Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved 5 stars for three consecutive years on GRESB Real Estate Assessment
• Received Green Star for seven consecutive years
• Achieved A rank in the GRESB Public Disclosure for three consecutive years
• Rated "Low Risk" on Sustainalytics ESG risk assessment
• Earned "BB" rating on MSCI ESG Ratings

Social Achievements

• Implemented various support systems for employee health and well-being
• Provided rent reduction to tenants affected by the pandemic
• Made a donation to a fundraising program in Hokkaido to support medical staff

Governance Achievements

• Amended asset management fee structure to strengthen incentive towards maximization of unitholder value
• Established Sustainability Promotion Council and Sustainability Department
• Implemented measures against conflict of interests with related parties

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on business operations and tenant relationships
• Climate change related risks (physical and transition risks)
• Maintaining communication with local communities during emergencies

Mitigation Strategies

• Implemented preventive measures against COVID-19 in owned properties
• Provided rent reduction and tailored measures to tenants affected by the pandemic
• Enhanced disaster prevention functions in owned properties
• Established a business continuity plan

Supply Chain Management

Responsible Procurement

• Green Procurement Standard

Climate-Related Risks & Opportunities

Physical Risks

• Abnormal climatic conditions
• Sea-level rise

Reporting Standards

Frameworks Used: GRI

UN Sustainable Development Goals

• 7.3
• 12.5
• 12.8
• 11.3
• 16.7

Awards & Recognition

• GRESB 5 stars
• GRESB Green Star
• GRESB A rank

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Started 100% renewable electricity procurement in four properties.
• Achieved 65% green-certified assets (GFA basis) as of May 31, 2022.
• 100% reduction of CO2 generated by electricity by the end of March 2026 (target).

Social Achievements

• Launched "New Working Style" project in October 2021.
• Consistently communicates with tenants to understand their needs.
• Organized ESG training sessions for PMs.

Governance Achievements

• Established Sustainability Promotion Council.
• Established Climate Action Standards.
• Supports TCFD recommendations.

Climate Goals & Targets

Environmental Challenges

• Transition risks (carbon tax, stricter environmental regulations, changing customer behavior)
• Physical risks (extreme weather events, rising temperatures, sea levels)

Mitigation Strategies

• Deploying renewables, switching to LED lighting, retrofitting properties with energy-efficient equipment.
• Increasing proportions of environmentally certified properties and green lease agreements.
• Improving initiatives based on scenario analysis findings.

Supply Chain Management

Responsible Procurement

• Green Procurement Standards

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Rising temperatures
• Sea levels

Transition Risks

• Carbon tax
• Stricter environmental regulations
• Changing customer behavior

Opportunities

• Higher efficiency due to shift to properties with higher eco performance

Reporting Standards

Frameworks Used: GRI, TCFD

Certifications: ISO 14001

UN Sustainable Development Goals

• 7
• 11
• 12
• 13
• 16

Initiatives contribute to SDGs through reducing environmental impact, human capital development, contribution to local communities, tenant well-being, and supplier engagement.

Awards & Recognition

• GRESB 5 stars for 4 consecutive years
• GRESB Green Star for 8 consecutive years
• GRESB A rank in Public Disclosure for 4 consecutive years

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved and maintained KPIs for green building certification ratio, green lease contract ratio, and green bond ratio.
• 13 properties (approx. 31% of portfolio electricity consumption) using renewable energy by end of May 2023.
• CO2 emissions reduced by 37% in Commercial Mall Hakata air conditioning renewal.

Social Achievements

• MSCI ESG Rating upgraded from BB to BBB in May 2023.
• Overall tenant satisfaction score improved in 2023 survey.
• Introduced a group address system (free address system) in TRM's office, improving employee satisfaction.

Governance Achievements

• Established Sustainability Promotion Council and Sustainability Department.
• Implemented ESG-related clauses in property management agreements.
• Strengthened compliance system with regular Compliance Committee meetings and a Compliance Department.

Climate Goals & Targets

Environmental Challenges

• Transition risks (high carbon tax, stricter environmental regulations) and physical risks (extreme weather events) related to climate change.
• Maintaining high tenant satisfaction.

Mitigation Strategies

• Deploying renewables, switching to LED lighting, retrofitting properties with energy-efficient equipment, increasing environmentally certified properties and green lease agreements.
• Regular third-party tenant satisfaction surveys and subsequent improvements based on feedback.
• Disaster-resistant building designs and disaster preparedness measures (BCP).

Supply Chain Management

Supplier Audits: Annual monitoring and evaluation of outsourced property managers.

Responsible Procurement

• Green Procurement Standards
• ESG-related clauses in property management agreements.

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events
• Rising mean temperatures and sea levels

Transition Risks

• Increased pricing of GHG emissions
• Stricter environmental regulations

Opportunities

• Securing competitive edge by shifting to properties with higher environmental performance

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations

Certifications: ISO 14001

Third-party Assurance: Ernst & Young ShinNihon LLC

UN Sustainable Development Goals

• 7
• 12
• 11
• 16

The report mentions alignment with several SDGs, including those related to affordable and clean energy, responsible consumption and production, sustainable cities and communities, and peace, justice, and strong institutions.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• GRESB 5 stars for 5 consecutive years
• GRESB Green Star for 9 consecutive years

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved and maintained KPIs for green building certification ratio, green lease contracts ratio, and green bonds ratio by end of May 2024.
• Approximately 63% of the portfolio's electricity consumption was using renewable energy sources by the end of the fiscal period ended May 2024.
• Introduced internal carbon taxation in July 2024 to compare CO2 emissions from construction and energy-saving renovations.
• 74% of properties are green-certified (as of end of May 2024).

Social Achievements

• Improved overall tenant satisfaction score in the 2023 survey.
• Implemented a work reform project in spring 2023, changing office layouts and introducing a free address system.
• Donated to local governments through the corporate version of Hometown Tax Payment in 2023 (Hokkaido and Kyoto).
• Introduced label-free plastic bottles in April 2022 to reduce plastic use.

Governance Achievements

• Established a basic policy on sustainable procurement in April 2024.
• Strengthened the Sustainability Promotion Department, making it an independent organization under the President & CEO in April 2024.
• Implemented a robust compliance system with regular Compliance Committee meetings and an independent Compliance Department.
• Established a business continuity plan to prepare for unexpected crises.

Climate Goals & Targets

Environmental Challenges

• Transition risks (high carbon tax, stricter environmental regulations) and physical risks (damage to properties due to extreme weather) identified through scenario analysis (1.5°C and 4°C scenarios).
• Potential for damage to properties due to increased severity of extreme weather events.

Mitigation Strategies

• Deploying renewables, switching to LED lighting, retrofitting properties with energy-efficient equipment, increasing environmentally certified properties and green lease agreements.
• Disaster-resistant building designs, investment focus on areas resistant to inundation, business continuity management (BCM) policy, and fire insurance covering flood losses.
• Internal carbon taxation to inform decision-making on energy-saving renovations.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Basic Policy on Sustainable Procurement (April 2024)
• Green Procurement Standards
• ESG-related clauses in PM agreements
• Annual monitoring and evaluation of outsourced PMs

Climate-Related Risks & Opportunities

Physical Risks

• Damage to properties due to increased severity of extreme weather events

Transition Risks

• Higher operational costs due to carbon tax
• Additional costs for refurbishments to comply with stricter environmental regulations
• Decline in demand for properties with lower energy efficiency

Opportunities

• Higher efficiency due to shift to properties with higher environmental performance, leading to reduction of operational costs.

Reporting Standards

Frameworks Used: GRI Standards, TCFD Recommendations

Certifications: ISO 14001

Third-party Assurance: Ernst & Young ShinNihon LLC

UN Sustainable Development Goals

• 7.3
• 12.5
• 12.8
• 11.3
• 16.7

Initiatives contribute to these SDGs through renewable energy procurement, waste reduction, energy efficiency improvements, sustainable urbanization, and inclusive decision-making.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• GRESB 5-star rating (6 consecutive years)
• GRESB Global Sector Leader (Listed) and Asia Sector Leader in the Mixed (Office/Retail) category (2023)