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UDR ESG — Elevated Excellence

101 N. Meridian's exterior - UDR ESG - Elevated Excellence

Our Commitment to Environmental, Social, and Governance Responsibilities


At UDR, we understand the impact our business can have on the environment and upon our stakeholders. Our Environmental (“E”), Social (“S”), and Governance (“G”) (collectively “ESG”) efforts assist us in identifying and managing our sustainability risks and opportunities. Our ESG improvements are designed to improve operational quality, improve associate and resident retention, and reduce our impact on the environment. The 2024 ESG Report demonstrates our work in environmental sustainability, our investments in our associates, our residents, and the communities in which we operate, and our dedication to sound corporate governance. We are constantly working towards elevated excellence in ESG as it relates to our stakeholders and our bottom line.

For any questions about ESG at UDR, please contact UDR’s ESG Team at [email protected]

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Chairman and CEO Message

CEO Thomas Toomey

We are delighted to share with you our 6th annual ESG report, which highlights UDR’s ongoing and robust commitment to being an ESG leader. Realizing tangible progress towards our ESG goals is imperative as successful execution (1) helps to support and enrich our cultural values, (2) shows stakeholders UDR is committed to doing its part on ESG, and (3) enhances our bottom–line results.

Regarding UDR’s strategic vision and future goals, a foundational principal we have adhered to over my tenure as Chairman and CEO is “listen to our associates, listen to our residents, and listen to our investors”. This principle is a key driver of our company’s culture, and the feedback received from these diverse groups often provides the most actionable information regarding where we are excelling and where we can improve. ESG is no different and I believe our future ESG successes will largely be driven by continuing to listen and then implementing what we learn. Putting this mantra into action over the past year, we,

  • Listened to the needs of our associates more so than ever by conducting quarterly “pulse” surveys to better understand how our associates view their experiences at UDR. We received approximately 6,900 associate responses in 2023 and 2024 thus far, all of which have helped to shape and refine our approaches towards benefits, training, employee retention, etc.;
  • Listened to our residents by delving more deeply into their living experience with UDR through our Customer Experience Project (“CEP”). The CEP helps to improve our residents’ UDR experience and reduce resident turnover over time. This includes aiming to identify when our interactions with residents are successful or unsuccessful as these touch points can increase or decrease a resident’s likelihood of continuing to live with us. We built and calibrated the CEP using approximately 650 million historical resident–focused data points; and;
  • Listened to our investors through 708 interactions (85% of our outstanding common share count) in 2023 and early 2024 to better understand their views on our strategy and its execution.

Continuing to evolve our already strong culture so that it remains adaptable to ever–changing stakeholder wants and needs will remain key to our future success. We are hard at work to ensure that the feedback we receive from all stakeholders is not only heard but acted upon when appropriate.

As outlined in this report, we have continuously improved ESG over time at UDR. Noteworthy recent achievements include:

  • Lowering our 2023 portfolio–wide Scope 1 and 2 greenhouse gas (“GHG”) emissions intensity by 20% below our 2020 baseline year and halfway to our 40% reduction target expected to be achieved by 2035. We anticipate further improvement in the coming years as GHG emissions reduction initiatives are implemented at more of our apartment communities.
  • Deploying GHG emissions reducing initiatives over the past year into certain markets where we operate that are subject to BPS, being New York City, Washington, D.C., and Denver. These initiatives are estimated to reduce our total GHG emissions from energy in those markets by 10% in the coming years. Looking ahead, we plan to expand our GHG emissions reduction scope beyond BPS markets to systematically decarbonize a greater percentage of our portfolio.
  • Certifying an additional seven UDR apartment communities as sustainable during 2023, bringing our total to 36 communities. Sustainable communities are more desirable for our residents while driving revenue and expense efficiencies that create value for other stakeholders.
  • Receiving recognition for our ESG efforts including being named a 2024 National Top Workplaces winner in the Real Estate Industry and named to Newsweek’s America’s Most Sustainable Companies for the third consecutive year in 2024.

Collectively, these are significant accomplishments and are emblematic of our ongoing commitment to enhancing our ESG as ESG itself continues to evolve. My gratitude goes out to the entire UDR team, who showcase innovation and dedication daily to make UDR a better ESG steward.

As you read through our 2024 ESG Report, you will note that many of our ESG goals and disclosures tie to the UN Sustainable Development Goals (“SDGs”) as well as the GRI, SASB, and TCFD standards. Each serve as an important framework for decision making and goal setting across E, S, and G. Our aim is to provide full transparency around how UDR’s ESG efforts meet external requirements while encouraging our associates and residents to take an active role in achieving our sustainability goals.

Lastly, UDR’s capable and diverse Board of Directors (“Board”) and executive team remain firmly committed to advancing ESG and continuing to reduce our carbon footprint when economically viable and where appropriate. Our Board remains highly engaged across a variety of E, S, and G topics, receiving annual strategy updates and more specified progress updates at least quarterly. In addition, a portion of our senior corporate and field leaderships’ annual compensation remains dependent on whether we meet certain predetermined ESG–related goals. Continuing to foster an environment that encourages honest discussion and seeks to include diverse perspectives is key to our ultimate ESG success, and, as is evident, continues to be stressed at the highest levels.

I sincerely hope you find our 2024 ESG Report insightful and can appreciate the significant contributions UDR associates have made to turn our ESG goals into reality.

Sincerely,

CEO Thomas Toomey

Thomas W. Toomey
Chairman and Chief Executive Officer

Awards

National Top Workplaces
2024

Newsweek America's Most Responsible Companies
2024, 2023, 2022

GRESB Awards
Sector Leader: 2023, 2021
5-Star Rating: 2022

Logical Buildings Smart Buildings Innovator of the Year
2021, 2020

NAA Awards
2020 Excellence in Technology & Innovation Award
2020 Silver Sustainable Living Innovation Award

In the News

Recognized by NASDAQ 2023  

Recognized by NASDAQ 2022  

UDR Achieves GRESB 5 Star Rating  

Recognized by NASDAQ 2021  

2021 GRESB Top Listed Residential Company - Score 86  

2020 GRESB Top Performer Status - Score 83  

2020 GRESB Public Disclosure "A" for Second Year in a Row  

Other Reports

ESG Reports
2023, 2022, 2021, 2020, 2019

Environmental Metrics and Independent Assurance Statements
2023, 2022, 2021, 2020

Green Bond Reports
2022, 2021, 2020

ESG Highlights


National Top Workplaces Logo

Named a 2024 National Top Workplaces winner in the Real Estate Industry

UN SDGs

Aligned with 10 UN Sustainable Development Goals ("SDGs")

CO2 Icon

Adopted Scope 1 & 2 emissions intensity reduction of 40% and a Scope 3 emissions intensity reduction of 30% from 2020–2035

DEI

Diversity, equity, and inclusion (“DEI”) metrics are included in our senior executive team’s short–term incentive (“STI”) program

22 percent

Turnover rate achieved for 2023, lower than the industry standard

Solar panel

On–site solar generation has generated a cumulative 5 million kilowatt hours (“kWh”) of renewable energy since 2019

30 million

Committed $30 million to climate and sustainability funds

NEW

Quarterly associate pulse surveys to assess engagement, benefits, and more

NEW

Named Outstanding Developer/Builder of the Year as part of the 2024 LEED Homes Awards

78%

of associates believe there is open and honest communication at UDR, exceeding the industry average of 69%

539

Interactions with our shareholders in 2023 and early 2024, representing 85% of common stock outstanding

30%

of Common Area Electric Consumption procured from Renewable Energy Sources

UDR ESG Methodology


Materiality Assessment

To prioritize ESG topics to include in our disclosures, we rank each topic in terms of relative significance of how each topic influences stakeholder decisions and the relevant impact UDR has on the economic, environmental, and social aspects of each topic within UDR’s ecosystem. The topics and their rankings are periodically reviewed by senior leadership through a survey to reflect current ESG initiatives and relevant ESG engagement across our stakeholder groups. The results of our most recent survey are shown in our Materiality Assessment Table, while our ESG Report includes additional information concerning our management of the topics and relevant actions taken.

With regards to our ESG reporting, any use of the terms “material,” “materiality,” “immaterial,” “substantive,” “significant” and other similar terminology refers to the expected significance of our potential impact on economic, environmental and social topics or to topics or standards designated as “material” or “substantive” under the GRI standards, SASB standards or TCFD framework. These terms as used in our ESG reporting are not used, or intended to be construed, as they have been defined by or construed in accordance with the securities laws or any other laws of the United States or any other jurisdiction, or as these terms are used in the context of financial statements and financial reporting.

Materiality Assessment

ESG Governance

Starting in 2021, our Governance Committee Charter was amended to assign the Governance Committee oversight of the Company’s ESG disclosures, including any ESG report that is published. Sustainability is incorporated into UDR’s overall risk assessments, and the Board provides risk oversight. Continued discussions of ESG during Board meetings have focused on how we can further integrate human capital into our overall business and updates on our refreshed Sustainability Strategy, including progress towards our science–based emissions reduction targets and mitigation of climate–related risk. These discussions will continue to evolve as we seek to enhance our commitment to ESG and further align the Company’s sustainability objectives with those of our stakeholders.

UDR’s ESG Committee, made up of senior officers at the Company, sets Company–wide ESG targets, goals, and strategy in conjunction with the Board. Chairman and CEO, Tom Toomey, steers the Committee which approves the ESG strategy, while UDR’s other members are responsible for implementing and monitoring progress towards meeting ESG targets and goals, evaluating the integrity of the Company’s overall ESG reporting processes, and assessing the vision of our sustainability objectives. As part of our EMS process, we conduct third–party and internal assurance testing of the accuracy and completeness of significant ESG metrics. These include GHG emissions, energy usage, water usage, waste diversion, associate compensation, diversity, training, and gender metrics included in our 2024 ESG report and the 2024 GRESB survey.

United Nations Sustainable Development Goals


Sustainable Development Goals logo

In our 2022 ESG Report, UDR announced the alignment of our ESG goals with 10 of the 17 United Nations SDGs that we believe are the most relevant to our industry. To illustrate our continued commitment to these 10 goals, we have listed examples of contributions towards each selected goal with additional information available in our 2024 ESG Report.

 
Goal 3

In 2023 we enhanced our benefits package in 2023 based on associate feedback, including the reduction of the waiting period for benefits to kick in and 401(k) auto–enrollment for new hires, the addition of teen mental–health support to our associate resource program, and the opportunity for eligible associates to ,”sell back“ a portion of their accrued and unused vacation time to the company.

Goal 5

UDR incorporates gender–based compensation ratios into our annual compensation analysis, and the ratios, our EEO–1 table, as well as promotion metrics by gender are included in our ESG disclosures to provide transparency and track our efforts on this matter over time.

Goal 6

UDR continues to utilize water management and leak detection technology. In 2023, we used over 15,978,000 gallons of reclaimed water for irrigation purposes, thereby reducing our use of potable water.

Goal 7

In 2023, UDR produced over 1 million kWh of renewable energy through onsite solar and retired Green-e certified renewable energy credits (“RECs”) representing 33,903,000 kWh of energy usage. We continue to evaluate opportunities to implement renewable energy technologies to additional apartment communities.

Goal 8

In 2023, UDR achieved an associate turnover rate of 22%, which is lower than the industry standard of 40% (based on NAREIT and CEL data) and reduced the average number of open positions and time to fill metric by 50% from January 2023 to December 2023, despite the more challenging hiring environment post pandemic.

Goal 9

Over the last nine years we have completed over 300 sustainability projects to promote more efficient water and energy consumption and more sustainable waste management. We also have invested in strategic ESG and Climate Technology Funds, with $30 million committed to help us identify real estate technologies intended to reduce our carbon footprint.

Goal 10

In 2023, we strengthened our partnership with the National Diversity Council and other third–party DEI organizations to provide resources and support to our associates. With regards to hiring, we scored 4.33 out of 5 on an internal metric that measures our abilities to include diverse candidates in the interview process.

Goal 11

In 2023, UDR obtained 7 sustainability certifications, increasing our total number of certified communities to 36 (representing over 19% of the portfolio). Additionally, our environmental goal related to sustainability certification set a minimum standard of LEED Silver or equivalent for new developments.

Goal 12

Throughout 2023, UDR continued to engage with our residents around sustainable consumption strategies with over 82,700 environmental communications.

Goal 13

In 2023, we continued to utilize our asset– and market–level climate related risk ranking to determine and search for ways to mitigate near– versus longer–term climate–related risks and to optimize opportunities that could impact the Company.

ESG Measurement and Reporting


Our ESG goals were originally established to promote sustainability across our business operations, further our inclusive and innovative culture, and create long–term value for our stakeholders. In 2023, we updated our environmental goals to align with science–based targets and to reflect our most recent Sustainability Strategy update, including Scope 1, 2, and 3 emissions intensity reduction targets, where emissions intensity is represented as kg carbon dioxide equivalent (”CO2e“) per square foot (”SF“). We continue to incorporate intensity–based energy, renewable energy procurement, water, and waste reduction goals as operating sustainably affects the carbon footprint of our entire value chain.

We report our progress on each goal and target to our ESG Committee, Board, and our stakeholders. Periodically, our goals and targets are reviewed to confirm alignment with our business strategy and our stakeholders.

Progress towards ESG goals and targets chart1
Progress towards ESG goals and targets chart2
Progress towards ESG goals and targets chart3
 

Our Commitment To:


THE ENVIRONMENT  

SOCIAL RESPONSIBILITY  

CORPORATE GOVERNANCE