Framework & Approach

[4.14, 4.15] ProLogis defines its stakeholders as any person or group of persons who may affect or be affected by ProLogis’ business operations. This includes associations, brokers, communities, customers, employees, governments, investors, media, non-governmental organizations and suppliers.

[4.16] We use a variety of means to communicate with our stakeholders. Some of our most significant mechanisms include: customer satisfaction surveys, group and one-on-one investor meetings, investor perception surveys, industry forums, media interviews, quarterly earnings calls, employee “town hall” meetings and webcasts, public planning meetings and meetings with vendors and suppliers. Additionally, we provide departmental contact information on our corporate website, www.prologis.com.

We also respond to incoming inquiries. They can originate from local communities seeking volunteers, from third-party organizations looking for information about ProLogis’ plans to address climate change, such as the Carbon Disclosure Project and KLD Analytics, and from individual or institutional investors trying to better understand our business operations.

In 2009, we made progress formalizing our approach to stakeholder engagement and augmented both the frequency and depth of the two-way communications with our stakeholder groups, some of which is described in case studies in this report. We hired an external consultant to help add structure to our program, and we also began development of a new model to assess issues identified by stakeholder groups in the context of importance to the stakeholder and importance to ProLogis.

In analyzing issues important to stakeholders, we assess factors such as: level of stakeholder priority; impact on core activities; scope of stakeholder significance on local, regional and global levels; and degree of measurability. For ProLogis, importance is measured by factors such as: financial impact; legal/compliance impact; associate impact; reputation impact; and operational impact.

Please see the graph for a visual representation of our approach. The higher an issue is placed on both the X and Y axis, the more proactive ProLogis is in addressing the issue. Our performance relative to issues that are of the highest importance to our stakeholders and to the company will be managed by the most proactive management and communication mechanisms. This includes reporting such issues to senior management, discussion in our CR report or other documented communication mechanisms and monitoring to encourage improvement.

In this example, our Investor Relations (IR) department plotted the issue of “deteriorating property operating fundamentals.” Equity investors are a key stakeholder group for ProLogis, and the IR department defined this issue as being material for equity investors based on feedback from one-on-one meetings, quarterly conference calls, research reports published by this group and perception studies. The issue was scored and weighted by previously defined risk factors, then placed on the graph according to its overall score. Because this issue was rated to be high on the importance scale for both ProLogis and equity investors, the IR department made certain to address deteriorating property operating fundamentals, and how they relate to ProLogis’ business, in all different types of investor communications, including press releases, investor presentations and one-on-one meetings. The IR department continues to monitor investor feedback to determine if issue persists.

[4.17] Both the IR and HR departments conducted this exercise in 2009, analyzing issues that are potentially material to their key stakeholders. We used the exercise to further refine the framework for assessing materiality, and are taking the lessons learned into account as we continue to refine the model and increase the value of our stakeholder relations.

Stakeholder Engagement Mechanisms

Stakeholder	Engagement Mechanisms
Customers	Semi-annual customer advisory board meetings and annual customer surveys for key customers (See Case Study) Bi-annual customer satisfaction surveys at the property level Dedicated ProLogis associates to respond to needs and requests One-on-one meetings to discuss ProLogis support of customer sustainability efforts Customer-focused marketing materials about sustainability and other topics Speaking engagements at customer-attended conferences and events
Investors—Public	Quarterly earnings calls including Q&A with senior management Dedicated ProLogis associates to respond to investor needs and requests Perception study to gauge investor priorities Annual Investor Day, one-on-one investor meetings and brokerage conferences to gather real-time feedback Surveys from socially responsible investment funds and indexes, such as KLD Analytics Investor database utilized to track FAQs, which is utilized to prepare presentations, enhance disclosure and identify perception gaps
Investors—Fund	Quarterly report on fund performance Annual in-person meetings on fund performance Regular written correspondence on issues such as contribution agreements and distribution notices of return on capital
Employees	Regular global employee survey Quarterly worldwide, all-hands meeting and global webcast with CEO and senior management; includes Q&A Employee satisfaction survey during first year of employment Training programs and support Annual performance reviews Corporate Responsibility Champion program to engage employees in sustainability efforts Intranet site to enhance internal communications
Brokers	Quarterly Broker Update publication with relevant broker news Attendance and sponsorship of national broker conferences Attendance and hosting of various broker meetings at the market level Broker satisfaction surveys related to specific broker events
Nongovernmental Organizations	Attendance at conferences and meetings Participation in committees, such as US Green Building Council, to develop a LEED rating system for distribution centers NGO information requests and surveys, such as the Carbon Disclosure Project
Government	Close collaboration during entitlement process Engage on relevant issues via industry associations
Suppliers	Contract development and interaction throughout term of contract One-on-one meetings and calls Preferred vendor list
Industry Associations	Participation on various committees and leadership teams, such as NAIOP’s Sustainable Development Committee Active participation and frequent presenters at conferences and meetings
Communities	Input from, dialog with, and response to communities before, during, and after development Employee volunteerism ProLogis donations, including warehouse space to organizations in need
Media	Press releases distributed regularly announcing significant business activity Proactive engagement on topics important to certain media groups, including ProLogis’ approach to sustainability Press events hosted to engage with media on significant announcements Interviews conducted regularly with a variety of appropriate ProLogis spokespersons Dedicated ProLogis associates to respond to needs and requests on a daily basis