Heiwa Real Estate Co., Ltd.

Climate Impact & Sustainability Data (2021-04 to 2022-03, 2022)

Reporting Period: 2021-04 to 2022-03

Environmental Metrics

Total Carbon Emissions:15,140 tCO2e/year

Scope 1 Emissions:2,709 tCO2e/year

Scope 2 Emissions:12,431 tCO2e/year

Scope 3 Emissions:104,596 tCO2e/year

Renewable Energy Share:Not disclosed

Total Energy Consumption:139,220 MWh/year

Water Consumption:530,304 m3/year

Waste Generated:3,010 tons/year

Carbon Intensity:27.6 kg-CO2/m2

ESG Focus Areas

Environment
Society
Governance

Environmental Achievements

Received a 4-Star rating in the 2022 GRESB Real Estate Evaluation.
Switched to electricity derived from renewable energy sources at owned properties, resulting in a reduction in CO2 emissions equivalent to approximately 9,000 tons per year.
KITOKI building received multiple awards for its sustainable design and use of wood.
ORSUS Togoshiginza acquired ZEH-M Oriented certification.

Social Achievements

Certified as a Health & Productivity Management Outstanding Organization for 2023 (White 500).
Selected for inclusion in all six indices managed by the Government Pension Investment Fund (GPIF).
Nihonbashi Kabutocho revitalization efforts received a third consecutive award.
Various community initiatives, including the Edible KAYABAEN project.

Governance Achievements

Transitioned to a Company with a Nominating Committee, etc., in 2022.
Received an overall ranking of Grade AA in the Nikko Investor Relations Co., Ltd., All Japanese Listed Companies' Website Ranking 2022.

Climate Goals & Targets

Long-term Goals:

Not disclosed

Medium-term Goals:

Achieve at least 10% female managers by FY2025
Achieve 90% work engagement status by FY2023

Short-term Goals:

Reduce GHG emissions by 50% by 2030 (vs. FY2018)
Reduce water consumption by 20% by 2030 (vs. FY2018)
Reduce waste by 20% by 2030 (vs. FY2018)
Recycling rate of 70% by FY2030

Environmental Challenges

Declining brand value and potential customer appeal due to insufficient industrial and regional revitalization efforts.
Risk of district decline due to fewer local residents, visitors, etc.
Risk of personnel shortages, biased viewpoints and activities.
Risk of turnover rate increases and lower lease prices due to delayed responses to new needs.
Increased impact of energy price fluctuations due to dependence on the use of low-efficiency resources, carbon taxes and the tightening of other regulations.
Lost opportunities to acquire tenants and loss of lease premiums due to delays in implementing environmental measures.
Increased compliance risks due to deterioration of internal risk management systems and declining awareness of compliance.
Risk of reduced effectiveness of sustainability measures due to lack of understanding and cooperation within the Company.

Mitigation Strategies

Involvement in industrial revitalization, including contributions to the Global Financial City: Tokyo vision.
Invigorating the district through a variety of activities.
Enhance human capital through recruitment and promotion of diverse human resources.
Improve value provided by the Company with office environments suitable for new work styles.
Lower repair and operating costs by reducing resource usage and improving efficiency.
Using enhanced environmental friendliness as the point of differentiation from other properties.
Strengthening risk management and raising compliance awareness throughout the company.
Improving effectiveness of sustainability measures by raising sustainability awareness throughout the Company.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

Procurement policies for major products, services and business partners.

Climate-Related Risks & Opportunities

Physical Risks

Damage to properties caused by violent winds from typhoons or flooding inside buildings from torrential rains or overflowing rivers
Growing demand for air conditioning due to increasing numbers of extremely hot and cold days

Transition Risks

Higher taxes on GHG emissions if a carbon tax program is adopted, and stricter energy conservation standards for buildings
Increasing costs for adopting new technologies for building facilities
Higher prices of services from relevant suppliers amid growing need to decarbonize
Changing demand from building tenants and occupants based on their preferences for buildings equipped to combat climate change and avoidance of buildings that are not

Opportunities

Reduced energy consumption due to installation of more efficient facilities
Greater ability to attract building tenants, occupants, and users through more environmentally friendly and disaster-prepared facilities and services
Growing numbers of environmentally aware investors and banks that integrate climate-related factors in financing decisions

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Ministry of Economy, Trade and Industry’s Value Co-creation Guidelines

Certifications: GRESB 4-Star rating, ZEH-M Oriented certification (ORSUS Togoshiginza), SBT certification (1.5°C level)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

Not disclosed

Not disclosed

Sustainable Products & Innovation

KITOKI building (wooden hybrid construction)

Awards & Recognition

GRESB 4-Star rating
Health & Productivity Management Outstanding Organization for 2023 (White 500)
Green Star designation (GRESB)
Environmentally Sustainable Enterprise at the 4th ESG Finance Awards Japan
Wood City TOKYO Model Architecture Award Grand Prize (KITOKI)
Wood Design Award 2022 Honorable Mention (KITOKI)
Good Facilities Using Wood Competition 2022 Award for Excellence (KITOKI)
Good Design Award 2022 (KITOKI)
Excellence Award in the Urban Space Category at the 3rd Green Infrastructure Awards (Edible KAYABAEN)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:22,000 tCO2e (FY2022)

Scope 1 Emissions:Not disclosed

Scope 2 Emissions:Not disclosed

Scope 3 Emissions:Not disclosed