energy sources and technologies.

Our Net Zero Emissions Roadmap sets out our actions towards net zero across three phases: optimising energy consumption at our assets; generating renewable energy onsite; and developing onsite energy storage solutions.