2012 Corporate
responsibility report

MAKING A
POSITIVE
impact ACROSSA GLOBAL
PLATFORM

2

Prologis 2012 Corporate Responsibility Report

Corporate Overview

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

As the leading global owner,
operator and developer ofindustrial real estate, Prologis
strives to provide the mostsustainable logistics anddistribution platformin the industry.
With a long-standing commitment
to corporate responsibility,
we continue To achieve ongoing
success through formal
programs within three areasof focus.

environmental
stewardshipsocialresponsibility
Cover:
Prologis Park Osaka 4
CASBEE A Certified in 2012
Osaka, Japan

ethics andgovernance3

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Corporate Overview

To Our Fellow Stakeholders

We are also continuing to make important investments in energy

I am pleased to present our 2012 Corporate Responsibility Report

efficiency improvements throughout our global portfolio. Our

highlighting the work of our dedicated colleagues around the globe.

high-efficiency lighting upgrades significantly reduce energy

Our report details Prologis’ programs and achievements related toconsumption while lowering customer operating costs. To date,environmental stewardship, social responsibility, and ethics andmore than half of the Prologis operating portfolio, totaling 270

governance. It also describes the culture we’ve built to develop

million square feet (25 million square meters), has been upgradedfuture generations of Prologis leadership.

with energy-efficient lighting. We believe that these energy efficiency

Prologis continues to be the industry leader in delivering
sustainable distribution facilities around the world. We register all
new developments with the intent of obtaining certification with

Hamid R. Moghadam
Chairman andChief Executive Officer

investments deliver significant environmental benefits, providing
our customers with lower operating costs that support retention anddrive occupancy.

internationally recognized sustainable building standards, including

Our social responsibility programs further enhance the communities

LEED, BREEAM and CASBEE. In 2012, 15 Prologis properties acrosswhere we live and work. In 2012, the Prologis Foundation provided

eight countries received green building certifications. In total,

over $600,000 in grants to nonprofit and charitable organizations that

Prologis has developed 38 million square feet (3.6 million square

work in the areas of education, human welfare and disaster relief.

meters) of certified projects in 11 countries since 2006.

We helped our employees support the organizations they personally

Our renewable energy initiatives enhance the long-termsustainability of our properties while creating revenue for investors
and Prologis. To date, the company has developed 83 megawatts ofrooftop solar projects in six countries. We will continue to grow thisprogram in 2013, adding important solar-generating capacity to ourfacilities in markets like Japan, where demand for renewable energy
remains strong.

care about through our Employee Volunteer Program, Matching
Gift Program and Dollars for Doers Program. Our Space for Good
program provided nonprofit organizations with free or discounted
use of our vacant distribution center facilities around the world.

4

Corporate Overview

Prologis 2012 Corporate Responsibility Report“A MAJORITY OF
PROLOGIS EMPLOYEESSAY IT IS IMPORTANT
TO WORK FOR AN
ENVIRONMENTALLYRESPONSIBLE
COMPANY AND
TO VOLUNTEERAND PARTICIPATE
IN COMMUNITYSERVICE...”

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

In May 2012, we conducted our first global employee

We are proud of our progress and continue to work diligently

engagement survey as a new company. The survey confirmed our

toward our corporate responsibility and sustainability goals. We

commitment to environmental and social initiatives. A majority

were again included in the Dow Jones Sustainability North America

of Prologis employees say it is important to them to work forIndex in 2012, and named one of the Global 100 Most Sustainable

an environmentally responsible company and to volunteer

Corporations in the World at the World Economic Forum at Davosand participate in community service. We are pleased that ourfor the fifth consecutive year.

employees share our commitment to corporate responsibility
and sustainability, and believe that our continued focus on these
initiatives is one aspect that allows us to attract and retain the besttalent in the business.
Our team in New Jersey was presented with our IMPACT Award,
the highest honor bestowed by Prologis, for their unyielding
customer dedication before, during and after Superstorm Sandy. The
team went to extraordinary lengths to help our customers restore
their operations quickly, even as most of our colleagues faced theirown personal challenges in the aftermath of the storm.

As an integral part of the global supply chain, we recognize theimpact we can make on our planet and our communities. We
recognize it is an ongoing effort that will never be fully completed.
As we achieve our initial targets, we set new challenges for our
Company to ensure we are constantly striving to improve.
On behalf of everyone at Prologis, we appreciate your interestin our efforts.
Sincerely,

Hamid R. Moghadam
Chairman and Chief Executive Officer

5x

270M

named A Global 100 Most
Sustainable Corporationin the World for a
fifth year in a row

SQUARE FEET OF SPACEUPGRADED WITH
ENERGY-EFFICIENT
LIGHTING

5

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Prologis, Inc. is a self-administered and self-managed real estate

Prologis, Inc. is the leading global owner, operator and developer

investment trust (REIT). As a REIT, Prologis is not required to payof industrial real estate, focused on global and regional markets

corporate income tax. We are required to distribute a minimum ofacross the Americas, Europe and Asia. As of December 31, 2012,90 percent of our taxable income to investors annually in the form

the company’s portfolio covered more than 554 million square feetof dividends. Information on the company’s financial performance,(51.5 million square meters) of logistics and distribution facilities

dividend and market capitalization can be found by visitingin 21 countries. These properties are leased to approximately 4,500

http://ir.prologis.com.

retailers, transportation companies, and other enterprises. As of
December 31, 2012, Prologis had assets under management of $43.1
billion and 1,446 employees worldwide. Total revenue for the year
ending December 31, 2012, was $2.006 billion.

Since last year’s report, Prologis has reduced the square footage of
its portfolio by approximately 8 percent, from 600 million square feetto 554 million square feet as the company refocused our investments
in our key global and regional markets. As part of this effort, Prologis
exited the Seoul, South Korea, Tampa, Florida and Minneapolis,
Minnesota markets.

$43B

554

total assets
undermanagement

millionsquare feet

21

1,446

countries

employees

GRI Index

Company Overview

customers, including third-party logistics providers, manufacturers,

Prologis’ global corporate
headquarters is located in
San Francisco, California andour global operational headquarters
is located in Denver, Colorado.
Other principal office locations
are in Amsterdam, Luxembourg,
Mexico City, Shanghai, Singapore
and Tokyo.

Ethics and Governance

Prologis at a Glance

6

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Ethics and Governance

GRI Index

Prologis has investments in entities through a variety of ventures. We

REPORT GUIDE

co-invest in entities that own multiple properties with private capitalThis report incorporates the G3.1 Sustainability Reporting

investors and provide asset and property management services to

Guidelines and Construction and Real Estate Sector Supplement

these entities. We also have investments in joint ventures, generally(CRESS) released by the Global Reporting Initiative (GRI) as awith one partner, and some of which we do not manage.

framework for this report. GRI is an international multi-stakeholder

Our business strategy focuses on three principal lines of businesswithin two business segments:
Real Estate Operations Segment
Rental Operations —This represents the primary source of our core
LED site lighting reduces
maintenance costs andsaves energy.

Social Responsibility

revenue, earnings and funds from operations. We collect rent fromour customers under operating leases, including reimbursements
for the vast majority of our operating costs.
Capital Deployment — Our development and redevelopment
activities support our rental operations. We develop and redevelop
industrial properties primarily in global and regional markets tomeet our customers’ needs. Generally, in the United States, Europe
and Japan we develop on balance sheet while in emerging markets
such as Brazil, China and Mexico we develop with our private capital
partners in a variety of co-investment ventures.
Private Capital Segment
We co-invest in properties with private capital investors througha variety of co-investment ventures. We tailor industrial portfolios
to investors’ specific needs and deploy capital in both close-ended
and open-ended venture structures and other joint ventures, whileproviding complete portfolio management and financial reporting
services. We generally hold a 15 to 50 percent ownership interest inthese ventures.

network through which a recognized sustainability reporting
framework has been developed. This report has been externallyassured by Two Tomorrows (North America), a subsidiary of DNVBusiness Assurance North America.
This is Prologis’ sixth corporate responsibility report developed
following GRI guidelines. The report is global in scope and covers
our activities in the Americas, Europe and Asia during calendar andfiscal year 2012. Prologis publishes a corporate responsibility reporton an annual basis. The last Prologis report structured around the
GRI guidelines was published in April 2012 and covered calendar
year 2011. If you have questions or feedback on our report, pleasecontact Prologis’ Investor Relations department at +1 415-394-9000.
Prologis has applied GRI’s Guidance on Defining Report Content
to identify topics that reflect economic, environmental and social
impacts that we believe are relevant to our stakeholders. The
basis for reporting on other matters specific to the operationsof our business, including joint ventures, subsidiaries, leased
facilities, outsourced operations and other entities that can affectcomparability from period to period, can be found in Prologis’
Annual Report and Form 10-K, which is filed with the Securities
and Exchange Commission and is also available in the SEC Filings
section of Prologis’ website at http://ir.prologis.com/sec.cfm.

7

Corporate Overview

Prologis 2012 Corporate Responsibility Report

We report on
the topics that
could impact our
stakeholders inorder to ensurethat our report hasvalue and relevance.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Limitations on the boundaries of this report include the operations

METHODOLOGY FOR CALCULATIONS AND MEASUREMENTS

of occupants of our properties, which are outside of Prologis’

Energy and Carbon

control. We strive to work with our customers on sustainability

Energy —Whenever possible, we obtain utility bills directly from thematters, but their activities fall outside our boundary for

local utility company. Where our offices are part of a larger building

performance-data reporting. Prologis does not report on thethat is not sub-metered, we obtain energy bills for the entire

business activities of entities where we do not have directbuilding from our landlord and calculate energy consumption on aoperational control: our co-investment partners, joint venture

pro rata basis. For example, if we occupy 10 percent of a building,partners, service providers, customers, contractors, suppliers andwe assume we are responsible for 10 percent of the building’s

vendors.

energy consumption. If we cannot obtain any utility data for an

We report on our subsidiaries and affiliates where we have direct
operational control, unless otherwise noted. Information is provided

office, we estimate energy consumption based on The Climate
Registry’s General Reporting Protocol.

for leased facilities occupied for our business activities. Data, where

Travel —We utilize reports from contracted third-party travel

reasonably available, are reported for facilities that we own thatagencies and service providers to quantify our business travel. Ourare leased to customers. Significant year-over-year changes arefinance department provides reports of reimbursed mileage, based

denoted. Where possible, we also report with units that provide

on data submitted via employee expense reports. Where third-party

for comparable reporting, such as per square foot rather than peror finance department reports are not available, we estimate travel

building or per site.

based on our understanding of employee activity.

Our report is prioritized by relevance to Prologis’ business

Carbon —We utilize the GHG Protocol tools provided by the World

activities. We report on the topics that relate directly to our businessResources Institute as well as The Climate Registry’s Generalactivities that could impact our stakeholders in order to ensure that

Reporting Protocol to translate energy consumption and travel

our report has value and relevance. The key topics that fall within

activity into carbon emissions. Sources of these factors include theour reporting framework include economic performance, corporate

IPCC Guidelines for National Greenhouse Gas Inventories and others.

governance and employee programs, sustainable development
activity, energy conservation activity, corporate carbon emissions
and charitable activities.

8

Corporate Overview

Prologis 2012 Corporate Responsibility Report

We recognize that
our operations
both impact andare impacted byothers, so working
effectively with our
stakeholders is ofvital importanceto Prologis.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Since our last report, we have recalculated our 2011 operational

STAKEHOLDER ENGAGEMENT

carbon footprint as described in the Environmental Stewardship

Our approach to stakeholder engagement is to communicate

section of this report. This recalculation was the result of our

openly and to incorporate actionable, meaningful feedback fromfirst carbon footprint verification through The Climate Registry,

our stakeholders into our business decisions. We recognize that ourencompassing the required North American footprint (Scopes 1

operations both impact and are impacted by others, so working

and 2). During the verification process, we recalculated our Scope

effectively with our stakeholders is of vital importance to Prologis.

1 emissions to include fugitive emissions from refrigerators andAC equipment. We also used updated emissions factors for mobile
combustion. These changes resulted in a Scope 1 verified footprintthat was 335 metric tons greater than the footprint reported in our
2011 Corporate Responsibility Report. We also recalculated our
Scope 2 emissions using an updated figure for estimated electricity
use in offices for which utility bills were unavailable. This resulted
in a Scope 2 verified footprint that was 298 metric tons less than
the footprint reported in our 2011 Corporate Responsibility Report.
Finally, Scope 1 emissions were recalculated due to a correction in
the prorated share of office space for our San Francisco office. This
resulted in a reduction of Scope 1 emissions by 187 metric tons.
HR DataOur HR data are reported from internal PeopleSoft and Workday data
management systems. These systems include data on full-time, parttime and contract employees.

Framework & Approach
Prologis identifies its stakeholders as any person or group of
persons who may directly affect or be affected by Prologis’ business
operations. This includes customers, employees, investors,
contractors, local communities, associations, brokers, governments,
vendors and suppliers. Our intended audience for this report is our
key stakeholders: investors, customers and employees.
We use a variety of means to communicate with our stakeholders,
including customer satisfaction surveys, group and one-on-one
meetings, industry forums and events, media interviews, quarterly
earnings calls, employee town hall meetings, public planningmeetings and meetings with vendors and suppliers. We seek
to be proactive in responding to inquiries about our corporate
responsibility practices from our stakeholders. Examples include
third-party organizations looking for information about Prologis’plans to address climate change, such as the Carbon Disclosure

Renewable Energy

Project, and individual and institutional investors seeking to better

The project designer determines the energy capacity of the project

understand our business operations.

based on the as-built drawings. Data on the estimated power
generation of renewable energy projects are provided to Prologis
by the project designer, and a sample of this data is confirmed by athird-party consultant.
Community Donations
The Prologis Foundation disbursements are tracked by our Legaland Corporate Responsibility departments. The value of donated anddiscounted space through our Space for Good program is tracked
via our property management system.

9

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Stakeholder Engagement Mechanisms
Customers

Social Responsibility

Ethics and Governance

GRI Index

Investors—Private Capital
Quarterly reports on fund performance

Annual customer advisory board meetings in the United States

Quarterly investor calls covering fund performance and futureand Europe and annual customer surveys for key customers

outlook, including Q&A with fund teams and private capital

Biannual customer satisfaction surveys at the property level

senior management

Dedicated Prologis associates to respond to needs and requests of

Dedicated Prologis Private Capital client relations team to

our focus customers

anticipate and respond to investor needs and requests

Customer-focused marketing materials about sustainability

One-on-one investor meetings and conferences

and other topics

Annual Investor Forum

Speaking engagements at customer-attended conferences

Regular property tours to better familiarize investors with theand events

industrial asset class, market environment and the properties inRegular collaboration to share best practices

which the funds are invested

Regional customer events and direct customer visits

Questionnaires and surveys from investors and their consultants

Investors—Public
Quarterly earnings calls including Q&A with senior management
Periodic Investor Forums
Dedicated Prologis associates to respond to investor needs
and requests
Frequent opportunities to interact with an extended group ofsenior management at investor events
One-on-one investor meetings and brokerage conferences togather real-time feedback
Property tours to better familiarize investors with the industrial
asset class and market environment
Surveys from socially responsible investment funds and indexes,
such as the Dow Jones Sustainability Index

regarding socially responsible and sustainability efforts
Regular written correspondence on issues such as contributionagreements and distribution notices of return on capital
Research-focused local and regional events to educate
investors on global industrial real estate, the current climate
and future trends
Proprietary research reports distributions

10

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Employees

Social Responsibility

Ethics and Governance

GRI Index

Brokers

Periodic global employee engagement survey

Annual broker summit appreciation event

Quarterly all-hands meeting and global webcast with CEO andQuarterly broker update newsletter to keep brokers informed ofsenior management

relevant Prologis news

Training programs and support

Attendance and sponsorship of national broker conferences

Annual performance reviews

Attendance and hosting of various broker meetings

Intranet site for internal communications

at the market level

In-person sustainability and corporate responsibility presentations

Broker satisfaction surveys related to specific broker events
Nongovernmental Organizations
NGO information requests and surveys such as the

Employees in our Tokyo, Japan
office discuss sustainability
and corporate responsibility.

Carbon Disclosure Project
Attendance at conferences and meetings
Governmental Agencies
Close collaboration on projects ranging from brownfieldredevelopment to new developments
Engage during the permitting process for renewable energy
projects and new developments
Suppliers
Contract development and interaction throughout term of contract
One-on-one meetings and calls
Preferred vendor list
Industry Associations
Participation on committees and leadership teams
Active participation at conferences and meetings
Communities
Interaction with communities before, during andafter development
Employee volunteerism
Donations to nonprofit organizations

11

Corporate Overview

Prologis 2012 Corporate Responsibility Report

These discussions
present a unique
opportunity for
us to share bestpractices on
topics related
to sustainability
and corporate
responsibility...

Environmental Stewardship

Media

Social Responsibility

Ethics and Governance

GRI Index

The CAB meets annually in North America and in Europe, mostPress releases distributed regularly announcing significant

recently in the fall of 2012. These two-day, in-person meetingsbusiness activity

include representatives from approximately one dozen customers

Proactive engagement on topics important to specific media

representing a diverse mix of industries. The meetings coveroutlets, including Prologis’ approach to sustainability

industry trends, challenges customers face as corporate real

Press events hosted to engage with media on significant

estate managers, and ways Prologis can improve its service levelannouncements

and product delivery system. Sustainability is also a regular topic

Interviews conducted regularly with Prologis spokespersonsof discussion at the CAB meetings, especially as it relates toand subject matter experts

new technologies, building certifications and renewable energy.

Dedicated Prologis associates to respond to media inquiries

These discussions present a unique opportunity for us to shareon a daily basis

best practices on topics related to sustainability and corporate

Customers
Our customers are integral to our business. We serve more thanresponsibility, ensuring our programs in these areas are inalignment with our customers.

4,500 customers globally, including third-party logistics providers,

These meetings have provided important feedback from ourmanufacturers, retailers, transportation companies and othercustomers, and we are committed to addressing this feedback

enterprises. We strive to continually find new ways to better meetby modifying the way in which we interact and engage with ourtheir needs.

customers. Following each CAB meeting, action items are assigned

Prologis has a Global Customer Solutions team, led by ourmanaging director and head of global customer solutions, thatto members of the Global Customer Solutions team to ensure wefollow up on our commitments.

is dedicated to serving our focus customers, typically those with

Employees

multi-market and often multi-continent leases with the company.

Our employees are a critical part of our business—they sustain

Within our Global Customer Solutions team, we develop long-term

day-to-day operations, generate new business, maintain existing

relationships with our customers and understand their businesses

relationships and are the face of the company to many of ourand needs, serving as their strategic partner for real estate on aexternal stakeholders.

global basis.

To gauge employee engagement, a companywide survey was

We have been conducting biannual surveys with our customers at

conducted in April 2012. The survey focused on strategic leadership,

the property level since 1999. We also engage with our customers on

engagement, continuous improvement, customer focus anda more strategic level through our Customer Advisory Board (CAB).

corporate responsibility. High-level results of the survey werereleased to employees in June 2012, and in August 2012, a numberof specific initiatives were announced to address items revealed in
the survey.

12

Corporate Overview

Prologis 2012 Corporate Responsibility Report

CR Champions
seek to reduce theenvironmental
impact of ouroperations in our
corporate offices
and support theirlocal communities.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Four times a year, following the quarterly earnings call, the CEO

Private capital investors had the opportunity to receive informationand executive team host a town hall meeting to provide a company

regarding fund performance through both quarterly reports andupdate and answer employees’ questions submitted in advanceinvestor calls. Additionally, Prologis hosted a Global Investor Forumor asked live. The town hall meetings are videotaped and posted

in New York City in fall 2012. This forum provided an opportunity

shortly after the meeting on the company intranet to give allfor private capital investors to learn about Prologis, including

employees an opportunity to review the content.

our strategic priorities, global footprint, customer network andPrologis also provides employee education on corporate
responsibility and sustainability topics. On-site, in-person

proprietary research. Attendees also had the opportunity to meetwith senior management and the Investment Committee.

presentations in local offices provide a forum for educating

Third-Party Validationcolleagues and describing the company’s goals.

Charters, Principles, Initiatives

Prologis believes that strong corporate responsibility programs
include corporate-level, top-down initiatives, as well as bottom-up
efforts engaging employees at all levels of the organization.
Engagement with our employees is also enhanced through our
Corporate Responsibility Champions program. Employees in all of
our offices around the world have volunteered to be CR Champions.
The program includes colleagues in a variety of levels and job
functions, including property managers, administrative assistants
and maintenance technicians.
CR Champions seek to reduce the environmental impact of
our operations in our corporate offices and support their local
communities. They interact via regular conference calls to shareideas and best practices. By addressing corporate responsibility
at all levels of the organization, we seek to integrate a corporate
responsibility ethic into all that we do.
Investors
2012 marked a significant milestone for Prologis as we concluded our
first full year of operations as a new company. We remain committed
to providing timely, relevant information to both our public andprivate capital investors. Our Investor Relations team responded toinvestor requests as needed and met with investors in one-on-one
meetings and at investor conferences throughout the year.

Prologis is a leader in communicating its sustainability andcorporate responsibility practices in accordance with globally
recognized reporting systems. Third-party validation of thecompany’s annual GRI report ensures the quality and transparencyof its efforts. Since 2006, Prologis has produced an annual GRI
report, and also reports its carbon emissions in accordance with
the Carbon Disclosure Project. For a copy of Prologis’ most recent
GRI report and more information regarding Prologis’ sustainability
initiatives, please see:
http://www.prologis.com/en/responsibility.html.
Prologis annually reports its corporate carbon footprint and climatechange strategies, risks and opportunities in accordance with the
Carbon Disclosure Project. Prologis responds to the Global Real
Estate Sustainability Benchmark (GRESB) survey on behalf ofseveral of its largest co-investment funds. Prologis is also a memberof numerous sustainable investment indices such as the Dow Jones
Sustainability North America Index and the FTSE4Good Index.

13

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

AWARDS PROLOGIS RECEIVED IN 2012
Global 100 Most Sustainable Corporations in the World

Social Responsibility

Ethics and Governance

Prologis is a member of numerous industry associations and tradegroups, including:Asia Pacific Real Estate Association (APREA; Japan, Singapore)e-Commerce Logistics Park of the Year Award (China)

Association of Foreign Investors in Real Estate (AFIRE)

Guardian Sustainable Business Award – Built Environment Runner-up (U.K.)

Association of Industrial Real Estate Brokers (AIRE)

NAREIT Industrial Leader in the Light Award (U.S.)
Warehouse of the Year Award (Poland)

GRI Index

Boston College Center for Corporate Citizenship (BCCCC)
Building Owners and Managers Association (BOMA)
Conference on Foundations (COF)
German Sustainable Building Council (DGNB)
Institute for Sustainability (U.K.)
Institute of Real Estate Management (IREM)
International Facility Management Association (IFMA)
Japan Institution of Logistics Systems
National Association of Industrial and Office Properties (NAIOP)
National Association of Real Estate Investment Trusts (NAREIT)
National Brownfield Association
Pension Real Estate Association (PREA)Real Estate Roundtable (RER)
Retail Industry Leaders Association (RILA)
Risk and Insurance Management Society (RIMS)The Climate Registry (TCR)
The European Association for Investors in Non-Listed
Real Estate Vehicle (INREV)
U.K. Green Building Council (UKGBC)
U.S. Department of Energy’s Commercial Real Estate Energy
Alliance (CREEA)
U.S. Green Building Council (USGBC)
Urban Land Institute (ULI) and the ULI Greenprint Center for
Building PerformanceCorporate Overview

Environmental Stewardship

Social Responsibility

Ethics and Governanceenvironmental
stewardship

Our environmental stewardship
PROGRAMS seek to link actions in ourcompany and across business lines,
ENABLING us to make decisions that havethe greatest long-term financial,
operational and environmental value.

GRI Index

15

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

ENVIRONMENTAL STEWARDSHIP
Becoming the world’s most energy-efficient andsustainable real estate platform
We remain committed to leading the industry in specific areas
such as sustainable development, renewable energy and energy
efficiency, while we look to share best practices across ourorganization to capture greater value created by linking efforts. The
case studies from across our portfolio highlighted in this reportdemonstrate the value that is created by connecting our activities
across our global enterprise.
Our companywide efforts in energy-efficient upgrades and efficientsustainable buildings, plus the energy produced from solar projects,
totaled more than 550 million kilowatt-hours, worth approximately$66 million in 2012. If this could be aggregated, it would be sufficient
to convert as much as 18 percent of our global portfolio into zeronet-energy buildings.
This report lays the foundation for how our investments to further
integrate sustainability will deliver even greater savings and value

Social Responsibility

Ethics and Governance

GRI Index

Sustainability Objectives
Minimize energy use and carbon emissions by providing energy-efficientbuildings and a geographically diverse platform that allows our customers
to operate more efficiently
Minimize the ecological impact of our developments by meeting or
exceeding recognized sustainable development standards worldwide
Minimize the impact of our own business activities by encouraging
colleagues in our offices to reduce our environmental footprint in areas
such as energy, waste, procurement and water
sustainability goals
Register 100 percent of new development projects with a goal ofcertification where recognized rating systems are available
Achieve a 10 percent annual rate for energy-efficient lighting upgradesin the global portfolio
Reduce energy consumption in the portfolio 20 percent by 2020 on
a global basis

in the coming years for our customers and investors. We believe thisIncrease the number of megawatts developed by 300 percent
by the end of 2016

effort delivers better transparency and a clear path to value for our

Reduce our operational carbon footprint 20 percent by 2020

environmental stewardship efforts.
sustainability policy
Prologis is committed to minimizing environmental impacts of ouroperations and development activity in ways that benefit our customers,
our business and the communities where we operate.
This policy is translated into a series of objectives and goals that Prologis has
adopted for sustainable development, operations and renewable energy.

A number of people within Prologis have direct responsibility forour environmental goals and management approach. Our managing
director and head of global construction oversees our sustainable
development program, including building certifications andmaterials. The director of sustainability programs works directly onenergy efficiency projects within our portfolio. Our vice president of
renewable energy leads our renewable energy efforts.
To monitor progress toward these goals, we continue to enhance
our data-gathering capabilities and take steps to improve internal
communications. We provide updates on our performance relative
to these goals through our sustainability report and through various
investor questionnaires and industry surveys.

16

Prologis 2012 Corporate Responsibility Report

Corporate Overview

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Tokyo, Japan

Infill Focus

Prologis Park Zama
A well - locatedsite and asustainable masterplan delivers
lasting benefits

Location creates sustainable value

1,000

2.25M

kilowatt
solar arraysquare feet

The Prologis Park Zama project, located in Tokyo, Japan,
demonstrates how a well-located site and a sustainable masterplan delivers lasting benefits for our investors and customers.
This project combines industry-leading best practices in energy
efficiency and resilient design, resulting in an award-winning

CASBEE “S”

95%

RATING

leaseddevelopment. Combined, the two facilities on this site comprise2.25 million square feet (209,000 square meters) of modern
distribution space that is 95 percent leased to leading customers.
Prologis delivered the first building at this site in 2009 andcompleted the second building in 2012. These two state-of-the-art
distribution facilities represent the completion of a nearly decadelong vision to restore a former industrial manufacturing site toproductive economic use. Prologis secured the Zama land because
the infill location offered the potential for efficient customer accessto the Tokyo metropolitan market. Bringing our customers closer
to their customers is core to our investment strategy, and this infillsite was a perfect match.
Environmental Legacy
As a former auto manufacturing facility, the site required
extensive cleanup of pre-existing industrial contaminants prior todevelopment. To maximize productivity of the limited land area,
two multistory facilities were planned. The energy-efficient designof the buildings includes highly efficient office LED lighting thatminimizes energy use while delivering a high-quality operational
environment. Prologis is enhancing the sustainability features

17

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Tokyo, Japan

Infill Focus
Prologis Park zama

further by developing a 1.0 megawatt rooftop solar array on Zama

center to augment other facilities that suffered damage. The

2, expected to be completed in 2013. This renewable energy project

combination of resilient design features, energy efficiency andwill complement a similarly sized system already installed on Zama

renewable energy enabled the Zama properties to keep our

1. The solar array will power the building, supply the local utility withcustomers operating efficiently when they needed it most.

emission-free energy and generate revenue for Prologis.

The advanced seismic isolation
system is designed to minimize
the potential for damage froman earthquake.

Site Restoration

Unique Features

The Zama site had a long industrial-use history that required

Zama 2 achieved a CASBEE “S” rating in 2012, the highest rating

restoration prior to redevelopment. Integration of this cleanup

available under the Japanese sustainability certification program

program into the redevelopment plan was a key aspect ofand recognition of the building’s innovative application of

making the overall development of this highly-desirable property

environmentally friendly features. The adjacent Zama 1 building

successful. Brownfield redevelopment has and continues to

had previously received the same top rating. Both buildings havebe a core competency of Prologis. We have has successfully

sustainable features that are specifically designed to conserve

returned underutilized and environmentally impaired properties toenergy and water, and provide a desirable working environment for

productive use through redevelopment in all of our major markets.

our customers.

We continue to focus on these types of opportunities where they

The complex was fitted with an emergency backup power systemalign with our investment strategy.

supplemented by output from a rooftop solar array. An on-site water

Our track record of successfully restoring sites that have a legacy

filtration system is capable of providing potable water in the eventof environmental impairment continues through the development

municipal water service is interrupted. This system is in response

process for our new sustainable facilities. Prologis achieved

to a lesson learned from the March 2011 Sendai earthquake, wherecertification with the ISO 14001:2004 environmental management

otherwise operational facilities could not be occupied because

standards for our European development practices in 2009, anddomestic water supplies were interrupted.

completed recertification in 2012. We are currently pursuing

Both of the buildings were constructed using an advanced seismic
isolation system that is designed to minimize the potential fordamage from an earthquake. This system protected the buildings
from damage during the 2011 Sendai earthquake, allowing
customers to use the Zama property as their emergency distribution

ISO 14001 certification for our North American development
practices. This standard for environmental management helped
to ensure Prologis was not assessed penalties for environmental
noncompliance in 2012. Utilizing ISO 14001 provides a framework
for ensuring that our environmental management standards meetor exceed industry best practices.

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Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Zama in Context

feasible. Our efforts have been well received in the communities

Prologis strives to be a responsible steward of the environment,

where our properties are located, and we maintain a strong

restoring environmentally-impaired sites and delivering sustainablecommitment regarding compliance with applicable environmentalbuildings around the world. A product of these efforts is to enable

laws and regulations.

the restoration of healthy and biodiverse habitats for local species.
We have a long track record of restoring former industrial sites,
mitigating environmental hazards and returning idle brownfield sites
to productive economic use. This attention to infill redevelopment
focuses on recycling industrial land. Where completed, developmentof these infill sites also minimizes our impact on undeveloped areas
by reducing sprawl and decreasing the direct and indirect impacts tonatural habitats.

Our global market focus benefits our customers and supports strong
financial performance for our investors. Well-located properties
translate into higher occupancy by as much as 300 basis points (bps)while also delivering more than 200 bps of total return premiumfor our investors. Providing well-located properties to customers
can make their supply chain more efficient while simultaneously
sustaining the value of our investments.

Our focus on infill developments often involves the remediationor management of sites with a legacy of environmental issues.

Prologis Market Allocation

Working with local, state and federal regulatory agencies, we
GLOBAL MARKETSREGIONAL MARKETSOTHER MARKETS

develop and implement remediation plans to address legacy
conditions. When the environmental cleanup is completed and thesites are redeveloped, these infill properties are sought after by ourcustomers because of their proximity to major transportation hubs

4%

7%such as seaports, highway transportation networks and airports.

11%
14%

These locations create unique efficiencies that bring our customers
closer to their customers, and as a result, reduce environmental
85%

impacts associated with transportation and encourage a more
79%

efficient supply chain.
Prologis ensures that a baseline environmental assessment isconducted on all projects we undertake. This work allows us toevaluate the environmental condition of the property, develop
appropriate strategies to mitigate legacy environmental conditions,and determine whether our plans for the site will impact or threaten
any species or habitats. These assessments are conducted during theland procurement and entitlement process. We work in partnershipwith relevant regulatory agencies and stakeholder organizations tomanage impacts and to develop appropriate mitigation plans where

2011 Merger

2012 Year-End

Locations that Better Serve Customers
Prologis is realigning its portfolio globally to better serve customers
and major population centers where the vast majority of goods are
consumed. At year-end, 85 percent of Prologis properties were located inthese global markets. This is a 6 percent increase from 79 percent in June
2011. As this realignment takes place, we expect to be able to deliver evenbetter located facilities that help our customers operate more efficient
supply chains.

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Prologis 2012 Corporate Responsibility Report

Corporate Overview

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Northampton, U.K.

SUSTAINABLE Development

PROLOGIS PARK PINEHAM DC#4
INNOVATIVESUSTAINABILITYFEATURES REDUCE
EMBODIEd CARBON

Prologis Park Pineham DC4, a 460,000 square foot (42,000 square

“a”

15%

epc ratingarea of roof
with skylights

meter) distribution center near Northampton, U.K., demonstrates
Prologis’ commitment to innovative sustainable development andenvironmental stewardship that delivers high-quality buildings forour customers. This project was built in 2012 as a build-to-suit for
Prologis’ customer BMW.

12%excellent
CERTIFICATION

lower embodied
carbonThe design of Prologis Park Pineham DC4 includes sustainablefeatures that decrease the need for artificial lighting, the biggest
consumer of energy in a distribution center. Skylights makeup 15 percent of the building’s roof. Photocells ensure that thehigh-efficiency lighting system is activated only when necessary,
minimizing energy costs. The building’s energy-efficient design
qualified it for a BREEAM “Excellent” certification and an Energy
Performance Certificate (EPC) “A” rating. This is some of thehighest recognition possible for industrial buildings under U.K.
sustainability standards.
Innovative Design Features
While all of Prologis’ new developments incorporate sustainablefeatures, a unique attribute of Pineham DC4 is its roof. The curved
shape, rather than the flat design typical in a distribution center,
reduced the building’s overall volume without affecting theinterior clear height. This decreased the amount of steel needed
for construction and reduced the amount of space that required
heating. This design feature lowered the development cost andsignificantly decreased the building’s operating costs. Prologis
Park Pineham DC4 is the first building in our portfolio to feature
this innovative roof design. Given its success, similar applications
are being considered for future Prologis developments.

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Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Northampton, U.K.

SUSTAINABLE Development
Prologis Park pineham DC#4

“We trust Prologis
to deliver carbonefficient buildingsthat are energy
efficient andhigh quality.”

Sustainability

Air Tight
Dock Doorsand Facade

Features

Water
Recycling

Occupancy
Sensors(Lights)

EnergyEfficientLighting

Material-Efficient
Column andTruss Design

CarbonNeutralCladding

Extensive
Skylights

BMW not only supported these efforts, it worked with Prologis
to include targets related to the building’s embodied carbon,
BREEAM certification and EPC rating in the development contract.
BMW employees also joined Prologis employees in partneringwith the charitable organization Planet Positive to volunteer
at elementary schools near Pineham DC4. These volunteer
opportunities included hands-on workshops to help students andstaff understand sustainability and learn about actions they can

Martin Douglas, National
Parts Manager, BMW

take to personally reduce their environmental impact.
OfficePrologis continues to expand its relationship with BMW. In
February 2013, BMW contracted with Prologis to develop two
new sustainable distribution centers. These facilities, in Dallas,
Texas, and Ontario, California, will be designed to achieve LEED
certification and feature many of the same best-practice design
features included in the Pineham DC4 project.

Reducing Embodied Carbon
As the roof design demonstrates, Prologis Park Pineham DC4
was designed not only to minimize energy use during building
operations, but also to reduce the building’s embodied carbon
footprint by utilizing materials such as steel judiciously and by
procuring carbon-neutral building products. Following these efforts
to reduce the project’s embodied carbon footprint, Prologis worked
with the U.K.-based charitable organization Cool Earth to mitigate
the building’s remaining embodied carbon by protecting 318 acresof Peruvian rainforest from deforestation through a long-term landstewardship program.

Our relationship with BMW is just one example of how Prologis
partners with our customers to provide them with Class-A spacethat meets their operational requirements while accomplishing
our sustainable development goals. Prologis has delivered its
sustainable expertise on multiple building projects for individual
customers in many markets. In addition to BMW, Prologis hasdeveloped multiple certified sustainable projects for customers
such as Home Depot, Amazon.com, Marks & Spencer andCrate & Barrel.

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Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Pineham in Context
Prologis Park Pineham DC4 is one of 15 projects in eight countries

Cumulative Sustainable Building Certifications,where Prologis received sustainable certification in 2012. Prologis

by Rating System

has an industry-leading track record of delivering sustainablebuildings around the world. This is an important commitment that2012

has been part of our development program since 2008. We utilize

2011

certification systems accepted in our local markets, such as LEED,2010

BREEAM and CASBEE, and employ our own best-practice standards
where there is no accepted local certification standard. This maintains

2009

the quality of our projects while ensuring that our customers have2008

access to modern, energy-efficient space wherever they operate.

2007

In total, Prologis has developed 38 million square feet (3.6 million

2006

square meters) of certified projects in 11 countries since 2006.
Tres Rios 5 in Cuatitlan, Mexicoachieved LEED certification in 2012.

CASBEE
BREAM
LEED
DGNB
HQE

0

2

4

6

8
10
12
Million Square Feet

14

16

18

Note: CASBEE is a rating system used by Prologis in Japan. LEED is
predominantly used in the United States, and in Latin America. BREEAM is
a U.K.-based standard in use throughout Europe. HQE is in use in France.
DGNB is being utilized in Germany.

Cumulative Square Footage of Building Certifications
and Square Feet Certified by Year
2012
2011
2010
2009
2008
2007

CUMULATIVE BUILDING certifications
SQUARE FEET CERTIFIED BY YEAR

2006
0

5

10

15

20

25

Million Square Feet

30

35

40

50

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Prologis 2012 Corporate Responsibility Report

Corporate Overview

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Atlanta, Georgia

Energy Efficiency

Horizon DC1“Prologis is a recognized leader inproactively upgrading spaces with energysaving technologies such as motion-sensing
T-5 fluorescent lighting. The prospective

Energy efficiency reduces operating costs

500$60,000

light fixtures
replacedenergysavings

and brightest of all the competition.”
Kent Mason, Market Officer, Atlanta, Prologis

The lighting upgrade at the Horizon Distribution Center in Atlanta,
Georgia, provides an example of how Prologis is systematically
improving energy efficiency throughout its portfolio. We upgraded
the lighting at the 356,000 square foot (33,000 square meter) facility

tenants that tour our spaces consistently
remark that our vacancies are the cleanest

and delivers energy savings

600,000 356,000
kWh energy
saved

squarefeet

to provide an edge in a highly-competitive leasing environment
while reducing the building’s impact on the environment.
The local property management team replaced 500 existing highbay fixtures to improve the quality of light and make the space
more visually appealing to potential customers. Lower energy
costs from the new lighting reduced the total operating cost of thespace by 5 percent compared with comparable nearby buildingsthat lacked energy-efficient lighting. This discount was one factor
that enticed a customer to move into the distribution center shortly
thereafter.
While there are many decisions that factor into a customer’s leasing
decisions, consistently providing high-quality space that costs lessto operate often makes our properties a compelling alternative
to other, less efficient buildings. The Horizon Distribution Center
exemplifies the cost-effective and beneficial enhancement thatenergy-efficient upgrades are providing throughout the Prologis
portfolio.

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Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Horizon in Context

Cool Roofing

Prologis invests in energy efficiency improvements throughout its

Prologis is actively pursuing other building improvements that

global portfolio. These important investments significantly reduceenhance customer comfort, increase asset value and reduceenergy consumption and environmental impacts on our operating

environmental impacts. White, reflective roofing is a solution to

portfolio buildings while lowering customer operating costs. A

reducing heat island effects while delivering a more comfortableprimary component of the Prologis sustainability program is toand efficient building. The Prologis portfolio has 168 million square

work with customers to reduce energy use in buildings that arefeet (15.6 million square meters) of reflective roofing, a 3.3 percent

already operating. Energy savings from upgrades in the global

increase from 151 million square feet (14 square meters) in 2011.

portfolio have reduced electricity use by a projected 407 million
kilowatt-hours per year, worth $250 million in energy savings to ourcustomers over the next five years.
Fifty-one percent of the Prologis operating portfolio has received
energy-efficient lighting upgrades, up from 41 percent in 2011. This
is in line with our goal to upgrade 10 percent of our portfolio eachyear. Total investment in these improvements is estimated at $34
million, including our own investments and those of our customers.
These upgrades are an important path toward our goal of reducing
energy use across our global portfolio 20 percent by 2020.

Cumulative Lighting Upgrades
2012
2011
2010
2009
2008
0

50

100

150

200

250

300

Square Feet in Millions

We were recognized in 2012 for our efforts to improve energy efficiency
within our portfolio when we received the industrial sector leader award fromthe NAREIT Leader in the Light energy conservation recognition program.

Reflective Roofing in the Portfolio
2012
2011
0

50

100
Square Feet in Millions

150

200

24

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Portfolio Carbon Emissions
Prologis monitors energy and carbon emission performance of

Prologis Operational Carbon Footprint in CO2e

our buildings where we have access to whole-building energy
data through the ULI Greenprint Center for Building Performance’s

1,907
2,218

Scope 1benchmarking system. For a sample of 45 buildings that comprise15.6 million square feet (1.45 million square meters) of our portfolio,

5,827

Scope 2

6,299

2011 energy use was 7.6 kWh/square foot, a 0.1% decrease over theenergy use in the same properties in 2010. For the same sample of
45 buildings, 2011 carbon emissions (Scope 1 + 2 + 3) were 2.7 kg ofCO2e per square foot (29.1 kg CO2e/m2), a 0.5% decrease over the

2012

3,985
3,854

Scope 3
0

1,000

2,000

3,000

4,000

2011

5,000

6,000

7,000

Metric Tons

emissions from those properties in 2010. This is a limited sample of
Water-efficient landscaping
reduces demand for water indrought-sensitive markets.

our portfolio due to constraints on our ability to gather energy datafrom customers in our triple-net leased portfolio. It does, however,give us a baseline for measuring energy and carbon emissions. We
expect to report on a greater number of buildings in our portfolio in
the coming years.

Prologis has been reporting its operational carbon footprint, as wellas risks and opportunities related to climate change, to the Carbon
Disclosure Project for several years. In 2012, we began reporting ouroperational carbon footprint through The Climate Registry. Our 2011
North American operational footprint was independently verified by

Corporate Carbon Emissions

SCS Global Services, and we are in the process of independently

In addition to finding opportunities for energy efficiency in our

verifying our global 2012 operational carbon footprint.

portfolio, we also look for ways to reduce the energy use andcarbon footprint associated with our corporate operations. In 2012,
Prologis began a comprehensive energy efficiency and solar projectat its global headquarters in San Francisco. This project utilizes an
emerging form of project finance known as PACE (Property Assessed
Clean Energy), which provides long-term financing for sustainability
measures such as solar projects and energy efficiency upgrades.
This project, to be completed in 2013, is projected to reduce gridenergy purchases by 33 percent. The energy savings will be sharedby all customers in the building.

Prologis’ Scope 1 emissions include those related to burning fuelssuch as natural gas used by our offices and gasoline used in vehicles
driven by our field personnel. Our Scope 2 emissions include thoserelated to electricity used by our offices. We include business travelin our Scope 3 emissions.
Whether pursuing energy efficiency and solar projects at ourheadquarters or supporting lighting upgrades and cool roofing
throughout our property portfolio, Prologis seeks to deliver
sustainability in ways that benefit the bottom line. Energy-efficient
upgrades in our portfolio are delivering $50 million in annual
savings to customers—savings that benefit the environment andmake the company’s properties better able to attract and retain
customers.

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Prologis 2012 Corporate Responsibility Report

Corporate Overview

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

RIALTO, CALIFORNIA

Renewable Energy

Rialto I-210 DC3“The Prologis rooftop solar array
powers the local utility grid andcomplements our own initiatives toreduce environmental impacts andlower our operating costs.”
Bob Yunag, Rialto DC Site Manager, Stanley Black & Decker

Solar generates revenue and clean energy

2,600

3.8M

kilowatt
solar array

kWhproduction

In 2012, Prologis developed a 2.6 megawatt rooftop solar arrayat Rialto I-210 DC3, a 543,400 square foot (50,400 square meter)
distribution center in Southern California. The solar facility is
expected to produce 3.8 million kilowatt-hours (kWh) annually—
enough electricity to power the equivalent of the host distribution

543,400
squarefeet

center and two more like it. This array supplies the local utility gridwith clean electricity and provides additional revenue for Prologis
through construction management fees and roof rent.
The Rialto I-210 DC3 solar array is the latest rooftop solar project
to be completed by the Prologis Renewable Energy Group. This
team expands the use of our rooftop assets to generate clean solar
energy and complements our ongoing efforts to address climatechange. This growing commitment to renewable energy has beenaccomplished through partnerships with utilities and investors.
Even as the Renewable Energy Group developed the rooftop solar
array at this building, Prologis supported customer-led energyconserving improvements at the facility such as a high-bay lighting
upgrade and a water conserving drip irrigation system. StanleyBlack & Decker and Prologis have continued this collaboration by
exploring the possibility of upgrading outdoor light fixtures toenergy-efficient LEDs.
Aligning sustainability and corporate responsibility efforts helps
to make the Stanley Black & Decker facility more profitable,
and strengthens Prologis value as a partner in achieving
more energy-efficient industrial properties that have a smaller
environmental footprint.

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Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Rialto in Context
To date, Prologis has developed 83 megawatts of rooftop solar

Cumulative Solar Projects

projects in six countries. These projects have an estimated clean
electricity production capacity of 104 million kilowatt-hours annually.

2012

If this solar energy were used to offset building energy use, it would

2011

be sufficient to convert 18 million square feet (1.7 million square

2010

meters) of our operating portfolio into net-zero-energy properties.
This program has converted nearly 20 million square feet (1.8

2009million square meters) of underutilized rooftop space into sources

2008

of revenue-generating projects that contribute to clean energy. Our

2007

renewable energy initiative demonstrates a solution that enhances
sustainability within our property portfolio while creating revenue

0

10

20

30

40

50

60

70

80

90

70

80

90

Cumulative Megawatts

for investors and Prologis.
Prologis works withcustomers to enhance building
energy efficiency.

Megawatts Installed by Country
USA
Spain
Belgium
Japan
FranceGermany
0

10

20

30

40

50

Megawatts

60

Corporate Overview

Environmental Stewardship

Social Responsibility

Ethics and GovernanceSocialresponsibility

At Prologis, social responsibility
means excellence in how we interact
with our colleagues, suppliers andlocal communities. This includes
providing a challenging, dynamic anddiverse work environment that supports
our colleagues’ professional development.

GRI Index

28

Corporate Overview

Prologis 2012 Corporate Responsibility Reportour business will
benefit while we
expand support
for our local
communities,
encourage
volunteerism andreduce our impact
on the environment.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

SOCIAL RESPONSIBILITY

We have developed a series of 2013 goals against which to measure

At Prologis, social responsibility means excellence in how we

our social responsibility efforts. These include:interact with our colleagues, suppliers and local communities. Our
managing director and head of global construction ensures that ourpolicies against human rights violations, forced labor and child labor
are upheld at our construction sites. Additionally, our chief humanresources officer oversees our non-discrimination policy.

Implement a global supplier code of conduct
Launch IMPACT Day, our first global day of service, on May 17,
2013, for every Prologis office around the world
Double employee participation in Matching Gift and Dollars forDoers programs
Implement energy-reduction behavior-change activities throughour CR Champions
We believe that by setting goals in these areas, our businessColleagues in Denver, Colorado helped underserved families with home
improvement projects through the nonprofit Extreme Community Makeover.

will benefit while we expand support for our local communities,
encourage our employees to participate in volunteer activities
within their communities and continue to work together to reduce
our impact on the environment. We expect that these efforts
will continue to enable us to better attract and retain the best
employees and remain a welcomed member of the communities
in which we operate.
Employee Volunteer Program
The Employee Volunteer Program at Prologis is an important partof our culture, and allows us to invest in the communities where
we live and work. This program provides all employees with threedays per year to volunteer in their local community during regularbusiness hours. This includes two days to volunteer with fellow
employees at company-sponsored events and one day per year tovolunteer for organizations of their own choosing.
Examples of Prologis employees volunteering in their local
communities in 2012 included:More than 100 Prologis colleagues in our Tokyo and Osaka offices
in Japan participated in community cleanup activities where theycollected garbage and debris near Prologis properties in Tokyo,
Osaka and Kasugai.

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Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Ethics and Governance

GRI Index

Colleagues in our Denver, Colorado office made an impact byorganizations, as well as schools and universities. Additionally, ourhelping families with home improvement projects, including

Dollars for Doers program provided grants to organizations wherelandscaping, cleanup, repairs and painting, through the nonprofit

employees volunteered their time outside business hours.

Extreme Community Makeover. The Denver accounting department
packed supplies and prepared medical equipment for shipment todeveloping countries at Project C.U.R.E.
The Columbus, Ohio team assembled, sanded and painted tables forfamilies in need at the Furniture Bank of Central Ohio.
Volunteers teach Junior
Achievement curriculum in
San Francisco, California
and assemble furniture in
Columbus, Ohio.

Social Responsibility

Some of the organizations which received financial support from thePrologis Foundation in 2012 included:
American Red Cross
Boys and Girls Clubs
Habitat for Humanity

Employees in our San Francisco, California office refurbished rooms

Junior Achievement

at a local school through a project with Rebuilding Together andMetro Volunteers

taught students financial literacy with Junior Achievement.

Ronald McDonald House Charities

Prologis employees in Solihull, U.K. partnered with the charitable

Space for Good

organization Planet Positive to teach hands-on workshops at

Prologis developed the Space for Good program to provide

nearby elementary schools to help students and staff gain a better

warehouse space to charitable organizations in need of such space

understanding of the importance of sustainability.

on a temporary basis to address seasonal needs and respond to

Employees coordinated with customers and brokers in Atlanta,
Georgia to collect and sort hundreds of toys for the Marine Toys forTots Foundation.
The Nashville, Tennessee team regularly prepares breakfast for thecity’s homeless at their local chapter of The Salvation Army.
Prologis Foundation
The Prologis Foundation was established in 2001 with the goal ofproviding financial support to institutions of higher education andcharitable organizations. In 2012, the Foundation donated more than
$600,000 to nonprofit organizations, schools and universities.
Foundation grants were given to organizations primarily focusedon the areas of education and human welfare. The Matching Gift
program matched employee contributions to 501(c)(3) nonprofit

disaster relief efforts. Space for Good is an example of a programthat aligns our business with our charitable activities in a way that
directly benefits the needs of the local communities where we
operate.
In 2012, Prologis donated more than 4 million square feet (400,000
square meters) of distribution center space on a temporary basis
to organizations in need. This space represents a value of morethan $730,000. Organizations that benefited from space within ourbuildings included:
Marine Toys for Tots Foundation
National Multiple Sclerosis Society
Project C.U.R.E.
Salvation Army

30

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

athletic charity events

community involvement and wellness
Prologis is astrong supporterof physicalactivities thatbuild camaraderie
among employees
while serving
our communities.

In 2012, Prologis continued to sponsor and support activities around

Employees in Europe organized the Prologis Cycle Challenge, inthe world that exemplify our commitment to community involvement

which employees, brokers and customers biked over 350 miles inand employee wellness. Prologis employees around the world biked,

four days from Geneva, Switzerland to Nice, France. Employees

ran and walked to benefit charitable organizations throughout the year.

from the U.K., the Netherlands and France participated in the

As the title sponsor of the Courage Classic, Prologis encouraged
employees to bike over 150 miles in three days through the Rocky

event, which raised funds for reGENEration, Help Harry Help
Others and the Prince’s Trust.

Mountains of Colorado. Employees from across the United States,

Teams in San Francisco and Shanghai ran in the J.P. Morgan

Mexico and Japan participated in the event, which benefited

Corporate Challenge, the world’s largest corporate runningChildren’s Hospital Colorado.

series. These races supported Larkin Street Youth Services andCompassion for Migrant Children, respectively.
A core group of runners at Prologis has developed the Blazing
Bones Trail Series, charity-focused running events that take place

cycling,walking,running,
hikingthroughout the year across a variety of global locations. In 2012,
Blazing Bones organized two trail runs that benefited nonprofits
improving education and human welfare. A California event in thespring raised funds for The Guardsmen, Lucile Packard Children’s
Hospital and St. Dorothy’s Rest. A fall event in Colorado benefited
the Aurora Public Schools Education Foundation, Big Brothers
Big Sisters of Colorado and Ronald McDonald House Charities ofDenver. The events were designed so that employees of all fitnesslevels could participate, running, hiking and walking anywherefrom six to 26.2 miles.
By supporting employee involvement in these and other races
around the world, Prologis builds camaraderie, encourages
employees to live healthy lifestyles and gives back to thecommunities where we live and work.

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Corporate Overview

Prologis 2012 Corporate Responsibility Report

Prologis isdedicated tothe continual
improvementof training andeducation programsfor our employees.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

EMPLOYEESOur employees are not organized under collective bargaining

We believe our success is dependent upon the integrity of ouragreements, with the exception of France, where the population

workforce. Prologis is dedicated to attracting and retaining

falls under a collective labor agreement. These individuals makeexceptional talent by providing challenging and rewarding

up approximately four percent of our total headcount. No Prologis

professional opportunities that are matched by competitive

employees filed an Equal Employment Opportunity Commission

compensation packages. We are committed to treating employees(EEOC) claim against the company in 2012.

fairly and consistently, in addition to providing an equal
employment opportunity. We recruit, hire, train, promote andcompensate without regard to race, color, age, religion, gender,
disability or sexual orientation. Our chief human resources officer
oversees our policies related to employment practices, diversity andequal opportunity, training and education. The human resources
department has developed internal metrics to track performance andguide decision-making in these areas.

Skill and Career Development
Prologis is dedicated to the continual improvement of training
and education programs for our employees. Our April 2012
companywide employee engagement survey revealed a number of
unique opportunities to enhance our training offerings. As a resultof this survey, we launched Great People Management, a training
course to help our managers enhance their supervisory skills. In
North America in 2012, 192 managers and 382 employees completed

We believe attracting local talent often best serves our businessthis training for a total of 574 participants and 2,550 hours. This

needs. More than 99 percent of our employees are local nationals.

successful program is being launched in Europe and Asia in 2013.

We had a total of 10 expatriates companywide working in a market
other than his or her home country, seven of whom were at the vicepresident level or above.

Our educational assistance program was restructured and expanded
in 2012 and now offers up to $5,000 in tuition reimbursement for
full- and part-time employees earning an associate’s, bachelor’s,
and/or master’s degree if the degree is business or job related and

GLOBAL EMPLOYMENT BY REGIOnas of December 31, 2012

obtained through an accredited college or university.

The Americas

europe

asia

total

883

380

183

1,446

All Prologis employees receive an annual performance review.
In 2012, we developed a 360 feedback assessment tool andconducted assessments for our senior leaders. In 2013, this careerdevelopment tool will be made available to other supervisors

GLOBAL EMPLOYMENT BY type
Note: Contractors are not classified as Prologis employees.
FULL TIMEPART TIMECONTRACTORS

1,428

18

227

within the organization.

32

Corporate Overview

Prologis 2012 Corporate Responsibility Report

We place a highimportance on
developing strong
relationships withthe communities inwhich we operate.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

TurnoverCOMMUNITIESIn 2012, a total of 79 individuals were affected by a reduction in our

Each year, we strive to create a more meaningful impact in theworkforce, including 40 men and 39 women. Most of these changes

communities where we live and work. Supporting social needs inwere part of a planned restructuring due to the merger between

the community not only benefits our neighbors, but also enhances

ProLogis and AMB that was completed in June 2011.

our business. By leveraging our financial and physical assets

Prologis provides severance benefits to eligible full-time andpart-time employees whose employment is terminated due
to restructuring. In the U.S., this included severance pay plus
additional base pay for each year of continuous service; COBRA

to advance causes such as education, human welfare and theenvironment, we build relationships in the communities where we
live, work and operate. By supporting our employees’ community
interests, we stand out as an employer of choice.

premium health care coverage for a specified period; immediate, full

We place a high importance on developing strong relationships withvesting in the Prologis 401(k) Savings Plan; and outplacement andthe communities in which we operate. When Prologis establishes acareer counseling services.

presence in a community, we often take part in studies and engage

Benefits
Prologis is dedicated to attracting exceptional talent and offering
competitive compensation. Prologis employees who work more

directly with the communities to ensure the decisions we make withrespect to our operations are in alignment with the needs of each
community and surrounding market.

than 32 hours per week (30 hours per week in some countries) areThis is an important part of bringing the customers that lease spaceconsidered full-time employees and can choose to participate infrom us closer to their customers, and ensures that our operations

Prologis’ full benefits offering. Based on location, this offering canbalance the needs of each community with the economic andinclude, but is not limited to: medical and dental coverage, matchingenvironmental requirements of our business activity. As part of our401(k) plans, multiple insurance coverage options (including basic

due diligence, we complete development and environmental impact

and supplemental life, accidental death and dismemberment,

analyses that enable us to do some or all the following:

dependent life, short-term disability, long-term disability,
unemployment, etc.) and educational support.

Estimate the total number of jobs to be created and new tax
revenues to be generated as a result of the development
Conduct traffic studies to estimate the total number of automobile
and truck trips for each development
Develop traffic plans in conjunction with municipalities toefficiently manage traffic flows and minimize impacts to thesurrounding community
Minimize adverse impacts from light or glare
Attend community planning meetings to address citizen andgovernment questions and concerns
Develop stormwater management plans to properly control runoff

33

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Determine whether the development will impact any wetlands,

As our position in a community grows, we continue to build

and if so, apply appropriate mitigation efforts so there is no net

relationships within that community. Most of our growth is driven

decrease in wetland quality or quantity

by the business activities of our customers; as they enter into or

Verify whether any endangered plant and animal species will be

expand within a community, they create jobs in various sectors,

impacted by our development and adjust development plansincluding warehousing and distribution. Thus, our facilities become

when possible to mitigate impact

an integral part of a community’s employment opportunities.

Hire locally based contractors and service providers
Source construction materials locally where feasible

SUPPLIERS
The environmental and social impact of our business is influenced

In addition, when we establish a presence in a market throughby third-party contractors, vendors and suppliers. We seek todevelopment, we often improve local infrastructure such asactively engage our suppliers in our efforts to develop andexpanding access to utilities and building roads to improve

operate more sustainably. We have worked with trusted vendors

traffic flow.

on numerous occasions to install and test new energy-efficienttechnologies. We have also worked with manufacturers to introduce

Prologis CCP Cajamar
Industrial Park, Sao Paolo, Brazil

energy-efficient products to new markets.
We routinely utilize local construction materials and suppliers.
The two largest components of our buildings, concrete and steel,
are typically procured from local suppliers. In addition, we use
local or regional contracting for the construction of our buildings
except where necessary resources are not readily available. Thiseffort supports local businesses and keeps our investments within
the local community. Utilizing local suppliers also often reduces
shipping and transportation needs, which helps to reduce theenvironmental impact of our development projects.
Our general contractors in the United States are required toprovide accident and incident data along with their businessinformation when proposing to work with Prologis. These data
are evaluated along with factors such as cost and prior projectexperience to assess contractor performance in our procurement
and contracting decisions.

Corporate Overview

Environmental Stewardship

Social Responsibility

ethics andgovernance

Trust and business integrity are
critical to the long-term health ofany public company. At Prologis, werecognize this fundamental principle
and have formally incorporated it
into our corporate governance andour day-to-day business operations.

Ethics and Governance

GRI Index

35

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Our employees,
officers andboard members
receive regulartraining to stayabreast of ethicalissues and our
corporate values.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

ETHICSWe also have institutional processes for reporting incidents orTrust and business integrity are critical to the long-term health ofsituations that may be in violation of the Code of Ethics andany public company. We believe that to be successful and establish

Business Conduct. These include independent telephone hotlines

a culture of the highest ethical standards, our employees, officers

and an anonymous form available from our website and ourand board members must receive regular training to stay abreast of

intranet. Our Internal Audit department ensures all reports are

ethical issues and our corporate values.

investigated, with appropriate management action taken when

The Prologis Board of Directors has adopted a Code of Ethics andBusiness Conduct, which is applicable to all employees and thenecessary. Periodic reports are made to the Audit Committeeof the Board.

board. It is intended to help avoid conflicts and other issues thatIn 2012, Prologis did not take any legal action for anti-competitive

may arise in transactions between us and our stakeholders. The

behavior, anti-trust or monopoly practices. We did not have any

Code of Ethics and Business Conduct can be viewed on our website

fines or nonmonetary sanctions for noncompliance with laws andat http://ir.prologis.com/governance.cfm.

regulations.

Employees are responsible for abiding by the code in the

We also place high importance on maintaining consistent

performance of their jobs and in their interactions with each othermessaging when marketing our business. Every public-facing

and those outside of Prologis, including customers, investors,

employee adheres to a detailed disclosure policy, and Prologis

suppliers, government officials and local communities. At thefollows all New York Stock Exchange (NYSE) and Securities andstart of their employment, employees must formally certify their

Exchange Commission (SEC) guidelines and rules regarding

acknowledgement and acceptance of the Code of Ethics andpress release announcements and other marketing collateral. The

Business Conduct.

company also has processes in place to ensure Regulation Fair

Accountability
Our Ethics Committee includes our chief legal officer and general
counsel, our chief human resources officer and our chief financial
officer. The responsibilities of the committee include setting andupdating the ethics policy, overseeing employee ethics training,providing guidance and advice to employees and investigating
reported incidents of ethics noncompliance.

Disclosure compliance. Additionally, we maintain a strict policyof truth in advertising. We are in full compliance with marketing
communications regulations and do not have any violations toreport for 2012.

36

Prologis 2012 Corporate Responsibility Report

Corporate Overview

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

ETHICS AND GOVERNANCE

Global Compliance Policy
In 2012, Prologis released an updated
version of its Global Compliance Policy,
which reinforces our corporate
position against bribery and corruption
in all countries.

I

integrity

Integrity is the cornerstone of every action we take. Our word is
our bond. We strive to demonstrate a consistency of character
that is transparent, genuine, trustworthy and respectful.

Our Global Compliance Policy combines best practices from theForeign Corrupt Practices Act (FCPA), UK Bribery Act and othersimilar policies from the regions where we operate around theworld. All employees were notified of the improvements to theMPAmentorship

passionaccountability

The quality of our people is the key to our success. Throughmentorship, we pass on our institutional knowledge, develop
our talent pool and create a sustainable and learning enterprise.
We are passionate about our work. We are committed to going aboveand beyond what is expected of us. Decisive, nimble and results-driven,
we endeavor to be thoughtful and thorough in everything we do.
We are all accountable to each other, our customers and to our investors.
Individual accountability is critical to achieving the overall goals andobjectives of the company.

policy and can access it at any time via the company intranet. We
continue to provide awareness training to employees globally toensure compliance with this policy. Our global compliance officer
oversees the training related to and compliance with this policy.
Prologis has zero tolerance for bribery and corruption. We arecommitted to acting professionally, fairly and with integrity in all
our business dealings and relationships. Integrity is one of six
core values that shape the Prologis corporate culture. These corevalues are embodied in the acronym IMPACT. These values guideour interactions with customers, investors and colleagues in everyCcourage

We live in a constantly changing world. What was good enough yesterday
will not be enough tomorrow. We embrace change and we have thecourage to take calculated risks to exceed our business objectives.

T

teamwork

We are one team. We believe that our collaborative culture provides
a competitive advantage. We communicate openly with each otherand value diversity in perspectives and opinions.

country where we operate. The values represented by IMPACT are
essential to building our culture of enduring excellence.

37

Corporate Overview

Prologis 2012 Corporate Responsibility Report

We are committed
to corporate
governancepractices that
support a businessenvironment of
uncompromising
integrity.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

CORPORATE GOVERNANCE

The board conducts an annual self-evaluation of its performance

We are committed to corporate governance practices that support

and the performance of each board committee to determine

a business environment of uncompromising integrity. We reinforce

whether the board and committees are functioning effectively. The

this objective through our governance policies and compliance withresults of this evaluation are discussed by the full board, with any

the Sarbanes-Oxley Act of 2002, FCPA and the rules of the SEC andagreed changes incorporated in board and committee charters as

the NYSE.

applicable.

Our highest governance body is the Board of Directors, followed

Prologis’ Compensation Committee administers our executive

by our senior officers. Hamid R. Moghadam is the chairman of thecompensation program. On an annual basis, the compensation

board and chief executive officer.

committee reviews the elements of compensation for our
executive officers, which includes an evaluation of the program’sboard committees

effectiveness with respect to our ability to hire, retain and motivate

Audit Committee

key employees, as well as through our ability to create long-term

Board Governance and Nomination Committee

of a cash component (base salary and target cash bonus) andCompensation Committee
Executive Committee

shareholder value. The compensation structure primarily consists
a long-term equity component. For more on our compensation
structure, please refer to our Definitive Proxy Statement, filed on
March 15, 2013.

The Prologis Board comprises 10 members who are elected

Our governance structure helps to enforce the culture of corporate

annually, nine of whom are independent. Irving F. Lyons III is the

responsibility that has been fostered at Prologis. The board’s

lead independent director on the board. Prologis requires that

Governance and Nomination Committee has specific oversighta majority of our board be independent in accordance with theof corporate responsibility at Prologis. Three independent

applicable provisions of the Securities Act of 1934 and the standards

Board members sit on this committee and take an active role inadopted by the NYSE. Additionally, the Audit Committee, the Board

considering how the corporate responsibility program is integrated

Governance and Nomination Committee and the Compensation

into the company’s strategic plans and business activity. The

Committee consist entirely of independent directors as required bycommittee receives updates on Prologis’ corporate responsibility

law or under the rules of the New York Stock Exchange. Of the 10

programs on an annual basis.

members of the board, two are women.
Prior to the election of any member of the board by thestockholders, the Board Governance and Nomination Committee
screens potential candidates and obtains additional input from thechairman of the board and the chief executive officer.

38

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Interested parties may communicate with any of the directors,

The scope of risk within our business includes, but is not limited to,individually or as a group, by writing to them in care of Edward S.

the following:

Nekritz as follows:

External risks (hazards caused by fires, natural disasters or

Edward S. Nekritz

geopolitical factors)

Chief Legal Officer, General Counsel and Board Secretary

Financial risks (fluctuations in stock price, liquidity/debt ratings,

Prologiscustomer credit, taxes or currency-related risks)4545 Airport Way

Operational risks (human capital, processes, technology or

Denver, Colorado 80239

disaster recovery)

All communications should prominently indicate on the outside ofthe envelope that they are intended for the full Board, for outside
directors only, or for any particular group or member of the Board.
For a complete description of Prologis’ corporate governancepractices, please visit http://ir.prologis.com/governance.cfm.
Risk Management
Prologis takes a holistic approach to managing risk throughout
our company, not limited to familiar or quantifiable risk. Our
approach includes understanding and managing risk and risk/
reward relationships for corporate strategic objectives, establishingappropriate mitigation and management practices, and empowering

Organizational risks (reputation, competition, culture or
governance)
Macroeconomic factors (gross domestic product, supply anddemand, etc.)
In order to evaluate, measure and manage risk on an integrated
basis across geographies and different aspects of our business,
we have developed the Prologis Integrated Risk Index (PIRI).
PIRI is a proprietary risk management model that provides realtime monitoring of total company risk as well as the individualcomponents of risk. PIRI evaluates external risk, financial risk andbusiness risk, including real-estate-related asset risks such asvacancy, development, land, environmental, seismic and litigation.

leaders to identify functional risks.

PIRI increases risk awareness through the identification, assessment

Our management approach to addressing risks that might impact

risk components within their own sphere of influence.

financial performance builds upon traditional risk management
functions such as the Legal, Investment Services and Insurance/Risk
Management departments. However, the concept of risk mitigation
is woven into every function at Prologis, from the Treasury and
Finance departments to the Leasing and Capital Deployment
departments to the Corporate Communications, Corporate
Responsibility and Human Resource departments. Each of thesefunctional areas has developed internal metrics to track performanceand guide decision-making related to risk mitigation.

and prioritization of risks, and enables key business units to manage

Before any capital is committed to a new investment, we perform
thorough due diligence and present investment memos based on
the findings to Prologis’ internal Investment Committee, which iscomposed of the Executive Committee of the company as well as
rotating members of senior management globally. The committee
reviews investment memos, conducts an economic analysis andconsiders the social and environmental impacts of the investment.

39

Corporate Overview

Prologis 2012 Corporate Responsibility Report

We believe ourproactive approachto sustainable
development
positions us wellin regard to
managing future
regulation.

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

We take precautionary measures to address risk in operational

Prologis has a Disclosure Committee comprising appointed

planning and with new investments. We have operational controls in

employees that assist the CEO and the CFO with theirplace for emergency management, carry comprehensive insurance

responsibilities regarding the company’s disclosure controls andcoverage, maintain dedicated personnel to manage our assets,

procedures. Their purpose is to ensure these controls are adequately

conduct both standardized and consistent leasing practices, anddesigned and operating effectively. The Disclosure Committee

conduct a thorough underwriting process. In addition, throughensures that all appropriate information is disclosed in reports

our Internal Audit department, we perform regular independent

filed or submitted under the Securities and Exchange Act of 1934,

assessments of our systems to ensure we are performing according

as amended. A questionnaire is circulated quarterly to selected

to Prologis’ objectives.

company business unit leaders and others in charge of particular

We are committed to analyzing risks at the board level. The board
is responsible for evaluating the company’s business performanceand is updated on Prologis’ major strategies, plans and investment
activity at every board meeting. The Board Audit Committee ischarged with monitoring the quality and integrity of Prologis’
accounting and reporting practices. The Board Governanceand Nomination Committee regularly assesses and develops
recommendations for the Board regarding corporate governancematters and principles, as well as environmental stewardship andsocial responsibility matters.
In the future, we may be affected by stricter energy efficiency
standards for buildings. If buildings become subject to more
stringent energy conservation regulations, we may see more
stringent requirements related to zoning, impact fees andenvironmental management. We could also see energy and resource
risk due to less reliability and higher prices for energy, water andwaste disposal. We believe our proactive approach to sustainable
development positions us well in regard to managing future
regulation and helps to mitigate our exposure to fluctuations inthese areas.

processes or procedures to give feedback to the Disclosure
Committee and assist with monitoring. The Disclosure Committee
provides recommendations to the CEO and the CFO prior to thefiling of our SEC reports.

40

Corporate Overview

Prologis 2012 Corporate Responsibility Report

GRI
Content
Index

Environmental Stewardshipdescription

GRI Index

description

page

indicator

1.1

CEO Statement

3, 4

3.9

7

1.2

Key impacts, risks, and opportunities.

3, 4,	Data measurement techniques and thebases of calculations.

3.10

	Explanation of the effect of any re-statements
of information provided in earlier reports.

8

3.11

	Significant changes from previous
reporting periods in the scope, boundary,or measurement methods.

8

3.12

	Table identifying the location of the Standard
Disclosures in the report.

40

3.13

	Policy and current practice with regard toseeking external assurance for the report.

43

38

Indicator has been
partially reported

Ethics and Governanceindicator

15, 28,Indicator has been
fully reported

Social Responsibility

page

2.1

Name of the organization.

5

2.2

Primary brands, products, and/or services.

5

2.3

Operational structure.

5, 6

2.4

Location of headquarters.

5

2.5Countries of operation.

5

2.6

Nature of ownership and legal form.

5

2.7

Markets served.

5

4.1

Governance structure of the organization.

37

2.8

Scale of the organization.

5

4.2

37

2.9

Significant changes during the reporting period.

	Indicate whether the Chair of the highest
governance body is also an executive officer.

5
13

3.1

Reporting period.

6	Number and gender of members of the highest
governance body that are independent and/or
non-executive members.

37

Awards received in the reporting period.

4.3

2.10

3.2

Date of most recent previous report.

6

4.4

38

3.3

Reporting cycle.

6	Mechanisms for shareholders and employees
to provide recommendations or direction to
the highest governance body.

3.4

Contact point for questions.

6

4.5

Process for defining report content.

6, 7, 8

3.6

Boundary of the report.

6, 7	Linkage between compensation formembers of the highest governance body,senior managers, and executives, and theorganization’s performance.

37

3.5

4.6

	Processes in place for the highest governancebody to ensure conflicts of interest are avoided.

35, 37

4.7

37
	Process for determining the composition,
qualifications, and expertise of the members of
the highest governance body and its committees.

3.7

	Limitations on the scope or boundaryof the report.

6, 7

3.8

	Basis for reporting on joint ventures,subsidiaries, leased facilities, outsourced
operations, and other entities.

7

41

Corporate Overview

Prologis 2012 Corporate Responsibility Report

GRI
Content
Index

Ethics and Governance	Internally developed statements of mission orvalues, codes of conduct, and principles.

35, 36

EC7

	Procedures for local hiring.

31

EC8

33

	Procedures of the highest governance body foroverseeing the organization’s identification andmanagement of economic, environmental, andsocial performance.

39	Development and impact of infrastructure
investments and services provided primarily for
public benefit.

DMA	Disclosure of Management Approach –Environmental

14, 15

4.10

	Processes for evaluating the highest governancebody’s own performance.

37

CRE1

	Building energy intensity.

24

4.11

	Whether and how the precautionary approachor principle is addressed by the organization.

38, 39EN5

	Energy saved due to conservationand efficiency improvements.

23

4.12

	Externally developed economic, environmental, 12
and social charters, principles, or other initiatives
to which the organization subscribes or endorses.

EN6	Initiatives to provide energy-efficient or
renewable energy based products and services.

23, 26

EN7

	Initiatives to reduce indirect energy
consumption and reductions achieved.

19, 20,

EN13

	Habitats protected or restored.

18, 20EN14	Strategies, current actions, and future plans
for managing impacts on biodiversity.

18, 20,EN16

	Total direct and indirect greenhouse gas
emissions by weight.

24

EN17

	Other relevant indirect greenhousegas emissions by weight.

24

CRE3

	Greenhouse gas emissions intensityfrom buildings.

24

EN18

	Initiatives to reduce greenhousegas emissions and reductions achieved.

23

CRE5

	Land and other assets remediated and in need of 17, 18
remediation for the existing or intended land use.

4.13

	Memberships in associations.

13

4.14

	List of stakeholder groups engaged by theorganization.

8	Basis for identification and selection of
stakeholders with whom to engage.

8

4.16

	Approaches to stakeholder engagement.

8-12

4.17

	Key topics and concerns that have been raised
through stakeholder engagement.

11, 12DMA	Disclosure of Management Approach – Economic 38, 39

EC1	Direct economic value generated and distributed. 29

EC238	Financial implications and other risks andopportunities for the organization’s activities due
to climate change and other sustainability issues.

4.15

Indicator has been
fully reported
EC6	Policy, practices, and proportion of spending on
locally-based suppliers.

33

description

GRI Index

indicator

4.8

description

Social Responsibility

page

indicator

4.9

Indicator has been
partially reported

Environmental Stewardshippage23, 2432, 33

42

Corporate Overview

Prologis 2012 Corporate Responsibility Report

GRI
Content
Index

Indicator has been
partially reported

Ethics and Governance

GRI Index

indicator

	Initiatives to enhance efficiency and mitigate
environmental impacts of products and services.

18, 20,SO1	Monetary value of significant fines andtotal number of non-monetary sanctions
for noncompliance with environmental
laws and regulations.

17	Percentage of operations with implemented
local community engagement, impact
assessments, and development programs.

SO3

	Percentage of employees trained in organization’s 35, 36
anti-corruption policies and procedures.

SO7

35

DMA

	Disclosure of Management Approach –Labor Practices and Decent Work31

	Total number of legal actions for anticompetitive
behavior, anti-trust, and monopoly practices.

SO8	Total workforce by employment type,
employment contract, and region.

31	Monetary value of significant fines andtotal number of non-monetary sanctions fornoncompliance with laws and regulations.

35

LA1

LA2

	Total number and rate of new employee hires
and employee turnover.

32

DMA

	Disclosure of Management Approach –Product Responsibility

8, 11,

LA3

	Benefits provided to full-time employees.

32

LA4

	Percentage of employees covered by collective
bargaining agreements.

31

LA10

	Average hours of training per year per employee. 31

LA11	Programs for skills management andlifelong learning that support the continued
employability of employees.

32

LA12

	Percentage of employees receiving regularperformance and career development reviews.

31

DMA

	Disclosure of Management Approach –Human Rights

27, 28HR4

	Total number of incidents of discriminationand corrective actions taken.

31

DMA

	Disclosure of Management Approach – Society

32, 36

EN26

description

Social Responsibility

page

indicator

EN28

Indicator has been
fully reported

Environmental Stewardship23, 26

description

page
32

21, 33,35

PR1

	Life cycle stages in which health and safety
impacts of products and services are assessed
for improvement.

33

CRE8

	Type and number of sustainability
certification, rating and labeling schemes
for new construction, management,
occupation and redevelopment.

21

PR5

	Practices related to customer satisfaction.

11

PR6

	Programs for adherence to laws, standards,
and voluntary codes related to marketing
communications.

35

PR7

35
	Total number of incidents of non-compliancewith regulations and voluntary codes concerningmarketing communications.

43

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Ethics and Governance

GRI Index

Independent Assurance Statement

We adopt a balanced approach towards all stakeholders when

Scope and Objectives

performing our evaluation.

Two Tomorrows (North America) Inc. was retained by Prologis Inc. toconduct independent assurance of its 2012 Corporate Responsibility
Report (‘the Report’), as published on the company’s website at
http://www.prologis.com/en/responsibility.html.
The assurance process was conducted in accordance with the 2008
The Two Tomorrows group ofcompanies was formed in January
2009 following the merger ofleading sustainability and corporate
responsibility consultancies,
Csrnetwork Ltd and Sd3 Ltd. Two
Tomorrows (North America) is
a subsidiary of DNV Business
Assurance North America. Two
Tomorrows is an international
consultancy that helps companies toperform better and create value by
doing business in a sustainable way.
www.twotomorrows.com

Social Responsibility

AccountAbility 1000 Assurance Standard [AA1000AS (2008)]. We
were engaged to provide Type 2 assurance to a moderate level,
which covers:
Evaluation of adherence to the AA1000APS (2008) principles ofinclusivity, materiality, and responsiveness (the Principles)
The reliability of specified sustainability performance information.
Information presented in the Report, with the exception offinancial information related to Prologis’ 2012 10-K filing andProxy Statement, was included in the scope of our assurance
engagement. We used the Global Reporting Initiative (GRI) Qualityof Information Principles as Criteria for evaluating performance
information.

Our team comprised: Todd Cort, Sarah Gudernatch, and Natasha
D’Silva. Further information, including individual competencies
relating to the team, can be found at: www.twotomorrows.com
Basis of our opinion
Our work was designed to gather evidence with the objective ofproviding assurance as defined in AA1000AS (2008). We undertook
the following activities:
We conducted interviews with a selection of senior managers
in San Francisco, California and Denver, Colorado who
are responsible for areas of management and stakeholder
relationships covered by the Report. The objective of these
discussions was to understand Prologis’ governancearrangements, stakeholder engagement process, management
priorities, and systems;
We conducted a general review of issues raised by external parties
that could be relevant to Prologis’ policies to provide a check on
the appropriateness of statements made in the Report;

Responsibilities of Prologis Inc. and of the Assurance Providers

We visited one construction site in Fife, Washington. During

Prologis has sole responsibility for preparation of the Report. Two

the site visit, we interviewed local management and theTomorrows, in performing our assurance work, is responsible tocontractor company responsible for project management as

Prologis’ management. Our statement, however, represents ourwell as reviewed site-level sustainability data for January throughindependent opinion and is intended to inform all stakeholders

December 2012; andincluding Prologis’ management.

We reviewed the full 12-month sustainability data collated at

Two Tomorrows was not involved in the preparation of any partof the Report. This is our seventh year of providing assurance for
Prologis and currently, we have no other contracts with Prologis.

the corporate level and statements made in the Report. We
interviewed managers responsible for internal data validation,
reviewed their work processes, and undertook sample checks on
consolidated sustainability data.

44

Corporate Overview

Prologis 2012 Corporate Responsibility Report

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index

Findings

The company has an opportunity to improve its process of

On the basis of the work conducted, nothing came to ourprioritizing non-financial issues by developing a formal materiality

attention to suggest that the Report does not properly describe

process. A formal materiality process helps to ensure that non-

Prologis’ adherence to the Principles of Inclusivity, Materiality,

financial risks and opportunities are recognized and properly

and Responsiveness. Moreover, nothing came to our attention

considered by the company.

to suggest that the data and claims made in the Report are notaccurate and complete.

Responsiveness: the extent to which an organization responds tostakeholder issues.

Observations

Prologis engages and responds to stakeholders at all levels of

Without affecting our assurance opinion, we have noted thethe company. The company has particularly strong mechanisms

following areas of strong practice as well as opportunities forin place to respond to traditional stakeholders such as customers

Prologis’ to further improve its adherence to the Principles:and investors. These include particularly strong practices such as a

Inclusivity: the participation of stakeholders in developing andachieving an accountable and strategic response to sustainability.

customer advisory panel and regular investor updates on the green
building and sustainability initiatives undertaken by the company.

During construction of new developments, Prologis promotes

In addition, significant investment was made in 2012 and into 2013

health, safety, and environmental stewardship through contract

to engage with employees around sustainability initiatives andprovisions with construction contractors as well as active oversightcommunity involvement. Sustainability and corporate responsibility

and engagement.

have been focus areas for employee town hall meetings,

Although Prologis works effectively with local planning agencies,
there may be additional benefits to implementing more detailed
community outreach programs to engage neighbors during
construction to ensure any concerns are addressed proactively.
Materiality: identification of those issues which are necessary forstakeholders to make informed judgments concerning Prologis

information presented on the Prologis intranet, and in-personawareness raising efforts through operational visits by the Prologis
sustainability team.
Two Tomorrows (North America) Inc.
OaklandApril 2013		and its impacts.
In our opinion, and based on the information that we have reviewed,
Prologis has addressed the most material environmental and social
issues facing the company and its stakeholders.

Todd Cort
Project Director

Sarah Gudernatch
Project Associate

Natasha D’Silva
Project Associate

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Prologis 2012 Corporate Responsibility Report

Corporate Overview

Environmental Stewardship

Social Responsibility

Ethics and Governance

GRI Index