Transcription
WELLSustainedCorporate Social Responsibility Report2017
Letter From The CEOWellness is at the center of what we do.Welltower provides real estate settings thatpromote wellness for the aging population,and allow leading health systems to drivehealth care delivery toward the goal oflowered costs and improved outcomes. Weare committed to providing high-quality,modern and effective options for thoselooking for a senior living solution, and stateof-the-art medical offices for physicians, andour sustainability program helps us do so.Our efforts are focused on providing healthyenvironments for the people who visit,work and live in our properties, increasingoperational efficiency, and creating longterm, sustainable value for our stakeholders.Our sustainability program promotes thewell-being of our colleagues, and helps uslead the way in developing thriving andresilient local communities.March 2018, and The Welltower will promotewellness and community with the latestinnovations in energy efficiency and residentneeds for cognitive engagement, mobilityand nutrition.In London, we began construction in April2017 of our Wandsworth project, which isprojected to achieve a BREEAM rating ofExcellent. This seniors housing communitywill feature energy saving technologiesincluding cogeneration, solar hot water, lowflow fixtures, and LED lighting.Welltower’s environmental, social andgovernance achievements continue tolead the industry and garner recognition.Our 2017 accomplishments are highlightedbelow: Thomas J. DeRosaCEO, Welltower Inc.In 2017, we completed preconstruction ofThe Welltower, midtown Manhattan’s firstpurpose built assisted living and memorycare community located at E. 56th street.This unique 16 story, 130,000 square footcommunity will be developed to meet NewYork’s strict criteria for LEED and WELLBuilding Certifications. We broke ground inWe were recognized as a globalleader in sustainability performanceby sustainability investment specialist,RobecoSAM. We were listed in theRobecoSAM 2018 SustainabilityYearbook and recognized as an IndustryMover for the greatest improvementin performance over the previous year.The Sustainability Yearbook identifies2
the top 15 percent of companies in itsindustry for environmental, social andgovernance leadership. We advanced our goal of owninghigh-quality real estate. Welltowercertified eleven medical officebuildings under the IREM CertifiedSustainable Property Program and 17seniors housing communities underthe Energy Star Building CertificationProgram.We introduced green leases in ourMedical Office portfolio and wererecognized through the Institutefor Market Transformation and theDepartment of Energy with the GreenLease Leader Award.We were honored as an EPA GreenPower Partner for renewable energyusage, and were listed in the DowJones North America SustainabilityIndex.Through the Welltower Foundation,we provided more than 800,000in funds to charitable organizationsduring 2017, including 80,000 inhurricane relief funding across the USand Puerto Rico. We participated in the inauguralSustainable Development ImpactSummit, sponsored by the WorldEconomic Forum. We extended wellness programsto our employees across theglobe. These research basedprograms, fitness challenges andhealth screenings had tremendousparticipation, resulting in a healthierwork environment and healthierworkforce.We continue to enhance our sustainabilityprogram, and remain committed to beinga global leader in sustainability. I inviteyou to review our 2017 Corporate SocialResponsibility Report to learn more aboutour work.Thank you for your interest in Welltowerand sustainability.Sincerely,Thomas J. DeRosaCEO, Welltower Inc.3
EconomicOur Work & the UN Sustainable Development Goals4
Our Work & the UN Sustainable Development GoalsProviding the infrastructure necessaryfor health and wellness is the core ofour business. By investing in seniorshousing, medical office and post-acutecare properties, we are helping toensure seniors and their families agewell and live well.We develop modern and resilientproperties and support disaster reliefefforts throughout our communities.Our women’s network, CORE,provides a platform for women atWelltower to network, find mentorsand gain the skills needed to grow intheir career.We work to reduce the amountof waste sent to landfill from ouroperations. Our properties haverecycling programs, and we holdelectronic waste recycling eventsthroughout the year for our tenantsand employees.In addition to the opportunities weoffer at our corporate and regionaloffices, our properties supporthealthcare professionals and theirwork. We also support local suppliersand vendors, allowing them to in turnhire employees and provide jobs.By increasing our energy efficiency,reducing energy consumption,supporting alternative transit andconsuming green power, we arereducing our emissions and potentialnegative impact on climate.5
EconomicGeneral Disclosures6
General DisclosuresDISCLOSURE DESCRIPTIONRESPONSEOrganizational Profile102-1Name of the organizationWelltower Inc.102-2Activities, brands, products, and servicesWelltower is driving the transformation of health care infrastructure. We invest with leading seniors housingoperators, post-acute providers and health systems to fund the real estate infrastructure needed to scaleinnovative care delivery models and improve people’s wellness and overall health care experience. Welltower ,a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth marketsin the United States, Canada and the United Kingdom, consisting of medical office buildings, seniors housingand post-acute care communities. For more information, please visit our website.102-3Location of headquartersWelltower is headquartered in Toledo, Ohio.102-4Location of operationsWelltower operates in three countries: the United States, Canada and the United Kingdom.102-5Ownership and legal formWelltower (NYSE:WELL) is a publicly-traded company incorporated in Delaware, United States.102-6Markets servedAdditional information about our markets can be found within our 2017 Annual Report and Form 10-K.102-7Scale of the organizationAdditional information about our organization can be found within our 2017 Annual Report and Form 10-K. Fortotal number of employees, see 102-8 of the General Disclosures.102-8Information on employees and otherworkersAs of December 31, 2017, we employed 422 full time employees and 6 part-time employees. Additional information on the structure of our workforce can be found within the Social Disclosures section of this report.Supply chainOur supply chain reflects the diverse nature of our operations and is grouped along the following categories:corporate operations, capital markets, investments/asset management and real estate services. Key procurement categories include office supplies, food and beverage, furniture, fixtures and equipment, and corporateprofessional services. Procurement from the corporate operations, capital markets and investments and assetmanagement groups largely consists of office supplies, food and beverage for corporate offices and professional services. The real estate services group procurement is focused on securing goods and services to support the operation of our medical office buildings and is quite diverse. Where possible, we seek to green oursupply chain and we encourage our vendors to adopt sustainable practices.102-97
General Disclosures102-10102-11102-12Significant changes to the organizationand its supply chainNo significant changes.Precautionary Principle or ApproachWelltower recently set long term energy, emissions and water reduction goals focused on reducing ournegative environmental impact. Additionally, we strive to own and operate efficient buildings and minimize theimpacts from our operations. More information on our approach to environmental topics can be found in theEnvironmental Disclosures section of this report.External initiativesWelltower supports the UN Sustainable Development Goals and our work contributes to a number of the goals,including good health and well-being, gender equality, sustainable cities and communities and climate action.We are aligned with the WRI Greenhouse Gas protocol and support the CDP climate change program byexternally reporting our energy and emissions data to CDP annually.We actively engage with allied industry organizations through memberships and leadership roles on boardsand executive committees. Our CEO is a director of CECP, the CEO Force for Good, an organization foundedto create a better world through business, and a member of the executive advisory board for Argentum,an association dedicated to supporting companies operating professionally managed, resident centeredsenior living communities and the older adults and families they serve. Our EVP-Business and RelationshipManagement is a director of the California Assisted Living Association (CALA), an association that representsthe state's residential care facilities for the elderly, and an executive committee officer of the American SeniorsHousing Association (ASHA), an organization that represents the interests of the companies involved inthe finance, development and operation of the full spectrum of housing and services for seniors. Our SVPInternational is a member of the Future Leaders Council of the National Investment Center for Seniors Housingand Care (NIC), an organization that works to enable access and choice by providing data, analytics andconnections that bring together investors and providers.102-13Membership of associationsIn addition to the leadership roles in which our executives serve, we are members of the following organizations:AHCA: the nation's largest association of long-term and post-acute care providers, advocating for quality careand services for frail, elderly and disabled AmericansBOMA: BOMA represents the owners and managers of all commercial property types. Its mission is to advancea vibrant commercial real estate industry through advocacy, influence and knowledgeBusiness Renewables Center: a member-based platform that streamlines and accelerates corporate purchasingof off-site, large scale wind and solar energyDepartment of Energy Better Buildings Alliance: Better Buildings brings together public and private sectororganizations to work together on operating more energy efficient buildingsGRESB: an investor driven organization assessing the sustainability performance of real estate sector portfoliosand assetsUrban Land Institute: a nonprofit research and education organization whose mission is to provide leadershipin the responsible use of land and in creating and sustaining thriving communities worldwide8
General DisclosuresDISCLOSURE DESCRIPTIONRESPONSEStrategy102-14Statement from senior decision-makerPlease see CEO letter of pages 2-3 of this report.102-15Key impacts, risks, and opportunitiesWe provide details on economic, social and environmental risks and opportunities in our Annual Report and10-K filings, CDP responses and throughout this report.Ethics and Integrity102-16Values, principles, standards, and normsof behaviorAt Welltower, we believe that a dedicated commitment to ethical behavior is the right thing to do, is goodbusiness and is the surest way for us to remain a business leader, an employer of choice and a good corporatecitizen. Part of everyone's job at Welltower is to do the right thing. Our reputation is based on the integrity ofeach of our directors, officers, employees and those with whom we do business. For us, doing the right thinggoes beyond compliance. We must work according to our ethical principles and endeavor to conduct ourselvesin a manner beyond reproach.Our Code of Business Conduct and Ethics provides an overview of the principles, standards and norms ofbehavior expected of Welltower directors, officers and employees. We distribute the Code to our employees,provide additional policies and procedures supplementing the Code, and conduct annual refresher training toensure employees are aware of the Code and the behavior expected of them.102-17Mechanisms for advice and concernsabout ethicsOur Code of Business Conduct and Ethics details the mechanisms available to report concerns about unethicalbehavior, and other violations of the Code. We believe part of everyone's job at Welltower is "to do the rightthing" and we will not take action against someone who reports or otherwise tries to stop suspected wrongdoing.Governance102-18Governance structureFor information on our governance structure, including the committees, and environmental, social andgovernance decision making, please visit elegating authorityOur Corporate Governance Guidelines outline the role of the Board and how responsibilities are delegated tosenior executives and other employees.102-20Executive-level responsibility foreconomic, environmental, and socialtopicsUltimate responsibility for Welltower's corporate sustainability programs lies with the SVP-Asset Management,who reports directly to the CEO and meets with the Board of Directors on a regular basis. The SVP-AssetManagement is kept up-to-date on sustainability topics through regular meetings with the sustainabilitymanager.9
General Disclosures102-21Consulting stakeholders on economic,environmental, and social topicsShareholders and other stakeholders can communicate directly with the Board of Directors in writing, orthrough the Governance Hotline. All comments are reviewed and addressed if necessary.102-22Composition of the highest governancebody and its committeesFor more information on our Board of Directors, including composition, independence, tenure, committeeappointments, other commitments, diversity and background please see our 2018 Proxy Statement.102-23Chair of the highest governance bodyThe Chair of the Board of Directors is not an executive officer. In 2014, we separated the roles of Chairman andCEO, which we believe best positions the CEO to focus his time and energy on operating and managing thecompany while increasing the Board of Directors’ independent oversight.102-24Nominating and selecting the highestgovernance bodyFor more information on the nomination and selection process for our Board of Directors, please see theNominating/Governance Committee Charter.102-25Conflicts of interestOur Code of Business Conduct and Ethics details our conflicts of interest policy and the Board's role inensuring conflicts of interest are avoided.102-26Role of highest governance body insetting purpose, values, and strategyOur Corporate Governance Guidelines provide information on the roles of the Board of Directors and seniorexecutives regarding the strategic direction of the organization.102-27Collective knowledge of highestgovernance bodyOur Corporate Governance Guidelines and Committee Charters provide information on how the Board is keptup to date with Welltower's economic, social and governance performance.102-28Evaluating the highest governancebody’s performanceOur Corporate Governance Guidelines and Nominating/Corporate Governance Committee Charter provideinformation on the process for evaluating the Board of Directors composition and performance.102-29Identifying and managing economic,environmental, and social impactsOur Corporate Governance Guidelines and 2018 Proxy Statement provide information on risk management atWelltower, including the role of the Board of Directors in the enterprise risk management process.102-30Effectiveness of risk managementprocessesOur Corporate Governance Guidelines and 2018 Proxy Statement provide information on risk managementat Welltower, including the role of the Board of Directors in reviewing the effectiveness of the enterprise riskmanagement process.102-31Review of economic, environmental,and social topicsOur Corporate Governance Guidelines and 2018 Proxy Statement provide information on how the results of theenterprise risk management process are communicated to the Board.102-32Highest governance body’s role insustainability reportingThe annual Corporate Social Responsibility report is reviewed and approved by Internal Audit, Legal andWelltower's Disclosure Committee.10
General Disclosures102-33Communicating critical concernsOur Corporate Governance Guidelines provide information on how shareholders and other interested partiesmay communicate with the Board. Additionally, we have established a Governance Hotline that allows anyonewho has a concern relating to Welltower Inc. to communicate that concern to the Audit Committee.102-34Nature and total number of criticalconcernsWe have established a Governance Hotline that allows anyone who has a concern regarding questionableaccounting, internal accounting controls or auditing matters relating to Welltower Inc. to communicate thatconcern to the Audit Committee. In 2017, no correspondence was received through the hotline.102-35Remuneration policiesA detailed discussion of remuneration policies for the Board of Directors and Welltower senior executives canbe found within the 2018 Proxy Statement, pages 9-10 and 29-68.102-36Process for determining remunerationA detailed discussion of remuneration policies, including the process for determining remuneration, can befound within the 2018 Proxy Statement, pages 29-68.102-37Stakeholders’ involvement inremunerationAt the 2017 Annual Meeting, approximately 96% of shareholder votes were cast in favor of the compensation ofthe named executive officers (also commonly referred to as “Say-on-Pay”). The Compensation Committee andmanagement continue to engage with shareholders as part of their continuing efforts to refine and enhancethe executive compensation program. For more information on shareholder outreach initiatives, see page 33 ofthe 2018 Proxy Statement.102-38Annual total compensation ratioA detailed discussion of pay ratio is can be found within the 2018 Proxy Statement, page 67.Stakeholder Engagement102-40List of stakeholder groupsWe undertake continuous engagement with a wide range of internal and external stakeholders, including ouremployees, Board of Directors, tenants, operating partners, industry peers, investors, government agencies,credit rating agencies, investor service groups, sustainability ranking organizations, community partners andnon-governmental organizations.102-41Collective bargaining agreementsWelltower is not a party to collective bargaining agreements.102-42Identifying and selecting stakeholdersWe engage with a wide range of stakeholders, through formal and informal mechanisms, in order to obtaina holistic overview of our material aspects. Each of the stakeholders we engage may have influence over ourlong-term successes or a vested interest in the work we do.11
General Disclosures102-43Approach to stakeholder engagementWe have a comprehensive stakeholder engagement management procedure which helps us track and planstakeholder engagement through a number of channels. These include: our employee outreach channels; ourWelltower Collaborative, which connects our seniors housing operating partners with one another and withour management team; making use of regulatory filings, informal face-to-face discussions, company reportingand feedback mechanisms and formal meetings with the investment community to proactively engagewith stakeholders; developing partnerships with non profit health systems and NGOs; tenant and operatorengagement surveys; and our work with our community partners.102-44Key topics and concerns raisedSee 102-47 of the General Disclosures.Reporting Practices102-45102-46Entities included in the consolidatedfinancial statementsOur Form 10-K includes financial data for the company's operations unless otherwise noted, and can beaccessed here.Defining report content and topicboundariesIn 2017, we undertook a comprehensive review of our material topics to ensure continued alignment withthe expectations of our stakeholders, the demands of our business and enhanced sustainability reporting.We identified a wider range of material topics in comparison to previous years, a move which reflects theinclusivity of our stakeholder engagement process and our desire to report in a transparent manner. To ensurethe completeness of our materiality procedure, we reached out to a wide variety of internal and externalstakeholders to gather a broad oversight of sustainability topics relevant to Welltower and our industry.We leveraged our in-house sustainability expertise, consulted with our technical staff, senior management,employees and external consultants, and undertook desk-based assessments of industry trends, reportingmechanisms and peers in the REIT industry. We integrated observations from internal engagements with theviews of our external stakeholders through a series of formal and informal mechanisms, including collectingfeedback from tenants and from our operating partners through regular meetings and interactions, periodicsurveys, and our Welltower Collaborative, which is an exclusive forum that brings our operating partnerstogether on an annual basis to share best practices and present new ideas and technologies. The output of thisprocess was a broad list of topics relevant to the economic, environmental and social impacts of our business.We undertook a prioritization process, drawing on expertise in-house and external expertise to define a list ofmaterial topics.As an outcome of our stakeholder engagement and materiality process, we determined the following materialtopics to provide disclosures for in this report:102-47List of material topicsECONOMIC: direct economic performance, indirect economic performance, financial implications of risksassociated with climate change, anti-corruptionENVIRONMENTAL: energy consumption, water consumption, GHG emissions, waste sent to landfill and wastediversion rates, green building certifications, tenant sustainability engagement, environmental supply chainSOCIAL: employee training & development, diversity & equal opportunity, employee health, safety and wellness,philanthropic partnerships12
General Disclosures102-48Restatements of informationThere are no restatements of information from previous reports.102-49Changes in reportingThere are no significant changes in scope and aspect boundaries from previous reports.102-50Reporting periodJanuary 1st 2017 - December 31st 2017.102-51Date of most recent reportIn August 2017, we published our GRI G4 (core) aligned report covering the 2016 calendar year.102-52Reporting cycleAnnual.102-53Contact point for questions regardingthe reportQuestions and comments should be sent to info@welltower.com.102-54Claims of reporting in accordance withthe GRI StandardsThis report has been prepared in accordance with the GRI Standards: Core option.13
EconomicEconomic14
EconomicDirect and Indirect Economic Performance103-1 103-2 103-3 201-1 201-2 203-2Like many organizations, protecting stockholdercapital and enhancing stockholder value are ourprimary objectives and drive all other decisions.Our long term success and viability allow us toexecute our sustainability and social responsibilitystrategy. By providing the capital for cost-effective,consumer-focused seniors housing facilities, medicaloffice buildings and post-acute care centers, we aredeveloping the necessary infrastructure to serve anaging population. Together with our partners, we arecreating more efficient residential and care networksthat can treat a greater number of people at a lowercost, deliver better outcomes and operate moresustainably.OUR REAL ESTATE*UK 110US 1022We have significant direct and indirect economicimpacts on our stakeholders. Our direct impactsinclude wages and benefits paid to employees,dividends paid to shareholders and payments madeto suppliers and vendors, among others. Our greatestindirect impact is providing the real estate neededto help people live well and age well. Our propertiessupport healthcare professionals, provide best-in-classsettings for seniors to reside in and for post-acutecare patients to recover in. The property taxes we paysupport our local communities and allow them to growand thrive. Our charitable giving allows us to share oursuccesses with the communities in which we operate.For information on our economic performance,management approach and its evaluation, please seeour 2017 Annual Report and Form 10-K and our 2018Proxy Statement.1OutpatientMedical 19%Seniors Housing 68%*based on in place property count as of 12/31/2017OUR PERFORMANCE 36.5B1Enterprise Value 4.3B2017 Revenue 1.2Bin new investments in 2017187consecutive quarterly dividendpayments to shareholderssince inceptionOUR CONTROL BOUNDARY2193 propertiesSource: Bloomberg as of 12/29/2017Our control boundary refers to our medical office building portfolio where we retain operational control of the facility2Long Term/PostAcute Care 13%Canada 14713,289,072 sq ft15
EconomicDirect and Indirect Economic Performance103-1 103-2 103-3 201-1 201-2 203-2INDIRECT ECONOMIC IMPACT BY THE NUMBERSCLIMATE CHANGE AND OUR BUSINESS16,000,000Outpatient Medical visits 198,000residents in seniors housingcommunities 124,819,091in property taxes paid58,282health care professionalssupported67%The biggest risk posed by climate change isregulatory. Local and state governments in the areasin which we operate are beginning to implementvarious climate and energy related ordinanceswith which we must comply. Examples of theseordinances include mandatory energy benchmarkingin California, minimum energy performancerequirements in the UK and carbon tax schemesin Canada. We must remain abreast of emergingregulations and be prepared to comply as needed.We have mechanisms in place to ensure we arecomplying with existing regulations and that we areaware of emerging regulations that might affect us.The biggest opportunity presented by climatechange is changing consumer preference. Weexpect there to be a demand for energy efficientand sustainable seniors housing and outpatientmedical properties in the future. By owning andoperating efficient properties, upgrading to thelatest technologies, and pursuing green buildingcertifications for eligible properties, we hope toposition ourselves to take advantage of this trend.of senior managers hiredfrom the local community(refers to VP and above)16
EconomicAnti-Corruption103-1 103-2 103-3 205-2Our reputation is based on the personal integrity of each of ourdirectors, officers and employees, and those with whom we dobusiness. A dedicated commitment to ethical behavior is theright thing to do, is good business, and is the surest way for usto remain a business leader, an employer of choice and a goodcorporate citizen.We require each of our directors, officers and employees to actwith integrity, ethically and in compliance with all applicablelaws, regulations and policies. We have processes in placeto ensure directors, officers and employees understand theconduct expected of them and provide mechanisms foremployees to report suspected non-compliance.Policies and Procedures: We recently updated our Code ofBusiness Conduct and Anti-Corruption Policy. These documentsdetail the responsible business conduct we expect from ouremployees and those doing business on behalf of Welltower.They also provide information on what resources employeeshave if they have questions or concerns. We distribute theAnti-Corruption Policy upon hire and annually in our employeehandbook and intranet. Our General Counsel provides oversightfor the Code of Business Conduct and Anti-Corruption Policy.These documents are reviewed annually and updated asnecessary.business. This training provides employees additional resourcesand information on what is considered unethical behavior andhow they should respond when confronted with questionablesituations.Risk Assessment: We assess risks related to compliance withanti-corruption laws for the jurisdictions in which we operatein as part of our enterprise risk management program. Our riskassessment process informs the development of our policiesand the training we deliver to our employees around anticorruption and business ethics.100%of employees receivedrefresher training oninsider trading andanti-corruption in 2017Training: We provide online anti-corruption training to ouremployees. We also provide instructor led, in person trainingto our investment teams on a periodic basis. This training helpsto ensure that our employees are aware of our policies and anychanges, understand anti-corruption laws and regulations andunderstand the behavior expected of them when conducting17
EconomicEnvironment18
EnvironmentEnergy103-1 103-2 103-3 302-1 302-3 302-4We believe environmental sustainability is an important partof our commitment to helping people live well and age well.Operating efficiently, reducing our energy consumption andreducing our energy use intensity enables us to control utilitycosts, maximize the life of our equipment, mitigate the impactof emerging energy and climate-related regulations andminimize our environmental impact.Our energy management strategy consists of a multi-prongedapproach that utilizes procurement, benchmarking, engagementand continuous improvement to drive performance and helpus meet our goals. Our strategy and associated initiativesextend to the properties under our control boundary wherewe have operational control. While we do not have operationalcontrol of the properties outside our control boundary or ofour tenant spaces, we work to influence and partner with ourtenants and operating partners to reduce their impacts aswell. Key performance indicators include: energy costs, energyconsumption, energy use intensity and progress made towardachieving our energy reduction goal.Procurement: Our energy management strategy starts withprocurement. By treatin
Housing Association (ASHA), an organization that represents the interests of the companies involved in the finance, development and operation of the full spectrum of housing and services for seniors. Our SVP-International is a member of the Future Leaders Council of the National Investment Center for Seniors Housing
