Canadian Apartment Properties Real Estate Investment Trust : Our 2023 ESG Report

Environmental,

Social and

Governance

Report

2023

Introduction

About this Report

REPORTING SCOPE AND BOUNDARIES

This report summarizes Canadian Apartment Properties Real Estate Investment Trust's (CAPREIT's) environmental, social, and governance (ESG) actions and performance for the 2023 calendar year. Although CAPREIT's consolidated financial statements include CAPREIT's operational footprint in Europe, our 2023 ESG report covers CAPREIT's Canadian business operations, which comprise of 89% of our suites and sites as at December 31, 2023, including residential suites, manufactured home community (MHC) sites, and commercial/retail spaces, unless stated otherwise.

Unless stated otherwise all currency is in Canadian dollars.

REVIEW AND ASSURANCE

We engaged sustainability consultants Quinn+Partners to advise on material report content, indicators, and alignment with leading ESG disclosure frameworks and standards including GRI (2021), the Sustainability Accounting Standards Board (SASB) Real Estate Standard, and recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).

KPMG was engaged to provide a limited assurance conclusion over select indicators for the year ended December 31, 2023. For details, please refer to KPMG's Independent Limited Assurance Reporton page 68.

REPORTING FRAMEWORKS AND STANDARDS

This report has been prepared with reference to investor- focused ESG standards and frameworks including SASB and the recommendations of the TCFD. In addition, we have provided performance metrics with reference to the updated (2021) GRI Standards. This report cross-references information related to these standards and frameworks with indices provided in the Performance Scorecard and standards indices at the back of this report.

CONTACTS AND INQUIRIES

Any questions or comments about this report can be directed to CAPREIT's Senior Vice President, Corporate Affairs: Larry Greer, [e-mail]. For more information on CAPREIT's sustainability and ESG-related activities and accomplishments, and to view our past reports, please visit www.capreit.ca/about-us/our-esg-story.

GRI 2021 2-2	GRI 2021 2-4
GRI 2021 2-3	GRI 2021 2-5
CAPREIT 2023 ESG REPORT	1

The Hub Place, Vancouver, BC

Contents

Introduction

About this Report	1
Message from our President and
Chief Executive Officer, and Chair	3
2023 ESG Highlights	4
Who We Are	5

Our Approach to ESG

Our Approach to ESG	6
CAPREIT's ESG Strategy	7
Awards, Certifications and Memberships	8

Best Place to Live

Asset Management	10
Resident Satisfaction and Safety	15
Affordable Housing	17
Community Partnerships	19
Next Steps	20

Best Place to Work

People and Culture	22
Diversity, Equity and Inclusion	24
Environmental Health and Safety	25
Next Steps	26

Best Place to Invest

ESG Governance Systems and Processes	28
Corporate Governance Practices	31
ESG Risk Management	33
ESG Integration in the Investment Process	34
Next Steps	35

Climate Action

Climate Governance	37
Climate Strategy	38
Climate-related Risk Management	39
Climate-related Metrics and Targets	40
Next Steps	41

2023 ESG Performance Scorecard

Reporting Scope	43
CAPREIT's ESG Performance Scorecard	43
SASB Index	54
TCFD Index	56
GRI Content Index	57
Assurance Report	68

CAPREIT 2023 ESG REPORT

2

Message from our President and Chief Executive Officer, and Chair

interacting with CAPREIT, as well as the many ways residents can provide feedback and escalate their concerns to us. It is our hope that our Resident Bill of Rights framework can be used by the entire industry to better explain renters' rights and empower vulnerable communities.

INTRODUCTION

Message from our President and Chief Executive Officer, and Chair

2023 ESG Highlights

Who We Are

We are thrilled to share the progress we have made in advancing our ESG vision in alignment with our strategic pillars to be the Best Place to Live, Work and Invest. As we navigate the complexities of today's ever-changing landscape, our commitment to fostering satisfaction among our residents and employees, building thriving communities, and protecting the environment remain guiding principles.

In 2023, we established a new iteration of our business strategy that has the objective of modernizing the performance and quality of our portfolio with a focus on getting better, rather than bigger. We are achieving this through selling certain older, legacy properties which we have identified as non-core and re-investing in new-build rental apartments located in highly coveted Canadian cities where immigration is greatest, and housing is needed the most. At the heart of our new strategy is a forward-looking approach to capital allocation and the strategic repositioning of our portfolio to align with our long-term commitment to sustainability. The new-build apartments in our portfolio tend to be more energy efficient and therefore have lower capital investment requirements compared to older-vintage buildings. In 2023, we purchased approximately $300 million in recently constructed, purpose-built rental properties while disposing of over $400 million worth of non-core buildings.

CAPREIT 2023 ESG REPORT

At the same time, we invested $29.8 million on energy-saving and resiliency, and $0.9 million on water efficiency projects in our Canadian Portfolio. This represents an increase of nearly 50% from the $19.9 million and $0.8 million we spent in 2022 on energy saving and resiliency, and water efficiency projects, respectively. This increase should lead to lower utility costs for CAPREIT and increased comfort for our residents, while also reducing the environmental footprint of our legacy properties and complying with future performance standards.

Affordable housing continues to be a key focus of our ESG Strategy. We recognize the critical importance of providing safe, comfortable, and affordable homes for our residents, as well as using our voice alongside other real estate investment trusts (REITs) to advocate for solutions to Canada's housing supply and affordability crisis. While publicly traded residential REITs represent less than 3% of the total rental market in Canada, we are proud to set a strong example by prioritizing our commitment to affordability for our residents, and ultimately raise the bar for our entire industry.

In line with our desire to be the Best Place to Live, and our strategy of getting better, rather than bigger, we are always seeking new ways to enhance our resident experience. This past year, to empower residents, we developed a Resident Bill of Rights. The purpose of the Resident Bill of Rights is to communicate resident rights in plain language, explain the respect that can be expected when

Last year, we continued to prioritize our support for employees through the provision of ongoing professional development opportunities, and we reinforced our unwavering commitment to protecting their health and safety. In 2023, CAPREIT became a Canadian Red Cross (CRC) certified in-house,first-aid training provider, and hosted our first internal emergency first-aid training session. In addition to helping ensure certification compliance at sites, the ability to facilitate training in-house creates professional development opportunities for employees to become instructors.

Our Board continues to be engaged in our ESG Strategy, particularly in Enterprise Risk Management (ERM), which encompasses our ESG and climate risk management. In addition to progressing our ERM Framework, we also expanded our Board education program to include periodic presentations by risk owners. These presentations enhance our Board's ability to make informed decisions by providing comprehensive overviews of priority risks.

In conclusion, our dedication to sustainability reflects our overarching responsibility to all our stakeholders to implement good environmental, social and governance practices, while delivering sustainable financial returns for our investors and providing a secure, comfortable, high-quality living experience for our residents.

Thank you for your continued support as we embark on this transformative journey towards a more sustainable and responsible future.

Mark Kenney

President and Chief Executive Officer

Dr. Gina Parvaneh Cody

Chair

OUR APPROACH TO ESG

BEST PLACE TO LIVE

BEST PLACE TO WORK

BEST PLACE TO INVEST

CLIMATE ACTION

2023 ESG PERFORMANCE SCORECARD

3

2023 ESG Highlights

Please see link to CAPREIT's Conservation and Sustainability video series for more information about our approach to sustainability.

1. Includes energy efficiency and resiliency investments in residential suites and buildings, MHC sites, and commercial/ retail spaces in the Canadian portfolio.
2. The financial and non-financial risk parameters include offering higher returns, lower costs, better energy efficiency, and improved risk profiles.

CAPREIT 2023 ESG REPORT

Best Place to Live

$30.7 million

invested in energy-saving1, resiliency, and water efficiency projects in Canada

7/10

scored on our annual Resident Satisfaction Survey and our Recommendation Score remained strong at 78%

Published a Resident Bill of Rights

6.1%

reduced our per suite energy use since 2022

Best Place to Work

88%

employee satisfaction with CAPREIT's approach to diversity and inclusion

Launched an internal first-aid training program

61%

female participation in leadership development programs

Implemented a new hire survey to better understand the needs of new employees

Best Place to Invest

50%

female independent trustees

Our new investment strategy further integrates financial and non-financial risk return parameters2

10.2%

total reduced greenhouse gas (GHG) emissions compared to 2019

Expanded our Board Education Program to incorporate insights on specific areas of risk

INTRODUCTION

Message from our President and Chief Executive Officer, and Chair

2023 ESG Highlights

Who We Are

OUR APPROACH TO ESG

BEST PLACE TO LIVE

BEST PLACE TO WORK

BEST PLACE TO INVEST

CLIMATE ACTION

2023 ESG PERFORMANCE SCORECARD

4

Who We Are

CAPREIT is Canada's largest publicly traded provider of quality rental housing.

CAPREIT owns approximately 57,000 residential apartment suites, townhomes and MHC sites well-located across Canada and approximately 7,000 residential suites in the Netherlands as at December 31, 20231.

HOW WE DELIVER VALUE

In Canada, our strategy has evolved to currently prioritize the modernization of our portfolio. We are actively recycling capital by divesting older, non-core properties, creating a substantial source of funding to redeploy into more strategically-aligned opportunities. We are investing to improve the living experience of our residents, the operational performance of our buildings, and the strength of our earnings, to ultimately drive value for all our stakeholders now, and in the future.

CAPREIT 2023 ESG REPORT

IN 2023 WE:

64,000

Provided over 64,000 homes2

12%

Delivered a compound annual growth rate of 12% since inception to our unitholders3

$1,516

Had an average monthly rent of $1,516 in occupied residential apartments

98.8%

Achieved 98.8% occupancy rate in our Canadian residential portfolio4

1. Although CAPREIT's consolidated financial statements include CAPREIT's operational footprint in Europe, our 2023 ESG report covers CAPREIT's Canadian business operations, unless otherwise stated.
2. Select 2023 business highlights include operations in Canada and the Netherlands, for suites and sites as at December 31, 2023.
3. Since inception, unitholders have received a total return, including monthly cash distributions, of 2,044% as at December 31, 2023, or 12% compounded annually.
4. Excludes MHCs.

CANADA

57,374	98.8%
Total suites or sites	Residential apartment occupancy
Province	% Portfolio5	Suites or Sites	% Occupancy
British Columbia	16%	6,207	99.0%
Alberta	3%	2,209	99.1%
Saskatchewan	<1%	234	96.2%
Ontario	52%	22,432	99.2%
Québec	17%	10,394	97.6%
Nova Scotia	6%	3,340	99.3%
Prince Edward Island	1%	424	100.0%
MHC sites	5%	12,134	96.1%

5 Canadian Portfolio allocation by fair value as at December 31, 2023.

SASB IF-RE-000.A	GRI 2021 2-1

INTRODUCTION

Message from our President and Chief Executive Officer, and Chair

2023 ESG Highlights

Who We Are

OUR APPROACH TO ESG

BEST PLACE TO LIVE

BEST PLACE TO WORK

BEST PLACE TO INVEST

CLIMATE ACTION

2023 ESG PERFORMANCE SCORECARD

5

Our Approach

Our Approach to ESG

CAPREIT invests in its buildings and people in order to build a leading portfolio of residential rental properties.

As a responsible provider of housing, we recognize the multifaceted benefits of embracing ESG principles, ranging from improving our environmental sustainability and social responsibility practices and reducing operational costs, to risk management; and long-term value creation.

Our acquisition and disposition initiatives together have the strategic objective of modernizing and optimizing the performance of our portfolio. Our new investment strategy supports our ESG objectives as we aim to acquire newer built properties that tend to have superior energy- and emissions efficiency and offer affordable, modern, high-quality suites in quickly growing Canadian markets.

In 2023, we continued to make progress on our ESG objectives across our strategic pillars. In 2024 and beyond, we plan to continue improving on our approach to ESG by more formally integrating our ESG priorities in how we invest, manage and operate our properties.

We continuously monitor the regulatory landscape to stay informed on current and forthcoming developments related to ESG disclosure regulations, including the Canadian Sustainability Disclosure Standards (CSDS).

CAPREIT 2023 ESG REPORT

Best Place

to Live

Best Place		Best Place
to Work		to Invest

INTRODUCTION

OUR APPROACH TO ESG

CAPREIT's ESG Strategy

Awards, Certifications and Memberships

BEST PLACE TO LIVE

BEST PLACE TO WORK

BEST PLACE TO INVEST

CLIMATE ACTION

2023 ESG PERFORMANCE SCORECARD

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CAPREIT's ESG Strategy

INTRODUCTION

OUR APPROACH TO ESG

CAPREIT's ESG Strategy

Awards, Certifications and Memberships

Best Place to Live

Best Place to Work

Best Place to Invest

Climate Action

Vision

Providing safe and sustainable homes for our residents

Creating a workplace that attracts the best and the brightest, providing opportunity for growth and development

Reinforcing ESG governance and performance to create measurable business value

Climate is a cross-cutting ESG factor that we consider in all aspects of our business

Priority Areas

Asset Management	Resident Satisfaction and Safety
- Energy Management	Affordable Housing
- Water and Waste Management	Community Partnerships

People and Culture	Diversity, Equity and Inclusion
- Employee Engagement and Recognition	Environmental Health and Safety
- Professional Development
- Employee Health and Wellness

ESG Governance Systems	ESG Risk Management
and Processes	ESG Integration in the
Corporate Governance Practices	Investment Process

Climate-related Risk Management	Climate Governance
Climate-related Metrics and Targets	Climate Strategy

BEST PLACE TO LIVE

BEST PLACE TO WORK

BEST PLACE TO INVEST

CLIMATE ACTION

2023 ESG PERFORMANCE SCORECARD

GRI 2021 3-1	GRI 2021 3-2

CAPREIT 2023 ESG REPORT

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Awards, Certifications and Memberships

INTRODUCTION

OUR APPROACH TO ESG

CAPREIT's ESG Strategy

Calgary Residential Rental Association (CRRA)

The Calgary Residential Rental Association Awardsrecognize excellence in the CRRA membership and the Alberta Residential Rental Industry. CAPREIT received the following awards:

• Community Service Award
• Landlord of the Year
• Tenant Experience Award - Tammy Christensen, Mayfair Place

Investment Property Owners Association of Nova Scotia (IPOANS)

IPOANS Innovation & Excellence Awardscelebrate property owners and managers in Nova Scotia who demonstrate distinction across eleven categories. Recognizing the work of corporate programs and individual contributors, these awards highlight the best and brightest of Nova Scotian owners and managers who have made an impact on their communities. Award recipients from CAPREIT include:

• Pillar of the Community Award - Jennifer Bateman

Canadian Federation of Apartment Associations (CFAA)

CAPREIT was recognized at the 2023 CFAA Awardsfor Renovation of the Year - Common area/Amenity under $750,000 for our Knightsbridge King Cross property in Brampton, Ontario.

BOMA Québec

Two CAPREIT buildings that participated in BOMA Québec's Building Energy Challengereceived Improved GHG Performance awards. This award is given to participants who reduced the greenhouse gas emissions in their buildings below the level registered the previous year.

• Appartements Habitat 2500
• Le Métropol

ForAffordable.ca

Through the Canadian Rental Housing Providers for Affordable Housing,we are working to encourage governments to prioritize the construction of more affordable and stable purpose-built rental properties across the country.

Canadian Chamber of Commerce Housing and Development Strategy Council

As a member of the Housing and Development Strategy Councilof the Canadian Chamber of Commerce, CAPREIT collaborates with federal decision-makers to shape housing policies. The council addresses challenges such as standards, regulations, and labour markets, proposing solutions to align policies with industry needs and meet economic and environmental goals.

Awards, Certifications and Memberships

BEST PLACE TO LIVE

BEST PLACE TO WORK

BEST PLACE TO INVEST

CLIMATE ACTION

2023 ESG PERFORMANCE SCORECARD

Federation of Rental-housing Providers of Ontario (FRPO)

The MAC Awardshonour leaders of the apartment industry and their commitment to best-in-class rental accommodations. Through their dedicated teams and innovative spirit, MAC Award winners bring their newest project efforts and ideas to life. We were proud to receive two nominations at the 2023 Gala:

• Best Amenity Space - Renovated - 4000 & 4010 Lawrence Ave, Toronto
• Property Manager of the Year - Mehul Jani

CAPREIT 2023 ESG REPORT

Real Property Association of Canada (REALPAC)

REALPACis a national industry association dedicated to enhancing Canada's real property sector's long-term vitality. REALPAC aims to support the industry's growth and development through connecting with senior executives, advocating for favourable business conditions, and offering education and resources.

GRI 2021 2-28

8

Best Place to Live

CAPREIT aims to be the Best Place to Live by providing our residents quality homes in well-located, thriving Canadian communities. We continually invest in our buildings to improve operating efficiency and maintain high standards of service. Business success hinges on attracting residents and ensuring their living conditions are safe, comfortable, well-managed, and cost-effective.

		RESIDENT
ASSET		SATISFACTION		AFFORDABLE
MANAGEMENT →		AND SAFETY →		HOUSING →

COMMUNITY

PARTNERSHIPS →

CAPREIT 2023 ESG REPORT

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