2008
SUSTAINABILITYREPORT

PLANETPEOPLEP R O F I TA B I L I T Y

INTRODUCTION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

REPORT GUIDE

Report Guide[3.1-3.3] This is ProLogis’ third sustainability report, which is global in scope and covers ouractivities in North America, Europe and Asia during Fiscal Year 2008, except when otherwise
noted. ProLogis publishes its report on an annual basis; the last report was published in
April 2008 and covered Fiscal Year 2007. Enhancing our commitment to reducing energy
consumption and use of natural resources, this year’s report will be published in electronic
format. This concept also enables us to include additional charts, graphs and supplemental
information. Additionally, the GRI Content Index and GRI Profile Indicators will appear not
only in a list as referenced above, but also hyperlinked within the body of the text to signify
the specific disclosure it meets. We believe this change will improve the reader’soverall experience.
Since our last report, there have been no re-statements of information provided in the sustainability-related disclosure. However, due to the global financial crisis and economic downturn,
ProLogis has made changes to the structure and operations of the company (detailed in the
Company Overview section) and is not currently focused on starting new construction.
[3.5-3.11] The basis for reporting on other matters specific to the operations of our business, including joint ventures, subsidiaries, leased facilities, outsourced operations and otherentities that can affect comparability from period to period, can be found in ProLogis’ Annual
Report on Form 10-K, which is filed with the Securities and Exchange Commission and also isavailable in the SEC Filings section of ProLogis’ website at:
http://ir.prologis.com/sec.cfm.
This report is intended to provide information about the most significant sustainability-related
impacts that arise from our business activities and is focused on those over which we havethe greatest degree of control or influence. By identifying and reporting on the most material
issues to ProLogis and its stakeholders, we ensure that our reporting remains relevant
and useful.
To the extent possible, we have included data from internal resources or with the help of ourbusiness partners. When original data was not available, we relied on third-party sources
for estimates.
This report incorporates the most recent G3 Guidelines as released by the Global Reporting
Initiative (GRI) as a general framework for this report. GRI is an international, multi-stakeholder
network through which a recognized sustainability reporting framework has been developed.
This report has been externally assured and GRI-checked as meeting the requirements for
GRI’s Application Level “B+”.
[3.4] Questions or feedback? Please contact ProLogis’ Investor Relations department at+1 800-820-0181.

©2009 ProLogis

2

GRI Indicators

INTRODUCTION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[3.12] GRI CONTENT INDEX

Report Guide

Environmental
EN0

p22

Management Approach Disclosure

EN1

p30

Materials used by weight or volume

EN3

p24

Direct energy consumption by primary energy source

EN4

p24

Indirect energy consumption by primary source

EN6p26, 27, 28	Initiatives to provide energy-efficient or renewable energy based products and

EN7

p34

Initiatives to reduce indirect energy consumption and reductions achieved

EN13p35, 36, 43

Habitats protected or restored

EN14

p43

Strategies, current actions, and future plans for managing impacts on biodiversity

EN16

p23

Total direct and indirect greenhouse gas emissions by weight

EN23

p23, 24

Total number and volume of significant spills

EN26

p29, 31	Initiatives to mitigate environmental impacts of products and services, and extent

EN28p24	Monetary value of significant fines and total number of non-monetary sanctions

services, and reductions in energy requirements as a result of these initiativesof impact mitigation
for non-compliance with environmental laws and regulations
Social		HR0p37

Management Approach Disclosure

HR4

p44

Total number of incidents of discrimination and actions taken

LA0

p44

Management Approach Disclosure

LA1p46, 47

Total workforce by employment type, employment contract, and region

LA2

p45

Total number and rate of employee turnover by age group, gender and regionLA3p45	Benefits provided to full-time employees that are not provided to temporary or

LA4

p45

Percentage of employees covered by collective bargaining agreements

LA10

p44

Average hours of training per year per employee by employee categoryLA12p44	Percentage of employees receiving regular performance and career

PR0

p48

PR1

p29	Life cycle stages in which health and safety impacts of products and services are

part-time employees, by major operations

development reviews
Management Approach Disclosure
assessed for improvement, and percentage of significant products and services
categories subject to such proceduresPR5

p48	Practices related to customer satisfaction, including results of surveys measuring

PR6

p14, 48	Programs for adherence to laws, standards and voluntary codes related to

PR7

p14, 48	Total number of incidents of non-compliance with regulations and voluntary

customer satisfaction
marketing communications, including advertising, promotion and sponsorshipcodes concerning marketing communications, including advertising, promotion
and sponsorship by type of outcomes
SO0

p38

SO1

p43	Nature, scope, and effectiveness of any programs and practices that assess andManagement Approach Disclosure
manage the impacts of operations on communities, including entering, operatingand exitingSO3

p44	Percentage of employees trained in organization’s anticorruption policies

SO4

p44

SO7

p44	Total number of legal actions for anti-competitive behavior, anti-trust andSO8

p44	Monetary value of significant fines and total number of non-monetary sanctions

and procedures
Actions taken in response to incidents of corruption
monopoly practices and their outcomesfor non-compliance with laws and regulations©2009 ProLogis

3

GRI Indicators

INTRODUCTION
Introduction
Corporate Information

Report Guide

Economic Indicators
EC0

p49

EC1

p38, 50, 51, 52	Economic value generated and distributed, including revenues, operating costs,

Management Approach Disclosure
employee compensation, donations and other community investments, retained

Environmental Stewardshipearnings and payments to capital providers and governments
EC2p29, 53	Financial implications and other risks and opportunities for the organization’s

EC6p52	Policy, practices and proportion of spending on locally based suppliers at signifi-

EC7p46, 50	Procedures for local hiring and proportion of senior management hired from theEC8p38, 39, 42, 52 	Development and impact of infrastructure investments and services provided

Social Responsibility

activities due to climate change

Business Excellencecant locations of operation

Global Presence

local community at significant locations of operation
primarily for public benefit through commercial, in-kind or pro bono engagement
GRI Profile Indicators
1.1

p6	Statement from the most senior decision-maker of the organization about therelevance of sustainability to the organization and its strategy. Statement shouldpresent the overall vision and strategy for short-, medium- and long-term

1.2

p6

Description of the organization’s key impacts, risks and opportunities

2.1

p17

Name of organization

2.2

p17

Primary brands, products and/or services

2.3

p17	Operational structure of the organization, including main divisions, operating

2.4

p17

2.5

p57	Number of countries where the organization operates and names of countries

companies, subsidiaries and joint ventures
Location of organization’s headquarters
with either major operations or that are specifically relevant to the sustainability
issues covered in this report
2.6

p17

2.7

p57	Markets served, including geographic breakdown, sectors served, and types of

2.8

p17	Scale of organization: employees, net sales, capitalization (debt and equity),

2.9

p51	Significant changes during reporting period regarding size, structure or ownership,

Nature of ownership and legal form
customers/beneficiaries
quantity of products or services provided
including location of operations, facility openings/closings, changes in sharecapital structure, other capital maintenance and formation

2.10

p7

Awards received during reporting period

3.1

p2

Reporting period

3.2

p2

Date of most recent previous report

3.3

p2

Reporting cycle

3.4

p2

Contact point for questions regarding report

3.5

p2, 14	Process for defining report content, including materiality, prioritizing topics within

3.6

p2

Boundary of the report

3.7

p2

Specific limitations on the scope or boundary

3.8

p2	Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced

report and identifying stakeholders expected to use the report

operations and other entities that can significantly affect comparability fromperiod to period
3.9p2	Data measurement techniques and the bases of calculations, including

3.10

p2	Explanation of the effect of any re–statements of information provided in earlier

assumptions underlining information in the reportreports and the reasons for such restatements©2009 ProLogis

4

GRI Indicators

INTRODUCTION
Introduction

3.11

p2	Significant changes from previous reporting periods in scope, boundary or

Report Guide

measurement methods
3.12

p3

Table identifying location of Standard Disclosures of the report

3.13

p9

Policy and practice with regard to seeking external assurance for report

Environmental Stewardship4.1

p19	Governance structure of the organization, including committees under the highest

Social Responsibility

4.2

p19	Indicate whether the Chair for the highest governance body is also an

Business Excellence

4.3

p19	For organizations with a unitary board structure, state the number ofCorporate Information

governance body
executive officer
members of the highest governance body that are independent and/or

Global Presence

non–executive members
4.4

p20	Mechanisms for shareholders and employees to provide recommendations or

4.5

p7, 20	Linkage between compensation and organizational performance for members

4.6

p19

4.7

p7, 19	Processes for determining the highest governance body’s qualifications and4.8

p19	Internal mission statements, codes of conduct, principles related to economic,

4.9

p7, 19	Processes for the highest governance body to oversee the identification anddirection to the highest governance bodyof the highest governance body, senior managers and executives
Processes in place for highest governance body to avoid conflicts of interest
expertise on economic, environmental and social topics
environmental and social performance; status of implementation
management of economic, environmental and social performance, including risks,
opportunities and compliance; state frequency with which senior management
assesses sustainability
4.10

p7, 20	Processes for evaluating the highest governance body’s own performance,

4.11

p20

4.12

p54	Externally developed economic, environmental or social charters, principles or

4.13

p54

Membership in associations and/or national/international advocacy organizations

4.14

p14

List of stakeholder groups engaged by the organization

4.15

p14

Basis for identification and selection of stakeholders with whom to engage

4.16

p14	Approaches to stakeholder engagement, including frequency and type4.17

p14	Key topics and concerns raised during stakeholder engagement and how theparticularly with respect to economic, environmental, and social performance
Explanation of whether/how the “precautionary approach” is addressed
other initiatives to which the organization subscribes/endorsesof engagement
organization has responded, including through reporting©2009 ProLogis

5

GRI Indicators

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

EXECUTIVE INTRODUCTION

Executive Introduction[1.1-1.2] Since ProLogis publishedits first GRI report three years ago, we
have worked hard to improve, expand
and refine what our commitment tosustainability means. At ProLogis,
this concept incorporates businessexcellence, environmental stewardshipand corporate social responsibility, which
gives our sustainability initiative a “triple
bottom line”: benefit to the planet, topeople and to the profitability that makes
our existence possible. Embracing thisdefinition commits us to making progresson all three fronts at the same time, andnot one at the expense of others.

	Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

With that in mind, I believe it is important to recognize the vastly different landscape theindustry is facing after last year’s disruption in the credit markets and global economic
recession. This change of events has had a dramatic impact on companies worldwide, andProLogis has not been immune. In November of 2008, we had a change in the CEO role. My
predecessor was a key driver behind our rapid growth and international expansion. However,as most companies are doing in the current environment, we have had to put our expansion
plans on hold. We also have had to make some very tough decisions related to the structure
and operations of our company, including selling our China operations and a portion of ourJapan portfolio, halting new development starts worldwide and reducing our workforce.
Despite these challenging times, sustainability is an initiative to which ProLogis remains
fully committed. We believe our focus on sustainability not only serves as a competitive
differentiator but it enables us to establish strategic relationships with customers and partners
as well as attract and retain the industry’s most talented professionals, all of which ultimately
impacts our triple bottom line.
As such, I’m pleased to report that we continued to raise the bar in our industry withregard to sustainability during 2008. Not only did we continue to implement our lighting
retrofit and green building programs, but we also received external validation from two new
global sustainability indexes, the Dow Jones Sustainability Index and the S&P U.S. Carbon
Efficient Index.
We also made substantial progress toward our renewable energy goals and formalized ourapproach to working with utilities, investors and suppliers on projects at our facilities. As aresult, we were able to announce the nation’s first, and currently the largest, single roof-top
solar lease with Southern California Edison in the first half of 2008, and our second roof-top
lease with Portland General Electric later that year. Both agreements are a significant step

©2009 ProLogis

6

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presencein ProLogis’ renewable energy program and enable us to generate additional value fromour existing assets without any outlay of capital. More details about these two exciting solar
projects are in the Environmental Section of this year’s report.
[2.10] Our efforts did not go unnoticed. During 2008, ProLogis received 15 industry awards,
including:
The Commercial Real Estate Development Association’s (NAIOP) “Industrial Developer of
the Year” in Atlanta, Georgia, based on our social responsibility, development andenvironmental awareness;
The “Logistics Environmental Technology Development Award” in Japan for ProLogis’
development and implementation of a precast concrete and seismic isolation system that
reduced the amount of CO2 and Life Cycle CO2 emissions in multi-story facilities;
The “Best Green Development in Central and Eastern Europe” for ProLogis Park Uzice in the
Czech Republic based on the park’s sustainable design, comfortable interior environment,
access to public transport, economic viability and high quality building design;
In the U.K., the Estates Gazette “Green Award” and Property Week’s “European Green Award,”
both of which recognized our overall commitment to sustainability as well as our innovative
facilities that set new standards in sustainable design; and,Mueller, Catellus’ mixed-use redevelopment project in Austin, Texas, was named one of
the “Top Ten Best Eco-Friendly Neighborhoods” by Natural Home, a magazine for healthconscious, environmentally concerned homeowners.
[4.5, 4.7, 4.9, 4.10] Perhaps the most significant improvement to our global sustainability
platform during 2008 was the appointment a Chief Sustainability Officer and theestablishment of a Board Sustainability Committee, which comprises three individuals who
were selected for their experience and background in sustainability.
We are very proud of our accomplishments and hope you enjoy reading about our progress.
If you have any feedback, we welcome you to let us know what you think.

Walter C. Rakowich
Chief Executive Officer©2009 ProLogis

7

Executive Introduction
	Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction

INDUSTRY AWARDS

Corporate Information

Best Green Development in Central and Eastern Europe
ProLogis Park Uzice was recognized during the Construction Investment Journal awards in Poland	Independent AssuranceStatement Supplement

Best Warehouse Award
ProLogis Park Uzice was recognized during the LOG-IN conference in the Czech Republic	Stakeholder Engagement andCommunication Framework

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

Executive Introduction

Best Warehouse/Logistic Development in Slovakia
ProLogis Park Bratislava was recognized during the Construction Investment Journal awards
in Slovakia

Company Overview

Developer of the Year, Asia
ProLogis was recognized by Euromoney.com

CASE STUDY:An Integrated Approach
To Sustainability

European Green Award
ProLogis was recognized by Property Week (UK)
Excellence in Logistics Supply Chain Service Provider
ProLogis was recognized during the Asia Logistics and Supply Chain Management Summit in China
Facility Design, Honor Award
Catellus’ Los Angeles Air Force Base project was recognized by the United States Air Force as partof its Design Awards Program
Grand Prize
ProLogis was recognized for a build-to-suit facility developed in South Paris for Poste Immo, thereal estate branch of the French Post
Green Award
ProLogis Park Pineham was recognized for its sustainable design by the Estates Gazette (UK)
Industrial Developer of the Year
ProLogis was recognized by the Atlanta chapter of NAIOP
Industrial Development of the Year
ProLogis Park Lingang was recognized by Asia Pacific Commercial Real Estate magazine(Asiacre.com)
Logistics Environmental Technology Development Award
ProLogis was recognized for its development and implementation of a precast concrete andseismic isolation system in Japan
Merit Award/Spotlight Award 2008
ProLogis was recognized by the Nevada chapter of NAIOP
Most Admired Real Estate Company
ProLogis was recognized by Fortune magazine (USA)Top Ten Best Eco-Friendly Neighborhoods
Catellus’ Mueller project was recognized by Natural Home Magazine (USA)©2009 ProLogis

8

Corporate GovernanceCORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[3.13] INDEPENDENT ASSURANCE STATEMENT SUPPLEMENT
This report has been subjected to an independent assurance by Two Tomorrows, which
recently merged with csrnetwork, the firm that provided assurance for our two previous reports.
In conducting the assurance, Two Tomorrows evaluated the Materiality, Completeness andResponsiveness in the report in line with the guidelines of the AA1000 Assurance Standard(2003) as well as the requirements for reporting at the B+ level for the Global Reporting
Initiative G3 guidelines.

INDEPENDENT ASSURANCE STATEMENT
Scope and objectives
ProLogis commissioned Two Tomorrows to offer independent assurance on its
2008 Sustainability Report. The scope of our assurance work included:• All information within the 2009 Sustainability Report,
unless specifically excluded; and• The GRI (Global Reporting Initiative) comparison table.
The scope of our assurance work excluded:• Specific performance claims from case studies within the Report;• Economic performance information;• Any information presented on the ProLogis website that is not included in the2008 Sustainability Report.
The objectives of the assurance process were to check claims and systems for collection ofdata, and to review the arrangements for the management and reporting of sustainability
issues. The assurance process was conducted in accordance with the AA1000 AssuranceStandard (2003).
Responsibilities of the management of ProLogis and the assurance providers
The management of ProLogis have sole responsibility for the preparation of the 2008
Sustainability Report and associated publications. In performing our assurance activities,
our responsibility is to the management of ProLogis, however our statement represents our
independent opinion and is intended to inform all of ProLogis’ stakeholders, including themanagement of ProLogis. We were not involved in the preparation of any part of the Report.
We have had no other contracts with ProLogis.
This is the third year that we have acted as independent assurance providers for ProLogis (in2006 and 2007 we traded as Csrnetwork Ltd.). We adopt a balanced approach towards all
ProLogis stakeholders and a Statement of Impartiality relating to our contract with ProLogis
will be made available on request. The opinion expressed in this assurance statement should
not be relied upon as the basis for any financial or investment decisions. The independent
assurance team for this contract with ProLogis comprised Todd Cort and Jennifer Rosenberg.

©2009 ProLogis

9

Executive Introduction
Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

Further information, including a statement of competencies relating to the team can be found
at: www.twotomorrows.com.
Basis of our opinion
Our work was designed to gather evidence on which to base our conclusions. We undertook
the following activities:• We conducted interviews with a selection of directors and senior managers responsible
for areas of management and stakeholder relationships covered by the Report inDenver, CO. The objective of these discussions was to understand ProLogis’ governancearrangements, stakeholder engagement process, management priorities and systems;• We attended a meeting of the Sustainability Management Committee to assess theprocess for identifying and acting on material issues;• We conducted a general review of issues raised by external parties that could be
relevant to ProLogis’ policies, to provide a check on the appropriateness of statements
made in the Report;• We visited one construction site in Juarez, Mexico. During the site visit, we interviewed
local management and the contractor company responsible for project management.
Site-level sustainability data for January through December 2008 was reviewed during
the site visit;• We reviewed full 12-month sustainability data collated at the corporate level, andclaims made in the Report. We interviewed managers responsible for internal data
validation, reviewed their work processes and undertook sample checks on consolidated
sustainability data and also sustainability data submitted by the Juarez project site;• We undertook an assessment of the company’s reporting and management processes
against the principles of materiality, completeness and responsiveness as described in
the AA1000 Assurance Standard (2003).
• We assessed the company claims with regard to reporting against the GRI G3 voluntarystandard for application level B.
Observations:
On the basis of the method and scope of work undertaken and the information provided to
us by ProLogis, we believe:
Materiality – has ProLogis provided information on material issues to enable
stakeholders to make informed judgements?
• Nothing came to our attention to suggest that material issues have been omitted fromthe scope of the Report. We found evidence that appropriate systems are in place formonitoring and gathering information on relevant management arrangements andperformance for each of the aspects described in the Report.

©2009 ProLogis

10

Executive Introduction
Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence• ProLogis has established a leadership position on green building design andconstruction for new buildings. However, the objectives and performance of existingbuildings within the company portfolio do not yet match this position, although we
note recent landmark initiatives such as the Department of Energy partnership to findinnovative solutions to improve green aspects of existing buildings.
• The effort by ProLogis management over the last 18 months to develop a more robustmateriality assessment is a positive example of progress. The next steps for ProLogis will
be to link this materiality process to the business decision-making criteria (e.g. throughthe corporate risk management framework) and also to test the materiality criteria withinternal and external stakeholders.
• During the site visit, we noted strong practices with regard to health and safety
management and the selection of sites with low relocation or resettlement impacts. We
recommend that ProLogis formalize these practices by strengthening health and safety
data reporting and adopting a corporate policy on the selection of site locations that
includes resettlement aspects.
Completeness – does ProLogis have systems in place to understand changes tostakeholder expectations and to provide complete and accurate information against theissues identified as material for inclusion in the Report?
• Nothing came to our attention to suggest that the data included in the Report have notbeen properly collated and calculated from information reported at operational level. We
were unable to verify the authenticity of some source documentation for office energy
use at some locations outside of the United States. However, the aggregated value ofthese un-verified sources is relatively small. Therefore, we consider there to be a minimalrisk of material mis-statement with regard to carbon emissions.
• We note strong improvement in the data collection efforts for aspects related to LEED
certification – such as waste data, water usage data, etc. However, for these data sets,
the information is limited to operations that are being built to LEED standards (North
American developments). The next challenge in data collation for ProLogis will be tocollect equivalent and comparable data from all international operations.
• The installation of the Board Sustainability Committee and Chief Sustainability
Officer (CSO) are very positive developments from 2008. We recommend that thecharter for the Committee be reviewed to explicitly cover aspects of social andeconomic sustainability.
• ProLogis has established strong corporate guidelines for ethical practice through theCode of Ethics. We recommend that these guidelines be explicitly extended to business
partnerships and joint ventures.
• There appears to be an opportunity to create a more formal role for the ProLogis internal
audit team on sustainability aspects through a regular schedule of audit activities.

©2009 ProLogis

11

Executive Introduction
Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

Responsiveness – how does ProLogis demonstrate that it has responded to
stakeholder concerns?
• Customer communication appears to be a strong point within the ProLogis stakeholder
engagement effort. However, although ProLogis demonstrates a variety of innovativemeans to inform customers of sustainability initiatives, there is room to improve themechanisms by which ProLogis hears customer priorities on sustainability issues andhow this feedback is systematically evaluated and used to drive stronger decisionmaking. The result is that customer communication tends to focus on sustainability
aspects with a clearly demonstrable business case such as lighting upgrades toenhance energy efficiency. Other opportunities such as reducing operational waste that
could achieve greater benefits and promote best practice have not been pursued to thesame extent.
• We believe that ProLogis has been highly responsive to employee expectations during
the recent down-sizing.
• Mechanisms to engage with communities during design, build and operation are
wide-ranging, but not systematic except where required by local regulatory agencies.
We believe that a systematic process for community engagement based on proactive
dialogue around key issues could add significant value. This process should include
mechanisms for active dialogue, metrics to measure success and tools to raiseawareness in employees and community members. Such a strategic approach could
be extended to community investment activities as well, including activities led by the
ProLogis Foundation.
• We note that some targets from the 2007 Sustainability Report have not yet beenachieved – particularly with regard to human resources (revised employee handbook,increased commitment to the ProLogis University and a new Human Resources datasystem). We look forward to monitoring progress against these targets in the future.
• We have seen evidence that ProLogis is seeking expert feedback on sustainability
aspects and believe that this is a positive step forward in corporate level stakeholder
engagement. This type of engagement could be broadened to include expertise on awider range of topics through a review panel or similar. Also, it would be valuable tostakeholders if ProLogis would explain how the feedback from expert review will be used
to drive systematic decision-making on sustainability aspects.
Two Tomorrows
USA March 2009

Todd Cort
Project Director©2009 ProLogis

Jennifer Rosenberg
Consultant

12

Executive Introduction
Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility

Two Tomorrows is a business focused, corporate social responsibility consultancy organization,bringing together specialists from the fields of environmental management, social accounting,and sustainable development.
Two Tomorrows North and South America (trading as Csrnetwork) is a subsidiary of
Two Tomorrows (Group) Limited (www.twotomorrows.com).

Executive Introduction
Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework

Business Excellence

Company Overview

Global Presence

Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability©2009 ProLogis

13

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[3.5; 4.14-4.17] STAKEHOLDER ENGAGEMENT
AND COMMUNICATION FRAMEWORK
In embracing sustainability as a key corporate value, we recognize that our operations are
multi-directional – they both impact and are impacted by others. Therefore, working effectively
with our stakeholders is of vital importance to the company.
ProLogis defines its stakeholders as any person or group of persons who may affect or beaffected by ProLogis’ business operations. This includes customers, investors, employees,
brokers, governments and non-governmental organizations, suppliers, associations, media
and the communities in which we operate. ProLogis defines sustainability in the context of oureconomic, environmental and social performance; it is our understanding that each of thesestakeholder groups has an interest in at least one of these aspects of our company
and therefore is expected to have an interest in this report.
In determining report content, we took into consideration a variety of issues that arepotentially important to our stakeholders, including energy use and greenhouse gas
emissions, sourcing, compliance and investing. We then identified the issues over which
ProLogis has some ability to make an impact. For each of those issues, we determined theirmateriality by assessing the level of importance to the stakeholder, public recognition of
the issue, binding requirements, risk and relation to core competencies and organizational
strategy. This exercise provided a systematic approach to identifying the material issues
included in this report. Please see our Stakeholder Engagement Grid for an overview of our
stakeholders and how we currently engage them.
We communicate openly and in good faith with our stakeholders and encourage honest
feedback from them. This is obtained through active outreach, including customer satisfaction
surveys, group and one-on-one investor meetings, investor perception surveys, industry
forums, media interviews, quarterly earnings calls, employee “town hall” meetings andwebcasts, public planning meetings and meetings with vendors and suppliers. Additionally, we
provide departmental contact information on our corporate website, www.prologis.com.
We also respond to incoming inquiries. They can originate from local communities seeking
volunteers, from third-party organizations looking for information about ProLogis’ plans toaddress climate change, such as the Carbon Disclosure Project and KLD Analytics, and fromindividual or institutional investors trying to better understand our business operations.
[PR6] We place a high importance on maintaining consistent messaging when marketingour business. Every employee adheres to a detailed disclosure policy, and we follow all NYSE
guidelines regarding press release announcements and other marketing collateral. The
majority of our senior marketing staff belongs to one or more professional organizations, suchas the Business Marketing Association and the American Marketing Association, and adheresto guidelines established by these groups. [PR7] We are in full compliance with our marketing
communications regulations and do not have any violations to report for 2008.

©2009 ProLogis

14

Executive Introduction
	Independent AssuranceStatement Supplement
 takeholder Engagement andS
Communication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship

STAKEHOLDER — ENGAGEMENT MECHANISMS
Stakeholder Engagement Mechanisms
Customers• Bi-annual customer satisfaction surveys• Dedicated ProLogis employees to respond to needs and requests

Social Responsibility• Select regional customer meetings to discuss sustainability and ProLogis’ approach• One-on-one meetings to discuss ProLogis support of customer sustainability efforts

Business Excellence• Customer-focused marketing materials about sustainability and other topics• Speaking engagements at customer-attended conferences and events

Global Presence
Investors – Public• Perception study to gauge investor priorities• Annual Investor Day and other investor meetings to gather real-time feedback• Surveys from socially responsible investing groups or other investors, such as
KLD Analytics• Quarterly report on fund performance• Annual in-person meeting on fund performance• Regular written correspondence on issues such as contribution agreements anddistribution notices of return on capital

Employees• Quarterly worldwide employee meetings with CEO and senior management;
includes Q&A• Employee satisfaction survey during first year of employment• Global employee survey (in development)• Training programs and support• Annual performance reviews• Sustainability Champion program to engage employees in sustainability efforts• New Intranet site to enhance internal communications
Brokers• Quarterly Broker Update e-newsletter with relevant broker news
• Attendance at national broker conferences• Attendance and hosting of various broker meetings at the market level

Nongovernmental
Organizations• Attendance at conferences and meetings• Participation in committees, such as US Green Building Council, to develop a
LEED rating system for distribution centers• NGO information requests and surveys, such as the Carbon Disclosure Project
Government• Close collaboration during entitlement process• Engage on relevant issues via industry associations©2009 ProLogis

	Independent AssuranceStatement Supplement
 takeholder Engagement andS
Communication Framework
Company Overview
Corporate Governance• Quarterly earnings calls including Q&A with senior management• Dedicated ProLogis employees to respond to individual needs and requests

Investors - Fund

Executive Introduction

15

CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction

Stakeholder — Engagement Mechanisms Continued

Corporate Information
Suppliers

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence• Contract development and interaction throughout term of contract• One-on-one meetings and calls• Preferred vendor list

Industry
Associations• Participation on various committees and leadership teams, such as NAIOP’s
Sustainable Development Committee• Attendance at conferences and meetings
Communities• Input from, dialog with, and response to communities before, during,
and after development• Employee volunteerism and ProLogis donations
Media• Press releases distributed regularly announcing significant business activity• Proactive engagement on topics important to certain media groups, including
ProLogis’ approach to sustainability• Press events hosted to engage with media on significant announcements• Interviews conducted regularly with a variety of appropriate ProLogis spokespersons• Articles written and other information provided in response to media inquiries• Dedicated ProLogis employees to respond to needs and requests on a daily basis©2009 ProLogis

16

Executive Introduction
	Independent AssuranceStatement Supplement
 takeholder Engagement andS
Communication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

COMPANY OVERVIEW

Executive Introduction[2.1-2.4] ProLogis is a leading global provider of distribution facilities, with more than
475 million square feet (44 million square meters)* of industrial space in markets all
across North America, Europe and Asia, as of December 31, 2008. Headquartered in
Denver, Colorado USA, ProLogis is a FORTUNE 500 company and a member of the S&P 500.
[2.8] ProLogis has a presence in 18 countries and has 1,480* employees worldwide.
The company leases its industrial facilities to more than 4,500 customers, including
manufacturers, retailers, transportation companies, third-party logistics providers and otherenterprises with large-scale distribution needs. In addition to our core industrial business, weare active in retail and mixed-use development in Europe and throughout North America as
Catellus Development Group, a ProLogis company. Information on the company’s financial
performance, dividend and market capitalization can be found in the economic section ofthis report.
[2.6] ProLogis is a Maryland real estate investment trust and has elected to be taxed as such
under the Internal Revenue Code of 1986, as amended. Our world headquarters is located in
Denver, Colorado. Our European headquarters is located in the Grand Duchy of Luxembourgwith our European customer service headquarters located in Amsterdam, the Netherlands.
Our primary office in Asia is located in Tokyo, Japan.
We were formed in 1991, primarily as a long-term owner of industrial distribution space
operating in the United States. Over time, our business strategy evolved to include thedevelopment of properties for contribution to property funds in which we maintain anownership interest and the management of those property funds and the properties theyown. Recently, the global financial markets have been undergoing pervasive and fundamental
disruptions, which began to impact us late in the third quarter of 2008. As the global credit
crisis worsened in the fourth quarter, it was necessary for us to modify our business strategy.
As such, we discontinued most of our new development activities and for the near term will
focus on our core business of owning and managing industrial properties.
Currently, our business is organized into two reportable business segments: direct-owned
and investment management. Our business was previously organized into three reportablebusiness segments: direct-owned (previously called property operations); investment
management; and development or CDFS business. Due to the recent economic conditions,
we have modified our business strategy and, as a result, will no longer perform the investment
and development activities within our CDFS business segment. Additionally, we transferred
all of our real estate and other assets that were in our development pipeline to ourdirect-owned segment and transferred our investments in industrial and retail joint ventures
to our investment management segment.

©2009 ProLogis

17	Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

DIRECT-OWNED

Executive Introduction

Our direct-owned segment represents the long-term ownership of industrial properties.
Our investment strategy in this segment focuses primarily on the ownership and leasing ofindustrial and retail properties in key distribution markets. We consider these properties tobe our Core Properties. Also included in this segment are real estate properties that werepreviously acquired or developed within our CDFS business segment and that, because ofchanges in our business strategy, were transferred to this segment due to our current intent tohold and operate these assets on a long-term basis. These include operating properties that
we previously developed with the intent to contribute to an unconsolidated property fund. We
now refer to these properties as Completed Development Properties. We also have industrial
properties that are currently under development and land available for development that arepart of this segment, the majority of which we plan to hold and use in this segment.

INVESTMENT MANAGEMENT
The investment management segment represents the investment management of
unconsolidated property funds and certain joint ventures and the properties they own. We
utilize our investment management expertise to manage the property funds and certain joint
ventures, and we utilize our leasing and property management expertise to manage theproperties owned by these entities. We report the property management costs, for both ourdirect-owned segment and the properties owned by the property funds, in rental expenses
in the direct-owned segment, and we include the fund management costs in general andadministrative expenses.

CATELLUS
Catellus Development Group is a business unit of ProLogis focused on mixed-use and retail in
North America. In 2005, Catellus merged with ProLogis; today, Catellus continues to manage
its portfolio of mixed-use and retail properties under the umbrella of ProLogis.

©2009 ProLogis

18	Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

CORPORATE GOVERNANCE

Executive Introduction

We are committed to maintaining corporate governance practices that uphold a businessenvironment of uncompromising integrity. We continue to enhance this objective through ourgovernance policies and compliance with the Sarbanes-Oxley Act of 2002, FCPA and the rulesof the New York Stock Exchange (NYSE).
[4.1] Our highest governance body is the Board of Trustees, followed by our senior executives.
The ProLogis Board is responsible for reviewing and approving strategic plans, corporate
actions and financial objectives and [4.6] adheres to a well-defined code of ethics. In
addition, the Board participates in a company-wide ethics challenge conducted each year
by our legal department. [4.1] Our Board Committee Charters include:• Audit Committee Charter• Board Governance and Nomination Committee Charter• Investment Committee Charter• Management Development and Compensation Committee Charter• Sustainability Committee Charter[4.2] After a management change in November 2008, the Chairman of the Board is now aseparate position from the Chief Executive Officer; since May of 2007, the two positions had
been combined.
[4.3] Our Board comprises 10 members who are elected annually, nine of whom are
independent. We require that a majority of our Board be independent in accordance withthe applicable provisions of the Securities Act of 1934 and the rules standards adopted by
the NYSE. [4.7] Prior to the election of any member of the Board, the Board Governance andNomination Committee screens all potential candidates with a brief biographical sketch,
conducts interviews and retains executive search firms as necessary. The Committee may lookat a variety of factors to identify potential candidates, including each individual’s focus onenvironmental, economic and social responsibility.
[4.8] At regular meetings, the Board reviews and evaluates internal mission statements,
codes of conduct and principles related to economic, environmental and social performance.
At the November 2008 Board meeting, a revised mission statement, which now includes
sustainability, was developed and is as follows: “Our mission is to be the leading global
provider of sustainable distribution facilities to the world’s largest users of distribution space
and to maximize shareholder value through customer service, organizational excellence andour commitment to corporate social responsibility.”[4.9] The Board receives an official update on sustainability initiatives during quarterly
Board meetings. In 2008, ProLogis created the position of Chief Sustainability Officer, whoreports directly to the CEO and acts as the direct liaison between the Board and senior
management on all environmental and social responsibility objectives. The three members of
the Board Sustainability Committee are committed to analyzing the company’s environmental©2009 ProLogis

19	Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

stewardship on a regular basis, with the full Board responsible for evaluating the company’s
overall sustainability performance. To address economic sustainability, the Board Audit
Committee is charged with monitoring the quality and integrity of the accounting andreporting practices of the company.
[4.10] The Board conducts an annual self-evaluation, based on previously defined criteria,of its performance and the performance of designated committees to determine whether
the Board and committees are functioning effectively. This evaluation includes the Board
Sustainability Committee. The results are documented in Board minutes and discussed by
the full Board with any agreed changes incorporated in Board and committee charters
as applicable.
In addition, RiskMetrics Group assigned ProLogis an Industry Corporate Governance Quotient(CGQ) rating of 91.3 in April of 2009. RiskMetrics Group’s CGQ is the most widely recognizedthird-party measure of corporate governance. The organization ranks U.S. companies using
65 different variables across eight categories: board of directors, charter and bylaw provisions,executive and director compensation, audit, anti-takeover provisions, stock ownership,progressive practices and director education.
[4.5] Our compensation philosophy is to reward superior company and executive
performance and to attract and retain highly competent executives upon whose judgment,
initiative and leadership our success depends. Our Management Development andCompensation Committee focuses on completing regular performance reviews for our senior
executives. The Committee is responsible for setting compensation levels in accordance withcompany goals and objectives; the Committee also oversees programs in hiring, motivating
and retaining key employees and in creating short- and long-term shareholder value.
[4.11] We take precautionary measures to address risk management in operational
planning and with new investments. We have operational controls in place for emergency
management, carry comprehensive insurance coverage and conduct a thorough underwriting
process. Before any capital is committed to a new investment, our investment committee
reviews investment memos, conducts an economic analysis and often considers the socialand environmental impacts of the investment.
[4.4] You may communicate with any of the trustees, individually or as a group, by writing
to them c/o Edward S. Nekritz, General Counsel and Secretary, ProLogis, 4545 Airport Way,
Denver, Colorado 80239. All communications should prominently indicate on the outsideof the envelope that they are intended for the full Board, for outside trustees only or for any
particular group or member of the Board.
For a complete description of ProLogis’ corporate governance practices, please visit:
http://ir.prologis.com/governance.cfm.

©2009 ProLogis

20

Executive Introduction
	Independent AssuranceStatement Supplement
	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

CORPORATE INFORMATION
Introduction
Corporate Information

Executive Introduction

AN INTEGRATED APPROACH TO SUSTAINABILITY

	Independent AssuranceStatement Supplement

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

At ProLogis, we are committed to all three dimensions of sustainability: environmental
stewardship, social responsibility and business excellence. Sustainability is integrated into
every level at ProLogis. It is part of our corporate culture and exerts influence throughout
business decisions and negotiations. Our new governance structure helps to enforce thesustainability culture that has been fostered at ProLogis.
In 2008, we revised the way we govern our sustainability practices internally, adding a
Sustainability Committee to our Board of Trustees. Three members preside on this committee
and take an active role in considering how the company deploys and reacts to varying
opportunities regarding ProLogis’ sustainability program. We also created the position of Chief
Sustainability Officer (CSO). At the executive level, the CSO makes decisions related to our
day-to-day sustainability programs and manages our in-house sustainability team.
This team is comprised of two dedicated associates whose primary focus is on furthering
ProLogis’ sustainability efforts. For example, the Director of Renewable Energy serves as thelead for solar, wind and all other renewable energy projects that ProLogis pursues. We also
have a Sustainability Analyst who tracks ProLogis’ carbon footprint and creates reduction
strategies, oversees our green building metrics and manages our Sustainability Champion
program, described below.
In early 2008, ProLogis identified one person in every office in the United States who was
willing to help further the company’s sustainability efforts on a local level. Specifically, thisincludes minimizing each individual field office’s impact on the environment and contributing
to the local communities in which we operate. These “Sustainability Champions” create a
network with the following objectives:
1. Elevate awareness of sustainability within the company.
2. Improve sustainability-related communication and data sharing.
3. Reduce the impact of our operations on the environment and enhance
our communities.
In early 2009, ProLogis rolled out the Sustainability Champion program in Europe and has
made plans to engage our teams in Japan and Korea mid-year. By addressing sustainability at
all levels of the organization, this approach is helping to integrate a sustainability ethic into allthat we do.

©2009 ProLogis

21	Stakeholder Engagement andCommunication Framework
Company Overview
Corporate Governance
CASE STUDY:An Integrated Approach
To Sustainability

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[EN0] As the industry leader in environmental stewardship, we see it as our duty to do ourutmost to contribute to the solution of three major global challenges confronting humankind– climate change, overburdened ecosystems and conventional oil depletion. We do this by:• Minimizing carbon emissions, through carbon neutrality in our own business
operations as well as through innovative designs for our developments that provide ourcustomers with practical options for moving toward carbon neutrality.
• Minimizing the ecological footprint of our developments worldwide by meeting or
exceeding relevant local or regional green building design standards.
• Minimizing the consumption of transportation fuels for our customers by offering
future-smart locations and reconfiguration options based on the industry’s largest andmost proactively-managed global building and land portfolio.

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project©2009 ProLogis

22

ENVIRONMENTAL STEWARDSHIPCorporate Information
Environmental Stewardship
Social Responsibility
Business Excellence

CARBON MANAGEMENT AND ENERGY EFFICIENCY[EN16, EN23] We believe our leadership in proactively addressing the carbon impacts of ouroperations and products will be recognized and rewarded through increased customer loyalty
and enhanced community relations. During 2008, we continued to calculate and offset ouroperational carbon footprint and are in the process of developing a corporate carbon strategy.
Below is a table that details ProLogis’ total direct and indirect greenhouse gas emissions byweight for the year.(1)PLD Carbon Footprint
Comparison

PLD Carbon Footprint Comparison

Global Presence

Offices and Transportation by Region

NA Offices

NATransportation

Europe Offices

EuropeTransportation

Asia
Offices

2008
2007
2006

Asia
Transportation

8,386.61

Metric Tons CO2 Equivalent

1,519.54

1,335.92

671.74751.36

1,468.26

1,426.93

807.70728.803,304.51
4,705.05

2,575.68

7,280.70

7,188.63

5,810.94

Metric Tons CO2 Equivalent

14,881.48

Total

16,307.66

Introduction

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored

06 07 08

Note: 2006 is US only	CASE STUDY:
Pacific Commons Wetlands
Restoration Project

ProLogis also continues to work with the Chicago Climate Exchange (CCX), the world’s first
voluntary, legally binding greenhouse gas emissions reduction, registry and trading program.
As an Associate Member in CCX, we have committed to annually measuring and offsetting
100% of our U.S. operational carbon footprint. We have taken our commitment to the nextlevel by measuring and offsetting 100% of our global operational carbon footprint. For 2009,
we committed to establishing a goal for reducing these carbon emissions and have alreadymade progress in increasing our efficiency.

Electricity/Indirect
Energy Consumption

Natural Gas

Carbon Footprint

12,200,155 kWh63,410 therms

16,293.91 metric tons of CO2

For example, in early 2008 we began fine-tuning our headquarters building to maximize
efficiency through practices such as adjusting our HVAC schedule and investing in additional
controls for lighting. We also invested in GPS units for all of our maintenance trucks to
reduce unnecessary driving and identify the most efficient routes possible. While we believe
buying carbon offsets is necessary to mitigate our environmental impact, we also believe the(1) In early 2008, ProLogis acquired a company
plane that is no longer in use and is currently
marketed for sale. The company plane accounted for approximately 2,200 metric tonsof CO2, which indicates that the total organic
output from ProLogis for 2008, not including theplane, was in fact less than the previous year.

©2009 ProLogis

23

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

responsible approach to carbon management is to become as efficient as possible first, andthen offset only what we cannot feasibly reduce.
We recognize that our carbon emissions not only result from our operations, but also from our
supply chain. In 2008, we concluded a study to measure the embodied carbon of ProLogis
Park Pineham in the U.K. Embodied carbon is the carbon associated with the life-cycleof warehouse development, beginning with extraction of raw materials to make building
components, the manufacturing of the materials and their transport to the site, the energy
consumed during construction, and finally, the demolition and waste management at the endof the building’s life. Partnering with our suppliers, we offset 110% of the building’s embodied
carbon footprint, thus delivering our customer a carbon-neutral building from the start.
We began a similar study on a U.S. warehouse in 2008, which will be concluded once ourdevelopment activity resumes.
By addressing not only our direct emissions but also the emissions over which we have lesscontrol, we believe we are taking a comprehensive approach to addressing carbon and theimpacts of our business on climate change.
[EN28] ProLogis has never been fined for non-compliance with environmental laws andregulations and, [EN23] due to the nature of our business we have a very low risk ofsignificant spills.
[EN3, EN4] We are focused on improving the energy efficiency of the existing facilities in our
portfolio. In 2006, we initiated a lighting program to install or upgrade the lighting systems in
our North American portfolio with energy-efficient T5 and T8 fluorescent lighting. As of the endof 2008, high-efficiency lighting had been installed in more than 26 million square feet (sf)of warehouse space. Compared to standard warehouse lighting systems, this translates into asavings of over 29 million kilowatt hours (kWh) of electricity per year, enough energy to power
more than 2,600 Americans’ homes for one year or produce more than 21,000 metric tons ofcarbon dioxide emissions. Below is a table demonstrating the total number of high-efficiency
lighting systems year-over-year since we first started the program (2):

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration ProjectNorth American Portfolio
2008

11.8M SF2007

11.4M SF

2006

3.1M SF(2) The total amount of high efficiency lighting
installed is not directly under ProLogis’ control;
our customers choose whether or not they want
to upgrade their lighting systems in existing
facilities and incur the related costs. In addition,
current economic circumstances are causing
many companies to reevaluate their priorities
and cut back on certain non-critical activities,
which can include sustainability efforts that
require capital outlay. Despite this, through ourfrequent customer contact we will continue
to promote high-efficiency lighting to ourcustomers, as it typically achieves a fast returnon investment and reduces their operating
costs. ProLogis also will continue to invest in
high-efficiency lighting to make its vacant space
more attractive to potential customers. However,
because of economic circumstances we will
likely commit less of our own capital to lighting
upgrades than we otherwise would.

©2009 ProLogis

24

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

In Europe, as part of a directive related to the Kyoto Protocol, many countries are now
required to implement a rating system to designate building energy efficiency. This is aneffort to educate consumers and the market about the environmental impacts of buildings,
with the ultimate goal of improving energy performance. For example, as of October 2008,
the U.K. government mandated that all commercial buildings have an Energy Performance
Certificate (EPC) when they are bought, sold or rented. Twelve of our warehouses haveearned or projected scores that equate to using between 30-40% less energy than similar
new buildings. Other countries are adopting rating systems as well. At this time, our German
warehouses are averaging a 45-50% energy reduction compared to similar new warehouses.
The number of warehouses rated under other systems is minimal, but early results show thatthese too are above average in terms of energy efficiency. We have a system in place to track
our EPC scores and average savings, and will continue to monitor and report our performancein this area.

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project©2009 ProLogis

25

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information

Carbon Management andEnergy Efficiency

U.S. DEPARTMENT OF ENERGY STUDY

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[EN6] In fall of 2008, the U.S. Department of Energy (DOE) awarded approximately$15 million for a new, national study to speed market adoption of current technologies
and design solutions that yield significant, measurable savings for commercial buildings.
The DOE solicited proposals from national laboratories to achieve cost-effective energy
savings of 50% above ASHRAE Standard 90.1-2004 for new commercial building designs and
30% for retrofits of existing buildings. The labs targeted major retailers, financial institutions
and real estate firms as partners in the study; ProLogis was included in a proposal from the
National Renewable Energy Laboratory (NREL), one of the nation’s leading laboratories forrenewable energy and energy efficiency research and development.

	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities

As part of the study, we committed to working with NREL to review typical warehouse design
specifications and enhancements using computer-run simulations that identify the impactsof design and technology changes on energy use. So far, we have attended meetings with theDOE, NREL and other participants, and will focus our 2009 efforts on the retrofit building. From
the ProLogis perspective, we hope to gain knowledge of cost-effective upgrades we can use to
greatly improve the energy performance of our existing portfolio, while also helping to improvethe energy efficiency of the commercial building stock as a whole. (http://ir.prologis.com/
releasedetail.cfm?ReleaseID=337189)©2009 ProLogis

26	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

RENEWABLE ENERGY INITIATIVES[EN6] We continue to prove our position as an industry leader. Not only does ProLogis havea well-developed sustainability program, but we are now using that expertise to create
additional income in a tough economic environment.
In 2008, realizing the potential to create additional income from its existing assets, ProLogis
formalized its approach to renewable energy installations at its warehouse facilities in North
America, Europe and Asia. We are soliciting utility/energy companies to sign long-term leaseagreements for roof space on our existing facilities, to be used for solar installations, andthird-party investors to potentially lease and/or fund our solar installations.
There are many reasons why partnerships between utilities, investors and commercial/industrial real estate owners make sense. Industrial warehouses, by design, are located near
major populations. As such, facilities that reach these populations are connected to the local
utility company’s electrical grid serving these same populations.
Additionally, by leasing our rooftop space and earning construction management fees for
installing the solar panels, we are able to supplement our revenue stream without committing
additional capital. Our fund investors benefit by getting additional revenue through roof leases
on facilities with solar installations.
Currently, ProLogis has 11 solar installations with capacity totaling 6.1 megawatts (MW),which should generate 5,237,590 kilowatt hours (kWh) per year. However, solar power is
not the only renewable energy we are targeting. ProLogis also is dedicated to installing windturbines at parks where conditions are viable for this technology. So far, ProLogis has three
installations with capacity totaling 68 kilowatts (kW) and an estimated annual productionof 49,200 kWh. At full capacity, including the total power generated from both our solar andwind installations, we could provide electricity to power approximately 527 homes.
These efforts helped us make considerable progress toward our renewable energy goals
during 2008. So far, ProLogis is approximately 27% of the way to reaching its 2010 goal of
installed capacity of 25 million kWh per year across the company’s global property portfolio.

©2009 ProLogis

27

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information

Carbon Management andEnergy Efficiency

ROOFTOP SOLAR INSTALLATIONS

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[EN6] At the time of our first solar installation announcement, we believe ProLogis was the
only real estate owner/manager in the United States with a dedicated solar program using
its own rooftops. And, we have the roof surface space to make a true impact – more than
475 million square feet across North America, Europe and Asia.

Renewable Energy Initiatives
 ASE STUDY:
C
Rooftop Solar Installations
Minimizing Our Footprint

In 2008, ProLogis partnered with two large utilities for rooftop solar installations: Southern
California Edison (SCE) and Portland General Electric (PGE). In March of 2008, ProLogis
entered into an agreement with SCE, the largest electric utility in California, to lease morethan 600,000 square feet of roof space at ProLogis’ Kaiser Distribution Park in Fontana,
California, to power a 2.44 megawatt (MW) installation. In December of 2008, the installation
was completed and the power turned on.

	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals

In October, ProLogis signed its second
rooftop solar lease with PGE, a verticallyintegrated electric utility in Oregon, fora 1.1 MW installation. The solar powersystem has been installed on three
ProLogis distribution centers in the
Portland area, the largest of which isa 518 kilowatt (kW) installation at
a 246,000-square-foot distribution
facility located at ProLogis Park PDX
in northeast Portland. The remaining
577 kW has been installed on two
separate ProLogis distribution centers
at ProLogis Park PDX Corporate Center
East, located nearby. Construction on
the project was completed in December
2008, with the electricity turned on in
January 2009.

©2009 ProLogis

	CASE STUDY:
U.S. Department of Energy Study

ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project28

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

MINIMIZING OUR FOOTPRINT[EN26] ProLogis maintained its commitment to developing its facilities to the highest
environmental standards, including the U.S. Green Building Council’s LEED (Leadership in
Energy and Environmental Design) program, BREEAM (Building Research Establishment
Environmental Assessment Method) in the U.K and CASBEE (Comprehensive Assessment
System for Building Environmental Efficiency) in Japan.
[EC2] As we reported last year, ProLogis announced two major initiatives in early 2008 to
develop all of its new facilities in the U.S. and U.K. according to LEED and BREEAM standards.
Since then, both LEED and BREEAM have increased in recognition and adoption by othernations across the globe, which is helping to set the bar for the real estate industry as awhole. We strive to build in accordance with the accepted green building rating system in allof our regions of operation. Where rating systems do not exist, we implement best practices
learned from developing sustainable buildings across our global portfolio.
[EN26, PR1] At the end of the year, ProLogis had 46 buildings registered or certified
worldwide, including:• LEED in North America: 35 buildings registered or certified, totaling
14.4 million square feet
• LEED in Europe: One building registered, totaling 130,000 square feet
• BREEAM: Seven buildings certified, totaling 2.8 million square feet
• CASBEE: Four buildings registered or certified, totaling 4 million square feet
We do not expect to increase the total number of buildings that achieve certification orregistration during 2009 by a significant amount due to our company-wide decision to
postpone development starts in response to the global financial crisis and our focus onpreserving capital. However, we will meet these standards in buildings that were underconstruction prior to our decision and will continue to meet these standards in new buildings
once we resume development.
[EN6] Buildings developed to these standards benefit from reduced energy consumption andcarbon emissions. For example, ProLogis’ LEED facilities are typically designed to achieveenergy savings of 24.5% for new buildings, although our design has targeted up to 35%
savings at some of our facilities. In terms of kilowatt hours, ProLogis’ 2008 U.S. LEED starts
are expected to save over 13.6M kWh per year during their operation. This is equal to: 9,767
metric tons of carbon dioxide emissions, or the amount saved by eliminating 1,789 passenger
cars, or planting 2,220 acres of pine forests.
In terms of formally tracking our results as they relate to our multi-year goals, ProLogis
established a data collection system for the United States/Canada. We started eight buildingsin this region during 2008, with more than half of them meeting the goals outlined above.

©2009 ProLogis

29

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

We have not yet expanded the data tracking system to formally cover Europe, Japan or
Mexico; however, we completed research on ways to incorporate LEED into our developments
in Mexico so that we can achieve our goals in this and other developing markets when market
conditions improve.
In addition, in September of 2008, ProLogis received ISO 14001 certification for all of its U.K.
project management activities. ISO 14001 standards provide guidelines for environmental
management systems (EMS), which serve as management tools for companies to identify
and control the environmental impact of their activities, products or services; continually
improve environmental performance; and implement a systematic approach to setting andachieving environmental objectives and targets. In October, ProLogis finalized a nine-step
global implementation plan and timeline to extend this accreditation to encompass its project
management activities across the rest of Europe. ProLogis is well underway with its objectives,and hopes to receive certification in Europe by the end of 2009, with North America, Japanand Korea targeted for year-end 2010.
[EN1] Some of the most common materials used in ProLogis’ distribution centers include
concrete, structural steel, rebar, sprinkler pipe, roof deck, roof insulation, roofing andasphalt paving. In 2008, ProLogis used 3.2 million cubic yards of concrete; 163,000 tons ofconcrete, 91,000 tons of rebar; 8.2 million linear feet of pipe; 72.7 million square feet of roofmaterial and 1.7 million tons of asphalt. We report this information to help demonstrate theenvironmental impact of our development activities.

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint	CASE STUDY:
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project©2009 ProLogis

30

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information

Carbon Management andEnergy Efficiency

CUSTOMERS IN SPAIN DEMAND ENVIRONMENTALLY ADVANCED FACILITIES

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[EN26] ProLogis’ approach to development at its industrial park in Zaragoza, Spain, was tocreate a strategic location for distribution while also providing a turn-key sustainable solution.
Today, ProLogis properties in Zaragoza comprises two facilities totaling 1.37 million square
feet, both of which were completed as build-to-suit projects and are fully leased.

	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint

Our objectives during the design and construction process at both facilities focused on
reducing water consumption, increasing energy efficiency, recycling construction waste
and creating a positive work environment. As a result, both facilities were constructed using
a variety of sustainable design techniques and are now among the most environmentallyadvanced industrial facilities in the country.

 ASE STUDY:C
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities

The first distribution center, completed in early 2008 and leased to ARC International,
utilizes(1) skylights clerestory windows that increase interior daylight; a laminated-wood(2) roof
structure frame,(1) energy-efficient lighting systems,(3) roof-mounted solar panels that generate
electricity and heat water. The second distribution center, which will be completed in early2010 and is leased to Bosch-Siemens Home Appliances, utilizes the same features as the first
distribution center and also has direct access to rail.
Both facilities benefit from lowmaintenance and water-efficientlandscaping, a rainwater retention basin
for irrigation and use in the toilets which
are low-flush to reduce water usage,
motion-activated faucets, covered parking
for eco-friendly cars and free power
outlets for electrical vehicles. We also
prepared an Environmental Users Manual
for the occupiers of the buildings.

	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project(1) The optimization of skylights and clerestory
windows can generate savings of nearly

We recently completed a study on theenergy and carbon savings at the facility
leased to ARC. ProLogis achieved a 70%
reduction in operational emissions basedon U.K. environmental standards for
distribution facilities and a more than
70% reduction in operational energy
when compared to a typical building. Over a 25-year period, the facilities are expected toachieve a 55% reduction in operational energy usage. The sustainable cost savings are
estimated at 148,000 Euro per year.

50 percent compared with artificial lighting,while energy efficient lighting systems minimize
energy usage up to 40 percent less than astandard system. This results in savings on
power consumption, carbon emissions andrunning and maintenance costs.

(2) The laminated wood roof structure, which isrenewable, was procured from well-managed
and forest stewardship certified sources. It has
lower embodied carbon compared to steel/concrete-made elements and has better fire
resistance than steel.

(3) The energy produced by the roof mounted
solar panels flows directly into the utility grid.
The total yearly output is about 120,000 kWh,which is equivalent to nearly 10 percent of thebuilding’s energy needs, and represents savingsof 52 tons on carbon emissions.

©2009 ProLogis

31

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

OFFERING “FUEL EFFICIENT” FACILITIESProLogis distribution centers are designed to maximize the efficiency of our customers’ supply
chain operations. They ensure the accurate and seamless flow of goods from the point of
manufacture to their ultimate destination, and in many ways they enable our customers to befuel efficient.
We have long focused our acquisitionand development activities on sitesthat can maximize the efficiency
of distribution, logistics and lightmanufacturing — near major highways,
large population centers and tradehubs, including seaports, airports andintermodal. Often, this translates into lessfuel consumption due to the direct routes,
shorter travel times and convenient
access to the product consumers.

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint ASE STUDY:C
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project©2009 ProLogis

32

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information

Carbon Management andEnergy Efficiency

MULTI-YEAR GOALS

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

In 2006, ProLogis adopted a series of multi-year, quantifiable waste and renewable energy
goals to be achieved by the end of 2010 for all new development in its global portfolio. They
are as follows:

Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations

Utilization of 20% recycled content, based on cost, in all new warehouse developments.

Minimizing Our Footprint

Diversion of 75% of construction debris from disposal in landfills and incinerators on all
new projects.

 ASE STUDY:C
Customers in Spain
Demand Environmentally
Advanced Facilities

Reduction of potable water usage for landscape irrigation by 50% in accordance withmethodology established under the U.S. Green Building Council’s LEED (Leadership in
Energy and Environmental Design) program.
Installation of renewable energy sources that have a combined generation capacity of over
25 million kilowatt hours per year across the company’s global property portfolio.
Over the years, ProLogis has made progress toward reaching its goals. However, we are notprogressing as fast as originally expected due to the fall-out of the global credit markets
and the resultant impact on our business operations and development pipeline. Given thesechanges, we are planning to re-evaluate our multi-year goals and adjust them to reflectcurrent and near-term market conditions, and we will report on any modifications accordingly.

©2009 ProLogis

	CASE STUDY:
U.S. Department of Energy Study

33

Offering “Fuel Efficient” Facilities
 ASE STUDY:C
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

PROLOGIS GREEN PATH
[EN7] In 2008, ProLogis’ U.S. Sustainability Champions identified at least one action item
each of their offices could take to reduce their environmental impact. The solutions included
installing motion sensors for office lighting, unplugging office equipment on the weekend,
establishing recycling programs and even mandating double-sided printing. They also
assisted our sustainability team on several other corporate initiatives, including calculating
the company’s carbon footprint and providing information about electronics management tosupport a comprehensive corporate recycling policy.

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations

The Sustainability Champions also helped create the “ProLogis Green Path.” This initiative
is a culmination of the solutions implemented by each office during 2008, compiled andexpanded into set of guidelines that address four specific Environmental Impact Areas —Energy, Waste, Procurement and Water—and the various steps each office can take to reduce
its impact in each of them.

Minimizing Our Footprint

In early 2009, ProLogis rolled out the Sustainability Champion initiative and Green Path inEurope, and plan to engage Japan and Korea mid-year.

Offering “Fuel Efficient” Facilities

 ASE STUDY:C
Customers in Spain
Demand Environmentally
Advanced Facilities

	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project©2009 ProLogis

34

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

HABITATS PROTECTED OR RESTORED[EN13] ProLogis completes an Environmental Impact Assessment (EIA) at every project weundertake to determine whether our plans for the site will impact or threaten any species or
habitats. This assessment is conducted during the land procurement and entitlement process;we will work in partnership with relevant agencies and organizations to sufficiently mitigate
any impacts and go above and beyond where possible.
For example, at one of its land holdingsin California’s Inland Empire, ProLogis
created a 9-acre conservation habitat
under the direction of the California
Department of Fish and Game andthe U.S. Army Corps of Engineers. The
mitigation at the site involved theenhancement and conservation of amature riparian habitat (the interface
between land and a stream) and ariparian/upland transition habitat. As partof this, ProLogis planted 82 oak trees andone acre of scrub oak; built a 550-squarefoot pond; removed exotic, non-nativeplants and installed a perimeter fence
and signage to protect the habitat. To
ensure that the mitigation project met
the required standards and to provide additional benefit to the area, ProLogis salvaged topsoil
from areas of the site to be developed and redistributed it in the conservation area.
At ProLogis Parc Narita III in Tokyo, Japan,
ProLogis preserved 172,000 square feetof forest located near the site. At first,
ProLogis planned to apply for permission
to cut the trees according to the local
government’s requirements. However,after discussing the park’s impact on theland and ways to limit this, we decided
to not cut or move any trees during thedevelopment process. Although thisrequired ProLogis to modify a few
plans, we felt it was important to keep
the woods and protect the site’snatural environment.

©2009 ProLogis

35

Carbon Management andEnergy Efficiency
	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint ASE STUDY:C
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored	CASE STUDY:
Pacific Commons Wetlands
Restoration Project

ENVIRONMENTAL STEWARDSHIPIntroduction
Corporate Information

Carbon Management andEnergy Efficiency

PACIFIC COMMONS WETLANDS RESTORATION PROJECT

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[EN13] In connection with our Pacific Commons project, an 840-acre, mixed-use
redevelopment located in the city of Fremont, California, Catellus restored and rebuilt 440
acres of vernal wetlands habitat located immediately adjacent to the project. The company
then donated the land to the U.S. Fish and Wildlife Service, with which it had worked closely
to recreate a series of shallow vernal pools that border the Pacific Commons property. We
also constructed a 1,800-foot causeway to preserve connectivity between the pools and toallow the resident wildlife, which includes several endangered and protected plant and animal
species, to safely migrate under the roadway.
Today, the site consists of two preserve areas believed to have previously supported an
extensive vernal pool and wetland complex. The reconstruction of the pools, which arecharacterized by their seasonal flooding and drying, has resulted in a number of unique andrarely seen plants to reemerge, providing an indication that the restoration is well on its way.
To further ensure successful establishment, Catellus agreed to manage and track ecological
data at the site for 10 years, after which we will set up an endowment to fund future
maintenance by the U.S. Fish and Wildlife Service.
The enhanced property forms the largest
vernal pool complex in the South Bay
and is being incorporated into the Don
Edwards San Francisco Bay Wildlife
Refuge, the first urban federal wildlife
refuge established in the United States.
In support of its long partnership with the
U.S. Fish and Wildlife Service, Catellus
will also donate and install several large
interpretive panels to educate the public
about the function of the seasonal
wetlands and to introduce its resident
rare species.

©2009 ProLogis

	CASE STUDY:
U.S. Department of Energy Study
Renewable Energy Initiatives
	CASE STUDY:
Rooftop Solar Installations
Minimizing Our Footprint ASE STUDY:C
Customers in Spain
Demand Environmentally
Advanced Facilities
Offering “Fuel Efficient” Facilities
	CASE STUDY:
Multi-Year Goals
ProLogis Green Path
Habitats Protected or Restored
 ASE STUDY:
C
Pacific Commons Wetlands
Restoration Project36

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[HR0] At ProLogis, corporate social responsibility means setting expectations of exemplarysocietal conduct for ourselves, be it in our own business activities, our local communities, ora global context. We strive to do this by:• Demanding high standards of social responsibility from ourselves as well as fromour partners and suppliers, no matter where in the world we do business.
• Engaging in community programs through employee involvement and charitable
contributions that improve the health and welfare of children and youth in the regions
where we operate.
• Joining others in global problem-solving in areas where our professional experienceand corporate resources can make a significant difference to the solution of urgent
global issues.

©2009 ProLogis

37

Community Engagement
Social Responsibility on
a Global Scale	CASE STUDY:
The Mueller Foundation
Managing our Impact
	Employees: Our Most
Valuable Assets
	Customer Satisfaction andMarketing Standards

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

COMMUNITY ENGAGEMENT

Community Engagement[SO0] We believe in being a good corporate citizen, and that charitable actions provide
long-term return on investment and greatly contribute to our social sustainability. [EC8] Acrossthe globe, our employees offer their time, expertise and financial support with the goal of
making a positive impact on the communities in which the company operates. In support oftheir efforts, ProLogis provides every employee with two paid days each year to be used forcommunity service.
In 2008, ProLogis and its employees donated more than 5,300 hours of time andapproximately $1.5 million to more than 150 charities and organizations in need. Someof the organizations we helped include:• Mercy Corps• The Salvation Army
• Habitat for Humanity• Project C.U.R.E.
• United Way• Boys and Girls Clubs• Ronald McDonald House• Tokyo Museum of Logistics• Office National des Forêts (ONF)• Multiple schools, hospitals and food banks[EC1] Almost half of the money donated came from the ProLogis Foundation, which wasestablished in 2001 with the goal of providing financial support to institutions of higher
education and charitable organizations across North America. Since then, the Foundation’s
scope of influence has been expanded to include our operations in Europe and Asia.
The Foundation continues to be managed by ProLogis’ legal team, led by our general
counsel. In 2007, we reported our plans to hire a foundation manager dedicated to managing
charitable activity and fund allocations. Due to our focus on cost containment driven by the
global credit crisis, we have not yet placed anyone in this role. Organizations seeking further
information should contact ProLogis via regular mail to the attention of the Foundation c/o
Ed Nekritz.

©2009 ProLogis

38

Social Responsibility on
a Global Scale	CASE STUDY:
The Mueller Foundation
Managing our Impact
	Employees: Our Most
Valuable Assets
	Customer Satisfaction andMarketing Standards

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

SOCIAL RESPONSIBILITY ON A GLOBAL SCALE[EC8] ProLogis is committed to supporting community programs that improve the health andwelfare of children and youth in the regions where we operate. During 2008, the company
completed charitable activities in virtually every country in which it operates. For example, in
Mexico, ProLogis and MolsonCoors Brewery joined forces to co-sponsor a fundraising event
benefiting the victims of the flood-ravaged cities of Tabasco and Chiapas. Organized by Project
C.U.R.E, the event helped secure much needed medical supplies and equipment, which weredelivered on a cargo container. In addition to providing financial support for the supplies andthe delivery, ProLogis staff was onsite for the unloading of the container.
In San Antonio, Texas, 11 people from the
ProLogis office spent a day rebuilding andrenovating a home for a family of three
through its partnership with Habitat for
Humanity. Work on the home included
installing doors, windowsills, trim,
baseboards, floors, shelving and interior
hardware, as well as painting, caulking
and tiling. The home is located on theeast side of the city in an area where
Habitat builds about 50 homes a
year; this is the third house the local
ProLogis team has helped build in the
San Antonio area.

Social Responsibility on
a Global Scale	CASE STUDY:
The Mueller Foundation
Managing our Impact
	Employees: Our Most
Valuable Assets
	Customer Satisfaction andMarketing Standards

In the U.K., ProLogis contributed timeand money to support a variety ofeducation-based organizations. In
Bristol, we contributed toward a new bus for a school for hearing impaired children, replacing
their old, worn-out bus. In Birmingham, the team renovated a garden at a school in an
economically deprived area. They also worked directly with the students on reading and otherprojects and restored part of an outdoor activity center there. In Dartford, ProLogis donateda half-acre site for the development of a construction skills workshop, now known as the
ProLogis Academy. This site will serve as a job training facility for people seeking employment
at construction and infrastructure projects throughout the region.

©2009 ProLogis

Community Engagement

39

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

In Budapest, Hungary, we renovatedan old building to serve as a newkindergarten school for “Beszélj Velem”(Speak to Me Foundation); a non-profit
organization that teaches disabledchildren between the ages of three andeight. In 2008, the foundation stopped
receiving support for a lease on abuilding where the kindergarten had
been located for several years, forcing
them to move to an old, run-downbuilding. Since they had no available
funding to refurbish the facility, theyturned to ProLogis Hungary for help. The
ProLogis team, along with a networkof construction subcontractors, helped
renovate the building, paint and improve
the landscaping, resulting in a nicer environment for the children.
At ProLogis offices in Tokyo, our employees have been collecting plastic bottle caps from water,
teas or other drinks, which are then sent to a non-profit group called “Eco-Cap Movement.”
The organization sells the caps to local recycling plants and donates the proceeds to anothernon-profit in Japan called “Vaccines for the World’s Children,” which sends polio vaccines tochildren in developing countries.
In China, we pledged to fund theconstruction of one new school for every
five million square feet of industrial
development completed. In 2008, wedeveloped three new schools, bringing
the total number of schools built in China
to four. In addition to the construction,
ProLogis also donated books, TV sets, discplayers and other items for the students’use. More than 1,000 students attend
the schools, which are located in the
Guangxi, Dalian and Ningxia regions.

©2009 ProLogis

40

Community Engagement
Social Responsibility on
a Global Scale	CASE STUDY:
The Mueller Foundation
Managing our Impact
	Employees: Our Most
Valuable Assets
	Customer Satisfaction andMarketing Standards

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence

One of the most significant donations from last year was the result of a global, collective effort
among ProLogis employees following the 7.9 magnitude earthquake that hit central China in
May of 2008, killing more than 69,000 people and leaving millions of people homeless. We
partnered with Mercy Corps, an international humanitarian aid and development charitableorganization that focuses on emergency relief services, to participate in the aid and relief
efforts for the survivors affected. Donations from our employees around the world, plus
matching from the ProLogis Foundation, resulted in a total contribution amount of
4.73 million RMB (US$691,000) to support the China Earthquake Relief Fund.

Community Engagement
Social Responsibility on
a Global Scale	CASE STUDY:
The Mueller Foundation
Managing our Impact
	Employees: Our Most
Valuable Assets

Global Presence	Customer Satisfaction andMarketing Standards©2009 ProLogis

41

SOCIAL RESPONSIBILITY
Introduction
Corporate Information

Community Engagement

THE MUELLER FOUNDATION

Social Responsibility on
a Global Scale

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[EC8] Catellus, a ProLogis business unit, serves as master developer for Mueller, a 711-acremixed-use community located less than three miles from downtown Austin, Texas. The awardwinning project incorporates a number of new urbanism and green building principles, andalso offers the Mueller Affordable Homes Program. This program, which is one of the mostambitious in the country, requires a minimum of 25% of the project’s for-sale and for-rent
residences to be deemed affordable.
To support this program, as well as efforts related to schools and education, parks and open
space, job training programs, sustainable development and other charitable programs,
Catellus helped form the Mueller Foundation, a 501(c)(3) Texas non-profit organization withan independent Board of Directors. The Foundation enables Catellus to implement a “sharedappreciation” program, where affordable-qualifying families enter into an agreement with the
Mueller Foundation, which provides an interest-free second lien on affordable homes.
In effect, the Mueller Foundation makes up the difference between the sales price and themarket value of the home. Proceeds generated from the program, which are procured throughhome sales fees and appreciation sharing, are used by the Mueller Foundation to support
long-term affordable and other community goals. To date, the Mueller Foundation has closed
on more than 100 affordable homes.
The Mueller Foundation aims to generate more than $35 million before Mueller’s
completion, which is estimated to be 10 to 15 years from now. Catellus has selected theAustin Community Foundation to manage the funds. These funds will be used to ensure that
Mueller’s ambitious Affordable Homes Program remains vital for years to come. For more
information on the Mueller Foundation and the Mueller Shared Appreciation Program, please
go to: http://www.muelleraustin.com/homes/affordable/affordability.php.

©2009 ProLogis

42

 ASE STUDY:C
The Mueller Foundation
Managing our Impact
	Employees: Our Most
Valuable Assets
	Customer Satisfaction andMarketing Standards

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

MANAGING OUR IMPACT

Community Engagement[SO1; EN14] When ProLogis enters a community, we often take part in studies andengagement mechanisms with the communities. As part of our analysis and due diligence,
we complete development and environmental impact analyses that enable us to do some or
all the following:• Estimate the total number of jobs to be created and new tax revenues to be generated
as a result of the development.

 ASE STUDY:C
The Mueller Foundation
Managing our Impact• Conduct traffic studies to estimate the total number of vehicle and truck trips foreach development.

	Employees: Our Most
Valuable Assets• Develop traffic plans in conjunction with municipalities to efficiently manage traffic flows
in order to minimize impacts to the surrounding community.

	Customer Satisfaction andMarketing Standards• Minimize any adverse impacts from light or glare.
• Attend community planning meetings to address and respond to citizen andgovernment questions and concerns.
• Develop storm water management plans to properly control runoff quality and quantity,
which includes treating run-off from impervious surfaces such as parking lots prior
to discharge.
• Determine whether the development will impact any wetlands and if so, apply
appropriate mitigation efforts so there is no net decrease in wetland quality or quantity.
• Verify whether any endangered plant and animal species will be impacted by ourdevelopment and if so, change our development plans so the threat is eliminatedand the species is not negatively impacted.
In response to public infrastructure concerns from the City of Pataskala in Ohio, which was
responsible for approving phase two of development at ProLogis Park 70-Etna, ProLogis
committed to providing new tax revenue for public infrastructure projects as well as support
the activities of the local school district. This included a donation to the Southwest Licking
Education Foundation, which will be used for education-enhancing and scholarship purposes;a donation to the Township for the new Etna Township Hall; and, other school levy donations.
It also included public infrastructure improvements, which will be reimbursed over a periodof time.
[EN13] During the remodeling of two lakes at The Bridge, a ProLogis mixed-use development inEngland, we worked to restore the habitat for a water vole population - Arvicola terrestris – thatwould have been impacted by the modifications. In addition to transplanting reeds, sowing
grass seeds and planting native shrubs, we ensured the banks of the lakes were formed witha minimum of two meters of clay fill, which is ideal for water vole burrows. We also installed
pre-planted coir matting along the southern bank of the south lake, which supports vegetation
growth, protects the banks against erosion and creates an ideal foraging and burrowing
environment for the voles. ProLogis completed the transformation in conjunction with its joint
venture partner at The Bridge, Dartford Borough Council, and Natural England, a division of the
public sector of the Department for the Environment, Food and Rural Affairs.
©2009 ProLogis

Social Responsibility on
a Global Scale

43

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

EMPLOYEES: OUR MOST VALUABLE ASSETS[LA0] We affirm our commitment to Equal Employment Opportunity. We believe that ouremployees are our most important assets and seek to hire and retain superior employees
by committing to excellent employment standards. We recruit, hire, train, promote andcompensate candidates for employment, as well as our current employees, without regard
to race, color, age, religion, gender, national origin, disability or sexual orientation. All otherpersonnel actions including, but not limited to, disciplinary action and fringe benefit programs,
will be based on the same principles. [HR4] In North America, ProLogis had one incidentof discrimination raised during 2008; it was resolved during the investigation process. In
addition, the two incidents of discrimination that were raised and reported on in 2007 wereresolved and closed during discussions between management and the employees. To date,
ProLogis has not been found to have discriminated against its employees.
ProLogis Human Resources employees with hiring responsibility try to attend at least one
diversity-related career fair per year. ProLogis follows all relevant federal and state laws
applicable to individuals with disabilities, Vietnam-era and disabled veterans and endeavors
to maintain guidelines and practices that meet the standards required by law.
[LA12] ProLogis also is dedicated to the continual improvement of its training and education
programs for its employees, which we achieve through a number of strategic communications
tools. For starters, we believe that regular updates about the company’s business operations,career growth opportunities and sustainability efforts worldwide contribute to the development
and knowledge of our employees. We communicate to our employees through one-on-one
and group meetings, by phone, by email and most significantly, through our global
intranet site.
In addition, we expanded our global training and development team, which was formed in2007. This group has already made substantial progress formalizing and enforcing training
programs. At the end of the year, more than 70% of ProLogis employees had received
a performance and career development review. Our performance review process is acombination of performance and development training.
[LA10] ProLogis tracks its investment in its employees in terms of dollars spent. In total,
ProLogis invested more than $2.5 million in training and development for its employees
during 2008, which averages to more than $1,750 per employee.
[SO3] Separately, 100% of our employees are trained in corporate governance standards.
Each year, ProLogis requires every employee to participate in an online “Ethics Challenge.” Thisis a program designed to train and reinforce ProLogis’ beliefs and values to all employees,
officers and Board members. In regard to FCPA (Foreign Corrupt Practices Act) training, we
trained all of our senior management team, all of our China associates, 81 employees in
Europe and the majority of our people in Mexico during 2008. [SO4] The company did notexperience any incidents of exposure to corruption. [SO7] We did not have to take any legal
actions for anti-competitive behavior, anti-trust or monopoly practices, [SO8] and we did nothave any fines or non-monetary sanctions for non-compliance with laws and regulations.

©2009 ProLogis

44

Community Engagement
Social Responsibility on
a Global Scale ASE STUDY:C
The Mueller Foundation
Managing our Impact
 mployees: Our Most
E
Valuable Assets
	Customer Satisfaction andMarketing Standards

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[LA3] In terms of benefits, ProLogis employees who work more than 30 hours per week
are considered full-time employees and can choose to participate in ProLogis’ full benefits
offering. This includes medical and dental coverage, matching 401K and employee stock
purchase plan (ESPP) as well as supplemental life, accidental death and dismemberment,
dependent life, short-term disability and long-term disability insurance. Employees who
work fewer than 30 hours per week are considered part-time and can choose to participate
in ProLogis’ 401K and ESPP programs. [LA4] We believe that our relationships with our
employees are good. Our employees are not represented by collective bargaining agreementswith the exception of Europe, where we have employees who are represented by collective
labor agreements, which are required by law. These individuals make up 5% of our
total headcount.
[LA2] As Walt Rakowich noted in his letter, ProLogis was impacted by the challenging market
conditions and had to take several significant steps to address the situation. As part of this, we
re-sized our overhead structure to reflect the current level of business activity and our outlook
for reduced near-term earnings. Unfortunately, we had to reduce our workforce in order toachieve our objective of a 20-25% decrease in general and administrative expenses. This wasin no way a reflection of the work done by our employees. ProLogis is providing severance
benefits to eligible full-time and part-time employees whose employment was terminated
due to the restructuring. This includes a minimum amount of severance pay plus additionalbase pay for each year of continuous service; COBRA premium healthcare coverage forthree calendar months; immediate, full vesting in the ProLogis 401K Savings Plan; and,
outplacement and career counseling services.

©2009 ProLogis

45

Community Engagement
Social Responsibility on
a Global Scale ASE STUDY:C
The Mueller Foundation
Managing our Impact
 mployees: Our Most
E
Valuable Assets
	Customer Satisfaction andMarketing Standards

SOCIAL RESPONSIBILITY
Introduction[LA1 and EC7]

Community Engagement

Corporate Information

Social Responsibility on
a Global Scale

Environmental Stewardship

Global Employment
by Type (1)Employees
by Region

 ASE STUDY:C
The Mueller Foundation

Business ExcellenceManaging our Impact

848

1,651

Social Responsibility

 mployees: Our Most
E
Valuable Assets
	Customer Satisfaction andMarketing Standards

384

419

Global Presence

Full time
Contract/Temp.

Employee Turnoverby Gender (2)Employee Turnoverby Age (3)

13%

11%
8%

13%

21%

15%
11%

North America

4%

10%

20%

22%

23%

27%

27%

24%

22%

23%
19%

24%

23%

30%

Employee Turnover
by Region

23

23

Part Time

EuropeAsia

Male

Female

20-29

30-39

40-49

50+

(1) 
Contract/temporary workers are not
ProLogis employees.

(2) 
Employees who terminated employment asa percentage of gender by region, not apercentage of total headcount.

(3) Employees who terminated employment asa percentage of age group by region, not asa percentage of total headcount.

©2009 ProLogis

46

SOCIAL RESPONSIBILITY
Introduction[LA1 and EC7]

Community Engagement

Corporate Information

Social Responsibility on
a Global Scale

Environmental Stewardship

Reduction in Forceby Region (4)Reduction in Forceby Gender (4) ASE STUDY:C
The Mueller Foundation

73%

Social Responsibility

Managing our Impact

65%

Business Excellence56% mployees: Our Most
E
Valuable Assets
	Customer Satisfaction andMarketing Standards

8%

9%

11%

19%

26%

33%

Global Presence

Male

Female

20%

24%
11%

22%

22%

31%

56%

58%

72%

80%

Reduction in Forceby Age (4)North America

20-29
Reduction In Force

30-39
Reduction In Force

40-49
Reduction In Force

Total #of Expats

50+
Reduction In Force

Total # of VPs andAbove that are Expats

60

92

157

Total # of VPs
and Above

0%

4%

EuropeAsia

North America©2009 ProLogis

59Europe

47

Asia

(4) 
Employees terminated in workforce reduction
by demographic group, by region.

SOCIAL RESPONSIBILITY
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

CUSTOMER SATISFACTION AND MARKETING STANDARDSCommunity Engagement[PR0] We constantly strive to be our customers’ property business partner of choice.
To continually provide exceptional levels of customer service, ProLogis developed ProServe,a systematic customer service initiative. This effort provides a framework for regular andproductive interaction between our employees and our customers. [PR5] This is reflected in
our high levels of customer retention, which exceeded 79% as of December 31, 2008, as
well as the degree of satisfaction recorded in our bi-annual customer survey.
This survey is conducted in North America every two years. We ask customers to rate theirgeneral experience with their ProLogis personal contact and contractors, as well as in theareas of leasing, property management, facility condition and maintenance. Customers rated
our performance on a scale of 1 to 5, with 5 representing top performance. The table at rightsummarizes the percentage of respondents indicating a 4 or a 5 in each category.
North America 2008 Customer Survey Results
Percentage of Respondents Awarding 4s and 5s
Ratings of 4 and 5 equate to "good" and "excellent"

Leasing

85%

Property Management

90%

Maintenance87%

General Experience84%

Our Properties

GeneralExperience

Our Properties

78%

77%

85%

84%

87%

86%

85%

Maintenance90%

Property
Management

89%

89%

Leasing

78%

2006
2008

[PR6] In addition to meeting high customer satisfaction levels, we also place a highimportance on maintaining consistent messaging when marketing our business. Every
public-facing employee adheres to a detailed disclosure policy, and we follow all NYSE
guidelines regarding press release announcements and other marketing collateral. The
majority of our senior marketing staff belongs to one or more professional organizations,such as the Business Marketing Association and the American Marketing Association, andadheres to guidelines established by these groups. [PR7] We are in full compliance with ourmarketing communications regulations and do not have any violations to report for 2008.
©2009 ProLogis

48

Social Responsibility on
a Global Scale ASE STUDY:C
The Mueller Foundation
Managing our Impact
	Employees: Our Most
Valuable Assets
	Customer Satisfaction andMarketing Standards

Business excellence
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence[EC0] As a leading global provider of distribution facilities, ProLogis offers its customers amodern and geographically diverse portfolio of land and assets across North America, Europe
and Asia, enhanced by unparalleled customer service and an unwavering commitment tosustainability. Leveraging these core strengths, we are committed to delivering industry-leading, long-term financial growth through our diversified business model. We do this by:• Maximizing long-term shareholder value through an exceptional level of service,
long-term customer relationships, and a dynamic business model with multiple
revenue streams.
• Maintaining high corporate governance and stakeholder engagement standards
through exemplary board stewardship, coupled with regular stakeholder dialogue andsatisfaction surveys.
• Managing ProLogis as a global firm through a diversified presence across the globe,
respecting local culture, the employment of local nationals everywhere we operate, amultinational senior management team, and strong shared values and business ethics.

©2009 ProLogis

49

Generating Economic Value
Sustaining Economic ValueDistributing Economic Value	Climate Change and Related
Economic Implications
Memberships and IndicesBusiness excellence
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

GENERATING ECONOMIC VALUE

Generating Economic Value[EC1] Industrial distribution facilities provide a crucial link in the modern supply chain by ensuring
the accurate and seamless flow of goods to population centers. These facilities also function asprocessing centers for goods and enable companies to store enough inventory to meet surges indemand and to cushion themselves from the impact of a break in the supply chain. As a leading
global provider of distribution facilities, ProLogis consistently meets the distribution needs of new
and existing customers with modern, high-quality distribution space.
[EC1] Since going public in 1994, ProLogis has grown from $400 million in assets undermanagement in the United States to a global portfolio comprising more than $34 billion in assets
in 18 countries. ProLogis’ geographic diversification allows us to support our customers’ needs inglobal markets that have the strongest long-term fundamentals, while our local presence means
we can quickly respond to individual market conditions.
[EC1] ProLogis’ unwavering commitment to providing superior customer service and establishinglasting client relationships continues to generate value. Our customers consistently turn to us when
the need for distribution space arises.
[EC1] As a Real Estate Investment Trust (REIT), we generate income from two main business segments: direct-owned properties and investment management. Our direct-owned segment focuses
primarily on the ownership and leasing of industrial and retail properties in key distribution
markets. Our investment management segment represents the investment management of ourunconsolidated property funds and certain joint ventures and the properties they own.
Realizing that economic value is supported internally by the integrity of our employees andtheir daily contributions to the business, ProLogis is dedicated to attracting exceptional talent andcompensating its associates competitively. [EC7] We also understand that attracting local talent
best serves our business operations. More than 99% of our employees are local nationals; we have
only nine expatriates working in markets other than their home country, five of which are at thevice president level or above.
Our focus on employee recruitment and retention has proven fruitful. Even through these
difficult times, ProLogis associates delivered outstanding results in 2008, achieving record total
leasing activity for the year. We believe the quality of our people and strength of our customer
relationships will help ProLogis maintain high customer retention and better-than-average market
leasing levels despite challenging economic conditions.
Common Dividend Per Share

Composition of
Revenue$14.9 Billion Total
Market Capitalization(as of December 31, 2008)

$6.2
$2.07

26%

$2.4

$1.84

$1.60

$1.46
$1.48

$1.44

$1.42

$1.34
$1.38

$1.30

$1.01
$1.07
$1.24

$0.94

$5.7

(in billions)

CDFS
Fund Management
Property Operations

95 96 97 98 99 00 01 02 03 04 05 06 07 08©2009 ProLogis

06 07 08

50

74%

Debt
EquitySustaining Economic ValueDistributing Economic Value	Climate Change and Related
Economic Implications
Memberships and IndicesBusiness excellence
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

SUSTAINING ECONOMIC VALUE

Generating Economic Value[EC1] [2.9] In today’s market, ProLogis recognizes the importance of reducing debt andincreasing balance sheet liquidity. Taking a prudent approach to our operations, in Novemberof 2008, ProLogis announced a definitive action plan that aims to both de-risk our businessmodel and de-leverage the company.
[2.9] One of the first actions we announced in support of that plan was the sale of ouroperations in China and certain assets in Japan to GIC Real Estate for a total cash
consideration of $1.3 billion. This allowed us to reduce our development pipeline by almost$1 billion, eliminating the need to spend an additional $250 million of construction costs
and eliminating the leasing risk associated with these properties. In addition, we halted
all but previously committed development starts and stopped $500 million of planneddevelopment starts from previous quarters. In an effort to readjust operations, we also
realigned our regional offices to better support the ongoing management of our core assets.
[EC1] [2.9] Our goal is to de-leverage the company by $2.0 billion by the end of 2009.
Toward this goal in the fourth quarter of 2008, we completed contributions to our property
funds and sales to third parties of assets totaling $1.33 billion. We anticipate a similar levelof disposition activity in 2009 and will use the cash generated to pay down debt.
[2.9] We have also taken action to right-size the company for the current economic
environment, with an anticipated annual cash savings of nearly $100 million. Part of thiseffort included a reduction of workforce in order to achieve our objective of a 20-25%
decrease in general and administrative expenses.
[2.9] Lastly, ProLogis is in the process of renegotiating certain terms of its lending agreements
to provide more financial flexibility both on-balance sheet and within our property funds going
forward. For example, in December of 2008, we completed a tender offer for a portion of our
5.25% notes due November 15, 2010. We repurchased approximately $310 million principal
amount of these notes, representing approximately 62% of the principal amount outstanding,for a total consideration of approximately $217 million. We also announced the closing of$104.7 million of secured financing with a large institutional investor on behalf of an affiliate
of ProLogis North American Industrial Fund II. The proceeds were used to refinance a$62 million secured debt facility that was set to mature in January 2009 and pay down
$42 million of another debt facility, thereby reducing 2009 maturities in the fund by
approximately $104 million.

[2.9] To reflect the changes in our business model, we have also revised the structure of our
financial reporting measures, bringing our reporting from three business segments to two. For
additional background and rationale of this approach, please refer to pages three through 12 inour 2008 annual report on 10-K. While no one can be absolutely certain of the duration of thisdownturn or what the lasting effects will be, ProLogis can be certain about this: we will continue
to be a global enterprise, focused on our core industrial business, growing our investment
management segment and eventually resuming development in markets with strong underlying
demand. Most importantly, we will do all of this in a more conservative manner than in previous
years, and with a lower level of debt.
©2009 ProLogis

51

Sustaining Economic ValueDistributing Economic Value	Climate Change and Related
Economic Implications
Memberships and IndicesBusiness excellence
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

DISTRIBUTING ECONOMIC VALUE

Generating Economic Value[EC1] Because we have elected to operate as a REIT for federal tax purposes, we pay acompulsory 90% of taxable income to shareholders each year in the form of quarterly
dividends, generating additional value for our stockholders. More information about revenues,
operational expenses and earnings can be found in our 2008 annual report on 10-K.
[EC8] By nature of our business, our operations enhance markets around the world.
Understanding that the community plays a vital role in local, national and global economies,
we consciously engage with local groups through volunteer work, infrastructure improvements
and in-kind donations. For more about our social responsibility efforts please refer to theSocial Section of this report.
[EC6] In an effort to spread economic value to the economies in which we operate, we utilize
local construction materials and suppliers with each property development project. In 2008,
we spent $1.33 billion on contractors to support our development activity. Of this amount,more than $1 billion was on local or regional companies.

©2009 ProLogis

52

Sustaining Economic ValueDistributing Economic Value	Climate Change and Related
Economic Implications
Memberships and IndicesBusiness excellence
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

CLIMATE CHANGE AND RELATED ECONOMIC IMPLICATIONS[EC2] Universal climate change has the potential to impact our business in many forms.
ProLogis is continually assessing business risks and opportunities associated with climatechange while evaluating appropriate responsive actions. Our consideration includes:• Further adoption and regulation of green building standards set by national,
state and local municipalities leading to stricter building codes.
• Enhanced regulation of carbon dioxide emissions.
• Increased cost of energy-intensive construction materials (most notably
concrete and steel).
• Higher fuel costs increasing operating and construction costs.
• Rare and severe weather patterns leading to potential asset damage.
• Overall increased preference for businesses to associate with othersustainability-conscious companies.
[EC2] Because ProLogis’ sustainability practices are advanced, especially compared to ourpeers, we feel that we are prepared to react quickly should any of the above considerations
prove to become viable business risks. Our evaluation is constant and we are aware of trends
as they begin to form. As such, our business practices are frequently evolving.
[EC2] For example, stricter building codes continue to be enforced. Fortunately for ProLogis,
we are already experts at green building practices, with more than 20 million square feet
(1.8 million square meters) of space registered or certified as “green” worldwide, with morein the process of certification. For additional information on our building practices, pleaserefer to the Environmental Section of this report.
[EC2] We believe demand for green buildings will continue to increase and that we will realize financial returns from building energy-efficient facilities. In studies conducted by McGrawHill and CoStar, LEED office buildings have shown evidence of receiving higher rents andselling at larger profit margins. We realize that there is no comprehensive data specifically forthe industrial market; however, we have experienced early anecdotal evidence of these trends
in our own operations.
[EC2] For more insight on ProLogis’ risk assessment process, please refer to the company’s
2009 response to the annual Carbon Disclosure Project Report. The Carbon Disclosure Project(CDP) is an independent, not-for-profit organization that acts as an intermediary between
shareholders and corporations on all climate change related issues. Its mission is to collectand distribute high quality information that motivates investors, corporations and governments
to take action to prevent climate change. We respond to CDP because we think it is important
to disclose our risks and opportunities related to climate change to our investors and the
public, and we plan to submit our fourth response this year.

©2009 ProLogis

53

Generating Economic Value
Sustaining Economic ValueDistributing Economic Value	Climate Change and Related
Economic Implications
Memberships and IndicesBusiness excellence
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

MEMBERSHIPS AND INDICES

Generating Economic Value[4.13] We are proud to be members of more than 52 third-party organizations,
including building-owner groups, local building councils, sustainability-focusedorganizations and chambers of commerce worldwide.
[4.12] We are pleased to be listed in a few of the most recognized and esteemedsustainability indexes for publicly traded businesses:• The North American and World indexes of the Dow Jones Sustainability Index, the firstglobal index tracking the financial performance of the leading sustainability-driven
companies worldwide and providing asset managers with reliable and objective
benchmarks to manage sustainability portfolios.
• The FTSE4Good Index, established jointly by the Financial Times and the London Stock
Exchange to measure the performance of companies that meet globally recognizedcorporate responsibility standards.
• The Domini 400 Social Index, one of seventeen indexes developed by KLD Research &Analytics, Inc., the leading provider of environmental, social and governance research for
institutional investors.
• The S&P U.S. Carbon Efficient Index; composed of S&P 500 companies that maintaina relatively low carbon footprint, as measured by metric tons of CO2 divided byannual revenue.

©2009 ProLogis

54

Sustaining Economic ValueDistributing Economic Value	Climate Change and Related
Economic Implications
Memberships and IndicesBusiness excellence
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence©2009 ProLogis

52 third-party organizations

Generating Economic Value

American Chamber of Commerce in Germany
American Planning Association
Association of German Engineers (VDI)
Association of German Refrigerated Warehouses and Logistics Companies
Building Owners and Managers Association (BOMA)
Chicago Climate Exchange (CCX, US)
Congress for the New Urbanism
Environmental Protection Agency’s ENERGY STAR program
German Association of Materials Management
German Logistics Association (BVL)
Industrial Developers Sustainability Forum (U.K.)
International Council of Shopping Centers (ICSC)Japan Business Federation
Japan Association for Chief Financial Officers
Japan Federation of Freight Industries
Japan Institute of Logistics Systems
Japan Institution of Logistics Systems National Association of Industrial and Office Properties (NAIOP, US)
The Association for Real Estate Secutirization (Japan)
The Japan Third Party Logistics Association
Urban Renewal Coordinator Association of Japan
Pegasus Club (Japan Retailing Center)
Tokyo Ginza New Rotary ClubSix Chambers of Commerce in Japan
National Association of Real Estate Investment Trusts (NAREIT, US)
National Brownfield Association
Purchasing and Logistics (BME, Germany)
Real Estate Roundtable (US)Responsible Business Forum (Poland)
Romania Green Building Council
Society of Office and Industrial Realtors (SIOR, US)
The Association for Real Estate Securitization (Japan)
The Institute of Logistics and Warehousing (Poland)
United Kingdom Green Building Council (UKGBC)
United States Green Building Council (USGBC)
Urban Land Institute (ULI)
American Chamber of Commerce Mexico
Read Estate Developers Association (ADI, Mexico)
Mexican Association of Industrial Parks (AMPIP, Mexico)
Mexican Association of Real Estate and Infrastructure Funds (AMFII, Mexico)
Korea Logistics Association
Korea Warehousing Association
Korea Third-Party Logistics
Korea Logistics Professional Associating
Korea Chamber of Commerce & Industry
The European Chamber of Commerce in Korea
The American Chamber of Commerce in Korea
Korean CEO’s Association of Multinational Corporation

55

Sustaining Economic ValueDistributing Economic Value	Climate Change and Related
Economic Implications
Memberships and Indices

GLOBAL PRESENCE
Introduction
Corporate Information
Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence©2009 ProLogis

MISSION

Mission & Profile

Our mission is to be the leading global provider of sustainable distribution facilities tothe world’s largest users of distribution space and to maximize shareholder value
through customer service, organizational excellence and our commitment to corporatesocial responsibility.

PROFILE
ProLogis is a leading global provider of distribution facilities, with more than 475 million
square feet of industrial space (44 million square meters) in markets across North America,
Europe and Asia. The company leases its industrial facilities to more than 4,500 customers,
including manufacturers, retailers, transportation companies, third-party logistics providers
and other enterprises with large-scale distribution needs.

56

Global Map

GLOBAL PRESENCE
Introduction

GLOBAL MAP [2.5, 2.7]

Mission & Profile

Corporate Information

Global Map

Environmental Stewardship
Social Responsibility
Business Excellence
Global Presence

north america

europeasia©2009 ProLogis

57