Climate Change Data

Environmental Metrics

ESG Focus Areas

• Green Buildings
• Climate Change

Environmental Achievements

• 93.2% of properties in MHR’s portfolio had green building certification as of January 31, 2020.

Social Achievements

• Not disclosed

Governance Achievements

• Established a Sustainability Committee comprising MIM’s President & CEO, all General Managers, persons in charge in departments related to ESG, among others. Final decisions are made by the President & CEO.

Climate Goals & Targets

Environmental Challenges

• Potential unintended environmental and social risks associated with green building projects, including energy and water consumption, dispersal of toxic substances, and negative impacts on people's health.

Mitigation Strategies

• MHR has an Environmental Management System (EMS) in place. MIM's Investment Management Guidelines require due diligence on toxic substances before acquiring new properties and stipulate proper management of any detected substances in existing properties.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Green Bond Principles 2018 (GBP), Japan’s Green Bond Guidelines 2017

Certifications: CASBEE Certification for Real Estate, CASBEE Certification for Buildings, DBJ Green Building Certification, Building Energy-efficiency Labelling System (BELS)

Third-party Assurance: Sustainalytics

UN Sustainable Development Goals

• SDG 7
• SDG 9
• SDG 11

Green buildings contribute to affordable and clean energy, sustainable cities and communities, and industry, innovation, and infrastructure.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions by 18% (vs. FY 2019) in FY2022
• Introduced renewable energy electricity in most owned properties
• Green Building Certifications acquisition rate: 93.5% (in acquisition price) as of July 31, 2023

Social Achievements

• Overall employee satisfaction score 4.1 (5-point scale) in FY2022
• Paid holiday acquisition rate 99.7% in FY2022
• Implemented various initiatives emphasizing human rights and diversity for employees
• Individual meetings with institutional investors: 91 times (in 2022)

Governance Achievements

• Increased number of directors to five and its ratio of women to 40% in April 2021
• Received 4 Stars in GRESB Real Estate Assessment in 2023
• Inclusion in MSCI Japan ESG Select Leaders Index (May 2022)

Climate Goals & Targets

Environmental Challenges

• Risk of market fluctuation
• Risk of population decline
• Risk of change in work style
• Risk of aged-related deterioration of owned properties
• Earthquake risk
• Climate change risk
• ESG-related risk
• Risk related to human resources
• Compliance-related risk

Mitigation Strategies

• Investment in “premium properties in central Tokyo ”
• Maintenance of strong financial standing and high financial ratings
• Acquisition of a strong sense of trust from unitholders
• Securement of further competitive advantage through the provision of excellent management and operation
• Investment in properties with low PML and excellent earthquake resistance
• Investment in properties with excellent environmental performance, acquisition of green building certifications and promotion of reduction of greenhouse gas
• Initiatives for the improvement of external evaluation of ESG, and proactive information dissemination
• Setting of effective human resource development programs
• Acquisition of a strong sense of trust from stakeholders by appropriately implementing measures such as the establishment of effective internal control, thorough compliance, and checking and improvement of issues through internal audit

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Due diligence when acquiring real estate
• Checking efforts on “health and safety ” and “fair wage ” of employees in the selection of contractors

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events
• Rising mean temperatures

Transition Risks

• Increased pricing on GHG emissions
• Mandates on and regulation of existing products and services
• Substitution of existing products and services with low-carbon options

Opportunities

• Increased demand for highly energy-saving properties
• Lower fundraising costs for owners of highly energy-saving properties

Reporting Standards

Frameworks Used: GRI Standards (Core option), SASB Standards, TCFD Recommendations

Certifications: CASBEE, DBJ Green Building Certification

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• GRESB 4 Stars
• Green Star designation (12 consecutive years)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gases by 52.7% in fiscal 2023 (vs. FY 2019)
• Completed the introduction of renewable energy electricity in most owned properties

Social Achievements

• Implemented various initiatives emphasizing human rights and diversity for employees
• Improved workplace environment by conducting employee satisfaction surveys using third-party organizations
• Increased number of directors to five and its ratio of women to 40% in April 2021

Governance Achievements

• Increased number of directors to five and its ratio of women to 40% in April 2021
• Worked on building fair and effective corporate governance and made efforts to enhance internal control through thorough compliance and risk management

Climate Goals & Targets

Environmental Challenges

• Risk of market fluctuation
• Risk of population decline
• Risk of change in work style
• Risk of aged-related deterioration of owned properties
• Earthquake risk
• Climate change risk
• ESG-related risk
• Risk related to human resources
• Compliance-related risk

Mitigation Strategies

• Investment in “premium properties in central Tokyo ” that can expect high profitability and asset value to be maintained regardless of the market environment
• Maintenance of strong financial standing and high financial ratings
• Acquisition of a strong sense of trust from unitholders due to the maintenance and improvement of profitability and asset value over the long term
• Investment in “premium properties in central Tokyo ” that can surely capture office demand by functioning as headquarters even amid population decline and the spread of remote work
• Securement of further competitive advantage through the provision of excellent management and operation meeting tenant needs, in addition to investments in “premium properties in central Tokyo ” with excellent convenience, comfort and safety
• Implementation of construction work for optimum maintenance of asset value based on Mori Building Group’s management record over many years
• Investment in properties with low PML and excellent earthquake resistance
• Capturing of tenant demand by owning properties with high earthquake resistance and excellent BCP measures
• Investment in properties with excellent environmental performance, acquisition of green building certifications and promotion of reduction of greenhouse gas
• Investment in properties located in areas with low risk of flood
• Capturing of tenant demand by owning properties with low risk of climate change and excellent environmental performance
• Initiatives for the improvement of external evaluation of ESG, and proactive information dissemination
• Improvement of evaluation and decline in fundraising costs in the capital market as a company with high ratings on ESG
• Setting of effective human resource development programs (evaluation and feedback, training system, support for qualification acquisition, etc.)
• Development of an excellent working environment where each employee can fully demonstrate their skills
• Implementation of employee satisfaction survey and continuous improvement of issues
• Acquisition of a strong sense of trust from stakeholders by appropriately implementing measures such as the establishment of effective internal control, thorough compliance, and checking and improvement of issues through internal audit

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Selection of contractors considering ESG initiatives, particularly health and safety and fair wage for employees.

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events such as typhoons and floods
• Rising mean temperatures

Transition Risks

• Increased pricing on GHG emissions
• Mandates on and regulation of existing products and services
• Strengthening of standards for energy conservation

Opportunities

• Reduced GHG emissions
• Increase percentage of renewable energy
• Introduce energy-saving equipment and energy management system
• Increased demand for highly energy-saving properties

Reporting Standards

Frameworks Used: GRI Standards (Core option), SASB Standards, TCFD Recommendations

Certifications: CASBEE, DBJ Green Building Certification

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

MHR has identified areas of Materiality to prioritize and made clear highly relevant SDG targets. It aims to contribute to achieving a sustainable society by strengthening its response to SDG and other social issues while maintaining and improving its business competitiveness.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• GRESB 4 Stars and Green Star (13 consecutive years)
• Nikko IR Companies' Website Ranking: AA Website (2023)