STATEMENT ON PRINCIPAL ADVERSE IMPACTS OF INVESTMENTDECISIONS ON SUSTAINABILITY FACTORS
Product Name/Legal Entity Identifier: CRE Logistics REIT, Inc.
The following is the adverse sustainability impact statement of CRE Logistics REIT, Inc. (“CRE REIT”)
pursuant to Regulation (EU) 2019/2088 (“SFDR”). We have no employees in accordance with theprohibition on having employees under the Act on Investment Trusts and Investment Corporations of Japan,
and rely on CRE REIT Advisers, Inc. (the “Asset Manager”) to manage and operate the properties in our
portfolio. CRE REIT and the Asset Manager are hereinafter referred to collectively as “we”, “us” or “our”.
References to “fiscal year” or “FY” are to the 12 months began or beginning April 1 of the year, unless
noted otherwise.
Please note that SFDR requirements, including the scope of their application to issuers outside the European
Economic Area, continue to evolve. We are therefore taking a principles-based approach to compliance with
the SFDR disclosure standards, which are subject to change.
1. Summary
We consider principal adverse impacts of our investment decisions on sustainability factors. The present
statement is our consolidated statement of the principal adverse impacts on sustainability factors (“PAI”).
The statement covers the reference period from January 1, 2023 to December 31, 2023 unless noted
otherwise. The statement will be reviewed as needed.
We believe that enhancing unitholder value is possible only while preserving sustainable environment andachieving sustainable society. We make our contribution by investing in high-quality logistics facilities andconducting long-term, stable asset management. Under our sustainability policies and framework, we
collaborate with the Asset Manager, to implement a wide range of initiatives promoting environmental,social and governance, or ESG, goals.
We use the definition of PAI as described in Recital 20 of SFDR being “those impacts of investment
decisions and advice that result in negative effects on sustainability factors,” with sustainability factors
referring to environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐
bribery matters as defined in article 2 (24) of SFDR.
We believe that investment decisions that negatively affect climate or other environment-related resources,or have negative implications for society, can have a significant impact on risks and value creation for ourunitholders. To this end, we consider PAI of our investment decisions throughout all major steps of theinvestment decision and property management process throughout the lifecycle of the properties in our
portfolio.
2. Description of principal adverse sustainability impacts
Nearly all types of economic activity have the potential to impact various PAI indicators both positively andadversely. We aim to manage the risks connected to PAI from our investment decisions in several ways,
including general screening criteria, due diligence and our ESG initiatives. Some of the PAI indicators listed
below are currently already being monitored and reported. As the availability of data improves in the future,
we intend to add more indicators.
Table 1
Principal adverse sustainability impacts statement
We do not invest in investee companies, but invest in real estate. As adverse sustainability indicators 1-16
as contained in Table 1 of Annex 1 of the SFDR Delegated Regulation pertain to investee companies, these
are not included in this PAI statement, which pertains to real estate investments.

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Indicators applicable to investments in real estate assets
Adversesustainability
indicator

MetricImpact in
2023 (FromJanuary 1,
2023 toDecember31, 2023)

Impact in
2022 (FromJanuary 1,
2022 toDecember
31,2022)

Explanation

Actions taken

Fossilfuels

17.
Exposure
to fossil
fuels
through
real estate
assetsShare ofinvestments
in real estate
assetsinvolved in
the extraction,
storage,transport or
manufactureof fossil fuels

N/A

N/A

We do notinvest in realestate assets
involved in theextraction,
storage,transport or
manufacture offossil fuels.

N/A

Energyefficiency

18.
Exposure
to energyinefficient
real estate
assetsShare ofinvestments
in energyinefficient
real estate
assets

As ofDecember31, 2023,
0.0% of ourproperties
were not the“GreenBuildings”(as defined to
the right)
based ontotal floor
area.

As of
December31, 2022,
5.4% of ourproperties
were not the“GreenBuildings”(as defined to
the right)
based ontotal floorarea.

To track theenvironmental
performance ofour properties,
we rely on
certifications
issued by thirdparty
organizations,such as theDevelopment
Bank of Japan’s(“DBJ”) Green
Building
Certification,
Building
Energyefficiency
Labeling
System(“BELS”)
certification,
Comprehensive
Assessment
System for
Built
Environment
Efficiency(“CASBEE”)
certification,and otherequivalentcertifications.
We call our
properties thatreceive any
suchcertifications“GreenBuildings”.

We will do ourbest to obtainappropriate
environmental
certifications
for properties
that are not the“GreenBuildings” indue course.

2With respect toDBJ
certifications,
we consider aproperty tohave sufficientenvironmental
certification if
it received fourstars or higher
out of DBJ’s
five-starranking system.
With respect to
CASBEE, weconsider aproperty tohave sufficientenvironmental
certification if
it received an A
Rank or higher
out of the
CASBEEranking system.
With respect to
BELS, weconsider aproperty tohave sufficientenvironmental
certification if
it received fourstars or higher
out of BELS’
five-starranking system.

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Table 2
Additional climate and other environment-related indicators
CRE REIT does not invest in investee companies, but invests in real estate. As additional climate and otherenvironment-related indicators 1-17 as contained in Table 2 of Annex 1 of the SFDR Delegated Regulation
pertain to investee companies, these are not included in this PAI statement, which pertains to real estate
investments.
Adversesustainability
impactAdverse sustainability impact (qualitative or quantitative)

MetricIndicators applicable to investments in real estate assets
Greenhousegas emissions

18. GHG emissions
Scope 1 GHG emissions generated by properties were 0 t-CO2e(in 2021), 0 t-CO2e (in 2022) and 0 t-CO2e (in 2023).
Scope 2 GHG emissions generated by properties were 188.1 tCO2e (in 2021), 329.8 t-CO2e (in 2022) and 184.2 t-CO2e (in2023).

Scope 1 GHG
emissions generated
by real estate assets
Scope 2 GHG
emissions generated
by real estate assets

Scope 3 GHG emissions generated by properties were 6,197.4 tCO2e (in 2021), 7,108.8 t-CO2e (in 2022) and 6,618.3 t-CO2e (in2023).

From 1 January2023, Scope 3 GHG
emissions generated
by real estate assets

Total GHG emissions generated by properties were 6,385.5 tCO2e (in 2021), 7,438.6 t-CO2e (in 2022) and 6,802.5 t-CO2e (in2023).

Total GHG
emissions generated
by real estate assets

Greenhouse gas emission intensity from our portfolio was 0.011 tCO2e/m2 (in 2021), 0.013 t-CO2e/m2 (in 2022) and 0.011 tCO2e/m2 (in 2023).
We aim to achieve 46% reduction in CO2 emissions intensity fromour portfolio by FY 2030 compared with the FY 2019 levels.
Energyconsumption

19. Energy consumption intensity
Energy consumption intensity of owned properties were 28.70
kWh/m2 (in 2021), 36.74 kWh/m2 (in 2022) and 35.03 kWh/m2(in 2023), including the scope of management by tenants.
We aim to reduce energy consumption by installing eco-friendly
equipment such as LED lighting (introduced at 18 of ourproperties), highly-insulated sandwich panels (introduced at 19 of
our properties), human sensors (introduced at 21 of ourproperties), well water-based roof watering equipment, and green
walls (introduced at one of our properties).

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Energy consumption
in GWh of owned
real estate assets per
square meter

Table 3
Additional indicators for social and employee, respect for human rights, anti-corruption and anti-bribery
matters
We have no employees in accordance with the prohibition on having employees under the Act on
Investment Trusts and Investment Corporations of Japan, and rely on the Asset Manager to manage andoperate the properties in our portfolio. Accordingly, additional indicators for social and employee, respectfor human rights, anti-corruption and anti-bribery matters in this PAI statement pertain to the AssetManager and the tenants of the proprites in our portfolio, to the extence available.
SOCIAL AND EMPLOYEE, RESPECT FOR HUMAN RIGHTS, ANTI-CORRUPTION AND ANTIBRIBERY MATTERS
Adversesustainability
impactAdverse impact on sustainability factors (qualitative or
quantitative)

MetricIndicators applicable to investments to the Asset Manager or tenantsSocial andemployeematters

3. Number of days lost to injuries, accidents, fatalities or illness
We monitor absenteeism and injuries among the Asset Manager’s
employees.

Number of workdays
lost to injuries,
accidents, fatalities orillness of investee
companies expressed
as a weighted average
The number of
workdays lost to
injuries, accidents,
fatalities or illness at
the Asset Manager
was 0 from January
1, 2023 to December
31, 2023.

5. Lack of grievance/complaints handling mechanism related to
employee matters
We have established a policy which handles complaints from ourclients and business partners. We record and categorize thecomplaints between level 0 to level 3. The complaints categorized
as level 2 (i.e., a significant degree of dissatisfaction and requiring
careful handling, including consultation with legal counsel ifnecessary) or higher are reported to our compliance officer andhandled based on the Representative Director’s instruction after
input from relevant business departments and legal counsel.

6. Insufficient whistleblower protection
We have established a whistleblower system that has established ahotline to our Compliance Department. All of our employees may
use the whistle blower system, regardless of their employment
status, length of employment, or length of working hours. The
reports are escalated to the Representitive Director andinvestigated. If there are any violations of laws, regulations, or
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Share of investments
in investee
companies without
any
grievance/complaints
handling mechanism
related to employee
matters
All of our clients andbusiness partners areprovidedgrievance/complaints
handling mechanism.
Share of investments
in entities without
policies on theprotection ofwhistleblowers
All of the AssetManager’s officers

Anticorruption andanti-briberyinternal rules, corrective measures and measures to prevent
recurrence will be promptly taken. Confidentiality regarding theuse of the whistleblower system will be maintained, and we willprotect the whistleblower so that the use of the system will not beinterfered with and the person who made the report or consultation
will not be disadvantaged

and employees areprovided
whistleblower
protection.

17. Number of convictions and amount of fines for violation ofanti-corruption and anti-bribery laws

Numbers ofconvictions andamount of fines forviolations of anticorruption and antibribery laws by
investee companies

Before entering into a lease agreement, we confirm that the tenant
is not related to antisocial forces based on a database provided by
Nikkei Telecom. This includes review of the tenant’s reputation,
including whether the tenant has been convicted for an organizedcrime such asbribery, as well as whether the tenant is regarded as
an antisocial force. We update the review once a year after entering
into a lease agreement.

No convictions andrepuration damages
with respect to our
tenants have beenreported.

For descriptions of actions which CRE REIT takes and will take with respect to the PAI indicators, pleaserefer to our ESG website: https://cre-reit.co.jp/en/esg/index.html
3. Description of policies to identify and prioritize principal adverse sustainability impacts
Subject to data availability, we monitor the selected PAI indicators for the existing properties in our portfolio.
Prior to our investment in a property, we conduct a due diligence review of the property, including ESG due
diligence, which includes selected PAI indicators. The due diligence findings related to selected PAI
indicators are reported and reviewed prior to the investment decision.
In order to realize sustainability in our asset management while maximizing our portfolio value, we consider
ESG factors in our investment and asset management processes. In particular, the Asset Manager has
established a green finance framework consisting of green loans and green bonds. When determining
whether to acquire or invest in a property though green financing, we rely on the DBJ, BELS and CASBEE
certifications. We use green financing to acquire properties that receive (i) four stars or higher out of DBJ’s
five-star ranking system, (ii) A Rank or higher out of the CASBEE ranking system or (iii) four stars or higher
out of BELS’ five-star ranking system.
For further information, please refer to our ESG website: https://cre-reit.co.jp/en/esg/index.html
4. Engagement policies
Due Diligence and Screening
When investing in properties using proceeds from our green financing, we do not consider properties that
do not meet the criteria under our green finance framework. We also do not generally consider investing inproperties that are designated as contaminated areas that require government notification under the Soil
Contamination Countermeasures Act of Japan or that do not otherwise meet our environmental standards
based on their history of land usage and soil contamination, assessment by experts and examination ofpresence of harmful substances, unless appropriate measures are taken under the Soil Contamination
Countermeasures Act or we conclude, after appropriate due diligence review, that any health or other ESG
risk is limited. We also review whether the property we may acquire is compliant with applicable law.
We have selected PAI indicators GHG emissions and energy consumption intensity as our PAI indicators
in Table 2 above for the following reasons.
6•GHG emissions from buildings have a major environmental impact.

•

Reduction of GHG emissions is one of the major environmental challenges confronted by the world.
In Japan, owners of offices (buildings) are required to calculate GHG emissions based on the Law
Concerning the Promotion of the Measures to Cope with Global Warming, and are also required toreduce total emissions by the Tokyo Metropolitan Government and to submit global warming
countermeasure agreement/reports.

•

As society becomes more low-carbon or decarbonizes, taking the initiative to reduce GHG emissions
is expected to generate financial benefits, such as differentiation from competitors, greater ability to
attract prime tenants, increased access to capital from ESG investors, and improved loan terms fromfinancial institutions.
GHG emissions generated from fossil fuel atcommon areas

Scope 1

GHG emissions generated from electricity or heat
used at common areas

Scope 2

GHG emissions generated from fuels, electricity
and heat used by tenants

Scope 3

Refrigerant gases such as CFCs and halons leaked
from building equipment (such as air conditioning)
owned by us

Scope 1

GHG emissions other than above resulting fromour business activities

Scope 3

Based on our initiatives with our tenants, we have selected the number of convictions and amount of fines
for violation of anti-corruption and anti-bribery laws as our PAI indicator in Table 3 above. We need to
avoid the significant reputational risk of having a relationship with any antisocial force and to ensure
proper business operations by eliminating relationships with antisocial forces. If an existing business
partner is found to be an anti-social force and we fail to take appropriate measures such as immediately
terminating the business relationship, we may be subject to severe administrative penalties from regulatory
authorities, or may receive a request from other existing business partners to terminate the transaction.
Furthermore, we have selected the number of days lost to injuries, accidents, fatalities or illness, lack ofgrievance/complaints handling mechanism related to employee matters and insufficient whistleblower
protection as our PAI indicators in Table 3. We believe that, as an asset management company, we have a
responsibility to attract and retain excellent personnel by creating a healthy, safe, and comfortable work
environment for executives and employees and supporting their work-life balance. When an employee isabsent from work or is injured, we take measures in accordance with our employment regulations. We also
believe that addressing complaints and whistleblowing reports is helpful in improving our business andservices.
Engagement
We have standardized environmental provisions, which we refer to as “Green Lease” provisions, in the leases
with our tenants. Our Green Lease provisions include a clause for our tenants to collaborate with us to
implement measures for energy conservation, environmental preservation, etc. As of December 31, 2023,
41.5% of the leases we entered into with our tenants contained such Green Lease provisions. We plan toincrease the number of leases with our Green Lease provisions.

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The Asset Manager has established standards for selecting and evaluating suppliers to promote ESG
initiatives with suppliers. The Asset Manager evaluates each supplier’s ESG performance prior to entering
into a relationship with it, and conducts an annual sustainability review of each supplier.
5. References to international standards
We became a signatory as a supporter to the Financial Stability Board’s Task Force on Climate-related
Financial Disclosures (“TCFD”) established by the Financial Stability Board and joined the Japan TCFD
Consortium in February 2022. We have also provided disclosures regarding our TCFD scenario analysis in
August 15, 2022.
6. Historical comparison
See Table 1 and Table 2 above.

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