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Corporate Responsibility

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UDR Corporate Responsibility

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. ESG assists 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 2020 Corporate Responsibility Report describes our work in environmental sustainability, our commitment to community and relationships, and our dedication to sound corporate governance.

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Chairman and Chief Executive Officer Message - Thomas W. Toomey

CEO Thomas Toomey

UDR’s culture is one based on innovation, inclusion, empowerment, adaptability, and execution. I start with our cultural cornerstones, as without them, the successes we have realized implementing and reporting on a wide variety of ESG objectives would not have been possible. These days, ESG influences and contributes to our day-to-day and long-term growth and risk mitigation strategies, both of which benefit our stakeholders in intangible (e.g., being part of a company that promotes strong corporate citizenry) and in tangible (e.g., better net operating income and cash flow growth, etc.) ways.

In 2019, and to date in 2020 I am proud to write that our Associates continued to progress our ESG objectives, many of which are reported in this Report.

For “E,” we installed over 831,000 kilowatt hours of solar generation capacity at our properties, increased our purchase of Renewable Energy Credits, continued to retrofit our buildings with energy management systems and LED lighting, reported our emissions and carbon footprint for the first time, analyzed our portfolio against a variety of climate change risks, and committed to sector-leading energy, water and emissions-reduction goals – to name a few.

For “S,” we enhanced mandatory training for Associates, greatly expanded opportunistic Associate training that can lead to career advancement, increased our efforts to ensure our pay standards are not discriminatory due to race, ethnicity, or gender, paid our Associates for 2,558 hours of their time donated to charity (as actions speak louder than words), worked with residents who experienced financial hardship as a result of the COVID-19 pandemic, and ensured that our Associates understood their value during the pandemic by offering additional time-off, one-time bonuses for our front-line workers, flexible work schedules, and vacation buyouts – along with other benefits.

For “G,” we continue to believe we have a strong governance structure in place, but we are consistently validating this view through conversations with UDR’s investors and governance rating firms. During 2019, we directly engaged with 345 shareholders, representing approximately 79% of our shares outstanding. In general, our investors share our enthusiasm for advancing our ESG objectives and better understanding how UDR fits within their ESG investment frameworks. As such, continuing to improve how we report our ESG objectives and successes is paramount. In this Report, we enhanced our ESG disclosures, so they comply with the GRI Standards (core), the SASB standards, and the TCFD framework. We want to ensure that stakeholders understand what we are doing from an ESG perspective and can easily access the information we provide.

We believe that ESG is growing in importance and is key to being a strong corporate citizen, which is why we remain committed to consistently driving new ESG-related initiatives and further improving the transparency of our disclosures. In 2020, we have expanded our sustainability initiatives by installing Smart Home technology across an additional 10,000 apartment homes, again participating in the annual Global Real Estate Sustainability Benchmark (“GRESB”), installing an incremental 840,000 kWh of solar energy production, and doubling our procurement of renewable energy to reduce the Company’s carbon footprint. Looking ahead, UDR and the apartment industry face a variety of challenges. Risks such as the potential spread of rent control, future carbon tax legislation, changing customer preferences, climate change threats, cyber security threats, the long-term impact from Coronavirus, and sourcing and retaining talented Associates all will affect how we operate our business. When confronted with this laundry list of risks, I remind myself that our innovative, adaptive culture, which is driven by our diverse, dedicated group of Associates, will find a way to drive UDR’s business and commitment to ESG forward.We welcome your feedback on our progress towards our ESG goals, our transparency, and this Report.

Sincerely,Thomas W. ToomeyChairman and Chief Executive Officer

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ESG Highlights


ESG Highlights


NEW

Recognized by Logical Buildings & NAA for innovation/implementation of new building energy & water management technology

House

Installed over 831,000 kilowatt hours of solar generation capacity

Energy Certificates

Procured over 12M kWh of Green-e Certified Renewable Energy Certificates

300M

Green Bond issued

Water

Installed smart irrigation at properties resulting in an over 5-million-gallon reduction in water usage

87 Percent

of leases completed online

97 Percent

of associates are proud to work for UDR

1370

Associates

2558

Associate community service hours

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11% increase in resident loyalty scores

30 percent

Board of Directors are women

345

Interactions with our shareholders, representing ~79% of our ownership

UDR ESG Methodology


Incorporating ESG initiatives into our overarching business strategy helps to drive continued innovation, enhance operating results, increase our interactions with the markets and neighborhoods we operate in, and drive total shareholder return (TSR). But the lack of industry accepted ESG reporting and measurement standards can create confusion. To address this, we performed a Materiality Assessment in 2018 that included feedback from investors, Associates, resident engagement surveys, and senior management to better understand which ESG topics were important to UDR’s business, strategic goals, and stakeholders. UDR’s Corporate Responsibility Committee, which consists of the CEO and senior management from across the Company, prioritized the ESG sustainability topics that have the greatest benefit to UDR and our stakeholders.

ESG Governance

UDR’s Corporate Responsibility Committee, which consists of senior officers at the Company, sets and manages its ESG targets and goals. Our Chairman and CEO, Tom Toomey, steers the Committee and is actively involved in determining and implementing our ESG strategies and initiatives. UDR’s Senior Vice President of Corporate Services and Innovation, Matt Cozad, is responsible for the design and implementation of core ESG targets and goals, monitoring performance, and coordinating with all areas of the Company to ensure proper execution. During 2020, our Board of Directors has continued to expand their involvement in and contribution to the Company’s overall ESG strategy and ongoing ESG initiatives that help to fulfill this strategy. Their influence can be seen in our annual update to the Company’s three-year forward-looking Business Plan.

Materiality Assessment

In 2019, we enhanced our Materiality Assessment by incorporating all SASB materiality topics for the Real Estate sector as well as additional sustainability-related topics to address a broad set of stakeholder interests.

We then evaluated UDR’s ESG processes and controls for each topic to set resource allocation, frequency of performance measurement, goal setting, and reporting structures, with the objective of meeting the needs of our Corporate Responsibility Committee and aligning with the findings of our Materiality Assessment.

This process identified numerous opportunities for improvement, such as enhancing the measurement and reporting of our GHG emissions, updating our Associate and resident ESG-related training, better evaluating Associate engagement and diversity, as well as other areas of interest that drove clear and executable goals for 2019. This disciplined, top-down approach positively impacted our business results and ensured that our ESG goals aligned with the Company’s strategic objectives to expand margin, generate long-term earnings growth, and drive strong TSR relative to peers.