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ESG

Our commitment to sound governance, environmental stewardship, and social responsibility within our teams and communities is at the heart of our corporate mission, business strategy, and ESG focus areas.

“At Ladder, we look beyond the hallways we pass through every day, and we strive to succeed, not just financially, but also in being positive corporate citizens.” – Brian Harris, CEO

Our ESG Strategy and 2022 Highlights -

Ladder Capital Corp (Ladder or the Company) believes that the proactive development and oversight of the environmental, social, and governance (ESG) factors that matter most to our business can help promote long-term value creation for our shareholders, employees, clients, communities, and other stakeholders.

We evaluate our business operations and investment portfolio on an ongoing basis, guided by our commitment to execute the strategic ESG focus areas we consider accretive to our long-term business success. In 2022, we continued our progress in each area, as noted below:

Our ESG Strategy	2022 Highlights
Our Governance Principles
Accountability Integrity Risk Management	Our Executive Team and Board are fully aligned with shareholder interests, collectively owning over $139 million in LADR stock (over 10% of the market capitalization) 100% of our employees completed ESG, legal and compliance, anti-discrimination, and cybersecurity training requirements Continued robust shareholder engagement, encouraging ongoing, meaningful dialogue about the issues our shareholders find most important In November 2022, Ladder Capital Corp received an ESG Risk Rating of 17.2 from Morningstar Sustainalytics, assessed to be at low risk of experiencing material financial impacts from ESG factors.1 In no event shall such rating be construed as investment advice or expert opinion as defined by the applicable legislation. Strong performance across our loan and real estate investments, illustrating our credit risk management Proven track record with < 0.1% in losses across all investments originated since inception Extended, upsized and reduced the cost of our unsecured revolving credit facility, with all nine syndicate banks participating In May 2022, S&P put us on positive outlook following our upgrade in 2021 Hired Chief Technology Officer to further strengthen our information technology risk mitigation and best practices cybersecurity program
Our People
Diversity, Equity, and Inclusion Talent Recruitment, Development, and Advancement Collaborative Culture Competitive Compensation and Benefits Employee Health and Safety	40% of our Executive Team is comprised of women, more than 20% of employees identify as female, and 56% of those are currently at Director+ level, including our President who also serves on our Board 30% of all employees have been at Ladder over 10 years and 44% have been at Ladder for over seven years Promoted 24% of our employees in 2022 Held leadership development sessions for all of our Managing Directors and executives with a leading management consultant Maintained a robust summer internship program Hosted company-wide town halls and sponsored employee events to promote culture of collaboration Our January 2023 employee survey had a 94% participation rate; 100% of respondents were enthusiastic about working at Ladder Continued to provide our employees with remote and hybrid work opportunities Our new NYC headquarters includes a dedicated employee fitness center, multiple collaborative areas and two all-gender restrooms Reimbursed employees for up to 90% of medical premiums and fully covered dental, vision and other premiums Employee team participated in the J.P. Morgan Corporate Challenge, the world’s largest corporate running event, that seeks to serve as a catalyst between work and wellness
Our Communities
Community Engagement Community Development Access and Affordability Property Improvements	Committed to community engagement, including – DREAM Charter School back-to-school preparation and God's Love We Deliver meal events Provide mortgage loans to fit the needs of smaller enterprises and local property owners with an average loan size of $25 million Have 74 multifamily, manufactured housing, and mobile home (collectively, “multifamily”) investments. Using HUD's income categories, by loan count, 62% of these investments include affordable housing for low-income families, with 22% for very low-income families
Our Planet
Our Impact on Climate Change Environmental Investment Risk Management Resiliency Responsible Consumption	Estimated our Scope 1 and 2 greenhouse gas (“GHG”) emissions and are currently evaluating our approach to assessing Scope 3 emissions in light of stakeholder expectations and regulatory requirements Environmental risk assessment completed for all new loans and real estate investments, reviewed by specialized environmental counsel Updated our Phase I Environmental Site Assessment scope of work to include Emerging Contaminants of Concern (e.g., Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)) to comply with latest ASTM and EPA requirements Our geographic diversity helped limit the impact of 2022 named storms and natural disasters on our real estate and loan collateral properties Added responsible consumption checklist to every new deal that assesses energy and water usage upgrades as well as certifications for environmental performance or energy ratings Our new headquarters is built to NYC’s strict green codes in an LEED Silver building 93% of respondents indicated they commute via public or alternative transportation (walking or biking) per our January 2023 employee survey

^{¹ Copyright ©2023 Sustainalytics. All rights reserved. This publication contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary of Sustainalytics and/or its third-party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers.}

ESG Oversight

While the full Board of Directors (Board) has ultimate responsibility for ESG matters that impact our business, the Nominating and Corporate Governance Committee (NCG Committee) exercises primary Board oversight of ESG risk management, strategy, initiatives, and policies, in accordance with its charter. Our ESG Committee of cross-functional leaders, including our Head of ESG, drives our ESG strategy development and implementation. Our Head of ESG is our Chief Administrative Officer and General Counsel (CAO), who also has primary responsibility for Ladder’s corporate governance, capital markets activities, public relations, legal and compliance work, human resources (HR), cybersecurity and risk management. The Head of ESG provides periodic updates to the Board, NCG Committee, and Executive Team to keep them informed of, and to collaborate on, initiatives and progress within our ESG focus areas.

About This Disclosure

Our ESG Committee developed, and the NCG Committee approved, our corporate ESG strategy. The core focus areas of our ESG strategy are informed by, and selected to align our disclosures with, the Sustainability Accounting Standards Board (SASB) framework, the United Nations Sustainable Development Goals (SDGs) and the Task Force on Climate-Related Financial Disclosures (TCFD). For more information, please see Frameworks and Standards below.

Our Governance Principles +

Accountability

Shareholder Alignment

Ladder distinguishes itself from its peers by our high insider ownership and internally managed structure. Our Executive Team and Board collectively own over $139 million in LADR stock (over 10% of the market capitalization). In addition, Ladder’s portfolio is managed internally by its employees. This framework enables us to avoid conflicts of interest and align our priorities and day-to-day decision making with the best interests and priorities of our long-term shareholders.

Our shareholder engagement program is a robust process encompassing meetings held throughout the year with shareholders during which we encourage ongoing, meaningful dialogue about the issues our shareholders find most important. See Transparency and Fair Dealing below for further details regarding our shareholder outreach.

Integrity

Business Ethics and Compliance

Our Code of Ethics (Code) establishes the importance of exercising sound, ethical judgment and provides our employees with a framework for making responsible business decisions. Each employee must conduct business with integrity, in compliance with all applicable laws and regulations, and in a manner that excludes consideration of personal advantage. The Code requires that our business-related conduct both inside and outside the Company be guided by the following values:

Promote and maintain integrity in all dealings
Create long-term shareholder value
Respect people and create a positive culture for teamwork
Encourage responsible, results-oriented performance
Recognize and respect our fiduciary obligation to our shareholders
Consider environmental, social, and governance best practices

Our Chief Compliance Officer and Senior Regulatory Counsel (CCO) seeks to ensure that our Compliance Program adequately addresses applicable risks and identifies and addresses violations. Our CCO annually evaluates our Compliance Program and recommends changes for approval by our Audit Committee. As our Compliance Program also serves as the compliance program for our registered investment advisor, we undergo an annual Compliance Program review by a third-party regulatory consulting firm, which includes testing our Code's policies and procedures. We have also adopted a Code of Ethics for Senior Financial Officers that relates primarily to ethical accounting and financial reporting matters and is also reviewed and attested to annually by senior financial officers along with the Code. For more information, please see the Governance Library.

Compliance Program and Employee Certifications

Upon hire and annually thereafter, all employees must listen to, participate in, and attest to annual training and must acknowledge that they have received, read, understood, and agree to comply with the corporate policies and procedures. Our Compliance Program includes, but is not limited to, the following ethics topics, corporate policies, and procedures:

Ladder’s ESG Initiatives
Code of Ethics and Personal Trading Policy (and Code of Ethics for Senior Financial Officers, as applicable)
Insider Trading Policy
Information Technology (IT) Policies and Procedures
Anti-Bribery and Anti-Corruption Policies
Anti-Money Laundering Policy and Office of Foreign Asset Control (OFAC) Program
Political Contributions, Political Activities, and Public Positions
Gifts and Entertainment

As one of our subsidiaries is a registered investment adviser, all employees must also complete annual and quarterly brokerage account holdings and transaction certifications.

In 2022, 100% of our employees completed the required training, certifications, and attestations.

Transparency and Fair Dealing

We endeavor to be transparent, clear, and fair in our pricing practices and processes. Our Origination Team aims to cultivate long-term relationships with key direct clients and leading mortgage and investment-sales brokers nationwide. In 2022, over 30% of our loan originations were made to repeat Ladder clients, reflecting the value of our franchise and the strength of our client relationships. Our Asset Management Team maintains regular, direct dialogue with our clients and partners, aiming to ensure responsible and fair treatment of all parties while also managing for timely completion of business plans and full required payments. Our Head of Asset Management, a Co-founder and Member of the Executive Team, demonstrates our commitment to ensure, and emphasizes the importance of, the fair treatment of clients and partners and our dedication to the highest level of risk management.

In addition, Ladder is committed to being open and informative with our shareholders and bondholders. Our CEO, President, Investor Relations Team, and Board regularly engage with our shareholders and bondholders throughout the year through various communication channels, including email, quarterly earnings calls, one-on-one meetings and phone calls, debt and equity investor conferences, our Investor Relations website, and our Annual Stockholder Meeting. Among other informational items, our Investor Relations website includes our financial reports, an introductory overview presentation and presentations that provide detailed supplemental earnings data in an easy-to-read format. Our CCO and/or Head of Legal Structuring reviews and approves all marketing materials and the CAO, CCO, and, as applicable, external counsel review all investor relations disclosures.

Whistleblower Protection Policy

We maintain a Whistleblower Protection Policy, overseen by the Chair of the Audit Committee, that includes procedures for the CCO and Audit Committee to receive and investigate complaints as well as ensure the confidentiality and protection of whistleblowers. We have an anonymous phone line and web-based reporting system that permits employees to report, in good faith, any potential unethical business practices or misconduct, including questionable accounting or audit matters, without fear of retaliation. Our CCO proactively reminds employees during annual training and via email of the availability of our whistleblower hotline and website. Internal Audit conducts tests of the phone line and website annually.

Government Relations and Advocacy

We maintain policies regarding political contributions as well as gifts and entertainment intended to prevent any actual or perceived conflict of interest or pay-to-play practices with political contributions to federal, state and local officials who may have influence over the awarding of government and public business to financial services providers. Ladder does not make political contributions as a company. As one of our subsidiaries is a registered investment adviser, employee political contributions are limited to pre-cleared federal contributions while state and local political contributions are prohibited. Annual training on these policies is part of our Compliance Program, and we also send regular email reminders to all employees.

The Executive Team did not make any political contributions in 2022.

Risk Management

ESG Risk Ratings

Morningstar Sustainalytics

In November 2022, Ladder Capital Corp received an ESG Risk Rating of 17.2 and was assessed by Morningstar Sustainalytics to be at low risk of experiencing material financial impacts from ESG factors.¹ In no event shall such rating be construed as investment advice or expert opinion as defined by the applicable legislation.

Morningstar Sustainalytics’ ESG Risk Ratings measure a company’s exposure to industry-specific material ESG risks and how well a company is managing those risks. This multi-dimensional way of measuring ESG risk combines the concepts of management and exposure to arrive at an assessment of ESG risk, i.e., a total unmanaged ESG risk score or the ESG Risk Rating, that is comparable across all industries. Sustainalytics’ ESG Risk Ratings provide a quantitative measure of unmanaged ESG risk and distinguish between five levels of risk: negligible, low, medium, high and severe. Learn more about the ESG Risk Ratings here: www.sustainalytics.com/corporate-solutions/esg-solutions/esg-risk-ratings.

Board Oversight and Risk Management

At Ladder, we believe that one of the key functions of the Board is informed oversight of our risk management process. The Chairperson and non-executive members of the Board work together to provide strong, independent oversight of the Company’s management and affairs through its standing committees and sessions of the independent directors. Our Executive Team attends Board meetings and is available to address any questions or concerns raised by the Board on risk management and any other matters. In particular, the Board is responsible for monitoring and assessing strategic risk exposure, and our Audit Committee considers and discusses our major financial risk exposures and the steps our Executive Team has taken to monitor and control these exposures. Our Risk and Underwriting Committee assesses and monitors our risk management strategies including, but not limited to, those designed to mitigate credit, interest rate, liquidity, and counterparty risk and investments of material size. The Risk and Underwriting Committee reviews quarterly reports regarding topics such as interest rate risk, counterparty risk, and corporate covenant compliance. Each Board committee’s charter outlines its responsibilities related to our risk management process. In addition, the Board and its committees consult with outside experts as needed to address existing risks and/or anticipate future threats and trends.

Credit Risk Management

We operate a multicylinder platform with a core competency in commercial real estate credit underwriting and invest in three complementary, synergistic products – commercial real estate loans, properties, and securities. Our multicylinder model enables us to pivot and quickly adjust our product mix to target the most favorable risk-adjusted return according to market conditions.

At Ladder, every employee is responsible for mitigating risk. Our risk management processes encompass the active involvement of the Executive Team and department heads, supported by our underlying policies and procedures. We hold regular meetings on the loan origination pipeline, financing, liquidity, and asset management. We continue to have a proven track record with less than 0.1% in losses across all investments originated since inception in 2008.

Ladder employs a system of checks and balances throughout our investment and risk management process by maintaining separate Origination, Credit/Underwriting, Transaction Management, Investment Committee, and Asset Management teams and functions:

Our Comprehensive Investment and Risk Management

Origination. Our rigorous investment process begins with the filtering and selecting of potential investments by the Origination Team, with a preference for senior secured mortgage loans to finance new acquisitions that have recent valuations and newly capitalized business plans with additional funds from the sponsor. Originator compensation, which at increasing levels of seniority includes increasing proportions of restricted stock, is linked to investment performance, aligning our interests with those of our shareholders. The Origination Team conducts an initial due diligence review prior to proposing an investment to members of our Investment Committee for application and further diligence.

Credit/Underwriting. Once the Investment Committee approves the further processing of an investment, it undergoes a comprehensive legal and independent underwriting process. An underwriter who is independent from the Origination Team leads the due diligence and credit review using a checklist-based approach. Our systematic credit evaluation includes stress analyses, a site tour for each property (almost exclusively conducted by Ladder personnel), and third-party due diligence (including appraisal, environmental, and engineering reports) for each prospective loan and/or real estate investment.

Transaction Management. Our highly skilled, independent team of Transaction Management attorneys averages over 20 years of experience and leads legal diligence review, legal document negotiation, and closings.

Investment Committee. The process culminates in the delivery of a comprehensive investment memorandum to our Investment Committee, which includes our CEO, President, Chief Credit Officer and Head of Underwriting, who meet to approve or disapprove each prospective investment. Investment Committee members all have significant stock in the Company and are well aligned with the long-term interests of our shareholders in their decision-making. Every loan and real estate investment undergoes the same Investment Committee process and memorandum delivery regardless of size. Each meeting generally has at least one representative from each of the Origination, Underwriting, Transaction Management, Asset Management, and Finance teams. Approval from the Board's Risk and Underwriting Committee is required for proposed investments of a material size or outside the Company’s ordinary course of business.

Asset Management. Our in-house Asset Management Team, led by the Head of Asset Management who is also a Co-founder and Member of the Executive Team, proactively manages the Company’s investment portfolio, demonstrating our Company-wide emphasis on principal preservation and asset performance. The Asset Management Team, together with our Underwriting Team, retains all decision-making on, and monitors the credit performance of, our investment portfolio in concert with our third-party servicers and property managers. Collectively, they work closely with clients and/or joint- venture partners to manage all of our positions; monitor the financial performance of our assets and collateral assets, including the timely execution of business plans; monitor daily activities within our portfolio; and provide real-time responses to weather-related events affecting properties. Ladder performs detailed asset reviews, endeavors to perform periodic site inspections on every investment, and provides comprehensive internal asset-level performance reporting.

Financing Risk Management

We remain committed to a conservative financial management approach that provides a sustainable capital structure for our business and minimizes liquidity risks. Unsecured bonds and non-recourse, non-mark-to-market funding sources continue to be cornerstones of our capital structure, and our 2021 offerings in both markets further solidified and lengthened our liability structure while reducing our usage of mark-to-market financing. In 2022, we extended, upsized and reduced the cost of our unsecured revolving credit facility, with all nine syndicate banks participating. We have staggered our debt maturities to reduce refinancing risk, adopted a conservative dividend policy, and maintain low overall leverage.

We selectively utilize secured financing from a diverse set of trusted counterparties with whom we have longstanding relationships. All lending counterparties are rated no less than A- (or equivalent) from a nationally recognized credit rating service or are approved by the CEO. We are committed to being transparent with our lending counterparties and provide asset-level and corporate-level reporting on a regular basis.

In May 2022, S&P put us on positive outlook following our upgrade in 2021, and we remain on stable outlook by Moody’s and Fitch.

Data Security and Customer Privacy

We maintain a best practices, risk-based approach to cybersecurity with oversight by our Cybersecurity Team including the Chief Technology Officer (CTO), CAO, CCO, Head of Asset Management and senior leaders from our outsourced IT firm. The Cybersecurity Team monitors technology trends and developments to inform improvements and adjustments to Ladder’s technology, oversees the Company’s various cybersecurity training initiatives, and, at least annually, performs a formal evaluation of the Company’s cyber risks and mitigants. The Cybersecurity Team is in regular dialogue with the Audit Committee, which oversees cybersecurity on behalf of our Board.

At hire and annually thereafter, all employees participate in cybersecurity training and certify to our comprehensive IT policies and procedures. In 2022, 100% of our employees completed the required training and certifications. Cybersecurity best practices are also discussed during annual compliance training.

We maintain a broad assortment of cybersecurity protocols, including:

Multifactor authentication
Managed security service monitoring
Annual penetration testing by a rotating third-party vendor
Weekly vulnerability scans
Quarterly phishing exercises
Annual tabletop exercises
Annual vendor cybersecurity diligence
Cyber insurance and other relevant insurance policies

In our January 2023 anonymous employee survey, 100% of participants agreed that Ladder makes extensive efforts to increase cybersecurity and protect data privacy.

As a commercial real estate lender, we do not offer, and personally identifiable information (PII) is not obtained in connection with, financial products or services used primarily for personal, family, or household purposes. We have implemented and enforce our privacy procedures to protect PII in order to safeguard any PII that is provided for other purposes (e.g., employee onboarding or commercial real estate loan due diligence) and to comply with state privacy laws such as the California Privacy Rights Act (CPRA). Such procedures include, but are not limited to, document removal and destruction.

We have not had a cybersecurity breach or loss of PII in our nine years as a public company.

Business Continuity

We maintain a Business Continuity and Disaster Recovery Plan, Pandemic Preparedness Plan, Model Airborne Infectious Disease Exposure Prevention Plan (under the NY HERO Act), and Security Incident Response Plan (together, our BCP) to provide an appropriate response to emergency situations, protect our employees, minimize disruptions to client services, and protect Company and investor assets. We internally test, analyze, and modify our BCP every year.

Supply Chain Management

Our vendors are primarily in the financial services and real estate industries. In accordance with our Anti-Money Laundering Policy and OFAC Program, Ladder seeks to conduct due diligence prior to engaging any vendor. Ladder conducts further cybersecurity due diligence prior to retaining third-party service providers that have access to PII or are otherwise critical to Ladder’s business operations and annually thereafter. These cybersecurity due diligence questionnaires, overseen by Ladder's CTO, are reviewed by Ladder’s outsourced IT firm and by specialized IT counsel, as needed. Ladder maintains all documentation associated with this due diligence process and includes customized cybersecurity contract requirements based on the vendor’s level of access to Ladder’s confidential and/or personal non-public information. Key vendors with access to such information are required to provide their insider trading policies to our CCO for review and to certify compliance with such policies annually.

Additionally, Ladder has policies in place led by the CCO to prevent conflicts of interest, including limits on gifts and entertainment and outside business activities, further maintaining alignment with our shareholders’ interests.

Borrower Due Diligence

Ladder performs due diligence on borrowers and certain related parties, including sponsors and guarantors. The diligence process typically includes searches of court records; Uniform Commercial Code filings; state and federal tax liens; past and present litigation and judgments, bankruptcies, and foreclosures; OFAC records; criminal records; and news searches.

We expect this diligence to identify, in the jurisdictions we search, past and present claims of illegal activities and adverse human rights impacts such as claims of discrimination or harassment, wage or labor violations, or the illegal or unethical treatment of tenants (including through improper property maintenance). If such items are found, we typically require the searched party to explain and, as applicable, remediate the circumstances before proceeding with the loan. In this way, Ladder strives to mitigate adverse human rights impacts that are directly linked to our business operations through a business relationship, even if Ladder does not directly contribute to such impacts.

Ladder also performs a detailed tenant analysis and lease review on every investment, enabling us to identify tenants whose activities may pose a legal or reputational risk to the Company.

Our People +

Our tone at the top promotes a culture of transparency, accountability, and ethical behavior. As a firm with just 63 employees, Ladder’s flat management structure and open-door policy provide all employees with daily access to our Executive Team. We strive to create an environment where employees are comfortable asking questions and raising concerns. With our casual attire policy, we also believe that when employees are physically comfortable, they may be more relaxed in interactions with one another, leading to better teamwork, increased productivity, improved morale, and less stress.

The Board maintains oversight of human capital management and corporate culture and gains insight at regular Board and committee meetings about specific HR initiatives, including talent engagement, attraction, and retention.

Diversity, Equity, and Inclusion

A diverse workplace benefits from a variety of experiences and points of view. We are committed to creating a workspace that incorporates diversity, equity, and inclusion (DEI) and ensures that all individuals are treated with mutual respect and dignity. All levels of personnel are held accountable for contributing to a professional atmosphere that promotes equal opportunity and nondiscriminatory practices. Our DEI efforts are overseen by HR, which reports to our CAO.

We are an equal opportunity employer and do not discriminate against any candidate or employee on the basis of race, national origin, marital status, gender, gender identity, gender expression, or sexual orientation, age, disability, religion, or veteran status. We do not tolerate harassment, discriminatory behavior, or any kind of retaliation for reporting suspected misconduct.

Ladder provides two all-gender restrooms at its NYC headquarters. We also provide reasonable accommodations for qualified persons based on disabilities, religious beliefs and conditions related to pregnancy and childbirth. Employees may openly communicate and share ideas and concerns with management regarding working conditions, health and safety, and management practices without fear of discrimination, retaliation, intimidation or harassment. We prohibit the use of all forms of corporal punishment and modern slavery, including, but not limited to, forced labor, child labor and any form of human trafficking in our operations. We support and respect human rights.

We maintain an anti-discrimination, harassment, and retaliation policy that we endeavor to review and update at least annually and we conduct annual anti-discrimination and anti-harassment employee training. 100% of our employees completed our 2022 training. In our January 2023 anonymous employee survey, 98% of respondents agreed that discrimination is not tolerated at Ladder. The survey had a 94% participation rate.

Workforce Diversity

We assess diversity information as part of a broader effort to identify areas of continuous improvement to ensure that we are building and retaining a diverse workforce. We analyze this data to determine how best to attract and develop a pipeline of diverse and qualified candidates and promote an inclusive, anti-discriminatory environment of belonging that ensures equal access to opportunities.

With two female co-founders, gender diversity and equality have always been important to Ladder. 40% of our Executive Team is comprised of females. Over 20% of employees identify as females, and 56% of female employees are currently at the Director+ level, including our President, CAO, CCO, Controller, and Tax Director. One of our employees at the Director+ level identifies as LGBTQIA+.

60% of Ladder’s employees identify as white, 5% indicate they are non-white, and 35% have declined to disclose their race.

Ladder seeks employees who want to grow and learn with us. Over the last few years, we have gradually increased the diversity of our workforce with newer talent while maintaining a seasoned bench. One-third of our employees are under age 30, one-third are ages 30–39, and one-third are age 40 and over.

Talent Recruitment, Development, and Advancement

Attracting Talent

Our broad recruitment strategy is not limited to a pre-defined set of educational or work experiences. As stated above, we seek employees who want to grow and learn with us. We develop our employees and seek internal candidates for promotions prior to hiring from the outside.

Our paid summer internship program provides our interns with exposure to all parts of our loan origination and closing process, with exposure to our Origination, Credit/Underwriting, Transaction Management, and Asset Management Teams. Previous interns have provided very positive feedback about the program, and several are now full-time employees. We also partner with St. John’s University School of Law, providing chosen externs per semester with the opportunity to earn school credit via training experiences with our Legal and Compliance and Transaction Management Teams.

Contemporaneous Feedback

Ladder believes that our most important asset is our employees. We encourage an open dialogue between managers and other employees to allow for continued success. Our corporate culture encourages contemporaneous feedback to enable employees to refine their skills and expertise with each project. We believe that it is in the best interest of our employees to receive real-time feedback from their managers and direct guidance for professional development. All managers are trained on how to deliver effective and candid feedback to employees and we encourage employees to communicate with their managers about their workload, prioritization of projects, hours, and goals for advancement.

Talent Training, Development, and Advancement

Ladder is a dynamic company distinguished by the talent and dedication of our team. We hire for the long-term and invest in professional and personal development, with an organizational structure that drives employee engagement. We reimburse employees for professional licenses, memberships, and subscriptions as well as training programs, conferences, and classes. Employees are encouraged to participate in cross-functional team projects to develop comprehensive business knowledge. We incorporate professional development into our ongoing performance discussions and goal-setting for each employee.

All employees receive at hire, and annually thereafter, training on Ladder’s ESG initiatives, anti-harassment and anti-discrimination, cybersecurity, and legal and compliance. At hire, employees also receive workplace success training, and we hold regular informational sessions, from market trends to department overviews, to educate employees and keep abreast of current topics.

We seek to promote from within, developing a deep bench of experienced professionals ready to grow into more senior roles. Our department heads average over 10 years of tenure at Ladder, with the majority having been promoted to additional roles with increasing responsibilities over the years. In 2022, we hosted leadership development sessions for all Managing Directors and executives led by a leading management consultant.

Our employee promotion process seeks to ensure opportunities for internal advancement and mobility and provides a mechanism whereby employees can be recognized and rewarded for successful performance and professional development. Ladder promoted 24% of employees in 2022.

Collaborative Culture

At Ladder, we like to collaborate. We work in both formal and ad hoc teams and, to encourage the free flow of thoughts and information, use an open-floor seating plan in the office. We have a flat management structure and an open-door policy and take pride in helping train the Company’s future generations of leaders. When people join the Ladder family, we seek to take steps to ensure that new hires understand and feel comfortable in our workforce environment, which is based upon our Four Rs:

Employee Teambuilding

Ladder’s CEO and President host town hall meetings to provide a forum for direct engagement with our employees and senior leaders. Ladder also sponsors both formal and informal after-work teambuilding events, including days of service and, cocktail hours. At least annually, we distribute corporate gifts such as reusable tumblers, tote bags, and fleeces.

We offer various programs to develop and build field expertise and leadership skills. Our mentoring program pairs junior employees with senior employees in other departments to foster cross-departmental connections and allow junior employees to expand their industry knowledge beyond their respective teams. In addition to being available to answer any questions and provide guidance in the office, mentors are asked to take their mentees to lunch or dinner periodically. HR actively monitors the program and encourages feedback to ensure a valuable experience for all participants.

Unique to the Company is our Ladder Climbers Program that enables our junior staff to bond together and develop leadership skills. Managed by the junior employees, participating Climbers engage in after-work activities, on-site learning, and informational sessions.

Retaining Talent

We believe our strong corporate culture, opportunities for advancement, and competitive compensation and benefits make Ladder a desirable place to work. The average tenure for all employees is over six years, and that includes our 8 new hires during 2022. In fact, 44% of employees have been with Ladder for more than seven years, and 30% have been with Ladder for more than 10 years. We generally provide severance pay for involuntary terminations and conduct exit interviews for every employee departure to understand the reasons and to determine ways we can improve employee retention, our working environment and culture going forward.

We use anonymous employee experience surveys to solicit real-time feedback on topics such as job satisfaction and employee activities. Our January 2023 employee survey had a 94% participation rate. 100% of respondents were enthusiastic about working at Ladder and agreed that Ladder provides opportunities for learning and development. 95% of respondents felt comfortable raising issues with their managers. We use the information from these surveys to guide management engagement, decision-making, and strategy.

Competitive Compensation and Benefits

Our compensation program attracts and rewards talented individuals with the skills necessary to support our business objectives and create long-term value for our shareholders. Ladder is committed to a living wage for all employees and we offer competitive pay at all levels — including base salaries, annual incentive awards, and stock awards — and frequently evaluate industry pay practices, including by the Board’s compensation consultant. The Company does not inquire about applicants’ prior wages, benefits, bonuses, or other compensation (together, the salary history) when determining whether to hire or what amount of compensation to offer.

All employees are compensated based on Ladder’s profitability, and we grant stock awards with both time- and performance-based vesting components to promote employee retention and alignment. We believe that the stock awards that vest based on Company performance further align employee interests with long-term shareholder value creation.

We offer a comprehensive benefits package, including corporate payment of up to 90% of the premiums for our standard medical plan and 100% of the premiums for dental, vision, disability and life insurance for full-time employees and their families.

Our benefits program provides the following:

Both in-network and out-of-network medical and prescription coverage
Mental health, gender transition, and fertility services
Critical illness, supplemental long-term disability, and term life insurance
Flexible spending accounts, dependent care accounts, commuter benefits plan, and 401(k) retirement savings plan
Reimbursement for daily employee lunches as well as late-night meals and transportation

Ladder also provides the following paid leave:

Holidays and generous paid time off
Leave for the service of others, including blood, organ, and bone marrow donation leave and military leave
Bereavement leave
Parental leave for all employees and a private lactation room
Sick days and time off to care for family members or receive a COVID-19 vaccine

Employee Health and Safety

Health and Wellness Programs

We support our employees’ mental health and well-being and aim to create an environment that provides for work-life balance. Our new NYC headquarters includes a dedicated employee fitness center and multiple collaborative areas. We are also continuing to provide employees flexibility through a hybrid work structure. Our January 2023 anonymous employee survey showed that 100% of participants appreciated Ladder’s hybrid work model. And for in-office days, our NYC office is also conveniently located near major transportation hubs.

Through our healthcare provider, we offer discounted gym memberships and programs designed to help improve employee health and well-being, such as reducing stress and quitting smoking. We also encourage healthy eating during in-office days by reimbursing employee lunches (up to a reasonable cap) purchased at our NYC headquarters’ cafeteria or through an online provider, both offering a multitude of healthy food options. In addition, we further employee health and wellness through in-office flu shots every year.

In 2022, Ladder fielded an employee team in the J.P. Morgan Corporate Challenge, the world’s largest corporate running event, that seeks to serve as a catalyst between work and wellness. 21% of Ladder employees participated.

Work-Related Hazards and Responses

We maintain internal emergency procedures for circumstances that require medical attention and/or building evacuation. Any employee with emergency training is encouraged to inform the CCO or HR and to participate in assisting in an emergency. Employees are also required to participate in any fire or other emergency drills conducted by the buildings in which their offices are located and to know where all emergency exits are located.

Our Communities +

Community Engagement

At Ladder, our focus on community engagement starts at the top. As Brian Harris, our CEO, said, “At Ladder, we look beyond the hallways we pass through every day, and we strive to succeed, not just financially, but also in being positive corporate citizens.”

While such commitment starts at the top, it doesn’t stop there. Many of our employees are engaged with non-profit groups in their communities. Our January 2023 anonymous employee survey showed that 46% of participants volunteer outside of work for charitable causes.

The ESG Committee sought employee feedback and suggestions in selecting volunteer events and Ladder was able to benefit from these community relationships.

In 2022, Ladder facilitated days of community engagement for employee volunteers during the workday and donated office supplies in connection with our NYC office move. In June 2022, our employees, including our summer interns, helped teachers at DREAM Charter School break down their classes in preparation for moving locations and for summer school. DREAM serves over 2,000 youth annually across East Harlem and the Bronx through a network of inclusive, extended-day, extended-year charter schools and community sports-based youth development programs. In December 2022, almost half of our NYC-based employees assembled meal kits for God's Love We Deliver, a non-sectarian organization that cooks and home-delivers nutritious, medically tailored meals for people too sick to shop or cook for themselves.

Community Development

We facilitate community development by providing flexible and cost-effective mortgage loan financing to support the renovation, repositioning, leasing, and development of multifamily and commercial real estate throughout the country, including in low- to moderate-income communities that are typically underserved by the financing community at large. With an average loan size of $25 million, these mortgage loans are structured to fit the needs and business plans of smaller enterprises and local property owners. In providing this financing, we seek to contribute to improvements in the quality of life for community residents, improve access to, and affordability of, housing, create job opportunities, and lead by example for others to consider investing in community development in the future.

Ladder seeks to adhere to all federal and state anti-discrimination laws including the Fair Housing Act, the Equal Credit Opportunity Act, and the New York State Human Rights Law, as applicable.

Access and Affordability

Housing costs continue to be a significant portion of the typical household budget, with the general rule of thumb of spending up to 30% of take-home income on housing-related expenses. Maintaining that ratio can be difficult for low-income families and especially difficult for very low-income families, which according to the Department of Housing and Urban Development's (HUD) Section 8 program are families whose incomes do not exceed 80% and 50%, respectively, of the average median income (AMI) for an area.

As of December 31, 2022, Ladder's loan portfolio was comprised 51% of multifamily, mobile home, and manufactured housing (including mixed-use properties with a multifamily component of at least 40% by square footage or income), which emphasizes access to affordable housing in secondary and tertiary markets.

We had 74 manufactured housing, mobile home, and multifamily investments in our portfolio as of December 31, 2022. Using HUD's income categorizations, by loan count, 62% of these investments include affordable housing for low-income families¹, 22% of which include affordable housing for very low-income families², totaling $989.3 million and $202.5 million of carrying value of loans, respectively. 10,408 units qualify as affordable for low-income families, of which 3,915 qualify for very-low-income families.

As stabilized rent does not exceed the rent allocation (30%) for households earning 80% of AMI
As stabilized rent does not exceed the rent allocation (30%) for households earning 50% of AMI

Property Improvements

Borrowers are required by their loan documents to complete certain immediate repairs and deferred maintenance to keep tenants, their visitors, and the general public safe. As part of Ladder's loan due diligence, every property undergoes a Property Condition Assessment by a licensed engineer, which generally includes fire and life safety systems; moisture and microbial growth; Americans with Disabilities Act (ADA) compliance; ventilation systems; property security; walkways; landscaping; and earthquake, flood, wind, and hurricane risk evaluations. Inquiries are made to the municipality regarding outstanding fire code, building code, and zoning violations.

To further ensure compliance, Ladder conducts periodic site visits and may require the borrower to set aside funds in a loan reserve. Certain loans also have future funding components where borrowers must complete certain requirements and/or achieve certain milestones in order for Ladder to advance up to the full loan amount for payment of the costs of those property enhancements and/or renovations.

Further, buildings of a certain age are likely to house asbestos-containing materials (ACMs) and/or lead-based paint (LBP). In those instances, Ladder requires the borrower to follow an applicable Operations and Maintenance (O&M) plan of training, cleaning, work practices, and surveillance to maintain the ACM or LBP within the building in good condition until it is safely removed due to a scheduled renovation or demolition or its condition warrants removal.

Our Planet +

Our Impact on Climate Change

Ladder is actively engaged with a carbon accounting firm to understand and quantify our impact on climate change and has estimated its Scope 1 (0 MtCO2e) and Scope 2 (53 MtCO2e) GHG emissions for 2022. We are currently evaluating our approach to assessing Scope 3 emissions in light of stakeholder expectations and regulatory requirements. While we continue our work, Ladder is taking the steps described below under Responsible Consumption to manage its carbon footprint and is exploring other ways to mitigate it, such as through the still-developing carbon offset marketplace.

Environmental Investment Risk Management

We maintain a deal-related Environmental Policy (Policy) that applies to our owned real estate and all real estate collateral securing our loans. The Policy outlines the required environmental due diligence of site assessments and environmental considerations for our owned and collateral real estate properties.

Each loan and real estate investment undergoes an environmental risk assessment by an independent environmental professional (as defined in §312.10 of 40 CFR §312 of the Environmental Protection Agency regulations), the results of which are reviewed and approved by specialized outside environmental counsel and our Credit/Underwriting Team. We select third-party environmental professionals based on their experience with conducting environmental site assessments; national recognition; and a consistent track record of providing a high-quality product that is generally well received by Ladder, other market lenders, rating agencies, and investors that rely on these reports. We maintain a list of approved consultants and a standardized template for consistent review and reporting. The environmental risk assessment includes:

Phase I Environmental Site Assessment and Geotechnical Report - evaluates the property and its immediate surrounding area to identify any adverse environmental conditions. This evaluation includes a property site visit, review of government records, and interviews regarding past and present uses of the property to identify such potential environmental hazards as ground water pollution, polychlorinated biphenyls (PCBs), lead paint, asbestos, drinking water contaminants, and radon gas. In 2022, we updated our Phase I Environmental Site Assessment scope of work to include Emerging Contaminants of Concern (e.g., Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)) to comply with latest ASTM and EPA requirements.
Phase II Environmental Site Assessment - required if there are any areas of concern and consists of detailed inspections and lab tests to determine compliance with local, state, and federal regulatory guidelines and recommend additional review and/or remediation.

Our transaction process also includes specific documentary provisions, such as environmental representations and warranties, covenants, indemnities, other provisions governing environmental matters in our loan documents, and the potential use of environmental insurance to ensure ongoing sponsor compliance with applicable environmental laws and the completion of any required remediation. Compliance is monitored by our Asset Management Team, and we perform periodic property site visits which include a review of environmental considerations.

Our tenants are generally required by the terms of their leases to comply with all relevant laws, including environmental laws.

Resiliency

Flood, Wind, and Earthquake Insurance

We perform a flood, wind, and earthquake analysis on every loan and real estate investment and hold our borrowers and ourselves accountable for proper insurance coverage. As of December 31, 2022, 21 of 155 loans (or 14.0%) are in the 100-year flood plain. By book value, $670.0 million of $3.9 billion (or 17.0%) are within the 100-year flood plain.

Weather Event Tracking

Our $25 million average loan size provides for a granular portfolio and diversity in terms of geography and asset types. Such diversity is intended to limit the effect of any single extreme weather, named-storm, or other natural disaster event on our portfolio. In addition, our Asset Management Team is in regular communication with the borrowers, partners, property managers, and servicers of Ladder loans and real estate investments and receives real-time updates on current events that may affect the underlying properties within our investment portfolio. In the event of a severe weather event or other natural disaster, the Asset Management Team tracks the event as it develops and contact the property managers for each owned property and the borrowers for each loan during and after the event to understand the possible implementation of precautions and assessment of damage, if any. The effects of severe weather events or other natural disasters on the Ladder investment portfolio, if any, are provided in a comprehensive update to the Executive Team, Chief Credit Officer and Head of Underwriting. In 2022, the Asset Management Team identified minimal damage to our owned and loan collateral properties affected by Hurricanes and Tropical Storms Alex, Fiona, Ian and Nicole; a San Jose earthquake; and flooding and other severe storms across the South.

Tenant Environmental Impact Initiatives

The real estate we acquire consists primarily of properties leased on a triple-net basis. As such, in addition to taxes and insurance, the tenant is responsible for all maintenance and operational property expenses. While that limits our influence on the operation and environmental impact of those properties, many corporate parents of our tenants have publicly stated their commitment to environmental progress. In 2022, we continued to help an office campus tenant facilitate an approximately $150 million tenant-funded retrofit to meet LEED Gold’s energy standards and Fitwel certifications.

Responsible Consumption

Ladder endeavors to be in full compliance with environmental regulations in all locations where it has offices—our NYC headquarters and two branch offices in Miami, Florida, and Santa Monica, California. Approximately 90% of our employees work from our headquarters which was built in 2022 to NYC's strict green codes in an LEED Silver building. In addition, in 2022, we added a responsible consumption checklist to every deal that assesses energy and water usage upgrades as well as certifications for environmental performance or energy ratings.

Energy Management

We currently incorporate various eco-friendly practices within our business operations to reduce our electricity usage. Examples include motion sensors for automatic light shut off and office equipment that meets energy management standards such as ENERGY STAR. We encourage our employees to use public or alternative transportation for commuting, including by offering a pre-tax commuter benefits contribution plan. In fact, in our January 2023 employee survey, 93% of respondents indicated that they use public or alternative transportation (walking or biking) in lieu of driving to work. Our NYC headquarters is conveniently located near two major transportation hubs.

Waste Management

In 2022, we reduced our plastic water bottle consumption by installing advanced water filtration technology in our new headquarters and a water cooler in our previous headquarters.

In our drive toward digitalization, we seek to reduce the use of paper, relying to the extent possible on electronic signatures, databases, document retention software, and cloud-based financial software.

We participate in waste recycling programs with clearly marked containers and signage disbursed throughout our NYC headquarters. We also recycle broken or obsolete electronics.

Frameworks and Standards +

Our ESG Report has been informed by the accounting standards published by the Sustainability Accounting Standards Board (SASB), and we have also identified the United Nations Sustainable Development Goals (SDGs) that we believe best align with our business activities and key focus areas. In 2022, we added certain disclosures aligned with the Task Force on Climate-Related Financial Disclosures (TCFD).

Sustainability Accounting Standards Board

This table incorporates accounting standards from the SASB related to Mortgage Finance (FN-MF) and Real Estate (IF-RE).

Mortgage Finance and Real Estate
SASB Topic	Accounting Metric	SASB Code	LADR Response
Lending Practices	(1) Number and (2) value of residential mortgages of the following types: (a) hybrid or option adjustable-rate mortgages (ARMs), (b) prepayment penalty, (c) higher rate, (d) total, by FICO scores above or below 660	FN-MF-270a.1	Not applicable. Ladder does not make residential mortgage loans.
	(1) Number and (2) value of (a) residential mortgage modifications, (b) foreclosures, and (c) short sales or deeds in lieu of foreclosure, by FICO scores above and below 660	FN-MF-270a.2
	Total amount of monetary losses as a result of legal proceedings associated with communications to customers or remuneration of loan originators	FN-MF-270a.3	$0 for fiscal year ending December 31, 2022.
	Description of remuneration structure of loan originators	FN-MF-270a.4	Originators are compensated based on Ladder's profitability over the life of each investment, and we grant stock awards with both time- and performance-based vesting components to promote employee retention and alignment. The stock awards that vest based on Company performance further align originator interests with long-term shareholder value creation.
Discriminatory Lending	(1) Number, (2) value, and (3) weighted average loan-to-value (LTV) ratio of mortgages issued to (a) minority and (b) all other borrowers, by FICO scores above and below 660	FN-MF-270b.1	Not applicable. Ladder's borrowers are companies.
	Total amount of monetary losses as a result of legal proceedings associated with discriminatory mortgage lending	FN-MF-270b.2	$0 for fiscal year ending December 31, 2022.
	Description of policies and procedures for ensuring nondiscriminatory mortgage origination	FN-MF-270b.3	Ladder adheres to all federal and state anti-discrimination laws including the Fair Housing Act, the Equal Credit Opportunity Act, and the New York State Human Rights Law, as applicable.
Environmental Risk to Mortgaged Properties	(1) Number and (2) value of mortgage loans in 100-year flood zones	FN-MF-450a.1	As of December 31, 2022, 21 of 155 loans (or 14.0%) are in the 100-year flood plain. By book value, $670.0 million of $3.9 billion (or 17.0%) are within the 100-year flood plain.
	(1) Total expected loss and (2) loss given default (LGD) attributable to mortgage loan default and delinquency due to weather-related natural catastrophes, by geographic region	FN-MF-450a.2	$0 for fiscal year ending December 31, 2022.
	Description of how climate change and other environmental risks are incorporated into mortgage origination and underwriting	FN-MF-450a.3	We perform a flood, wind, and earthquake analysis on every loan and real estate investment and hold our borrowers and ourselves accountable for proper insurance coverage. Our granular portfolio provides diversity in terms of geography and asset types that limits the effect of any single extreme weather event on our portfolio. We maintain an Environmental Policy that outlines the required environmental due diligence of site assessments and environmental considerations for our owned and collateral real estate properties. Each investment undergoes an environmental risk assessment by an independent environmental professional, the results of which are reviewed and approved by specialized outside environmental counsel and our Credit/Underwriting Team. Compliance with environmental documentary provisions is monitored by our Asset Management Team, and we perform periodic property site visits which include a review of environmental considerations. In 2022, we added a responsible consumption checklist to every new deal that assesses energy and water usage upgrades as well as certifications for environmental performance or energy ratings. See Our Planet for more detail.
Energy Management	Energy consumption data coverage as a percentage of total floor area, by property subsector	IF-RE-130a.1	The real estate we acquire consists primarily of properties leased on a triple-net basis. As such, in addition to taxes and insurance, the tenant is responsible for all maintenance and operational property expenses. While that limits our influence on the operation and environmental impact of those properties, many corporate parents of our tenants have publicly stated their commitment to environmental progress. In 2022, we continued to help an office campus tenant facilitate an approximately $150 million tenant-funded retrofit to meet LEED Gold's energy standards and Fitwel certifications. In 2022, we added a responsible consumption checklist to every new deal that assesses energy and water usage upgrades as well as certifications for environmental performance or energy ratings. We currently incorporate various eco-friendly practices within our office operations to reduce our electricity usage. Examples include motion sensors for automatic light shut off and office equipment that meets energy management standards such as ENERGY STAR. We encourage our employees to use public or alternative transportation for commuting, including by offering a pre-tax commuter benefits contribution plan. In fact, in our January 2023 employee survey, 93% of respondents indicated that they use public or alternative transportation (walking or biking) in lieu of driving to work.
	(1) Total energy consumed by portfolio area with data coverage, (2) percentage grid electricity, and (3) percentage renewable, by property subsector	IF-RE-130a.2
	Like-for-like percentage change in energy consumption for the portfolio area with data coverage, by property subsector	IF-RE-130a.3
	Percentage of eligible portfolio that (1) has an energy rating and (2) is certified to ENERGY STAR, by property subsector	IF-RE-130a.4
	Description of how building energy management considerations are integrated into property investment analysis and operational strategy	IF-RE-130a.5
Water Management	Water withdrawal data coverage as a percentage of (1) total floor area and (2) floor area in regions with high or extremely high baseline water stress, by property subsector	IF-RE-140a.1
	(1) Total water withdrawn by portfolio area with data coverage and (2) percentage in regions with high or extremely high baseline water stress, by property subsector	IF-RE-140a.2
	Like-for-like percentage change in water withdrawn for portfolio area with data coverage, by property subsector	IF-RE-140a.3
	Description of water management risks and discussion of strategies and practices to mitigate those risks	IF-RE-140a.4
Management of Tenant Sustainability Impacts	(1) Percentage of new leases that contain a cost recovery clause for resource efficiency-related capital improvements and (2) associated leased floor area, by property subsector	IF-RE-410a.1
	Percentage of tenants that are separately metered or sub metered for (1) grid electricity consumption and (2) water withdrawals, by property subsector	IF-RE-410a.2
	Discussion of approach to measuring, incentivizing, and improving sustainability impacts of tenants	IF-RE-410a.3
Climate Change Adaptation	Area of properties located in 100-year flood zones, by property subsector	IF-RE-450a.1	6.4 million square feet as of December 31, 2022, primarily consisting of industrial, retail and office properties.
Climate Change Adaptation	Description of climate change risk exposure analysis, degree of systematic portfolio exposure, and strategies for mitigating risks	IF-RE-450a.2	See FN-MF-450a.3 in this table and TCFD table below.

Task Force on Climate-Related Financial Disclosures (TCFD)

Ladder’s Board, NCG Committee, Executive Team and ESG Committee - oversee and manage the Company’s climate change-related risks. This chart summarizes the Company’s efforts based on the TCFD recommendations.

Pillar	Topic	Ladder Practices
Governance	Board’s Oversight and Management’s Role in Assessing Climate-Related Risks and Opportunities	Board Oversight. Our Board of Directors has ultimate oversight of climate change-related risks. The NCG Committee is responsible for overseeing the Company’s environmental and social risks as they apply to shareholder value, including those related to climate and sustainability. Our Head of ESG updates the Board on Ladder’s ongoing evaluation of its carbon footprint and any other climate-related issues, as applicable. Management's Role. Ladder's ESG Committee supports the Company’s efforts in developing, implementing, monitoring and reporting on issues including Ladder’s GHG emissions. The ESG Committee collaborates with key executives and department heads across our Company.
Strategy	Short, Medium, and Long-Term Climate- Related Risks & Opportunities	We have identified climate change-related risks and opportunities that may impact our business over the short, medium and long-term. Environmental risks are a key part of Ladder’s underwriting and deal selection. Physical: Extreme weather may impact the properties we own and those acting as collateral for the loans we make and is our primary short- and medium-term climate-related risk. We assess these risks as part of our investment decision-making and asset management processes, as further described below. Changes in precipitation patterns and variability in weather patterns, rising mean temperatures and rising sea levels are longer-term risks to our business. Physical risks are mitigated by the granular nature of Ladder’s portfolio, which provides diversity in terms of geography and asset type ($25 million average loan size). The short average life of Ladder’s loans, and our focus on transitional or stabilized loans (no new construction) allows us to readily respond to shifting trends. With borrowers & property managers, our hands-on, in-house Asset Management Team tracks, seeks to reduce the impact of, and monitors the effects of severe weather on our portfolio. We also perform flood, wind and earthquake analyses on every deal and require adequate insurance (14% of loans in the 100-year flood plain). Opportunities may be found as climate migration potentially shifts populations to new locations and markets. Consumer demand is accounted for in Ladder’s investment selection process and our multi-cylinder platform allows us to adjust our product mix to target the most favorable risk-adjusted return. Regulatory & Reputational: Climate change could pose regulatory risks such as potential future carbon disclosure and costly compliance requirements for Ladder or our borrowers and property managers. We could be negatively affected by any perception that the Company does not proactively address climate change issues or through any direct or indirect association with a particular asset or company. On the other hand, our robust disclosure regarding, and response to, climate change may positively impact our reputation. Market: The potential devaluation of carbon-intensive properties by investors and the speed at which any devaluation may occur may negatively affect the value and liquidity of the properties we own or the properties underlying our collateral. As stated above, consumer demand is accounted for in Ladder's investment selection process and our multi-cylinder platform and granular, short-dated portfolio allow us to adjust our product mix to target the most favorable risk-adjusted return. Opportunity may exist in investor demand for environmentally and socially responsible investments.
Risk Management	Impact on Business Strategy and Planning	Our Executive Team, NCG Committee and Board focus on managing and mitigating various risks as they apply to our business and financial performance, including climate change and other environmental risks. The ESG Committee regularly monitors regulatory developments.
Risk Management	Processes to Identify, Assess and Manage Climate-Related Risks	Processes to identify, assess and manage climate-related risks are integrated into our investment decision-making and asset management processes. An environmental review of every prospective loan or real estate investment is conducted by a third-party expert and reviewed by outside environmental counsel. A responsible consumption checklist, which includes sponsor efforts to reduce electric consumption and water usage, is completed as well. In addition, Ladder performs a flood, wind and earthquake analysis on every prospective loan and real estate investment and holds our borrowers and ourselves accountable for proper insurance coverage. In the event of a severe weather event or other natural disaster, the Asset Management Team will seek to track the event as it develops and contact the property managers for each owned property and the borrowers for each loan during and after the event to understand the possible implementation of precautions and assessment of damage, if any. The effects of severe weather events or other natural disasters on the Ladder investment portfolio, if any, are provided in a comprehensive update to the Executive Team, Chief Credit Officer and Head of Underwriting. Further, Ladder conducts periodic site visits and includes specific documentary provisions, such as representations and warranties, covenants, indemnities and other provisions governing environmental matters, including the potential use of environmental insurance, in its loan documents to ensure ongoing sponsor compliance with applicable environmental laws and the completion of any required remediation. Compliance is monitored by Ladder's Asset Management Team.
Metrics & Targets	Metrics Used to Assess Climate-Related Risks	We currently track estimated Scope 1 and 2 GHG emissions to help understand our firm's climate impact and are currently evaluating our approach to assessing Scope 3 emissions in light of stakeholder expectations and regulatory requirements. We track and analyze our portfolio's 100-year flood zone data to best prepare for potential extreme weather events and necessary climate resiliency measures. As of December 31, 2022, 21 of 155 loans (or 14.0%) are in the 100-year flood plain. By book value, this equates to $670.0 million of $3.9 billion (or 17.0%) and by building space, 6.4 million square feet, primarily consisting of industrial, retail and office properties.
Metrics & Targets	Scope 1 and 2 Emissions (2022, Estimated)	Scope 1: 0 MtCO2e Scope 2: 53 MtCO2e

United Nations Sustainable Development Goals (SDGs)

The United Nations SDGs are a collaborative, global effort to achieve a better and more sustainable future for all. Represented by 17 global goals and 169 targets, the SDGs address challenges of poverty, inequality, climate change, environmental degradation, peace, and justice. We identified the key areas where we have the greatest influence and impact through our business strategy, products, and services.

Good Health and Well-Being

Achieve universal health coverage, including financial risk protection; access to quality essential healthcare services; and access to safe, effective, quality, and affordable essential medicines and vaccines for all

Our People

Our benefits and paid leave program are available to 100% of our employees, including corporate payment of up to 90% of the premiums for our standard medical plan and 100% of the premiums for dental, vision, disability and life insurance for full-time employees. Ladder offers in-office flu shots annually

Gender Equality

Ensure women's full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic, and public life

Our People

40% of our Executive Team is comprised of women. Over 20% of employees identify as females, and 56% of female employees are currently at the Director+ level. 100% of our employees completed our 2022 annual anti-discrimination and anti-harassment employee training. In our January 2023 anonymous employee survey, 98% of respondents agreed that discrimination is not tolerated at Ladder

Decent Work and Economic Growth

Promote sustained, inclusive, and sustainable economic growth; full and productive employment; and decent work for all

Our People

24% of Ladder employees were promoted in 2022. The average tenure for all employees is nearly six years. In fact, 44% of employees have been with Ladder for more than seven years, and over 30% have been with Ladder for more than 10 years

Sustainable Cities and Communities

Make cities and human settlements inclusive, safe, resilient, and sustainable

Our Communities

By loan count, 64% of our manufactured housing, mobile home, and multifamily investments include affordable housing for low-income families, 22% of which include affordable housing for very low-income families, totaling $989.3 million and $202.5 million of carrying value of loans, respectively. 10,408 units qualify as affordable for low-income families, of which 3,915 qualify for very-low-income families

Responsible Consumption and Production

Ensure sustainable consumption and production patterns

Our Planet

Approximately 90% of our employees work from our headquarters, which in 2022 was built to NYC's strict green codes in an LEED Silver building. Ladder completes a responsible consumption checklist for every deal that assesses energy and water usage upgrades as well as certifications for environmental performance or energy ratings

Climate Action

Take urgent action to combat climate change and its impacts

Our Planet

Ladder has estimated its Scope 1 and 2 emissions and we are evaluating our approach to assessing Scope 3 emissions in light of stakeholder expectations and regulatory requirements

Key Disclosures +

As Of Date

All data is as of December 31, 2022, unless otherwise stated. Data on this website may be modified or updated from time to time.

Forward-Looking Statements

Certain statements on this web page may constitute forward-looking statements. These statements are based on management's current opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results. These forward-looking statements are only predictions, not historical fact, and involve certain risks and uncertainties as well as assumptions. Actual results, levels of activity, performance, achievements, and events could differ materially from those stated, anticipated, or implied by such forward-looking statements. While Ladder believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect actual results. There are a number of risks and uncertainties that could cause actual results to differ materially from forward-looking statements made herein, including, most prominently, the risks discussed under the heading Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, as well as its consolidated financial statements, related notes, and other financial information appearing therein and its other filings with the U.S. Securities and Exchange Commission (SEC). Such forward-looking statements are made only as of the date of this release. Ladder expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard there to or changes in events, conditions, or circumstances on which any such statement is based.

Materiality is used within this web page to describe issues relating to environmental, social and governance (ESG) strategies that we consider to be of high or medium importance in terms of stakeholder interest. For the purposes of this web page, materiality should not, therefore, be read as equating to any use of the word under the securities or other laws of the U.S. or any other jurisdiction, or as used in the documents Ladder files from time to time with the SEC. No part of this web page will be taken to constitute an invitation or inducement to invest in Ladder, nor should this web page be relied upon in making investment decisions.

Additionally, terms such as “ESG,” “impact” and “sustainability” can be subjective in nature, and there is no representation or guarantee that these terms will reflect the beliefs, policies, frameworks or preferred practices of any particular investor or other third-party or reflect market trends. Any ESG, climate or impact goals, commitments, incentives and initiatives outlined in this web page are, unless explicitly stated otherwise, purely voluntary, not binding on our business and/or management and do not constitute a guarantee, promise or commitment regarding actual or potential positive impacts or outcomes. Ladder has established, and may in the future establish, certain ESG-related goals, targets, commitments, incentives and initiatives, including but not limited to those relating to greenhouse gas emissions (GHG) reductions.

Statistics and metrics contained herein, including GHG emissions metrics, are estimates, are not assured, and may be based on assumptions or developing standards. GHG emissions calculations methodologies and data collection practices as a whole are evolving and there are different frameworks, methodologies, and tracking tools being implemented by other asset managers. Such methodologies and data collection practices may not align with the approach used by other asset managers or preferred by prospective investors or with future market trends. Further, certain information contained herein has been obtained from third parties, and in certain cases have not been updated through the date hereof. While these third-party sources are believed to be reliable, Ladder makes no representation or warranty, express or implied, with respect to the accuracy, fairness, reasonableness or completeness of any of the information contained herein, and expressly disclaims any responsibility or liability therefor. Actual results may differ materially from any forward-looking statements.

United Nations Sustainable Development Goals

The United Nations SDGs are aspirational in nature. The analysis involved in determining whether and how certain initiatives may contribute to the SDGs is inherently subjective and dependent on a number of factors. There can be no assurance that reasonable parties will agree on a decision as to whether certain projects or investments contribute to a particular SDG. In addition, Ladder does not have full visibility into the operations of its investment portfolio. Accordingly, investors should not place undue reliance on Ladder's application of the SDGs, as such application is subject to change at any time and in Ladder's sole discretion. Similarly, various stakeholders may have differing approaches to ESG activities more generally. If we do not successfully manage expectations across these varied stakeholder interests, it could erode stakeholder trust, impact our reputation, and constrain our investment opportunities. In addition, clients and investors may decide not to commit capital to future fundraises as a result of their assessment of our application of the SDGs or our approach to and consideration of ESG.

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