BUILT WITH

PURPOSE2015 Sustainability Report®

TABLE OF
CONTENTSOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

Table of Contents
OUR APPROACH

TAKING RESPONSIBILITY:
Environmental Stewardship

BUILDING LASTING RELATIONSHIPS:
Social Responsibility

ACTING WITH INTEGRITY:

Ethics and Governance

ABOUT THIS REPORT

02
03
05
08
10
12

Our Approach: Built with Purpose
An Enduring Commitment: Message from our CEO
Sustainability’s Lasting Value: Letter from our VP of Sustainability
Global Challenges, Local Actions
Materiality and Stakeholder Engagement
Awards and Recognition

13
Taking Responsibility
14
Environmental Goals and Objectives
21	Case Study: Water Conservation24	Case Study: Brownfield Development

29	
Building Lasting Relationships
31
Case Study: Breakthrough Network
35
Case Study: Prologis UK Green Group39	
Acting with Integrity42	Case Study: Ethics Training Globally44	Case Study: Transparency

46
48
54
59

About this Report
External Assurance Statement
GRI G4 Content Index
Engage with Us®

BUILT
WITH PURPOSEOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

OUR APPROACH

Built with
Purpose
Prologis is committed to logistics real estate for the longterm. We strive to do what’s right for the communities
where we live and work and plan ahead to build a better
tomorrow. Our forward-looking approach to sustainable
design, development and operations has enabled us
to create the industry’s leading portfolio of high-quality
logistics facilities and deliver long-term value for our
stakeholders.
Our employees demonstrate their personal commitment
to ensuring a better future—forming relationships
with customers and investors that span decades andinvesting time and effort into the well-being of theircommunities. The foundation for these achievements
is a culture characterized by strong governance andepitomized by six core values that are embraced by all
Prologis employees: Integrity, Mentorship, Passion,
Accountability, Courage and Teamwork.

®

MESSAGE FROMOUR CEOOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

An Enduring Commitment
Dear Stakeholders,
Welcome to our 2015 Sustainability Report.
At Prologis, our enduring commitment
to logistics real estate goes hand in handwith an equally enduring commitment to
the environment, social responsibility andcorporate governance.
Logistics real estate is a great business to
be in. Across cycles and for the foreseeable
future, there are resilient, structural factors
driving demand, including:• Rising consumption, which increases
the volume of goods flowing through our
network of logistics facilities.
• Burgeoning e-commerce, which requires
three times the logistics space of offline
retail to accommodate packages instead of
pallets, high inventory turns, wide productvariety and returns.
• Growing emphasis on corporate
efficiency, which drives demand for higher
quality, better-located facilities.
In 2015, we delivered our best-ever financial
and operating performance.

These results are a testament to the valueof our focus on strategic markets, efficientbuildings and longstanding partnerships withour customers, employees and investors.
Credit for the company’s achievements goesto our talented team, who care about eachother, our stakeholders, our business and theinterconnected world we live in.

2015 was also a great year forsustainability at Prologis.
We collaborated with stakeholders acrossthe globe to deliver meaningful, positive
impacts benefiting our customers and thecommunities where we live and work.
More than 70 percent of our operating
portfolio now has efficient lighting, and31 percent has cool roofs. Solar installations in
our portfolio ended the year at 149 megawatts(MW), and over the course of the year, we
certified 45 projects comprising 15 million
square feet, bringing our total sustainablebuilding certifications to 173, representing
68 million square feet. These efforts, which
improve operating efficiencies for ourcustomers, enhance the quality and valueof our portfolio.

“

We collaborate withstakeholders acrossthe globe to deliver
meaningful, positive
impacts benefiting ourcustomers and thecommunities where
we live and work.

”

Hamid R. Moghadam, Chairman and CEO

MESSAGE FROMOUR CEO (CONTINUED)OUR APPROACH

We ranked among the Global 100 Most
Sustainable Corporations in the World for theseventh consecutive year; we won NAREIT’s
2015 Leader in the Light Sustainability Award in
the Industrial Sector for the fourth consecutive
year; we were again a component of the Dow
Jones Sustainability Index for North America,
and for the first time, we were listed on the
Dow Jones Asia Pacific Index. In 2015, for thethirteenth year in a row, Green Street Advisors
recognized Prologis as the REIT industry’s
corporate governance leader. I am pleasedby all of our sustainability achievements, butparticularly proud of this recognition. Strong
corporate governance characterized by ethicaland transparent behaviors is in our company’s
DNA. Throughout my career, I have advocatedfor integrity, transparency and responsible
stewardship of resources in the real estateindustry and beyond.

We are on track to achieve oursustainability goals.
We have a strong history of setting ambitious
goals and realizing them.
Our renewable energy program is on paceto meet our rooftop solar installation goal of
200 MW by 2020. In response to reduced
utility incentive programs, we are exploring
opportunities beyond solar, including
emerging energy technologies. This may
affect our program’s rate of growth over the
next few years.

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITY

All new development has been and will
be designed to comply with recognizedsustainable certification standards whereavailable—in line with our certification goals.
In the Americas, all of our projects aredesigned to comply with the sustainablefeatures defined in our LEED Volume programwith the U.S. Green Building Council. In otherregions where volume programs don’t exist,
certification plans and submissions are madebuilding-by-building at the local level.
We are steadily increasing the percentage
of our portfolio with cool roofs anddecreasing greenhouse gas emissions
from our corporate operations.
Across our portfolio, we install efficient lighting
as we deploy new buildings and upgrade
existing ones. However, due to portfolio
fluctuations from acquisitions and dispositions,achieving 100 percent efficient lighting may
continue to be a challenge.
Our Space for Good program provides rentfree space to nonprofits and nongovernmentalorganizations (NGOs) in times of crisis. Last
year, we provided 105 months of rent-freespace to 18 nonprofit organizations, totaling$1 million of in-kind rent. While we doubled
our impact in financial terms year-over-yearfrom 2014, I still feel that this program could
do more. Occupancy rates are at record levels,
but still we have the capacity to provide
rent-free space for short time periods to

ETHICS AND GOVERNANCE®

more organizations in need. The challenge
we face is one of quickly and efficiently
matching needs with space.

We remain vigilant about the future.
Increasing population, rising consumption andlonger supply chains contribute to growing
greenhouse gas emissions. In December
2015, we proudly joined 150 major companies
in signing the White House’s American
Business Act for Climate Pledge.
Looking forward, we will continue tofind ways to advance our leadership insustainability. In 2016, we are launchinga sustainability roundtable designed todeepen engagement with key customers.
We are simultaneously deploying a system
for monitoring suppliers’ compliance with
our supplier code of conduct and working tobetter align employee engagement with thepriorities of the communities where we live
and work. We have mechanisms in place fortracking and measuring our progress, and weknow that when we measure, we improve.
This is exactly what we will do in 2016 and in
the years beyond.
Sincerely,

Hamid R. Moghadam
Chairman and Chief Executive Officer

4

LETTER FROM OUR
VP OF SUSTAINABILITYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Sustainability’s Lasting Value“

Being forward-thinking
enables us to maintainour leadership positionin the industry andensures our company’s
resilience in the faceof complex andinterrelated challenges.

”

Jeannie Renné-Malone, Vice President, Sustainability

As I look back on this past year, I am proudof our sustainability accomplishments andinspired by my fellow employees. Their efforts
to minimize our environmental impacts,
engage with our communities and act with
uncompromising integrity are the lifeblood of
our sustainability program. There is still a great
deal of work ahead of us, but I am confident
we are on the right path. Together, we will
work diligently to ensure that Prologis isresilient in the face of complex and interrelated
global challenges and our sustainability
program leaves a lasting positive impact for
generations to come.
In 2015, we changed the way we refer toour program: from Corporate Responsibility
to Sustainability. We decided that the term“sustainability” is more comprehensive,
and therefore better fits our culture, ourcommitment to protecting the environmentand our pledge to being a good neighbor. It
also aligns with the language and priorities ofmany of our stakeholders.
Our program continues to be built on the three
dimensions of sustainability: environmental
stewardship, social responsibility andgovernance and ethics (ESG). For more than adecade, the ESG framework has allowed
us to efficiently and transparently track ourprogress toward meeting our goals throughreputable reporting frameworks and surveys
organized around ESG issues and topics. There
are many reasons we have a sustainability
program, but at the core, our purpose is todesign initiatives and strategies that result in
economic, environmental and social benefits
for Prologis and all of our stakeholders.

We have the opportunity—andthe responsibility—to work toensure that our impacts are positive.
Looking ahead into the second half of thisdecade and beyond, we know that it is criticalto monitor global risks and trends that may
affect our business. We align with several of
the United Nations Sustainable Development
Goals (UNSDGs) and work to continuously
improve our capacity to achieve our own
environmental goals and targets. Being
forward-thinking enables us to maintain ourleadership position in the industry and toensure our company’s resilience in the face ofcomplex and interrelated challenges, including

5

LETTER FROM OUR
VP OF SUSTAINABILITY (CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITY

extreme weather events, water scarcity, waste
management, pollution control, demand forclean energy, transportation, air quality andhealth and well-being.

We have seen many examples of innovative
strategies that reduce GHG emissions
and water and waste across our corporate
operations and portfolio, and we are excited
to build upon these successes:

Climate change continues to be the greatest
environmental challenge of our time. 2015
was the hottest year in recorded humanhistory, and global atmospheric concentrationof carbon dioxide—the primary driver ofrecent climate change—reached more than
400 parts per million. We are in the process ofre-assessing and extending our environmental
goals through 2025. As part of that process,we will introduce a science-based GHG
emission reduction target for our corporate
operations, and we are exploring water andwaste reduction goals. We demonstrated
our long-term dedication to climate action bysigning commitments leading to COP21 inParis, including the White House’s American
Business Act for Climate Pledge and the
CDP’s Commit to Action.

• Turf removal and replacement projects indrought-prone areas have resulted in reduced
water consumption and cost savings of morethan 50 percent.

Although consumption is a positive driver forour overall business, it has more challenging
implications from an environmental
perspective. As the worldwide leader inlogistics real estate, we have a uniqueperspective on the interconnectedness ofglobal growth, our business and the health andwell-being of our stakeholders. We have theopportunity and the responsibility to work toensure that our impacts are positive ones.

• Infill location strategies reduce trucking miles
and associated GHG emissions forour customers.
• Efficient lighting improves operational
efficiency for our distribution centers andcorporate operations.
• For the majority of our new construction,
20-30 percent of building materials are
regionally sourced, reducing GHG emissions
and boosting local economies.

ETHICS AND GOVERNANCE®

I am optimistic about our plans moving
forward, and know that as the world continues
to evolve and change, our sustainability efforts
must remain robust and resilient. Collaboration
with all of our stakeholders is critical as we
continue to make progress on sustainability
issues. In 2016, we are determined to focus
even more on stakeholder engagement— oncommunicating and working closely with
employees, customers, investors, communities
and suppliers to ensure that together our
progress is meaningful and ongoing.
I hope you enjoy reading our 2015
Sustainability Report, and I look forward toreporting on our progress next year.
Sincerely,

Jeannie Renné-Malone, LEED AP BD+C,
Vice President, Sustainability

WE ALIGN WITH SEVERAL U.N. SUSTAINABLE DEVELOPMENT GOALS:GOAL 7

GOAL 9GOAL 13

Ensure access to affordable,
reliable, sustainable andmodern energy for all

Build resilient infrastructure,promote inclusive and sustainableindustrialization and foster innovation

Take urgent action to combat
climate change and its impacts

6

THREE COMPLEMENTARY LINES OF
BUSINESS DRIVE ENDURING VALUEOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Three Complementary Lines of Business Drive Enduring Value
Current Revenue

Future Growth

Efficient Funding

Real Estate Operations

Capital Deployment

Strategic Capital

Leading customer service to the world’s best brands
across 669 million square feet in 20 countries

Expertise and a track-record of excellence indevelopment and value creation

Access to Prologis’ world-class capabilities inoperations and deployment for institutional investors

Global Reach Creates
Perspective

Efficiency

Engagement Drives
Sustainability

Preference Ensures
Enduring Value

employees in 20 countries
working in 14 languages$59B

in assets under management(AUM) and $23B in 3rd party AUM

149MW

5,200

2,403

670MSF

173

96.9%

714

3,200

9,900

84.5%

86

8,000 +

~1,600buildings in the Americas

buildings in Europe

buildings in Asia

owned, managed orunder development

industrial properties

acresof solar energy
installations

sustainable building
certifications in 15 countries

volunteer hours

customers

occupancy rate

customer retention

105

months of rent-freespace to 18 nonprofits

7

GLOBAL CHALLENGES,LOCAL ACTIONSOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Prologis Park Gyal, Budapest, Hungary.

Global Challenges, Local Actions
We are the world’s leader in logistics realestate with properties on the front linesof global commerce. Our well-locatedfacilities enable our customers to operate
more efficiently.
We connect makers to markets, and the
products that flow through our distribution
centers every day—from food topharmaceuticals, apparel to electronics,
industrial equipment to building supplies—
make modern life possible.
The effects of global logistics reach far beyond
the movement of goods. Activities associatedwith constructing and operating buildings
have lasting effects on local communities
and ecosystems. At Prologis, we see thisas a strategic opportunity, and we embedsustainability into our operating model tocreate a legacy of good.
Our forward-looking approach to sustainable
design and development—employing
innovative solutions in such areas as solar
energy, efficient lighting and brownfielddevelopment—helps us to minimize
environmental impacts. We strive to be a goodneighbor, strengthening local communities
by sourcing building materials and hiring

locally wherever possible. Our employees
volunteer their time and donate resources tolocal causes that contribute to the well-beingof the communities in which they live andwork. Throughout, we commit to transparent
communication and the highest level ofintegrity in all of our business dealings.
By embedding sustainability into our actions,
we deliver value to our customers, investors
and communities while helping to build astronger future for all.

8

CREATING SUSTAINABLE VALUEFOR OUR STAKEHOLDERSOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Creating Sustainable Value for Our Stakeholders
Our forward-looking approach to sustainable design, development and operations delivers long-term value for all of our stakeholders.

86%
14
3
149
30

of employees are proudof Prologis’ involvementin the community andsocial causes

Customers

hours of training per
employee per year
on averagebusiness days per
employee per year
to volunteer withcharitable organizations

MWof total solar energy
generating capacity

MWof solar installationsin 2015173

Employees

total sustainablebuilding certifications73%

of total operating
portfolio has
efficient lighting

22%

more efficient lighting per
operating hour than prevailing
U.S. energy codes

31%

of total operating
portfolio has cool roofs

9,900
Environment

Local
Communities$1.5
million105

volunteer hours to
local communities

in grants and donations
to support local causes
and nonprofits
months of rent-free spaceprovided to local nonprofits

9

MATERIALITY ANDSTAKEHOLDER ENGAGEMENTOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Materiality andStakeholder
Engagement
Open dialogue is essential to our decisionmaking process and vital to our success.
We actively engage with our stakeholders
and seek their input and opinions. We use“stakeholders” broadly to include any groupthat may directly impact Prologis and its
business operations, as well as those that may
be affected by us. The topics we engage on are
similarly broad, encompassing the full range ofenvironmental, social and governance issues.
Our formal materiality assessment process
began in 2013 when we conducted extensive,
one-on-one interviews with senior leaders toelicit their observations, opinions and insights
on material topics. Topics were identified by areview of guidelines and sector supplements
produced by GRI (Global Reporting Initiative),industry-related topics and sustainabilityrelated surveys. In 2015, we updated ourmaterial topics list, added several new
items and performed a two-part materiality
assessment survey to refine the focus of oursustainability initiatives.

The Prologis team, Solihull, UK.

We actively engage with our
stakeholders and seek their
input and opinions.
The first survey group consisted ofapproximately 100 mid- to senior-level
employees. These employees, who regularlyinteract with key Prologis stakeholders, wereasked to rank the relative importance of eachmaterial topic to their stakeholders. A second
round of surveys went to a select group ofsenior Prologis leaders, who ranked each
item based on the level of control Prologis
has over the topic, as well as the impact ofthat topic on our business. We combined
the results of these surveys with the input
we gained through other stakeholder groups
and engagement methods to create a list of
the most material topics for our business,
as shown in our Stakeholder Priorities andEngagement image found on page 11. Thesepriorities guide our sustainability initiatives
and commitments.

10

STAKEHOLDER PRIORITIESAND ENGAGEMENTOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Stakeholder Priorities and Engagement
We actively engage with our stakeholders to define priorities and establish modes of engagement that ensure alignment and respond to their concerns. Priorities listed
encompass material topics identified during our 2015 Materiality Assessment.

STAKEHOLDERSPRIORITIESENGAGEMENTCOMMUNITIES• Job opportunities• Local partnerships• Involvement in the community• Infrastructure improvements

Meetings before,
during and after
development ofproperties

Employeevolunteerism

Donations
to nonprofit
organizations

CUSTOMERS• Relationships• Operational efficiency• Location• Supply chain efficiencies

Annual Customer
Advisory Board
meetings in the
U.S. and Europe

Dedicated
relationshipcontacts

Biannualcustomersatisfaction
surveysOne-on-one
conversations
with customers

EMPLOYEES• Employee empowerment• Benefits and compensation• Workplace efficiencies

Global employee
engagement survey

Global employee
intranet, The Hub

Quarterly town
hall meetings

IMPACT Day

GOVERNMENT• Compliance• Zoning• Permits and entitlements

Collaboration
on projects

Regular meetings
during permitting
processes

INVESTORS• High-quality assets• Income and diversification• Transparency• ESG issues

Quarterly
earnings calls

Investor forums
and meetings

Proprietary
research reports

Global Real Estate
Sustainability
Benchmark (GRESB)

SUPPLIERS• Business relationships• Development opportunities

Project
development

One-on-one
meetings and
calls

11

AWARDS &RECOGNITIONOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Awards and Recognition
Prologis has been widely recognized for ourachievements and for the way we do business.
The 2015 Global Real Estate Sustainability
Benchmark (GRESB) Survey recognized
Prologis, Inc., Nippon Prologis REIT, Inc.
(NPR) and five Prologis funds (ELV1, NAIF,
PELP, PEPFII and PTELF) with the Green
Star, the highest award bestowed by theorganization. Prologis earned this distinction
for outstanding performance in the areasof environmental stewardship, social
responsibility and governance.

2015 Awards• 2015 Corporate Responsibility Award from the China Logistics & Supply Chain Association• 2015 Dow Jones Sustainability Indices: North America and Asia/Pacific• Corporate Knights: Global 100 Most Sustainable Corporations in the World• CR Magazine 2015 Responsible CEO of the Year Award Finalist—Hamid Moghadam• CSR Best Practice Award from the China Association of Enterprises with Foreign Investment• Denver Business Journal’s 2015 Partners in Philanthropy Award• FTSE4 Good Constituent• GRESB Green Star 2015
• Inbound Logistics 2015 G75 Green Supply Chain Partner

For the fifth year running, Prologis is
a component of the 2015 Dow Jones
Sustainability Indices (DJSI), which track
the leading sustainability-driven companies
worldwide. We are listed on both the North
America and Asia Pacific indices. The company
also received the National Association of Real
Estate Investment Trusts (NAREIT) Industrial
Leader in the Light Award for the fourth year ina row and was ranked as one of the Global
100 Most Sustainable Corporations in theWorld for seven consecutive years.

• NAREIT: 2015 Industrial Leader in the Light Award• Newsweek: Top Green Companies in the U.S. 2015
• San Francisco Business Times Most Influential Women—Tracy Ward

12

TAKINGRESPONSIBILITYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPTakingResponsibility
At Prologis, we are committed to environmental
stewardship. We understand the long-lasting impacts
that our buildings and development activities can haveon the environment. As the global leader in logistics realestate, we develop solutions that allow our business,development and operations—and those of ourcustomers—to grow and thrive while minimizing our
impacts on the planet. Sustainable real estate is not only
the right thing to do, it’s how we do business. Read on tolearn more about our approach and activities.

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

ENVIRONMENTAL GOALSAND OBJECTIVESOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Environmental
Goals and
Objectives
Prologis’ environmental goals and objectives
are linked with our strategic business goals
and objectives. As of December 31, 2015,
we made significant progress toward oursustainability goals. We will continue to set
challenging sustainability goals for ourselves,
and track and report our performance against
those goals.
As the completeness and accuracy of ourdata continues to improve, we have bettersightlines for establishing our sustainability
goals. Consequently, we are in the processof evaluating and recalibrating our current
baseline and existing goals based on
improvements in our data collection andreporting processes. We are working toward
creating science-based targets that build
upon our strong foundation of previous
accomplishments.

Prologis Park Pineham, Northampton, UK.

GOAL
100% of new development
designed with a goal ofcertification where recognizedsustainability rating systems
are available

100% energy-efficient lighting
across our operating portfolio

200 MW of solar in our
portfolio by 2020

PROGRESSRESULTS100%

45 new projects comprising 15 MSF
resulting in 68 MSF across 173 projects
in 15 countries

73%
74.5%

73% of our operating portfolio hasenergy-efficient lighting (based on
96% surveyed)

30 MW of solar installations resulting
in 149 MW of total generating capacity

14

HIGH-QUALITY
FACILITIESOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

LEFT: Prologis Park Dunstable, Dunstable, UK. RIGHT: Stapleton Business Center North, Denver, Colorado.

High-Quality Facilities
Prologis is logistics real estate’s leading
operator, with more than 3,200 buildings
comprising 669 million square feet (MSF)(62 million square meters (MM2)) of highquality facilities in the world’s most vibrantcenters of commerce.
Sustainability works best and most seamlessly
when it is incorporated into initial project
design. We take a long-term view and believein the lasting value of high-quality real estate.
Buildings built to the highest sustainability
standards are more efficient to operate,
reducing costs for tenants and encouraging
extended occupancy. Over time, efficientbuildings are better for customers,
investors and communities.

Sustainable Building Certifications

with internationally recognized building
certification ratings systems.

We continue to add sustainable building
certifications to our portfolio, in alignment
with United Nations Sustainable Development
Goal 9 (build resilient infrastructure andpromote sustainable industrialization).
In 2015, we added 15 MSF (1.3 MM2) ofbuilding certifications across 45 projects
in 12 countries. This brings our totalsustainable building certifications to
173 projects in 15 countries comprising
68 MSF (6.3 MM2) certified in accordance

173

TOTAL

sustainable building certifications

Notable sustainable building certifications
added in 2015:• Stapleton North, Denver: the firstindustrial building certified to LEED C&S
2009 in Colorado.
• DC1, Dunstable, UK: secured a final
BREEAM “Outstanding” accreditation,
and was a runner-up at the BREEAM awards
in 2015 based on our design stage rating.

68

MILLION SF

15

COUNTRIES(6.3 million m )215

RENEWABLE
ENERGYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Renewable Energy
Beyond identifying ways to consumeless energy, Prologis is contributing to a
low-carbon future by using our properties
as a platform to generate large volumesof clean electricity. Over the past decade,
Prologis has emerged as a leader in
corporate solar deployment.

149 MW

Enough clean energy to power
22,000 average homes in
9 countries each year

In 2015, Prologis’ solar footprint increased by
30 megawatts (MW), bringing the total to
149 MW in nine countries. That equates toenough clean energy to power approximately
22,000 average homes each year in the ninecountries where these projects are located.
Per the Solar Energy Industries Association,
among non-solar companies in the U.S., only
Walmart has more solar energy-generating
capacity on its rooftops.

Solar panels at a Prologis property in Redlands, California.

Our goal is to surpass 200 MW of solar in our
portfolio by 2020. We continue to monitor our
portfolio for energy opportunities beyond solar,
such as battery storage, to better serve ourcustomers and communities. Our emphasis
on renewable energy puts us in alignment
with United Nations Sustainable Development

Goal 7 (affordable and clean energy). Our focus
on solar and emerging energy technologies is atestament to our commitment to sustainability.
These projects make our electric grids cleaner
while bringing improved economic andenvironmental results that add incremental
value by harnessing previously underused
resources, such as roofs.
16

A GROWINGSOLAR FOOTPRINTOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

A Growing Solar Footprint
Prologis is a leader in distributed generation projects. We contribute to a low-carbon future by using our properties as a platform to generate large volumes of clean electricity.

30MW

Total solar footprint of 149 MW, broken down by region as follows:

North America

increase in solar footprint
from 2014 to 2015

Asia
Europe149 MW

71%
16%
13%

106 MW
24 MW
19 MW

Total 149 MW

78 MW
Equivalent number of homes powered per region per year*:

2011

2015

91%

increase in generating
capacity from 2011-2015

Asia

4,792

Europe6,265

North America

11,218*Home equivalencies based on average household power consumption by country in the World Energy Council's Energy Efficiency Indicators (2014 values).

17

EFFICIENT
LIGHTING

OUR APPROACH

Efficient Lighting
Lighting is typically the largest electrical loadin a distribution center, accounting for up to
two-thirds of electricity use. While most of
our facilities already have efficient fluorescentlighting, in early 2016 Prologis made LED
lighting standard in all new development
projects and lighting retrofits in the Americas,
the UK and Japan.
This industry-leading move complements
past progress in efficient lighting, with
73 percent of our global operating portfolio
by area using energy-efficient fixtures at
year-end 2015 (up from 68 percent in 2014).
We estimate our global portfolio to be
22 percent more lighting-efficient per
operating hour than prevailing U.S. codes,
translating into cost savings for our customers.

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITY

of our global
operating portfolio
has efficient lighting®

LED Standard: A Competitive Advantage
By moving to an LED standard, Prologis is leading the industry and providing the benefits enumerated below.

Minimum

35%

5-7x

more energy efficient

longer life

• At least 35% more energy
efficient than traditional
warehouse lighting types• Enhanced sensing andcontrols can increaseenergy savings• Long fixture life
with low light-level
degradation• Significant
maintenance savings• Exterior LEDs
reduce common area
electricity costs• Improved controllability
and instant on-off-on• Better light quality
and color rendition• Reduced electricalinfrastructure costs

73%

ETHICS AND GOVERNANCE• Longer, better
product warranties• Lower radiated heat

• Fixtures free oflead and mercury• Reduced GHG emissions

Customers

Environment

Prologis

18

ENERGY
EFFICIENCYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Energy Efficiency
Cool Roofs
We continue to install reflective roofing (coolroofs) on our buildings. A cool roof is one thathas been designed to reflect more sunlightand absorb less heat than a standard roof
through its white, reflective surface. Coolroofs can reduce roof surface temperatures
significantly, which in turn reduces a building’s
indoor air temperature.
Cool roofs also lessen the intensity of theurban heat island effect—the warming of the
air that occurs as the sun’s heat is absorbed byroads, buildings and rooftops. With nearly halfof the world’s population living in urban areas,
cool roofs benefit communities by helping tolower regional temperatures.

31%

of our total operating portfolio
has reflective roofing

Prologis Suzhou Xuguan Logistics Center, Suzhou, China.

Consumption Monitoring
Ideally, we would have full and open accessto our customers’ energy consumption data
for all of the buildings across our global
portfolio. In Europe and Asia, we typicallyhave access to our customers’ energy usage
data as landlords normally hold the main
utility accounts and reconcile consumption bycustomer. However, in the U.S., the majority of
our leases are triple net—this means that ourcustomers are responsible for paying their own
energy bills, making it more difficult for us toobtain this information. We continue to explore
opportunities to improve our access to energy
consumption data, as it will allow us to better
benchmark our performance and inform ourretrofit investment decisions.

Where we have access to whole-building
data, we enter and track energy, GHG
emissions and water and waste data
through the Urban Land Institute (ULI)
Greenprint Center for Building Performance’s
environmental management platform.
Prologis reported 2014 energy data for
611 properties to Greenprint, including
447 properties for which we had consistentyear-over-year information. Energy usage
decreased 7.6 percent, while emissions
decreased 3.7 percent from 2013 to 2014
on a like-for-like basis. When normalized for
occupancy, the energy use intensity is72.2 KWh/m2 in 2013 and 67.3 KWh/m2 in
2014. For these properties, 2014 building
energy intensity was 76 kWh/m2/year and GHG
emissions intensity was 28 kg CO2e/m2/year.

19

RESILIENT
BUILDINGSOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

Prologis Park Ichikawa, Chiba, Japan.

“

Resilient Buildings
Prologis leads the industry in innovative design
and technology solutions that increase theresilience of our buildings in areas with severe
weather hazards and high seismic activity.
Resilient facilities can reduce cleanup waste
associated with damage or loss following anatural disaster, as well as the environmental
costs associated with making repairs to or
rebuilding a damaged facility. A good example
is Japan’s Prologis Park Koga 1, which cameonline in 2015. This building uses a seismic
isolation system to reduce the roll effect during
an earthquake. The system ensures the safetyof people working in the facility, as well as theprotection of stored goods.

We maintain detailed emergency response andcommunications plans for every building in our
global portfolio, as well as construction crews
on standby and a supply of building materials
for emergency repairs in areas subject tonatural hazards. We make every effort to
relocate our customers to temporary spaces
at other Prologis buildings as needed. Our
disaster recovery plans were put to the testwhen Hurricane Patricia hit the West Coastof Mexico in October 2015, but with advanceplanning and rapid post-storm deployment,
Prologis’ operations came through without
serious damage or interruption.

Sustainability forus entails thinking
about and planningfor the longer term.
Resilient buildings
are a great exampleof how we work toalign with the needs
and considerationsof our customers, ourcommunities and theenvironment.

”

Jack Rizzo, Managing Director, Global Construction
and Development Services®

CASE STUDY:
WATER CONSERVATIONOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

A Master Gardener’s
Passion for the Environment
Saves Water at Work andin her Community
San Antonio, Texas, is suffering from a record-breaking five-year drought.
Formerly lush river-irrigated lands surrounding the city are now dry.
The situation is so severe that the San Antonio Water System posts
aquifer levels and water restrictions daily.

“

Prologis works across its operations to minimize environmental impacts.
Low-water operational solutions, including drought-tolerant landscaping
and xeriscaping, balance positive visual impact on the community withconservation of limited and precious fresh water resources.

Every drop of water counts. You startwith that, make it work and keep yourfocus on it.

”

Cappy Bird, Prologis Senior Property Manager

Cappy Bird, Prologis senior property manager, faced personal andprofessional challenges as a consequence of the drought. Bird is amember of the Bexar County Master Gardeners Association and a Master
Gardener—a distinction she earned by virtue of her training in horticulture.
She volunteers to educate others in her community, a role that became
more critical as gardens and vegetation all but disappeared. Bird also
manages 12 Prologis properties in drought-stricken San Antonio.

®

CASE STUDY(CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

variable amounts of water to determine which plants have the best ability
to survive drought conditions when daily temperatures reach 100 degrees
or more during central Texas’ steamy summers.
As part of her training, Bird has committed to contribute 20 hours ofcommunity service. Prologis supports her in this endeavor through the
Employee Volunteer Program, which gives employees one day per year tovolunteer during regular business hours with the nonprofit of their choice.

Senior Property Manager Cappy Bird walks the landscaped grounds at a Prologis property
in San Antonio, Texas.

Bird is determined to learn everything she can about water conservationand put that knowledge to work on the job and in her community. Says
Bird, “Water conservation is about more than reacting. It’s finding andmaking ongoing changes for long-term solutions.”
Bird took the initiative to complete a three-day Irrigation Efficiency
Training course, and she has applied her newfound skills at work. She isconducting seminars for Prologis property managers, maintenance techs
and landscaping and irrigation vendors in the San Antonio area to ensure
they are conserving every drop of water they can. The training teaches
participants how to determine if irrigation controllers are set properly, ifwater heads for properties with landscaping are appropriate and how tocheck for and fix leaks.

For one of the Prologis properties that Bird oversees, Prologis Park Perrin
Creek, the right materials for landscaping turned out to be rocks—andno vegetation whatsoever—to reduce water usage. “I want to conserve
every drop possible,” Bird said. The property comprises eight buildings
totaling 482,020 square feet.

Bird’s innovative, sustainable and beautiful rockscapesaves the company and the community more than
1.4 million gallons of water annually.

Bird is currently working with a landscape designer to deploy rockscaping
for a new Prologis property. “Of course, it’s nice to have things look pretty
for new buildings, but trees and plants might die and are very expensive
to replace,” she says. “It’s about maintaining a long-term perspective toconserve water for other purposes.”Working with Texas A&M, Bird has been involved in a droughtsustainability study project that evaluated 1,600 native plants using four

22

LOCATION STRATEGY:BROWNFIELD AND INFILLOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

Prologis Pulaski Distribution Center, Jersey City, New Jersey.

Location Strategy: Brownfield and Infill
Our forward-looking approach to development
means that we are where the action istoday and where it’s going tomorrow. Our
location strategies are purposeful. We arecontinuously assessing markets and facilities
to ensure that we are in the best possible
position to help our customers streamline
their supply chains and run their businesses
more efficiently.
Our brownfield redevelopment and infill
strategies help customers meet theirbusiness needs while sparing costs andminimizing GHG emissions. We target
buildings and development opportunities inlocations close to major transportation hubs,
such as ports, airports, railways and highways.

We also look for locations in vibrantcenters of global commerce, close to
our customers’ customers.
Often, the development of urban infill
properties involves the cleanup ofbrownfield sites with a legacy ofenvironmental contamination. We see thelong-term value in these sites and work
closely with local communities, investingin plans and taking the steps necessary toreturn environmentally impaired properties
to productive use. Our brownfield and infill
strategies complement the needs andrequirements of communities by providing
infrastructure improvements such as roads,
wastewater treatment, and other upgrades.

“

Our infill locations
ensure efficient delivery
while helping to reduce
environmental impacts
for urban communities.
At the same time,changing demographics
and supply constraints
may also lead to valueadded conversion
opportunities.

”

Mark Hansen, Managing Director, Investment
Officer, Value Added Investments®

CASE STUDY:
BROWNFIELD DEVELOPMENT

OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

Sustainable Values Applied
to new Development“

Prologis Park Moissy 2, well-locatedto serve metropolitan Paris, is the firstlogistics building in France to combine
so many sustainable features.

”

Olivier Barge, Vice President, Head of Regional Development, Prologis France,
and Regional Head, Project Management, for Prologis Southern Europe

Prologis Park Moissy 2 has two buildings comprising 1.2 MSF (113,000
square meters) under development. At full build-out, the park will include
up to five buildings comprising 240,000 square meters of Class-A logistics
space. The park, one of France’s first single-owner, master-planned parks,
is located in the city of Moissy-Cramayel in Seine-et-Marne just southof Paris with easy access to the city’s outer ring road. Moissy 2 is wellpositioned to serve metropolitan Paris, as well as the newer towns andemerging developments surrounding the city.

Brownfield Development and Recycling
Prologis Park Moissy 2 is a brownfield development previously owned by
Peugeot. The car manufacturer used the facility as a storage center for
replacement auto parts. According to Olivier Barge, “Most of the original
buildings have been demolished to make room for new Class-A logistics
facilities. Old concrete, metal and other materials were recycled andreused for new construction and roads.”®

CASE STUDY(CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Prologis Park Moissy 2 sits above a protected water table. Barge explains,“One of the challenges we faced during development was a municipal
requirement that our property not add to the already over-burdened publicstorm water run-off system. Flood risk was simply too high.”

The project is designed to improve thesurrounding environment through the installationof hives for bees and shelters for local fauna.

The development team took an integrated approach to minimizing thenew park’s impact on the surrounding ecosystem. According to Barge,“We collaborated with the Water Agency of Seine Normandie to ensurethat our presence wouldn’t negatively impact the area.” The teamdefined two objectives for storm water management: maximizing theretention of storm water within park boundaries and filtering storm
water to reduce pollutants and deliver it to the water table withcontaminants minimized. Prologis ultimately implemented a storm water
management system that directs storm water to ditches and green
hollows near water-resistant areas such as parking lots and roads.
Biodiversity is another important aspect of the project. Prologis is amember of Conseil International Biodiversité et Immobilier (CIBI), an
organization committed to enhancing urban biodiversity. Prologis Park
Moissy 2 is designed to improve the surrounding environment throughthe installation of hives for bees and shelters for various local fauna,as well as eco-friendly landscaping in accordance with CIBI criteria.

Olivier Barge discusses sustainability services with François Comaita, Head of Leasing forFrance, in the company’s Paris office.

During the park’s design phase, the Prologis team used the Dynamic
Energy Simulation Model—an innovative process that allows customers
to proactively reduce future energy consumption and associated costs byabout 25 to 35 percent. “We are currently the only logistics real estatecompany in France to use this system,” says Barge. “Customers are
surprised and pleased by the efficiency and cost savings they can achieve.”
This new Prologis building will be BREEAM “Very Good”accredited.

25

COMMITMENT TO SUSTAINABILITYIN OUR OPERATIONSOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

A Prologis employee bikes to work at our Solihull, UK, office.

Commitment to Sustainability in Our Operations
Our commitment to sustainability is equallystrong for our own operations. We address
climate change proactively. Prologis is firmlyaligned with United Nations Sustainable
Development Goal 13 (taking urgent action
to combat climate change and its impacts),
and we are proud to be one of 150 major
companies to sign the White House’s
American Business Act for Climate Pledge
in December 2015. We intend to lead ourindustry as we move toward a net-zerocarbon world. We have identified and are

implementing a number of strategies toreduce GHG emissions across our business
operations, from the energy consumed in
our offices to the way we travel to work. We
endeavor to use locally sourced materials
and local contractors in our own supply chain,
thereby decreasing transportation and shipping
distances and further diminishing our impacts.
Our employees are key partners in these
efforts. We encourage and support our teammembers around the world to champion

energy, waste and water-use reductions tosave costs and reduce our carbon footprint.
Prologis Green Path, our internal sustainability
program, is designed to engage employees
in sustainable practices through the courseof their daily work. Green Path members
represent every office globally and interact
regularly with our Sustainability team,
helping to make environmental stewardshipan everyday event.

26

CORPORATE CARBON
FOOTPRINT REPORTING

OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Corporate Carbon
Footprint Reporting
Prologis has been reporting our corporate
GHG inventory annually since 2006 to The
Climate Registry and to CDP. These widely
recognized, voluntary and leading GHG
registries help businesses measure, track
and report annual GHG emissions.
Prologis exceeded our CDP Industry Group
Average of 87 by 11 points. We also improved
our CDP Disclosure Score by 12 points
year-over-year, moving from 86 to 98. The
Disclosure Score measures a company’s levelof transparency in its response. Our improved
score demonstrates our commitment totransparency and disclosure in quantifying
impacts related to our corporate operations
and real estate portfolio.
We turn to carbon offset projects andRenewable Energy Credits (RECs) only
after we have done everything we can toreduce our GHG emissions. We recognize
the importance of these programs to makeup for impacts we cannot currently mitigate.
Carbon offsets invest in real, on-the-groundprojects that would not move forward without

Prologis Park Terra Francesco, Ontario, California.

carbon financing. Typically, these projects
have sustainability benefits beyond reducing
GHG emissions, such as improving air quality,
human health, energy consumption andmore. RECs are a mechanism for purchasing
renewable energy that is either added to or
pulled from the grid.
In 2015, we offset 100 percent of our 2014
Scope 1 GHG emissions with carbon offsetsfrom the JB Hunt Intermodal carbon offset
project, which is industry-relevant because
its mandate is to improve the efficiency
of intermodal freight transport. In 2015,
we purchased RECs through our partner,
Renewable Choice Energy, to offset 100
percent of our 2014 purchased electricity for
our Denver and San Francisco offices.

100%

of 2014 headquarter offices’
Scope 1 GHG emissions andpurchased electricity offset by
the purchase of carbon offsets
and Renewable Energy Credits

This certificate represents the purchase of

2,461.00 MtCO2e

from Renewable Choice Energy on behalf of

Prologis - 2014 Scope 1 Emissions
Their purchase helps avoid up to

5,425,570 lbs. of CO2

from entering the atmosphere annually.

December 16, 2015
Quayle Hodek, Chief Executive Officer

Date

2015

27

CORPORATE CARBON
FOOTPRINT REPORTING (CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPTo measure our progress, we calculateannual GHG emissions for our corporate
and regional offices across six categories
of emissions sources as defined by the
GHG Protocol:

Greenhouse Gas Emissions Summary• Scope 1: Direct emissions from sources
owned or controlled by Prologis, suchas natural gas used to heat our offices,
fugitive emissions from refrigerants and thegasoline used in our vehicle fleet• Scope 2: Indirect emissions
associated with consumption ofpurchased electricity and gas• Scope 3: All other indirect emissions notincluded in Scope 2, such as business travel(air travel, rental cars, hotels and public
transportation), personal vehicle use forbusiness travel and employee commute
In 2015, we partnered with Anthesis Mosaic
to calculate our carbon footprint and trackdata annually in their web-based platform. The
platform performs all of the conversions andcalculations necessary to turn our raw data
into a GHG inventory that is compliant withinternational protocols. As part of our process
to develop the 2015 inventory, we assessed
each methodology and calculation and madeseveral changes to make the entire process
more efficient going forward.

SOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

2013

2014

2015

Change from2014 to 2015

Scope 1

2,159

2,461

2,264

-197

Scope 2

5,796

5,361

4,754

-607

Scope 3

8,231

9,834

7,835

-1,999Total

16,186

17,656

14,853-2,803

11

12

9

-3

MTCO2e* / FTE®

*Metric Tons of Carbon Emissions (MTCO2e)

Given the confidence in our 2015 inventory
in terms of accuracy and completeness,and that we are quickly approaching 2020,
we plan to change our baseline year to2015 and extend our goal to 2025. Overthe next few months we will conduct anin-depth assessment of our emissions andreduction trends and possibly set a sciencebased target. We will also recalculate allprevious inventories to ensure consistency
looking back and going forward and to help
in setting a more meaningful goal for 2025.
To meet our new goal, we will continue toidentify and implement sustainable businesspractices and further engage our employees
in our sustainability initiatives and emissions
reduction strategies.
The results of our 2015 GHG inventory,
without the recalculation of the previous

inventories, reveal a 16-percent decreasein emissions from 2014 to 2015. Scope 1
emissions decreased 8 percent, while
Scope 2 emissions decreased 11 percent.
Revised methodologies play a significant
role in these reductions and will be better
assessed after our recalculation. Scope
2 emissions reductions related to officeelectricity can be attributed partly tocompletion of our data center consolidation
project and the positive effects of employees
taking simple steps to save energy, suchas turning off lights and monitoring building
temperatures.
We report our operational carbon footprint to
the CDP, and our Scope 1, 2 and 3 emissions
are verified independently by DNV GL. See
page 48 for our Assurance Statement.

28

BUILDING LASTING
RELATIONSHIPSOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITY

Building Lasting
Relationships
At Prologis, social responsibility means setting
expectations for excellence in how we interact withpeople. Our commitment to social responsibility extends
to all of our stakeholders—employees, customers,
communities, suppliers and investors.
We strive to be a good neighbor and work to strengthen
the communities where we work and live. Our employees
demonstrate their personal commitment by putting
time and resources into organizations that promote
educational, environmental and social well-being.

SOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

OUR
EMPLOYEESOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITY

Our Employees
At Prologis, our employees are the key toour success. Every day, our employees work
together to turn focused strategy into marketleading performance, collaborating across alllevels of the organization to make the best
possible decisions for our customers,
our communities and our business. Every
employee plays an essential role in ensuring
the enduring value of our company. Ours is an
inclusive workplace where every employee
contributes, every employee is valued, andevery employee belongs.
Prologis’ dedicated employees are powerfulambassadors for sustainability. Through theirefforts—whether finding innovative solutions
to technical energy challenges, tackling
wasteful operational practices or volunteering
within their communities—Prologis
employees embody the forward-looking
spirit of our company.

ETHICS AND GOVERNANCE®

We believe that hiring employees with abroad range of experiences and perspectives
gives us an advantage in understanding andmeeting the needs of customers and otherstakeholders. We want the best talent,
wherever we can find it, and through a cultureof accountability and empowerment, seek tocreate an environment where every employee
feels they can contribute freely to the overall
success of the organization. As an equal
opportunity employer, our goal is consistentand fair policies that recognize and respect
cultural differences.
Gender diversity continues to be an importantarea of focus for Prologis. We know thattalent is distributed equally between womenand men. Our Breakthrough network,
launched in 2014, is designed to movethe needle for gender diversity throughcore human resources processes, training
programs, coaching, mentoring and culturechanges designed to ensure that inclusive
practices are the norm.

Employees

Americas

Europe

Asia

Men

800

457

181

162

Women

798

499

195

104

38.9% of men and25.9% of women
have supervisory roles

TOP: Property Administrator Neely Johnson analyzing data in the company’s San Antonio, Texas, office. MIDDLE: Employees at thePrologis corporate headquarters in San Francisco, California. BOTTOM: Lele Tang, Transaction Analyst for Prologis China, presents
the regional portfolio in the company’s Shanghai, China, office.

30

CASE STUDY:
BREAKTHROUGH NETWORKOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

Women Leaders Find Support
and Opportunity at Prologis
Logistics real estate has long been male-dominated. Breakthrough,a Prologis network designed to promote gender diversity and ensure
gender equity within the company and across the industry, was founded
on a simple premise. “Women represent half the population and half
the talent pool,” says Ed Nekritz, Prologis’ chief legal officer and general
counsel and Breakthrough board member.

“

Together, we are striving
for excellence.

”

Grace Leung, Vice President, Development, Prologis China

According to Tracy Ward, SVP, Investor Relations, Breakthrough co-founderand current board member, “For the companies that are here to stay,the companies of enduring excellence, attracting and developing female
leaders is a key business strategy.”
Grace Leung is succeeding in one of the most male-dominated of all realestate disciplines—development. Leung graduated from UC Berkeley in1985 with a degree in architecture. Her undergraduate design work on an
Oakland, California, community center won her a job straight out of school.

®

CASE STUDY(CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Despite Leung’s strong career start, she did not always feel thatthe wind was at her back. Early in her career, during a stint at anarchitecture firm, a particularly demanding client expressed doubt
about Leung’s ability to handle an important project. Says Leung,“That experience taught me that people who aren’t familiar withyour work may have reservations. However, once they work withyou and see that you deliver, their concerns are erased really fast.”
Leung balances her commitment to serve customers and deliver
strong returns to investors with equal emphasis on all dimensions ofsustainability. Her focus on problem-solving and accomplishment has
served her well in her career. She is the driving force behind Prologis’
first LEED certification in China, at Huiyang. In Huiyang and again in
Beijing, she deployed LED exterior lighting. For Prologis’ new officein China, she reduced energy use with a combination of LED andT5 lighting, and she sourced furnishings and finished materials freeof volatile organic compounds—doing right by her coworkers andthe environment. Leung collaborates with local planning authorities
to improve the aesthetic impact of her projects on surrounding
neighborhoods. In all that she does, she ensures that her work isof the highest caliber and that her employees are fully engaged.
“My major accomplishment is finding the right talent and coaching mybest performers,” says Leung. “Without capable professionals who are
passionate team players, we will not be able to deliver quality projects
and meet our goals.”
Leung is currently guiding her team up the learning curve to master
designing for resilience and sustainability in China.
“Together, we are striving for excellence,” she says. “Our goal is to be
the best in our business.”
TOP: Huizhou Huiyang Logistics Center, Huizhou, China.
BOTTOM: Grace Leung engages with a colleague in our Shanghai, China, office.

32

EMPLOYEEENGAGEMENTOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

Employees from Mexico City after another successful IMPACT Day project.

“

Employee Engagement
Employee engagement is a widely usedmeasure of the commitment employees
feel toward their organization. This is an
important area of focus at Prologis. It isessential to our culture and success that ouremployees care about their work and are
excited by the company’s mission, values andstrategies. Results from our latest employee
engagement survey, conducted in June 2015,
show Prologis employees are highly engaged
compared to benchmarks and peers.

Among the company’s top strengths are ourinvolvement in community service and ourcommitment to environmental responsibility.
These findings reinforce our belief that our
dedication to sustainability is an important
contributor both to employee engagement
and to attracting top talent. We will continue
to assess employee engagement and commit
to working to improve areas where we havethe opportunity to do better.

PERCENTAGE OF EMPLOYEES WHO AGREE OR STRONGLY AGREE
It is important to me
to work for an environmentally
responsible company.

I am proud of Prologis’
involvement in the communityand social causes.

It is important to me
to volunteer and participate
in community service.

86%

86%

75%

Corporate responsibility
and commitment
are very important toour ability to recruit,engage and retain great
employees.

”

Diana Scott, Prologis Chief Human Resources Officer®

EMPLOYEE VOLUNTEERISMAND GIVINGOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Employees participate in the company’s annual IMPACT Day, a full day for all employees to volunteer at local charities.

Employee
Volunteerism
and Giving
A spirit of volunteerism and giving is deeply
ingrained in Prologis’ culture. It is one of theattributes of which we are most proud.
We encourage our employees to volunteer,
giving them company and personal time
to devote to nonprofit and charitableorganizations. The Prologis Foundation,founded in 2001, seeks to improve thewell-being of communities around the world
through a wide range of vehicles, such as
financial grants and donations, matching gifts,
Dollars for Doers and disaster relief.

IMPACT DAY: OUR GLOBAL DAY OF SERVICE

1,400

Employees volunteered

7,000

Total volunteer hours

Employee volunteerism• Every year, each employee is given
two business days to volunteer atcompany-sponsored events andone business day to volunteer at theorganization of the employee’s choice

Charitable donations• More than $1.5 million in grants, donations
and matching gifts donated by Prologis

65

Nonprofit organizations
benefited

and the Prologis Foundation to nonprofit
organizations in support of educational,
environmental and social causes• 105 months of rent-free space to
18 nonprofits, totaling more than
$1 million in donated rent as part ofour Space for Good program• $100,000 to Mercy Corps to help withdisaster relief efforts after the April 2015
Nepal earthquake

34

CASE STUDY: PROLOGISUK GREEN GROUPOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

UK Office Manager
Brings Carbon Footprint
Focus to the Office
Prologis’ office in Solihull, UK, is not new, and it doesn’t have the latest
state-of-the-art sustainable design features. Nonetheless, one visionary
employee from that office is leading a team of fellow employees to
identify and implement strategies to reduce the office’s carbon footprint.

“

You’ve got to be seen doing theright thing in your own offices aswell as those you’re building forother people.

”

Julie Bunce, Prologis Office Manager and Green Group champion

Prologis UK has a strong history of taking action on climate change.
The team formed a partnership with the environmental charity
Cool Earth which has resulted in offsetting embodied carbon emissions
from more than 20 UK developments and protecting more than
6,000 acres of South American rainforest. Closer to home, Prologis UK
promotes sustainability through educational workshops and a uniquesustainability curriculum delivered at more than 30 schools in areas
where it has operations.
According to Julie Bunce, “Extending our sustainability mindset
into the Solihull office represented the next step in a natural progression.”
Bunce has championed corporate responsibility and sustainability eversince she started with Prologis more than 10 years ago. “You see somuch waste in an office environment. There must
be some things we can do.”®

CASE STUDY:(CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Julie Bunce meets with colleagues in Solihull, UK.

Prologis’ network of site-based teams, known as Sustainability
Champions, or Green Group Champions in the UK, advanceenvironmental stewardship and social responsibility efforts by engaging
their fellow employees in projects and programs that advance locally
relevant goals and strategies. Julie Bunce is one of Prologis UK’s GreenGroup Champions.
Bunce commissioned an employee survey to gauge interest in
sustainability. She was pleasantly surprised to discover that Solihull
employees demonstrated strong interest—almost twice the national
average compared to similar surveys conducted in the UK Bunce createda Green Group and hosted the group’s first meeting in late 2015 with aworkshop to explore simple, low-cost ways to reduce the office’s waste
and carbon footprint. The team came up with many ideas that are poised
to begin in mid-2016.

Green Group Champions
engage fellow employees in advancing environmental
stewardship and social responsibility projects.

Bunce describes her gratification in working with fellow Green Group
employees: “It’s quite exciting to see so many people, when it used to bejust me. Having a group helps us do so much more.” As to what motivates
her to take on the extra work, she says, “We’re lucky here— we can lookout our windows and see trees and fields. And it’s up to us to look afterthat properly.”

36

LEARNING AND
DEVELOPMENT

OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Learning andDevelopment
Our learning and development program
offers all employees the opportunity forlifelong learning. Focus areas include career
enrichment, talent management, leadershipdevelopment and real estate and technicaltraining. We actively pursue a policy oflateral role changes to respond to employeesinterested in broader exposure to thebusiness. We believe the value generated bythese programs goes beyond the individual.
It is in the company’s best business interest
to build skills and aptitude for learning in our
workforce. Better educated employees are
better equipped to ensure the future growthand value of our company. Further, developing
skills and talents allows individuals to thrive,
leading to better opportunities and greater
disposable income—thereby benefiting thecommunities where they live and work.

Onsite learning opportunities help employees broaden their skills.

TRAINING

14 hoursof training per employee
per year on average

500

COURSESavailable to our employees

100%of employees receive
regular performance andcareer development feedback

37

EMPLOYEE BENEFITS
AND WELL-BEING

OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Employee Benefits and Well-Being
Compensation and Equal Pay

Wellness Initiatives

Prologis employees receive a benefits packagethat includes time off and holiday pay, healthcoverage, retirement savings plans, life anddisability insurance, continuing education
opportunities and wellness programs. Relativecompensation among women and men incomparable roles at Prologis is consistent.
We plan to continue to develop our analyticalcapabilities so that in the future we canprovide more detailed breakdowns of relativecompensation that take into account factors
such as tenure, career experience and more.

We are committed to the total well-being of
our employees. Prologis’ wellness programs
support and motivate our colleagues acrossthe globe in their pursuit of a healthy lifestyle.
In 2015, we held our annual Healthy Steps
challenge, wherein global teams compete
for prizes based on a goal of walking
10,000 steps per day. In 2016, we will launch
Activate, a new individualized wellness
initiative for our U.S.-based employees.

As part of the Prologis culture of caring, weare committed to providing a safe and healthy
working environment for every employee.

20,350

STEPS

per day walked by 24 employees during
the eight-week Healthy Steps challenge

320 million

steps walked by 567 Prologis employees
during the company’s 2015 Healthy Steps challenge

TOP: Prologis employees review property blueprints in the Columbus, Ohio, office.
BOTTOM: A comprehensive benefits program assists employees with health, well-being and financial security.

38

ACTING WITH
INTEGRITYOUR APPROACHETHICS AND GOVERNANCE

Acting with
Integrity
Integrity in all business matters is our promise. Prologis
is committed to upholding the strictest ethical standards
and compliance in all business dealings. Our governancestructure includes built-in checks and balances to ensureaccountability and transparency. The following sections
describe how we ensure transparency and openness ofreporting; manage corruption, bribery and non-compliancerisks; and safeguard the integrity of our supply chain.

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

TRANSPARENCY
AND INTEGRITYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Transparency
and Reporting
Our corporate governance practices createa culture of enduring and uncompromising
integrity. The board of directors has
established high standards for employees,
officers and directors. Our board comprises
10 annually elected members, nine of whom
are independent, including our lead director.
Oversight of sustainability resides withthe board’s Governance and Nomination
Committee. This committee receives acomprehensive annual update on Prologis’sustainability program.
For a complete description of Prologis’
corporate governance practices and ourapproach to risk management, please refer
to our 2016 Proxy Statement and our 2015
Form 10-K, or visit the Investor Relations
page on our corporate website.
Our goal is transparent communication onsustainability-related issues, programs,
goals, data and progress. We regularly reporton environmental, social and governanceissues to a number of widely recognizedsustainability reporting organizations
such as CDP for our carbon footprint, thePrologis Park Pineham, North Hampton, UK.

Dow Jones Sustainability Indices (DJSI)
and the Global Real Estate Sustainability
Benchmark (GRESB). In addition, we provide
comprehensive public disclosures through ourannual Sustainability Report.

employees. Employees will not engage in
conduct or activity that would raise questions
about the company’s honesty, impartiality or
reputation or otherwise cause embarrassment
to the company.

Competitive
Behavior andNoncompliance

The Prologis board of directors has adopted
a Code of Ethics and Business Conduct andan Anti-Corruption Policy, which is applicable
to all employees and the board. The Codecan be viewed on our website and is available
on our company’s intranet. When they join
Prologis, each employee reads and signs theiracknowledgment and acceptance of ourCode of Ethics and Business Conduct. Our
Code of Ethics and Business Conduct and
our Global Anti-Corruption and Foreign Corrupt
Practices Act Policies have been translated into
16 languages to ensure that these documents
are well-understood by Prologis employees
around the world. For more information,
see the 2015 Prologis Annual Reportand 2016 Prologis Proxy Statement.

Prologis’ reputation is our most critical asset.
As a company known for integrity and highethical standards, we conduct business fairly,
in an ethical manner that is in full compliancewith all laws and regulations. Integrity is thefoundation for all company relationships,
including those with customers, suppliersand communities as well as those among

40

ANTI-CORRUPTION
AND BRIBERYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Anti-Corruption
and Bribery
Acting responsibly is integral to ourcompany culture. It is one of the tenetsthat ensures Prologis’ continued successby strengthening the relationships we havewith our stakeholders and making Prologis abetter place to work. A culture of responsible
behavior fosters goodwill in the communities
in which we operate and generates thefoundation of trust upon which we will build
a better tomorrow.

Prologis has a zero-tolerance
policy for bribery and corruption.

Corruption is an obstacle to trade andundermines fair business practices. Prologis
has a zero-tolerance policy for bribery andcorruption. We act with professionalism,
fairness and integrity in all our businessdealings and relationships globally. Our
employees, officers and board members
receive regular training on our Code of Ethics
and Business Conduct, information security,
global fraud prevention and the Global Anti-

Ethics training ensures professionalism across all relationships and business interactions globally.

Corruption and Foreign Corrupt Practices Act
to ensure they remain current on ethical issues
and corporate expectations.
In 2015, Prologis did not receive any inquiries
directly through our internal Ethics Helpline,
a confidential third-party-administered hotline
for reporting suspected Code of Conduct
violations. Prologis received 18 inquiries

for suspected Code of Conduct violations
through regular communication channels
with management. Of these, 12 were
unsubstantiated inquiries. For each of thesix substantiated inquiries, appropriate action
was taken and the matters are consideredlargely resolved. We had no breaches ofantitrust in 2015.

41

CASE STUDY: ETHICSTRAINING GLOBALLYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

Compliance Officer
Champions Ethics Education
Across the Globe
Ethical behavior, which is integral to Prologis’ culture, helps to ensure
the company’s enduring success. The company trains employees torecognize and respond to ethical concerns by considering impacts to thefull range of stakeholders, selecting the best path forward and escalating
as appropriate. Prologis’ robust ethics education program—tailored
to meet the needs of employees in every country where we dobusiness—is designed to identify and prevent issues before they arise.

“

We view our reputation as oneof our most critical assets.

”

Claire Hanselmann, Vice President, Global Compliance Officer

Training, which is delivered in an employee’s native language wheneverpossible and with the assistance of local experts as needed, ismandatory for all Prologis employees across the globe. The company
is committed to ensuring that all employees benefit from the samehigh level of training and keen awareness of ethical considerations. In
addition, employees receive supplemental, in-person training basedon their department or job function—for example, capital raising,cybersecurity, sexual harassment and discrimination.
As part of our commitment to ethics, in 2015, Prologis created a uniquerole accountable for delivering ethics training across the company. Claire
Hanselmann, global compliance officer, fills that role. She is excitedabout educating employees, delivering training and ensuring Prologis
adheres to the highest possible ethical standards.

®

CASE STUDY(CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Claire Hanselmann, Global Compliance Officer, speaks with a colleague at the company’s operations headquarters in Denver, Colorado.

One of Hanselmann’s 2015 projects was delivering in-person ethics training
focused on anti-corruption measures to more than 100 employees in Mexico
City. Attendees included employees in roles that ranged from maintenancetechnician to accountant to senior executive. Hanselmann presented
hypothetical situations using real-world examples for the group to deliberate.
According to Hanselmann, “The discussion was robust and interactive.
We looked at appropriate, ethical ways for employees to respond to red
flags and difficult situations.”
She also pointed out that having a co-trainer who spoke Spanish madea big difference to the level of engagement in group discussions. Similar
in-person training with in-language co-facilitation was delivered to
38 employees in São Paulo, Brazil.
Ethics education is provided in every country in which Prologis does
business. In addition, there is a strong local focus on ethics awarenessand behavior in all Prologis offices. Some training is completed via videoconference. For example, 110 China employees were trained with Claire
leading the session via video conference and one of the Prologis lawyers
for the country supporting her in-person to ease facilitation and ensure
local understanding.

Nearly 500 employees have participated in video conference training
in the Netherlands, the UK, Romania, Spain, France, Germany, Poland,
Hungary, Italy and the Czech Republic.

1,589 employees certified to the Code of Ethics
and Business Conduct

In addition, all new employees receive ethics training designed to ensurethat they are aware of and understand the policies set forth in thecompany’s Code of Conduct and Business Ethics and know how best
to respond to any ethical issues that might arise in the course of theireveryday work. Employees also receive quarterly reminders pertinent torelevant ethical topics, including insider trading, gifts and entertainment,
avenues for reporting potential issues and more.

43

CASE STUDY:
TRANSPARENCYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

Dialogue Drives Risk
Management
Jeff Bray, Prologis senior vice president of Global Risk Management,
benchmarks Prologis’ risk culture and framework every year. In 2015,
he moved away from traditional surveys and informal discussions,scheduling formal, one-on-one conversations with senior leaders.
Bray wanted to understand key risks from each leader’s uniquevantage point on the business. From these conversations, areas ofprogress within the company and emerging trends across the industry
became apparent. When Bray presented his findings to the board,they requested that he interview them as well. This resulted in further
hours of conversation with board members.

“

We’re looking beyond today’s risks towhat could come at us tomorrow.
Jeff Bray, Senior Vice President, Global Risk Management”

Bray’s conversations with senior leaders and board members told aconsistent story: “Protecting our reputation as a leading real estatecompany and trusted investment partner drives risk awarenessthroughout the company.” Bray adds, “Being a key component ofour customers’ supply chain and upholding our fiduciary obligation to
our investors have created a strong risk culture here at Prologis. Ourstrong risk culture ensures a resilient platform.”
Swapping surveys for interviews provided risk management withclearer sightlines on both current state and future possibilities andensures a current view of the risk landscape. Says Bray, “We continue
to improve relevance and transparency in our dialogue, and we makesure that our findings are actionable.”®

SUPPLY CHAIN
INTEGRITYOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Supply Chain
Integrity
Prologis practices vigilant environmental
stewardship and commits to providing
employees a safe and healthy working
environment. We expect our suppliers toadhere to these same principles. We work
closely with and depend on the work ofgeneral contractors and other suppliers toachieve our business aims, and we take thisopportunity to leverage our culture and values
to ensure a greater good.
In 2013, we launched our Supplier Codeof Conduct. It is now translated into four
languages and written into all of the contracts
that we sign with our suppliers. Prologis willcontinue to develop systems for monitoring
and reviewing supplier adherence to the codeof conduct and report our findings.
Prologis general contractors globally are
required to provide accident and incident data,plus reports on any OSHA or environmental
violations as part of the prequalification
process for working with Prologis. Data iscollected annually, and this information is taken
into consideration, along with factors such ascost and prior project experience, to assess

Prologis Park Pineham, Northampton, UK.

contractor performance in procurement andcontracting decisions. We plan to improve
our processes in the future by automatingprequalification documentation for easieraccess to data and more consistent trackingof suppliers.
Beginning in 2016, Prologis will work with PICS
Auditing (now Avetta) to ensure our suppliers
meet all of Prologis’ requirements: insurance

coverage, safety programs, financial stability,
quality systems, terms and conditions,sustainability, Supplier Code of Conduct andregulatory compliance. The PICS platform
allows us to ensure transparent, effective
supply chain management through a rigorous
prequalification process to improve supplierperformance, validate safety data, increase
operational efficiencies and reduce risk.

45

ABOUT
THIS REPORTOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

®

About
This Report
Prologis Kaiser Distribution Center, Inland Empire, California.

Prologis’ 2015 Sustainability Report provides
an overview of our company’s environmental,social and governance initiatives andsummarizes the progress we’ve made towardmeeting our goals and commitments across
our portfolio and operations. The report is
global in scope and addresses our 2015
activities in the Americas, Europe and Asia.
This report marks our ninth consecutive yearof reporting to GRI’s Sustainability Reporting
Guidelines and the Construction and Real
Estate (CRE) Sector Disclosures. This is ourthird year reporting in accordance with the
GRI G4 Guidelines—Core option. A GRI G4
Content Index is included on page 54, andspecific disclosures are included throughout
the report. Information and data for years prior
to 2015 have been included where available
and relevant.
Prologis has applied GRI’s Reporting Principles
for Defining Report Content. These principles
include GRI’s guidance on defining material

aspects and boundaries to identify the most
relevant environmental, social and governanceimpacts as they pertain to our business andstakeholders. The basis for reporting on
joint ventures, subsidiaries, leased facilities,
outsourced operations and other entities that
can affect period-over-period comparability
is detailed in our 2015 Annual Report and in
our Form 10-K, which is filed with the U.S.
Securities and Exchange Commission andis also available in the SEC Filings section of
Prologis’ website at http://ir.prologis.com/
financial-results/sec-filings.
We provide data for our corporate operations
and for the facilities we own and lease to
our customers. Limitations include occupant
operations on Prologis properties. Although westrive to work with our customers to enhancetheir sustainability measures, their businessactivities fall outside the scope of Prologis’
operational control and thus beyond theboundary of our performance-data reporting.
In addition, we do not report on the businessactivities of entities over which we do not
exercise direct operational control, including
our co-investment and joint venture partners,
service providers, customers, contractors,
suppliers and vendors.
This report has been externally assured by
DNV GL using the AA1000 Assurance Standard(2008). DNV GL interviewed members of
the Prologis executive committee and senior
management to ensure that this reportcomplies with the principles of inclusivity,
materiality and responsiveness. DNV GL
also assessed the reliability of specified
sustainability performance information andverified our 2015 GHG inventory using theWorld Resource Institute and World BusinessCouncil on Sustainable Development
Greenhouse Gas Protocol. Our complete
Assurance Statement is found on page 48.

46

MEMBERSHIPS
AND ASSOCIATIONSOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Memberships and Associations
2015 Memberships• Asia Pacific Real Estate Association (APREA)• Institute of Real Estate Management (IREM)• Society of Industrial & Office Realtors (SIOR)• Association of Industrial Real Estate Brokers (AIRE)• International Facility Management Association (IFMA)• Solar Electric Power Association (SEPA)• Boston College Center for Corporate Citizenship (BCCCC)• Japan Institution of Logistics Systems• Building Owners and Managers Association (BOMA)• National Association of Industrial & Office Parks (NAIOP)• The European Association for Investors in Non-Listed Real
Estate Vehicles (INREV)• Council on Foundations (COF)• National Association of Real Estate Investment Trusts (NAREIT)• German Association for Sustainable Construction (DGNB)• National Brownfield Association• Global Real Estate Sustainability Benchmark (GRESB)• Pension Real Estate Association (PREA)• Global Reporting Initiative (GRI) Organizational Stakeholder• Real Estate Roundtable (RER)• Institute for Sustainability UK Green Building Council (UKGBC)• Retail Industry Leaders Association (RILA)• U.S. Department of Energy’s Better Buildings Challenge
International Facility• U.S. Green Building Council (USGBC)• ULI Greenprint Center for Building Performance• Urban Land Institute (ULI)

47

EXTERNAL ASSURANCESTATEMENTOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Employees in our Columbus, Ohio, office.

External Assurance Statement
Scope and Objectives
DNV GL Business Assurance USA, Inc.
(DNV GL) was commissioned by Prologis
Inc. (Prologis) to conduct independent
assurance of its 2015 Sustainability Report(‘the Report’), as published on the company’s
website at http://www.prologis.com/docs/
Prologis2015SustainabilityReport.pdf.
Our assurance engagement was plannedand carried out in accordance with
AA1000AS (2008), using DNVGL’s VeriSustain
methodology. VeriSustain is based on
our professional experience, international
assurance best practice including AA1000
Assurance Standard, and the Global Reporting
Initiative (GRI) Sustainability Reporting

Guidelines. We understand that the reported
financial data and information are based ondata from Prologis’ 2015 Annual Report, which
are subject to a separate independent audit
process. The review of financial data takenfrom the Annual Report is not within thescope of our work.

• The reliability of specified sustainability
performance information and related claimsin the report for:»» Risk management»» Employee satisfaction, engagement,
benefits and compensation»» Ethics and ethical behavior

We planned and performed our work to obtain
the evidence we considered necessary toprovide a basis for our assurance opinion. We
were engaged to provide Type 2 moderatelevel assurance, with the exception of GHG
emissions which were verified to a reasonablelevel of assurance. Our scope covered:»» Building energy efficiency»» Impact of development on local
community»» 2015 greenhouse gas (GHG) inventory
assertions for Scope 1, 2 and 3 (category
6 and 7) for reporting to the CDP in 2016

• Evaluation of adherence to the AA1000AS(2008) principles of inclusivity, materiality andresponsiveness (the Principles); and48

EXTERNAL ASSURANCESTATEMENT (CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITY

A ‘high level’ of assurance would haverequired additional work at the headquarters
and site level to gain further evidence tosupport the basis of our assurance opinion.
We evaluated the performance data using
the reliability principle as defined below.
We followed the procedures as outlined inthe VeriSustain protocol found at, https://www.dnvgl.co.uk/assurance/reporting/index.html, to complete the project. We
used the Global Reporting Initiative (GRI)
Quality of Information Principles (Balance,
Clarity, Accuracy, Reliability, Timeliness
and Comparability) as criteria for evaluating
performance information, together with
Prologis’ data protocols for how the data
are measured, recorded, and reported. The
verification of GHG emissions were verified
to a reasonable level of assurance using
the World Business Council for Sustainable
Development (WBCSD)/ World Resources
Institute (WRI) greenhouse gas protocol andthe organizational boundaries are all global
sites under Prologis’ operational control. Alldata were verified for the period between
1 January 2015 to 31 December 2015.

Responsibilities of Prologis Inc. andof the Assurance Providers
Prologis has sole responsibility for
preparation of the Report. In performing our

ETHICS AND GOVERNANCE®

assurance work, our responsibility is to the
management of Prologis. Our statement,
however, represents our independent opinion
and is intended to inform all of Prologis’
stakeholders.
DNV GL was not involved in the preparationof any statements or data included in theReport, except for this assurance statement.
This is our tenth year of providing assurance
for Prologis. We adopt a balanced approach
towards all stakeholders when performing ourevaluation.
DNV GL’s assurance engagements are
based on the assumption that the data andinformation provided by the client to us aspart of our review have been provided ingood faith. DNV GL expressly disclaims any
liability or co-responsibility for any decision aperson or an entity may make based on thisAssurance Statement.

Basis of our opinion
A multi-disciplinary team of sustainability
and assurance specialists performed work at
headquarters and site level. We undertook
the following activities:• Review of the current sustainability issues
that could affect Prologis and are ofinterest to stakeholders;

TOP: Prologis office in Columbus, Ohio.
BOTTOM: Prologis corporate headquarters in San Francisco, California.

49

EXTERNAL ASSURANCESTATEMENT (CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

• Review of Prologis’s approachto stakeholder engagement andrecent outputs;• Review of information provided to us by
Prologis on its reporting and management
processes relating to the Principles;• We conducted interviews with a selectionof the senior officers and managers basedin San Francisco, California; Denver,
Colorado; Seattle, Washington; Boston,
Massachusetts; and Tokyo, Japan who areresponsible for areas of management andstakeholder relationships covered by theReport. The objective of these discussions
was to understand top level commitment
and strategy related to sustainability
and Prologis’ governance arrangements,
stakeholder engagement activity,
management priorities, and systems;• We visited one site in development inTokyo, Japan. During the site visit, we
met with the Senior Vice President,
Construction Management; Senior Vice
President, General Counsel & Compliance
Officer; Vice President, Human Resources& Administration; Managing Director, Headof Investor & Public Relations, Human
Resources & Administration, IT; Director,
Operations; Vice President, Global Energy& Development; Representative of thePrimary Service Contractor responsible forconstruction management at the site;

Prologis Meaux Distribution Center, Paris, France.

• We reviewed the specified data collated at
the corporate level, including that gatheredby other parties, and statements madein the Report. We interviewed managers
responsible for internal data validation,
reviewed their work processes, andundertook sample-based audits of theprocesses for generating, gathering, andmanaging the quantitative and qualitative
sustainability data;• We assessed documentation and evidence
that supported and substantiated claims
made in the Report;• We provided feedback on a draft of theReport based on our assurance scope.
Additional activities related to verificationof GHG Scope 1, 2 and 3 (Category 6 and 7)
Emissions• We assessed GHG data information
systems and controls, including:»» Selection and management of all
relevant GHG data and information;»» Processes for collecting, processing,consolidation and report GHG dataand information;»» Systems and processes that ensure theaccuracy of GHG data and information;»» Design and maintenance of the GHG
information system;»» Systems and processes that support the
GHG information system;• We examined the GHG data and information
to develop evidence for the assessment of
the GHG assertions• We evaluated whether the evidence anddata are sufficient and support Prologis’ GHG
inventory assertions.
Our team included: Tom Andresen Gosselin,
Stephanie Alderson, Kim Bach Vu, Natasha
D’Silva and Barbara Toole O’Neil.
50

EXTERNAL ASSURANCESTATEMENT (CONTINUED)OUR APPROACH

Findings
On the basis of the work conducted, nothingcame to our attention to suggest that theReport does not properly describe Prologis’
adherence to the Principles of Inclusivity,
Materiality, and Responsiveness. In termsof the reliability of performance data,
nothing came to our attention to suggestthat these data and claims have not been
properly collated from information reported
at operational level, nor that the assumptions
used were inappropriate.
Prologis’ reported GHG emissions are
14,853 metric tons of CO2e for Scope 1, 2
and 3 (Business Travel and Employee
Commute) were emitted in 2015 from its
global operations. Based on the processes
and procedures conducted we found that
Prologis’ reported GHG emissions arematerially correct and are a fair representationof GHG data and information, and havebeen prepared in accordance with theWorld Business Council for Sustainable
Development (WBCSD)/ World Resources
Institute (WRI) greenhouse gas protocol,
as referenced above.

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITY

Inclusivity: the participation of
stakeholders in developing andachieving an accountable andstrategic response to sustainability.
Based on our review, Prologis has exhibited
proactive engagement both with internaland external stakeholders by encouraging
feedback through multiple avenues, suchas the Employee Engagement Survey,
Customer Experience Initiative, and Customer
Sustainability Roundtable. There is opportunity
to explore a deeper level of engagementwith suppliers beyond current practices.
For example, Prologis has incorporated theSupplier Code of Conduct into all suppliercontracts and has also integrated a new
supply chain management software system to

ETHICS AND GOVERNANCE®

ensure compliance to Prologis’ requirements;
however, there is opportunity to continue toinvestigate ways in which they can proactively
interact with suppliers around sustainability.
For example, Prologis can consider
periodically convening suppliers to increaseawareness of Prologis’ sustainability priorities
in the region, provide a refresh Prologis’ Codeof Conduct and health and safety reporting
requirements, and share best practices
between suppliers.
Prologis underwent a materiality assessment
refresh in 2015 and expanded the assessment
to include a wider range of topics and amore varied group of internal stakeholders.
In order to capture external stakeholder
sentiments, employees who interact with key
stakeholders were surveyed about the topics

Observations
Without affecting our assurance opinion,
we also provide the following observations.

Prologis Park Chanteloup, Moissy-Cramayel, France.

51

EXTERNAL ASSURANCESTATEMENT (CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Prologis Stapleton Business Center, Denver, Colorado.

that most concerned those stakeholders.
While this does effectively expand the scopeof the assessment, best practice in materiality
includes direct engagement with external
stakeholders. We continue to recommendthat the materiality assessment include
external stakeholders directly as this would
provide precise insights from an external
perspective and would increase the credibilityof the identified material issues.

Materiality: identification of thoseissues which are necessary forstakeholders to make informed
judgments concerning theorganization and its impacts.
The report addresses the most material
environmental and social issues facing thecompany and its stakeholders. Prologis
has taken a strategic and forward-looking
approach towards addressing most of theidentified material topics. For example,
Prologis’ focused energy strategy has not only
made them leaders in energy efficiency intheir industry by focusing on energy-efficient
lighting, but they also demonstrate leadershipin the renewable energy arena with theiractive incorporation of solar on their buildings.
Solar allows them to leverage their space as amechanism for producing clean energy.
We recommend that Prologis consider
integrating the materiality and risk
management assessment exercises to ensurealignment of sustainability objectives withbusiness processes.

Responsiveness: the extent towhich the organization responds tostakeholder issues
Prologis systematically engages stakeholders
throughout the year in order to gain feedbackon the company’s own performance as wellas insight into stakeholder’s sustainability
priorities. The company uses data gathered
through engagement activities to inform
decision-making and enhance the effectivenessof the sustainability initiatives pursued. From
our review, DNV GL noted that Prologis
responds to the information gathered throughits engagement efforts to help stakeholders,such as its customers, achieve their own
sustainability objectives and help drive theirown sustainability performance forward.
We also noted that Prologis engages withlocal communities from the onset, startingwith impact assessments for planneddevelopment projects. In order to build on
assessing impact on local communities,
Prologis should consider implementing acompany-wide database system that retains
the community stakeholder issues raised
from various mechanisms in order to establish
52

EXTERNAL ASSURANCESTATEMENT (CONTINUED)OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITY

trends, assess impacts and help manage
stakeholder concerns in the future.
This would include engaging with suppliersand contractors on the issues raised.

Performance Information
Prologis’ reporting of goals and performance
including the disclosure of data is presented ina clear manner. They continue to progressively
move towards increased sustainability
performance by identifying and pursuing morechallenging sustainability objectives. In futurereports, we recommend that Prologis go into
more detail about the challenges they facewith their sustainability goals.
Prologis has been recognized for theirsustainability performance as evident though
the numerous sustainability awards won
many years in a row. There is clear alignmentof their environmental goals with their overallbusiness strategy, which further integrates
sustainability into their business objectives.
For the data within the scope of our assurance
engagement, we found that minimal technicalerrors have been identified based on thesampling. Prologis continues to take actions
to improve data collection and accuracy, such

ETHICS AND GOVERNANCE®

as the recent implementation of a suppliermanagement software system which will
increase the reliability of their supply chain
management data. The tone of the Report isbroadly neutral with no obvious and deliberateintent to unduly influence the reader.
DNV GL Business Assurance USA Inc.
Oakland, California
June 6th, 2016

Tom Gosselin
Project Director

Stephanie Alderson
Project Consultant

Jon WoodheadTechnical Reviewer

The purpose of the DNV GL group of companies is topromote safe and sustainable futures. The USA & Canada
Sustainability team is part of DNV GL Business Assurance,
a global provider of certification, verification, assessment
and training services, helping customers to build
sustainable business performance. www.dnvgl.com

TOP: A Prologis build-to-suit project (customer office) in Denver, Colorado.
BOTTOM: Employees in our Paris, France, office.

53

GRI G4
CONTENT INDEXOUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

GRI G4 Content Index
Indicator

Description

Location in Report

External
Assurance

Page

GENERAL STANDARD DISCLOSURES
Strategy andAnalysis

Organizational
ProfileG4-1

Statement from the most senior decision makerin the organization about the relevance ofsustainability to the organization and its strategy

Message from Hamid Moghadam

3-4

G4-2

Key impacts on sustainability and effects on
stakeholders

Message from Jeannie Renne-Malone,
VP of Sustainability

5-6

G4-3

Organization name

Prologis, Inc.

G4-4

Primary brands, products, and services

Three Complementary Lines ofBusiness Drive Enduring Value

G4-5

Headquarters location

San Francisco, CA

G4-6

Organization operations

Three Complementary Lines ofBusiness Drive Enduring Value

G4-7

Nature of ownership and legal form

2015 Form 10-K

G4-8

Markets served

Three Complementary Lines ofBusiness Drive Enduring Value

G4-9

Scale of the organization

2015 Form 10-K

G4-10

Total number of employees by type

Building Lasting Relationships

G4-11

Collective bargaining agreements

Our employees are not represented
by collective bargaining agreementswith the exception of those in France,
where the country’s workforce falls
under a collective labor agreement.
Our employees in France account for
approximately 3 percent of ourglobal workforce.

7

7

7

30

54

GRI G4
CONTENT INDEX (CONTINUED)

Organizational
ProfileIdentified
Material
Aspects And
Boundaries

Stakeholder
Engagement

OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

External
Assurance

Indicator

Description

Location in Report

G4-13

Organizational changes during the report

The Prologis portfolio of industrial realestate facilities grew by 347 properties
in 2015. Employee count grew by 100.

G4-14

Precautionary principle

Case Study: Transparency

G4-15

External charters, principles or other initiatives

GRI Organizational Stakeholder

G4-16

Membership associations

Memberships and Associations

G4-17

Entities included in financial statements

Prologis, Inc.

G4-18

Process for defining report boundaries andcontent

Materiality and Stakeholder
Engagement
About this Report

Yes, pages
48-53

Yes, pages
48-53

®

Page

44

47

10-11
46

G4-19

Material aspects included in the report

Materiality and Stakeholder
Engagement

Yes, pages
48-53

G4-20

Descriptions of material aspect boundaries within
the organization

Materiality and Stakeholder
Engagement

Yes, pages
48-53

G4-21

Descriptions of material aspects outside theorganization

Materiality and Stakeholder
Engagement

Yes, pages
48-53

G4-22

Restatements

In our 2014 report we stated our
average training hours as 33 per
employee. A re-evaluation of hours
determined the correct number to be
3.3 average hours per employee.

G4-23

Significant changes

None

G4-24

Stakeholder groups

Materiality and Stakeholder
Engagement

Yes, pages
48-53

10-11

G4-25

How stakeholders were identified

Materiality and Stakeholder
Engagement

Yes, pages
48-53

10-11

11

55

GRI G4
CONTENT INDEX (CONTINUED)

Stakeholder
Engagement

ReportProfileGovernance

OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

Indicator

Description

Location in Report

External
Assurance

G4-26

Approach to stakeholder engagement

Materiality and Stakeholder
Engagement

Yes, pages
48-53

10-11

G4-27

Topics raised during stakeholder engagements

Materiality and Stakeholder
Engagement

Yes, pages
48-53

10-11

G4-28

Reporting period

January 1, 2015 – December 31, 2015

G4-29

Date of most recent reportAugust 2015

G4-30

Reporting cycle

Annual

G4-31

Report contact

sustainability@prologis.com

G4-32“In accordance” option, GRI Index and reportassurance

About this Report

46

G4-33

Policy regarding report assurance

About this Report

46

G4-34

Governance structure of the organization

Acting with Integrity

40

G4-38

Composition of the board and its committees

2016 Proxy Statement

G4-39

Whether the chair of the board is also an
executive officer

Yes

G4-40

Nomination and selection process for the board
and its committees

2016 Proxy Statement

G4-46

Board role in reviewing risk management
processes for sustainability topics

Acting with Integrity

G4-47

Frequency of the board’s review of sustainability
impacts, risks and opportunities

Annual

G4-48

Highest committee or position that formallyreviews and approves the organization’ssustainability report

Acting with Integrity

Page

40

40

56

GRI G4
CONTENT INDEX (CONTINUED)

Ethics andIntegrity

OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

External
Assurance®

Indicator

Description

Location in Report

Page

G4-51

Remuneration policies for the board and senior
executives

2016 Proxy Statement

G4-52

Process for determining remuneration

2016 Proxy Statement

G4-56

Code of conduct

Acting with Integrity

Yes, pages
48-53

40-41

G4-57

Helplines or advice lines for employees

Acting with Integrity

Yes, pages
48-53

40-41

G4-58

Mechanisms for reporting concerns about
unethical or unlawful behavior

Acting with Integrity

Yes, pages
48-53

40-41

G4-EC1

Economic value

2015 Form 10-K

G4-EC2

Climate change risks

VP of Sustainability Letter2015 Form 10-K

5-6

G4-EN6

Energy reductions

Taking Responsibility

28

G4-EN7

Energy reductions in products and services

Taking Responsibility

19

G4-EN8Water withdrawals

Total water withdrawal for the
Denver office (commercial and recycled)– 2,439,000 gallons, a
9% decrease from 2014 usage.
The Denver office accounts for 20%
of our total FTE across the company.

G4-CRE1

Building energy intensity

Taking Responsibility

Yes, pages
48-53

19

G4E-EN15

GHG emissions (Scope 1)

Taking Responsibility

Yes, pages
48-53

27-28

ECONOMIC
SpecificStandard
Disclosures

ENVIRONMENTAL
SpecificStandard
Disclosures

57

GRI G4
CONTENT INDEX (CONTINUED)

SpecificStandard
Disclosures

OUR APPROACH

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE

External
Assurance®

Indicator

Description

Location in Report

Page

G4-EN16

GHG emissions (Scope 2)

Taking Responsibility

Yes, pages
48-53

27-28

G4-EN17

GHG emissions (Scope 3)

Taking Responsibility

Yes, pages
48-53

27-28

G4-EN18

GHG emissions intensity

Taking Responsibility

19

G4-EN19

Reduction of GHG emissions

Taking Responsibility

28

G4-CRE3

Building GHG intensity

Taking Responsibility

19

G4-EN30

Environmental impacts from product distribution
and employee travel

Taking Responsibility – Corporate
Carbon Footprint

28

G4-LA1

Number and rate of new employee hires andturnover344 new employee hires
6% turnover rate

G4-LA2

Benefits provided to full-time employees

Building Lasting Relationships

G4-LA6

Lost days and absenteeism

U.S. 6.37 lost work days

G4-LA59

Average hours of training for employees

Building Lasting Relationships

G4-SO1

Local community engagement, impact
assessments and development programs

Taking Responsibility
Building Lasting Relationships

G4-SO4

Communications and training on anticorruption

Acting with Integrity

G4-CRE8Type and number of sustainability certification,
rating and labeling schemes for new
construction, management, occupation andredevelopment

Taking Responsibility

SOCIALSpecificStandard
Disclosures

Yes, pages
48-53

38

37
Yes, pages
48-53

23
34
42-43

Yes, pages
48-53

15

58

ENGAGEWITH USOUR APPROACH

Engagewith UsWe value your feedback, and welcome any questions,comments or suggestions on this report andour performance. Please send your feedback to:sustainability@prologis.com.
Stay up to date or for more information contact us at:www.prologis.com
www.linkedin.com/company/prologis
www.facebook.com/prologis

ENVIRONMENTAL STEWARDSHIPSOCIAL RESPONSIBILITYETHICS AND GOVERNANCE®

PROLOGISCORPORATEHEADQUARTERS

Pier 1, Bay 1
San Francisco, California
94111 USA
Tel. +1 415 394 9000
Publication date: July 2016