Climate Change Data

KDX Realty Investment Corporation

Climate Impact & Sustainability Data (2022, 2023)

Reporting Period: 2022

Environmental Metrics

ESG Focus Areas

  • Contribution to a Sustainable Environment
  • Commitment to a Diverse Society
  • Stakeholder Engagement
  • Attractive Working Environment
  • Responsible Organization

Environmental Achievements

  • All four Investment Corporations (Kenedix Office Investment Corporation, Kenedix Residential Next Investment Corporation, Kenedix Retail REIT Corporation, and Kenedix Private Investment Corporation) awarded a “Green Star” designation by GRESB.
  • Active promotion of LED lighting conversion in common/tenant areas.
  • Installation of remote surveillance system for road heating resulting in significant fuel cost reduction (Kenedix Residential Next Investment Corporation).
  • Solar panel installation (Kenedix Retail REIT Corporation).
  • Switching to effectively renewable energy at some properties (Kenedix Office Investment Corporation).
  • High percentage of green certified buildings across all Investment Corporations (details provided in the report).

Social Achievements

  • Investments in various types of properties through REITs, considering environmental and social issues.
  • Investments in flexible/mixed-use properties contributing to diverse tenant needs.
  • Acquisition of ESG properties equipped with emergency batteries (Kenedix Residential Next Investment Corporation).
  • Installation of disaster response vending machines (Kenedix Residential Next Investment Corporation).
  • Distribution of emergency action manual handbooks (Kenedix Office Investment Corporation and Kenedix Retail REIT Corporation).
  • Introduction of ESG service “EaSyGo” to improve living and business environment and encourage tenant participation in ESG-related actions.
  • Green Lease agreements with some tenants.

Governance Achievements

  • Established Sustainability Committee and Compliance Committee.
  • Support for TCFD recommendations and joined the TCFD consortium.
  • Scenario analysis conducted based on multiple world outlooks (4℃ and 1.5℃ scenarios).
  • Implemented a risk management system addressing investment management risk, real estate management risk, financial risk, legal compliance risk, administrative risk, system risk, and business continuity risk.
  • Established a whistleblowing system.

Climate Goals & Targets

Medium-term Goals:
  • Achieve 20% female employees in management positions by the end of 2030.
Short-term Goals:
  • Increase the percentage of female employees in management positions to at least 15% by the end of 2025

Environmental Challenges

  • Climate change risks (transition and physical risks) identified through scenario analysis.
  • Potential conflicts of interest due to the scale of operations.
  • Need to continuously improve customer satisfaction.
Mitigation Strategies
  • Scenario analysis to understand and respond to climate change risks.
  • Establishment of a robust compliance system and risk management framework.
  • Regular customer satisfaction surveys and renovations to address tenant needs.
  • Implementation of measures to manage conflicts of interest, including Related Party Transaction Rules and a pipeline committee.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks
  • Intensification of heavy rains and torrential rains
  • Rise in sea level
  • Rise in average temperature
Transition Risks
  • CO2 emission regulation
  • Carbon tax
  • Advancement of energy-saving and renewable energy technologies
  • Evaluation by investors and financial institutions
  • Focus on environmental certification
  • Tenant behavior change due to environmental orientation
  • Tenant behavior change due to disaster-prevention orientation
Opportunities
  • Decrease in utility costs due to energy-saving, introduction of renewable energy, conversion to ZEB/ZEH, etc.
  • Decrease in financing costs due to high valuation
  • Maintain and improve occupancy rates by improving environmental performance
  • Maintain and improve occupancy rates by improving resilience measures

Reporting Standards

Frameworks Used: GRI Standards

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:100,349 t-CO2e (KDXR); 13,133 t-CO2e (KPI)
Scope 1 Emissions:1,592 t-CO2e (KDXR)
Scope 2 Emissions:40,036 t-CO2e (KDXR)
Scope 3 Emissions:48,720 t-CO2e (KDXR)
Total Energy Consumption:472,800 MWh (KDXR); 274,690 GJ (KPI)
Water Consumption:2,502,296 m3 (KDXR); 86,453 m3 (KPI)
Waste Generated:686 tons (KDXR)
Carbon Intensity:0.055 t-CO2/㎡ (KDXR); 0.00655 t-CO2/㎡ (KPI)

ESG Focus Areas

  • Contribution to a Sustainable Environment
  • Commitment to a Diverse Society
  • Stakeholder Engagement
  • Attractive Working Environment
  • Responsible Organization

Environmental Achievements

  • Achieved a Green Star designation in the GRESB Real Estate Assessment for all four REITs.
  • Reduced GHG emissions intensity by 11.8% (KPI) and 42% (KDXR) from the base year.
  • Installed solar panels at multiple properties.
  • Converted lighting to LED in common and tenant areas.
  • Implemented remote surveillance of road heating, reducing fuel costs.

Social Achievements

  • Invested in healthcare facilities to meet growing demand.
  • Expanded existing properties to include recycle stores and restaurants.
  • Participated in urban redevelopment projects, reusing underground piles.
  • Held community-participating events at properties.
  • Supported Japan for UNHCR through fundraising activities.

Governance Achievements

  • Established a Sustainability Committee chaired by the President & CEO.
  • Implemented a robust compliance system with a Compliance Officer and Committee.
  • Conducted annual internal audits with outside experts.
  • Established a whistleblowing system.
  • Signed on to the PRI and PFA21.

Climate Goals & Targets

Long-term Goals:
  • Net-zero emissions by 2050 (KDXR and KPI)
Medium-term Goals:
  • Achieve 42% reduction in GHG emissions (KDXR) by 2030.
  • Achieve 30% reduction in GHG emissions (KPI) by 2030.
  • Increase the percentage of female employees in management positions to 20% by the end of 2030.
Short-term Goals:
  • Increase the percentage of female employees in management positions to at least 15% by the end of 2025.

Environmental Challenges

  • Climate change risks (transition and physical risks)
  • Maintaining water supplies
  • Managing waste materials effectively
  • Balancing biodiversity protection with real estate development
  • Conflicts of interest due to the scale of operations
Mitigation Strategies
  • Scenario analysis to identify climate-related risks and opportunities.
  • GHG emission reduction targets (Science Based Targets certified for KDXR).
  • Water-efficient equipment updates and rainwater tanks.
  • Waste reduction and sorting initiatives.
  • Due diligence on properties to identify and address hazardous substances and soil contamination.
  • Compliance Manual and training programs to prevent conflicts of interest.

Supply Chain Management

Responsible Procurement
  • Due diligence on new business partners and brokers

Climate-Related Risks & Opportunities

Physical Risks
  • Intensification of heavy rains and torrential rains
  • Rise in sea level
  • Rise in average temperature
Transition Risks
  • CO2 emission regulations
  • Carbon tax
  • Advancement of energy-saving and renewable energy technologies
  • Evaluation by investors and financial institutions
  • Focus on environmental certification
  • Tenant behavior change due to environmental orientation
  • Tenant behavior change due to disaster-prevention orientation
Opportunities
  • Decrease in utility costs due to energy-saving, introduction of renewable energy, conversion to ZEB/ZEH, etc.
  • Decrease in financing costs due to high valuation

Reporting Standards

Frameworks Used: GRI Standards

Certifications: GRESB, CASBEE, BELS, DBJ Green Building, ResReal, JHEP, ABINC, Science Based Targets (KDXR)

Awards & Recognition

  • The 8th Yokohama Global Warming Prevention Award