ESG REPORT
2022

CONTENTS

Editorial Policy
This document is issued to engage with stakeholders and have readers understand the efforts made by Sekisui House Reit, Inc. (hereinafterreferred to as the “SHR”) and Sekisui House Asset Management, Ltd. (hereinafter referred to as the “SHAM”) toward realizing a sustainable
society. The GRI Standards (2021) and SASB Standards were referenced in editing of this document.
Reporting Coverage
Sekisui House Reit, Inc. and Sekisui House Asset Management, Ltd.
Reporting Period
Sekisui House Reit Inc.
May 1, 2021 to April 30, 2022 (Some details include information before and after the relevant period.)
Sekisui House Asset Management, Ltd.
February 1, 2021 to January 31, 2022 (Some details include information before and after the relevant period.)
Issue Cycle
Published annually as an annual report
Issue Data
December 2022 (Previous Data: December 2021)
Contact Information
Sekisui House Asset Management, Ltd.
Investor Relations Department and ESG Promotion Department
TEL: +81 3-6447-4870 (Main)〈Disclaimer〉
The forward-looking statements in this document, including earnings forecasts, are based on the judgment of SHAM in light of the information
available at the time of preparation and are subject to potential risks, uncertainties and other factors. Therefore, actual results may differ
significantly from the forecasts due to changes in various factors.

Sustainability Policy / Sustainability Promotion
SystemMessage from Senior
Management

Message from Senior Management
Introduction

We would like to take this opportunity to thank you for your exceptional support of Sekisui House Reit, Inc.
In recent years, as nearly all aspects in the business environment surrounding the company have undergone
dramatic changes, such as the spread of COVID- , heightened geopolitical tensions, soaring energy prices,ﬂuctuations in interest rates and exchange rates, etc., it continues to be diﬃcult to predict the future. In such anenvironment where uncertainty is increasing, in order for SHR to aim for stable, medium to long term growth, it isessential that we engage in efforts to realize a sustainable society that will be the foundation for this growth.

What SHR is Aiming for

SHR has set a vision of “managing assets to better provide for people, society and the future”. This is a declarationof our determination to continue contributing to the creation of a more prosperous “future” by seeking to enhancethe value of our assets under management together with our sponsor Sekisui House, and by providing social
capital for a new era for the “people” and the “society”. We believe that addressing social issues through asset
management that takes ESG (Environmental, Social and Governance) into consideration will contribute to therealization of a sustainable society and enhance the trust of stakeholders, thereby contributing to securing stableearnings over the medium to long term and maximizing unitholder value.

Recent Initiatives

Based on this idea, SHR has identiﬁed materiality (important issues) in , set KPIs (targets), and is actively
pursuing initiatives to resolve the issues. Key initiatives for are the promotion of reductions in CO₂ emissions
by switching to electricity derived from renewable energy for owned properties, enhancement of disclosure
through the implementation of quantitative scenario analysis in accordance with recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD), and promotion of gender diversity such as an appointmentof a female director at SHR. Our ESG initiatives, including these, have been highly evaluated from outside thecompany, and SHR has been included in the MSCI Japan ESG Select Leaders Index since June . We willcontinue to focus on enhancing the mutual sustainability of both society and SHR by improving the environmental
performance of owned properties, providing spaces that create happiness, ensuring business continuity, andbuilding a highly transparent governance system, while adding and revising materiality and KPIs in response tochanges in environment, society, and economy.
1

Toward the Realization of a Sustainable Society

SHR will continue to strive to maximize unitholder value through the provision of high-quality real estate, that will
become the social capital of a new era. As a REIT that leads the way in the era of the -year lifespan, we aim tocontinuously meet the expectations of our stakeholders and contribute to the creation of a prosperous future,
while aiming to be a widely loved REIT for a long time to come.
We would like to ask the continued support and encouragement of our stakeholders in the years ahead.
Sekisui House Reit, Inc.

Atsuhiro Kida

Executive Director (Right)
Sekisui House Asset Management, Ltd.

Toru Abe

President & Representative Director(Left)2

Sustainability Policy / Sustainability Promotion
System

SHR's Sustainability

Vision of Sekisui House Reit
Managing assets to better provide for people,
society and the future
Aim to maximize unitholder value by achieving
sustainable growth together with stakeholders
Provide high-quality social capital by pursuing theenhancement of the overall asset value of thecommunity

Maximize unitholder value
Provide high-quality social capital

A REIT that leads the way into an era of Promote ESG strategies and become a REIT that leads
the way into an era of the -year lifespanthe -year lifespanCorporate Philosophy of Sekisui House Group3

Sustainability Policy / Sustainability Promotion
SystemSustainability Management
Sustainability Policy
As a company, SHR and SHAM have a responsibility to contribute to the resolution of social issues, that arebecoming increasingly diverse and complex day by day, through business activities. We believe that fulfilling
this responsibility not only enhances the sustainability of the society and SHR, but also ultimately maximizes
unitholder value.
SHR has a vision, “managing assets to better provide for people, society and the future” and conducts
business activities from a medium to long term perspective. Based on the Sustainability Policy established by
SHAM, we will strive to contribute to the realization of a sustainable society and increase corporate value bycomplying with and implementing this policy.

1. Complying with ESG-Related Laws and Regulations

We implement in-house training for the purpose of enhancing knowledge with regard to ESG-related laws andregulations, and abide to such laws and regulations when conducting real estate investment managementwith considerations given to ESG.

2. Responding to Climate Change

We strive to reduce CO₂ emissions and actively promote the efficient use of energy toward the realization of adecarbonized society.

3. Water and Resource Saving Measures

We will actively contribute to the creation of a recycling-based society by promoting measures and publicawareness activities for reducing water use and implementing the three Rs (reduce, reuse and recycle) in
relation to resources.

. Biodiversity

In accordance with the Gohon no Ki (“ﬁve trees”) Project promoted by Sekisui House, we aim to realize
harmony with nature and the surrounding environment by conducting maintenance and management ofplanting and other greenery measures, centering on tree species with consideration given to the native
vegetation and other ecosystem matters.
4

5. Comfort and Safety

We will provide high-quality housing where residents can lead their lives in comfort and safety. We will also
provide convenient, safe, and comfortable spaces that contribute to enhancing the productivity of tenantcompanies.

6. Contributing to Regions and Communities

We will create liveliness in the region and work to coexist with and revitalize the region and community.

7. Cooperating with Stakeholders

In order to implement initiatives based on the Sustainability Policy, we will strive to cooperate withstakeholders including property management companies and other business partners, residents, tenantcompanies and facility users.

8. Initiatives for Directors and Employees

By respecting diversity, personality and individuality, and promoting work-life balance, we aim to create anorganizational culture in which each employee can work in a healthy and lively manner.
We will also strive to develop the abilities of our directors and employees, maximize their abilities, and secure
diverse and talented human resources.

9. Supply Chain Management

In order to promote environmental and social considerations throughout the supply chain, we seek theunderstanding and cooperation of property management companies and other business partners.

10. Disclosing Information and Acquiring External Certifications

We will proactively disclose ESG-related information to our stakeholders.
We will also continue to acquire environmental certification and assessment from external evaluation
organizations.

5

Sustainability Promotion System
SHAM has established the Sustainability Committee for the purpose of continuous and organizational
implementation of ESG initiatives. With the aim of strengthening the sustainability promotion system, theCommittee is composed of the President & Representative Director as Chief Sustainability Oﬃcer, the Director
in charge of ESG Ppromotion Department as Chief Sustainability Operator, all full-time directors, thecompliance oﬃcer, and all heads of departments of SHAM. This Committee sets targets and develops thesystem to promote sustainability. Matters deliberated by the Committee are approved and/or instructed, andvarious actions are taken based on them. The progress of initiatives and the status of engagement withstakeholders are reported regularly to the Committee, and reports are also made to the Board of Directors of
SHR as appropriate. The Committee will meet at least once every three months in principle (held seven times
in FY 2021.) With the Committee at the core, SHR and SHAM will work together to implement sustainability
initiatives across the organization and contribute to the resolution of social issues.

6Sustainability Policy / Sustainability Promotion
SystemMateriality(Important Issues)

Materiality Identification Process
In 2020, SHR has identified our materiality in accordance with the following process, with the aim of promoting
more concrete initiatives for sustainability through our business activities. Even after the identification ofmateriality, the environment surrounding stakeholders and SHR is ever-changing. By periodically reviewing
the materiality in accordance with these trends and pursuing the sustainability of SHR in a manner that meetsthe demands of society, we will fulfill our responsibility toward the mutual sustainable growth of both society
and SHR.

7

Materiality
SHR believes that sustainable growth in our business activities is built on a solid foundation of a sustainable
society, and recognizes that in order to continue providing "Prime Properties", which SHR focuses on as aninvestment strategy, it is necessary to carry out initiatives based on the guidelines of solving issues to build asustainable society through business activities. Based on this recognition, SHR has identified eightmaterialities (important issues) and set targets (KPIs) as indicators to resolve each of them. In light of the SDGs
adopted by the United Nations in 2015, we will pursue mutual sustainability of both society and SHR bypromoting efforts totoresolve
resolvethese
thesematerialmaterialissues.
issues.

Materiality of SHR
In consideration of environmental, social, and economic changes, in 2022, we reviewed some expressions ofmateriality and revised/ added targets (KPIs) for resolving materiality. The underlined sections are the parts
that have been reassessed and added.
Materiality and Target（KPI）

Related SDGs

Promoting Response to Climate Change
Medium term target (by FY ): Reduce % CO₂ emission intensity of portfolio
compared to FYLong term target (by FY ): Achieve Carbon Neutrality
Target(KPI)Reduce % energy consumption intensity of portfolio by FY
to FY(Note ) comparedPage
linkedPromote green leasetnemnorivnEPagelinkedCoexistence of Humankind and Nature and Activities for the Resources EnvironmentPage
linkedAdvance greeniﬁcation and respect biodiversity
Target(KPI)

No increasing waste emission intensity of portfolio compared to FY

Page
linkedNo increasing water use intensity of portfolio compared to FY
Investing in Real Estate with Excellent Environmental Performance
Target(KPI)

Achieve % or more of the portfolio with green certiﬁcation by FY
Promote ZEH initiatives

8(Note )

Page
linkedMateriality and Target（KPI）

Related SDGs

Providing Residents and Tenants with Secure and Comfortable Space that Oﬀers Peace of Mind
Periodic surveys on resident and tenant satisfaction and promote initiatives toimprove satisfaction
Target(KPI)

Promote certiﬁcation acquisition for comfort and health of buildings (spaces)
Periodic assessment of earthquake risk and ﬂood damage risk and theimplementation of measures to reduce such risksPagelinkedlaicoS

Periodic assessment of initiatives toward ESG in the supply chain and thepromotion of collaborative initiatives
Contributing to Society
Target(KPI)

As a member of society, contributing to greater vitality in the community andcountermeasures aimed at preventing damage from natural and other disasters
By FY , "Sekisui House Matching Program" (a joint donation system for
employees and the company) participation rate: %PagelinkedCreating a Rewarding Workplace

Target(KPI)

By FY ,
Percentage of female managers: %Average monthly work hours per person: hours
Take-up rate for male childcare leave: %Annual paid leave take-up rate: %PagelinkedAnnual participation in external training courses per person: twice
Annual internal training participation rate: %Practicing Sekisui House Group Human Rights Policy

9PagelinkedMateriality and Target（KPI）

Related SDGs

ecnanrevoG

Strengthening Corporate Governance System

Target(KPI)

Enhance eﬀectiveness of board of directors of SHR and SHAM
Conducting eﬀectiveness evaluation questionnaire（once/year）

Page
linkedPenetration of compliance
Conducting compliance training by external experts, etc.（four times/year）
participation rate: ％PagelinkedStrengthening internal controls structure
Conducting internal audit（twice/year）

Page
linkedStrengthen risk management system
Conducting risk management meeting（twice/year）

Page
linkedInformation Disclosure and Engagement with Stakeholders
Target(KPI)

Timely and appropriate disclosure of information and enhanced utility of
disclosures
Building relationships of trust with stakeholders(Note ) Will set reduction targets every years after FY(Note ) Will continue to maintain % or more after FY

Page
linkedand continue promotion of reduction in energy consumption intensity.
.

10

Sustainability Policy / Sustainability Promotion
SystemStakeholder Engagement
SHR conducts its business activities in the context of its ties with stakeholders. In order to continue as an investment
corporation that contributes to society, it is important to accurately understand the demands and expectations of its
stakeholders and society, and to respond to them through its business activities. For these reasons, SHR actively discloses ESGrelated information in order to gain a better understanding of its initiatives. At the same time, SHR strives to strengthen
engagement by utilizing the demands and expectations gained through communication with stakeholders in its businessactivities.

Engagement with Stakeholders

Related Links

Proactive Information Disclosure and Creation ofCommunication Tools
Holding Financial Results Briefings and Setting Up IR
Meetings with Institutional Investors
Participation in IR Events and Online Seminars

IR Library
Engagement with Institutional
Investors
Engagement with Individual Investors

Monitoring through External Evaluation Organizations
Initiatives to Reduce Energy Consumption

Selection and Evaluation of Property
Management Companies
Initiatives to Reduce Energy
Consumption

11

Engagement with Stakeholders

Related Links

Communication through Tenant Satisfaction Surveys
Collaboration Based on Green Lease Agreements

Conducting Tenant Satisfaction
Surveys
Promotion of Green Leasing

Support for Obtaining, Maintaining Qualifications, andConducting Various Training Programs
Ensuring an Internal Consultation Counter System
Promoting Diversity

Support for Acquiring and Retaining
Qualifications
Human Rights Reporting System
Promoting Diversity

Contributing to Local Communities
Supporting Initiatives / External Evaluations

Contributing to Local Communities
Supporting Initiatives / External
Evaluations

12

Sustainability Policy / Sustainability Promotion
System

Supporting Initiatives /External Evaluations

SHR and SHAM have expressed their commitment to promote ESG initiatives through the signing or supporting of each
initiative. In addition, we will analyze the strengths and weaknesses of SHR and SHAM through the acquisition ofsustainability assessments from external organizations, which will lead to further strengthening of our initiatives.

Signing of the PRI (Principles for Responsible Investment)
Since SHR and SHAM have conducted real estate investment management taking ESG into consideration to realize asustainable society and believe that such management policies share objectives with the PRI (Principles for
Responsible Investment) advocating incorporation of ESG issues into investment analysis and decision-making
processes, SHAM decided to support the basic approaches of the PRI and became a signatory in March .

The Six Principles. We will incorporate ESG issues into investment

analysis and decision-making processes.
. We will be active owners and incorporate ESG
issues into our ownership policies and practices.
. We will seek appropriate disclosure on ESG issues
by the entities in which we invest.
. We will promote acceptance and implementationof the Principles within the investment industry.
. We will work together to enhanceour
effectiveness in implementing the Principles.
. We will each report on our activities and progress
towards implementing the Principles.

13

Overview of the PRI
The PRI is a set of six principles listed above, established for the ﬁnancial industry in under the leadershipof the former United Nations Secretary-General, Koﬁ Annan, together with an international network ofinvestors working to realize said principles.
Signatories to the PRI pursue improvement of investment performance from the long-term perspective for
their beneﬁciaries to further fulﬁll their ﬁduciary responsibilities by incorporating ESG issues into investment
analysis and decision-making processes.
For details of the PRI, please click here.

Supporting the Recommendations of the TCFD
(Task Force on Climate-related Financial Disclosures)
SHR and SHAM recognize that eﬀorts
efforts to tackle environmental issues, such as climate change, are one of the
key issues in real estate investment management that take into account ESG, and SHAM, in July , hasdeclared support for the Recommendations of TCFD, and joined the Japan TCFD Consortium, a body of TCFD
supporters in Japan. Based on the TCFD's recommendations, SHAM analyzes the risks and opportunities
posed by climate change and promotes actions that are consistent with the TCFD framework.

Recommendations of the Task Force on Climate-related Financial Disclosures

Overview of TCFD
TCFD refers to the Task Force on Climate-related Financial Disclosures, which was established by the Financial
Stability Board at the request of the G20 to consider how to disclose climate-related information and respondto financial institutions. TCFD published its final report in June 2017 to encourage companies to disclose
climate-related risks and opportunities.
For details of the TCFD, please click here.

14

Expressed Support for the UN Global Compact
Sekisui House Group, to which SHAM belongs, has clearly stated its commitment to respect human rights in
the Sekisui House Group Corporate Code of Conduct and Corporate Ethics Guidelines, which are thefoundations of its corporate activities. Further, Sekisui House Group has expressed support for the 10
principles of the UN Global Compact.

Participation in GRESB Assessment
GRESB Assessment of SHR
In the 2022 GRESB Real Estate Assessment, SHR has received "3 Stars" in "GRESB Rating", which is based on
GRESB Overall Score and its quintile position relative to global participants. SHR also has received "GreenStar" designation for the sixth consecutive year by achieving high performance both in "Management
Component" that evaluates policies and organizational structure for ESG promotion, and "Performance
Component" that assesses environmental performance and tenant engagement of owned properties.
Moreover, in the GRESB Public Disclosure (five-level rating from "A" to "E"), which assess the width of ESG
information disclosure, SHR has received the highest "A" rating for the third consecutive year in recognition ofefforts
efforts
our ESG information disclosure efforts.

Overview of GRESBGRESB is an annual benchmark to evaluate environmental, social and governance considerations in the global
real estate sector, which was established in primarily by major European pension fund groups which led
the PRI (Principles for Responsible Investment). The characteristic of the GRESB Assessment is that it
evaluates sustainability eefforts
ﬀffoorts
rts by real estate companies, REITs and funds, not of individual properties.
For details of GRESB Assessment, please click here.
15

MSCI ESG Rating /Inclusion in the MSCI Japan ESG SelectLeaders Index
MSCI ESG Ratings investigate, analyze, and rate the extent to which companies are appropriately managing therisks and opportunities related to ESG and provides a comprehensive corporate ESG rating of seven levels,
ranging from “AAA“ to “CCC”. SHR acquired “A” in and has been included in “MSCI Japan ESG SelectLeaders Index” in . The Index is composed of select companies with high ESG performance from among
the companies in the MSCI Japan IMI Index. The Index is selected as one of the ESG indices for investment by
Japan’s Government Pension Investment Fund (GPIF).

USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES ON THIS PAGE DOES NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF "SHR" BY MSCI OR ANY OF ITS
AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

MUFG ESG Rating Certiﬁcate for J-REIT supported by JCR
SHR and SHAM have collectively been granted the highest “S” rank among grades in “MUFG ESG Rating
Certiﬁcate for J-REIT supported by JCR” by Mitsubishi UFJ Research and Consulting Co., Ltd. (“MURC”).
This Rating, which is conducted by MURC and supported by Japan Credit Rating Agency, Ltd. (“JCR”), intends
to evaluate J-REITs’ initiatives and implementations on ESG issues based on its own ESG check items, andassigns a score.

16

Environmental Initiatives

Our Approach toEnvironmental Considerations,
Environmental Performance
Our Approach to Environmental Considerations
In accordance with the following Sustainability Policy, SHR and SHAM promote initiatives to addressenvironmental issues and work with stakeholders to reduce environmental impact through business activities.
Sustainability Policy(excerpt)

Responding to Climate Change

We strive to reduce CO₂ emissions and actively promote the eﬃcient use of energy toward therealization of a decarbonized society.

Water and Resource Saving Measures

We will actively contribute to the creation of a recycling-based society by promoting measures andpublic awareness activities for reducing water use and implementing the three Rs (reduce, reuse andrecycle) in relation to resources.

Biodiversity

In accordance with the Gohon no Ki (“ﬁve trees”) Project promoted by Sekisui House, we aim to realize
harmony with nature and the surrounding environment by conducting maintenance and managementof planting and other greenery measures, centering on tree species with consideration given to thenative vegetation and other ecosystem matters.
Click here for the full Sustainability Policy.

Environmental Targets
SHR has set the following environmental targets to resolve materiality. While implementing various measuresto achieve the targets and reviewing them as appropriate in consideration of environmental, social, andeconomic changes, we will contribute to the realization of a sustainable society.
17

(Note ) Will set reduction targets every years after FY
intensity.
(Note ) Will continue to maintain % or more after FY

and continue promotion of reduction in energy consumption.

Environmental Management System（EMS）
SHAM has established an Environmental Management System (EMS) to address environmental issues speciﬁedin the Sustainability Policy. In this system, environmental performance data such as CO₂ emissions, energy
consumption, water use, and waste emissions, is used to set environmental targets (Plan), track achievements(Do), budget management and progress reporting (Check), and plan and implement improvement measures(Act). Furthermore, the Sustainability Committee deliberates and provides reports on the contents of each
item, and we work to continuously strengthen our initiatives.

Environmental Performance Data
The progress and results of KPIs related to environmental performance data are as follows.
In addition to compiling environmental performance data through an outsourced contractor, SHR has been
making efforts
eﬀorts to accumulate accurate and highly transparent data, such as by receiving third-party assurance
from SGS Japan Inc. with the exception of some data since ﬁscal year .
Click here for detailed data by asset type, other environment-related data, basis of calculation, etc.
Click here for detailed data by asset type, other environment-related data, basis of calculation, etc.

18

CO₂ Emissions
KPI: Medium term target (by FY ) Reduce % (intensity basis: compared to FYLong term target (by FY ) Achieve carbon neutrality)(t-CO₂/㎡)

FY Resultvs. base year

- .%FY 2018(Base year)

0.064

FY 2019

0.063

FY 2020

0.052

FY 2021

0.048

FY 2030(Medium term target)

0.032

0

Energy Consumption
KPI: Reduce % by FY(intensity basis: compared to FY

0.02

0.04

0.06

0.08

)
(MWh/㎡)

FY Resultvs. base year-.%

FY 2018(Base year)

0.174

FY 2019

0.179

FY 2020

0.161

FY 20210.165

FY 2023(Target)

0.165

0

0.05

0.10

0.15

0.20

Waste Emission
KPI: Avoid increasing waste emission intensity of portfolio compared to FY(kg/㎡)FY Resultvs. base year

- .%FY 2018(Base year)

7.455

FY 2019

5.382

FY 2020

3.679

FY 2021

3.288

0

2

4

6

8

Water UseKPI: Avoid increasing water use intensity of portfolio compared to FY(㎥/㎡)

FY Resultvs. base year

- .%FY 2018(Base year)

1.743

FY 2019

1.707

FY 2020

1.631

FY 2021

1.561

0

19

0.5

1.0

1.5

2.0

Introduction of Environmentally Friendly Facilities
SHR actively promotes the eﬃcient use of energy, and installs environmentally friendly facilities such as LED
lighting and energy-saving air conditioner in addition to energy-creating facilities through the installation ofsolar panels, etc. in owned properties.

LED Lighting
SHR promotes the changeover to LED lighting in common areas of residences. As of the end of the th ﬁscal
period, changes have been made to a cumulative total of properties, and it is expected that the annual
electricity usage will be reduced by . % and the annual CO₂ emissions will be reduced by tons with thechanges thus far.

Eﬀect of the Change to LED Lighting （Note ）（Note ）20Energy-Saving Air Conditioner
We are switching to energy-saving air conditioners in exclusive areas of residences. As of the end of the thﬁscal year, a cumulative total of , units have been replaced, which is expected to reduce annual CO₂
emissions by tons.

Eﬀects of Switching to Energy-Saving Air Conditioners （Note ）（Note ） The total covers residential properties that have been switched to LED lighting.
（Note ） The ﬁgures for each expected reduction are estimated by SHAM based on materials provided by the replacement
contractor or materials published by the Agency for Natural Resources and Energy of the Ministry of Economy,
Trade and Industry. There is no guarantee that the expected reductions will be realized.

In addition, we strive to reduce the environmental burden through the introduction of solar power generation
panels, Low-e double glazed windows with thermal shielding and thermal insulation capabilities, and electricvehicle chargers.

Examples of Facilities Installation
Solar Power Generation
Panels

Garden City Shinagawa
Gotenyama

Low-e Double Grazed
Windows

Prime Maison Gotenyama East Hommachi Minami Garden
City

21

Electric Vehicle Chargers

Switching to Renewable Energy-Derived Electricity
SHR has switched to electricity plans derived from renewable energy sources for residential properties(common areas) and oﬃce buildings.
By switching to electricity derived from renewable energy, the use of "FIT electricity" generated by renewableenergy and purchased by electric utilities through the feed-in tariﬀ (FIT) system and "Non-fossil Fuel Energy
Certiﬁcates with Tracking Information" that certify the environmental value of electricity generated from nonfossil energy sources, etc. are combined and CO₂ emission factor will be reduced to zero through the use of
substantial renewable energy.
By doing so, virtually carbon-free electricity use will be possible.
The replacement has been completed for . % ( . % of oﬃce buildings and hotel, and . % of residential
properties (common areas)) of the entire portfolio as of December , , and we intend to continue
promoting eﬀorts
efforts toward decarbonization.

Status of Switching to Renewable Energy-Derived
Electricity (As of December , )(number of buildings basis)

Entire Portfolio

90.1％

Switched
Not switched

90.1%
9.9%

Flow of Supply of Renewable Energy-Derived Electricity(Note) RE stands for "Renewable Energy %" and refers to an international initiative that aims to procure % of theenergy consumed in business activities from renewable energy sources.
22Environmental Initiatives

Measures for Addressing
Climate Change

Disclosure Based on TCFD Recommendation
In recent years, the environment, society and corporate activities
have been exposed to major risks due to climate change such as
global warming. SHR recognizes that resolving environmental
issues such as climate change is one of the key issues for us,which aims to provide "bases for sustainable living" and"sustainable bases of operation for business" through ESGconscious real estate investment management.
Based on the TCFD recommendations, SHAM identiﬁed and disclosed the risks and the opportunities posed by climatechange to the business in , and further analyzed and conducted a scenario analysis in , using future climate
projections published by international organizations and other sources as the main source of information. In , inaddition to analyzing the ﬁnancial impact of the identiﬁed risks and opportunities, SHAM conducted an analysis using
CRREM (Carbon Risk Real Estate Monitor). We will continue to enhance our resilience by enhancing information
disclosure and by appropriately identifying and responding to transition and physical risks related to climate change
through our initiatives in accordance with the TCFD recommendations, while simultaneously working strategically tocreate business opportunities.

Governance
SHAM has established a Sustainability Committee as the decision-making body for sustainability issues. It meets atleast once every three months to deﬁne policies, targets, and various measures related to sustainability and to discuss
climate change risks (transition risks and physical risks) and material issues in relation to mitigation of and adaptation
to climate change.
In , in addition to deﬁning the basic approach and organizational structure for addressing climate change-related
issues, the Director in charge of the ESG Promotion Department, who is the Chief Sustainability Operator, wasappointed as the director in charge of climate change, with the President & Representative Director as the Chief
Sustainability Oﬃcer, in order to strengthen the promotion of climate change initiatives and clarify its responsibilities.
These activities aimed at mitigating and adapting to climate change are reported as appropriate to the President &Representative Director, the Board of Directors of SHAM, and the Board of Directors of SHR.
In , the Sustainability Committee expanded its membership to include the heads of all departments in an effort
eﬀort toraise awareness of sustainability and strengthen the organizational structure for promoting awareness. And in , the“ESG Promotion Department” was established as a department dedicated to overseeing and managing ESG-related
operations to strengthen the promotion system.
Click here for Sustainability Promotion System.
23

Strategy
Based on the recognition that climate change is an important issue that will have a signiﬁcant impact on businessactivities, SHAM has set “Promoting Our Response to Climate Change” as a materiality of SHR, and views the various
risks and opportunities associated with climate change as one of the key points in its business strategy.

Risks and Opportunities Related to Climate Change
Risks related to climate change include risks associated with the transition to a decarbonized society ("transition risk"),
such as tightening of regulations such as carbon tax, falling demand for companies that cannot respond to
decarbonization, and a decline in reputation, and risks associated with the physical damage ("physical risk") caused byan increase in natural disasters and extreme weather events due to climate change. At the same time, we can also makeassumptions regarding opportunities created by climate change.
Category

Transition
risks

Physical risks

Opportunities

Changes in the world due to climate change

Policy, and laws and Regulations

Introduction of carbon taxes and emissions trading scheme
Tighter energy regulations

Technology

Innovation and further adoption of renewable energy and energysaving technologies

MarketChanges in evaluation and social values of climate change response

Reputation

Changes in tenant requirements for the environmental performanceof buildings

AcuteIntensiﬁcation of natural disasters such as typhoons, torrential rains,and storm surges

Chronic

Rise in sea level
Changes in cooling equipment demand due to rising temperatures
Increase in non-life insurance premiums due to frequent natural
disasters

Technology

Innovation of renewable energy and energy-saving technology

Policy, laws and Regulations, andReputation

Changes in tenant requirements for the environmental performanceof buildings

24Scenario Analysis
In order to assume various possible future events that could be caused by climate change and to understand the risks and opportunities
for the business activities of SHR and assess the ﬁnancial impact, SHAM used scenarios from international organizations and industry
groups such as the IPCC (Intergovernmental Panel on Climate Change) and the IEA (International Energy Agency) to conduct an analysis
for a world in which temperatures have increased by ℃ and . ℃, respectively.
Furthermore, climate change risks are highly uncertain with respect to the timing and the scale of the risks that materialize, and it isextremely difficult to predict their ﬁnancial impact. The current analysis places certain assumptions on the subject of the analysis,
socioeconomic changes, and anticipated natural disasters, and does not take into account the probability that the identiﬁed
risks/opportunities will be realized. Therefore, analysis methods will continue to be reviewed in the future in light of changes in theexternal environment.

℃ Scenario

The ℃ scenario is a future state that assumes no strict regulations or taxation aimed at decarbonizing society
will be enacted and that greenhouse gas (GHG) emissions will continue to rise. This is a scenario in which thephysical risk is relatively high and the transition risk is low.

25

. ℃ Scenario

The . ℃ scenario is a future state that assumes regulations and tax policies aimed at decarbonizing society
will be enacted. This scenario is characterized by relatively low physical risk and high transition risk.

26

Scenario Analysis Approach
Scenario analysis was conducted using the following process.
) Set the subject scope and time axis
) Extract and identify risks (transition risks and physical risks) and opportunities through qualitative assessments) Deﬁne scenario groups and organize a worldview with stakeholders in mind
) Set parameters related to risks and opportunities that have been assessed as being of high importance throughqualitative assessments) Assess the ﬁnancial impact on the business resulting from transition risks, physical risks, and opportunities) Understand how risks and opportunities are being addressed, and examine countermeasures
Subject

General business in real estate investment management and funding

Anticipatedperiods[Short term] From present until[Medium term] Until[Long term] Until

Category

Transition risks

Referenced
scenarios

IEA World Energy Outlook SPS ( ℃
scenario),
NZE （1.5℃ scenario）

27

etucA

Set parameters to evaluate the ﬁnancial
impact of risks and opportunities faced
by SHR, and calculate the impact bytaking into account diﬀerences inparameters under each senarios.
scenarios..

IPCC Fifth Assessment Report
RCP . ( ℃ scenario), RCP . ( . ℃ scenario)
Calculate the repair costs (direct damage) and lossof business opportunities (indirect damage) thatwill be caused when owned properties areinundated by ﬂoods caused by typhoons andtorrential rains.

cinorhC

Analysis methods

Physical risks

Calculate the impact in cases where the asset valueof owned properties located in low-lying areas
declines by being inundated by the rise in sea level
and the impact of the increase in the use of air
conditioning due to the normalization of extreme
weather.

℃ Scenario
Risk and opportunity
factors,
and ﬁnancial impact

Classiﬁcation

Periodanticipated

Amount ofﬁnancial
implications( . ) billion
yen

Identify
risks using
hazardmaps, etc.
Implement
measuresuch asstocking
emergency
power
supplies andinstall tide
and watergate barriers( ) billion
yen

Excludehigh-risk
properties
frominvestment

Physical risks

Acute

Chronic

Opportunities

Technology

Reduced rents due toinability to operatebusinesses due to ﬂooding
damage caused bytyphoons, torrential rains,etc.

Mediumand long
term

Decline in asset value of
owned properties due toﬂooding damage caused byrise in sea level

Mediumand long
term

Mediumand long
term

Increase in electricity
charges due to increased
usage of air conditioning
due to the normalization of
extreme weather

Reduction in electricity
charges by improving theenvironmental
performance of owned
properties

Mediumand long
term
28

Countermeasures( . ) billionyen. billionyen

Monitorchanges inusage
associatedwithweather andtemperaturechangeOptimize
HVAC
operation
throughhigheﬃciency
airconditioning
equipment
and building
automation
systems(BAS), etc.
Diligently
inspect
facilities for
degradation
caused byincreased
use

Identify
high-risk
properties
byquantitively
identifying
physicalrisks anddispose ofsuchproperties
as needed
Incorporate
quantitative
physicalrisk
information
into preacquisition
propertyevaluations

Collect information on newtechnologies and services
and add to portfolio
Convert owned properties to
ZEHs/ZEBs

. ℃ Scenario
Classiﬁcation

Policies,
laws andregulations

Transition
risks
Technology

Reputation

Risk and opportunity
factors,
and ﬁnancial impact

Periodanticipated

Amount ofﬁnancial
implications

Due to the introduction ofcarbon tax, tax burdens
corresponding to GHG
emissions will increase
operating costs

Mediumand longterm( . to . )billion yen

Increase in property
renovation costs as energy
regulations are tightened

Mediumand longterm( . ) billion
yen

Increase in solar power
generation equipment
installation costs(depreciation andamortization)

Mediumand long
term

Rising ﬁnancing costs due
to perceived inadequacy of
response to climate change

Short,
mediumand long
term

Decreased competitivenessand rent income due topoor environmental
performance of owned
residential properties

Mediumand long
term

29

Countermeasures
Set reduction targets for GHG
emissions intensity anddisclose progress against
targets
Renovate properties for
improved energy-saving
performance
Procure renewable energy
Reallocate portfolio toincrease investment ratio inproperties with outstanding
environmental performance
Acquire ZEH and ZEB
properties( . ) billion
yenCollect information on newtechnologies and services
and add to portfolio
Convert owned properties to
ZEHs/ZEBs( . ) billion
yen

Improve investor valuations
by strengthening information
disclosure using frameworks
such as TCFD
Promote green ﬁnancing( . ) billion
yen

Maintain brand image bymanaging climate risk
responsibly
Strengthen collaboration
within the Sekisui HouseGroup

Risk and opportunity
factors,
and ﬁnancial impact

Classiﬁcation

Acute

Periodanticipated

Reduced rents due toinability to operatebusinesses due to ﬂooding
damage caused bytyphoons, torrential rains,etc.

Mediumand long
term

Decline in asset value of
owned properties due toﬂooding damage caused byrise in sea level

Mediumand longterm

Amount ofﬁnancial
implications( . ) billion
yen

Identify
risks using
hazardmaps, etc.
Implement
measuresuch asstocking
emergency
power
supplies andinstall tide
and watergate barriers( ) billion
yen

Excludehigh-risk
properties
frominvestment( . ) billion
yen

Monitorchanges inusage
associatedwithweather andtemperaturechangeOptimize
HVAC
operation
throughhigheﬃciency
airconditioning
equipment
and building
automation
systems(BAS), etc.
Diligently
inspect
facilities for
degradation
caused byincreaseduse

Physical risks

Chronic

Increase in electricity
charges due to increased
air conditioning operation
due to the normalization of
extreme weather

Mediumand long
term

30

Countermeasures

Identify
high-risk
properties
byquantitively
identifying
physicalrisks anddispose ofsuchproperties
as needed
Incorporate
quantitative
physicalrisk
information
into preacquisition
propertyevaluations

Classiﬁcation

Technology

Opportunities

Policies,
laws andregulations,andreputation

Risk and opportunity
factors,
and ﬁnancial impact

Periodanticipated

Reduction in electricity
charges by improving theenvironmental
performance of owned
properties

Mediumand long
term

Increase in operation ofand rent from properties
with outstanding
environmental
performance

Mediumand longterm

Amount ofﬁnancial
implications

Countermeasures. to .
billion yen

Collect information on newtechnologies and services
and add to portfolio
Convert owned properties to
ZEHs/ZEBs

to .
billion yen

Identify needs throughtenant satisfaction surveys,
etc., and conduct energysaving renovations
Acquire ZEH and ZEB
properties
Acquire Green Certiﬁcations（Note） The amount of ﬁnancial implications is the annual implications estimated by SHAM based on the actual performance of SHR and other factors, andwith reference to various parameters based on scenarios presented by international organizations, etc. The accuracy of the ﬁgures is notguaranteed.

Analysis Results
Under the ℃ scenario, no strict regulations or tax policies aimed at shifting to a decarbonized society are enacted,
causing GHG emissions to continue to rise, and thus the cost of repairs and various types of insurance premiums forowned properties are expected to increase as weather-related disasters grow in intensity. In addition, the emergence of
weather-related disaster risks due to climate change is expected to aﬀect the selection of properties by tenants, andtenant demand is expected to decline for properties that are less resistant to weather disasters and less comfortable interms of response to environmental changes compare to competing properties.
On the other hand, under the . ℃ scenario, regulations and tax policies aimed at reducing GHG emissions will be
introduced to realize a decarbonized society. Taxes will be imposed on GHG emissions from owned properties due tothe introduction of carbon tax and environmental regulations such as energy-saving standards will be tightened, andthus the cost for renovations to comply with these regulations is expected to increase. In addition, this regulatory
tightening is expected to inﬂuence how tenants choose their property; while their demand for environment-friendly
buildings will rise, their demand for properties that are doing less to reduce environmental impact will relatively fall;and such properties will also face the risk of reclining asset value. Furthermore, it is anticipated that funding costs willrise if SHR’s response to climate change is deemed inadequate.
Considering that weather-related disasters will intensify in the ℃ scenario, SHR is focusing its investments onproperties that deliver high environmental performance and can withstand ﬂoods and other risks by virtue of boththeir location and speciﬁcations. Moreover, to manage transition risks and maintain our competitive advantage during
the transition to a low-carbon society as projected by the . ℃ scenario, we are reducing the CO₂ emissions of ourportfolio and focusing our investments on properties with green certiﬁcation. In this way, we are working proactively toaddress each risk to limit its impacts on our business and believe that these risks’ impact on our business is limited andour efforts
eﬀorts will, at the same time, open doors to new business opportunities in value creation.
As a further step, we conducted a transition risk assessment analysis using the Carbon Risk Real Estate Monitor(CRREM) for a portion of our portfolio. In the future, we intend to expand the scope of transition risk assessments to theentire portfolio, and then conduct a more in-depth analysis. SHR will continue to take a strategic approach against
climate change to both minimize risks and maximize opportunities.
31

Analysis According to CRREM
Overview of CRREM

CRREM (Carbon Risk Real Estate Monitor) calculates and publishes GHG emissions
pathways (carbon reduction pathways) up to consistent with the ℃ and . ℃targets of the Paris Agreement for each use of real estate in a total of countries (as ofAugust ) in Europe, North America and the Asia-Paciﬁc region including Japan. This
tool is expected to be utilized for operational improvement by comparing the property
data analyzed and pathways to calculate the timing of assets becoming stranded andcarbon costs for each property, and to grasp the scale of renovation required to addressthese issues.
（Note） Stranded assets are assets that turn out to be worth less than expected as a result of changes
associated with the transition to a low-carbon economy (lower than anticipateddemand/market prices).

Overview of CRREM Analysis Results

SHAM has targeted oﬃce buildings (excluding a data center, hereinafter referred to as “oﬃce building portfolio”) among
the properties owned by SHR (as of March ) and analyzed the potential stranded asset risk of the oﬃce building
portfolio for the following two cases using CRREM’s risk assessment tool. The analysis is based on the Asia-Paciﬁc versionof the tool (ver. . ), while some parameters (electricity emission factors, etc.) are adjusted. The graphs below show acomparison between the pathways for the oﬃce building portfolio, the ℃ target and the . ℃ target.
Case in which the current performance is unchanged

Case in which the current reduction target pace is maintained(Calculated based on the past performance on the assumption that no futureenergy-savings measures are taken)(Calculated on the assumption that energy consumption will be reduced by 4.2%
each year compared to 2018)

The office building portfolio will exceed the 2℃ pathway in 2044 and the
1.5℃ pathway in 2034.
GHG emissions must be reduced by 32% and 84% on each pathway,
respectively, to avoid becoming stranded assets by 2050.

In 2050, the office building portfolio will fall below the 2℃ pathway, butwill exceed the 1.5℃ pathway.
GHG emissions must be reduced a further 65% on the 1.5℃ pathway to
avoid becoming stranded assets by 2050.

Since SHR’s oﬃce building portfolio has high environmental performance, emission intensity is low, and for the time being, it will remain below
the ℃ and . ℃ pathways. However, if no measures are taken in the future, the oﬃce building portfolio will exceed the . ℃ pathway inand the ℃ pathway in . If emission reductions proceed at the pace of the current target, the ℃ target will be achieved by , but the. ℃ target will not be achieved. Therefore, we will expand the scope of the CRREM analysis to the entire portfolio of SHR in the future and use
this analysis to review our reduction targets and consider business strategies, including renovation, sale of properties and other initiatives.
32

Risk Management
SHAM has established an integrated risk management system for the purpose of accurately identifying various risks
inherent in the execution of our operations, managing such risks appropriately, preventing risks from materializing,and minimizing losses when risks occur. In order to properly carry out organizational risk management, the Chief
Manager of the Internal Control Promotion Department takes care of risk management as the chief supervisor, the headof each department is its own department’s responsible for each risk management, and the Internal Control Promotion
Department is in charge of promoting risk management.
Every business year, the Internal Control Promotion Department formulates a risk management plan for the following
ﬁscal year, consisting of annual policies, priority management risks, and receives approval from the Board of Directors.
The Internal Control Promotion Department also holds risk management meetings every six months, monitors the
progress of the risk management plan, including climate-related risks, and reports the details to the Board of Directors.
Under such risk management system, with respect to climate change, the Sustainability Committee of SHAM
continuously identiﬁes and assesses climate change risks and opportunities that may aﬀect SHR’s operations, andupdates its measures as deemed necessary by the President & Representative Director, who is also the Chief Executive
Director of the Sustainability Committee. We clarify the methods for managing climate change risks and opportunities,
and as part of our integrated risk management process, promote management of climate change risks/opportunities
and initiatives related to resilience.

Click here for Risk Management System.

33

Indicators and Targets
SHR recognizes that solving environmental challenges, such as climate change, is one of the key issues for thesustainable growth of our business. We have identiﬁed “Promoting response to climate change” and “Investing in realestate with excellent environmental performance” as materialities and have established the following metrics andtargets for use in identifying, evaluating, and managing climate change risks and opportunities.

■ CO₂ Emissions Reduction Target

Medium term target (by FY ) : Reduce % CO₂ emission intensity of portfolio compare to FYLong term target (by FY ): Achieve carbon neutrality■ Energy Consumption Reduction Target

Reduce % energy consumption intensity of portfolio by FY compared to FY
Set reduction targets every years after FY and continue promotion of reduction in energy
consumption intensity of portfolio.

■ Portfolio Green Certiﬁcation Target

Achieve % or more of the portfolio with green certiﬁcation by FY
Maintain % or more of it after FY .
Click here for indicators.

34

Environmental Initiatives

Coexistence of
Humankind and Nature,and Initiatives forEnvironmental Resources
The Gohon no Ki (“ﬁve trees”) ProjectIn accordance with the Gohon no Ki (“ﬁve trees”) Project promotedby the sponsor, Sekisui House, SHR carries out maintenance andmanagement of planting, etc. based on tree species that take theecosystem into consideration.
The Gohon no Ki Project is a landscaping and greening project thattakes the ecosystem into consideration launched in by thesponsor, Sekisui House, based on the approach that “three trees arefor birds, two trees are for butterﬂies, and all are local native tree
species”.
By planting mainly local tree species that are in harmony with theclimate of each region of Japan and are beneﬁcial to birds, butterﬂies,
and other creatures and that can be used as garden trees, we aim tocreate a garden that coexists with the nature around us and deepens
our attachment to the garden over time. In ﬁscal year , Sekisui
House planted . million trees and the cumulative number ofplanted trees since the start of the project has reached . million.
For insects, wild birds, and other creatures, the creation of greenery
spaces in cities, even on a small scale, would provide them a habitat
to live in and a corridor to move through, and would create foodchains and form ecosystem networks among creatures. Thisecosystem network will enrich the biodiversity of local communities
and Japan as a whole. These spaces not only make the place easy touse for creatures, but also make them a place where tenants canenjoy the richness of nature at the same time.
SHR will continue to maintain and manage tree planting and otheractivities on its owned properties based on ecosystem-friendly tree
species in accordance with Gohon no Ki Project.

35

Examples of implementation
In , we replanted trees and other vegetation for some residences. When replanting, in collaboration with Sekisui
House, we planted trees in accordance with the Gohon no Ki (“ﬁve trees”) Project after conﬁrming the details of thereplanting, such as the selection of native tree species and whether there are non-native species that fall under the
Non-Native Species That Require Comprehensive Measures.

Esty Maison Kayaba

Tree Plate

As for our oﬃce buildings, Garden City Shinagawa Gotenyama and Hommachi Garden City have rooftop gardens. The
greening of rooftops improves insulation performance and contributes to the creation of natural environments inurban areas.

Garden City Shinagawa Gotenyama

Hommachi Garden City

Prevention of Pollution Risks
Upon acquiring the assets to be invested in, SHAM establishes investigation items such as the use history, use
status and storage status of asbestos, PCBs, and other hazardous substances, geological status, land use
history, and soil contamination status in the due diligence standards, sufficiently conducts investigations to
examine the appropriateness of the investment targets. Even after the acquisition of assets, we maintain legal
compliance by investigating whether there are any violations of environmental laws and regulations in owned
properties through continuous acquisition of engineering reports and other means.
36Installation of Water-Saving Equipment
In residences, we have installed flow control valves to prevent excessive water flow and shower heads, toilets,
etc. equipped with water-saving functions. In office buildings, we are promoting water conservation andeffective water use through measures such as the use of stored rainwater for sprinkling water on the rooftop
garden of Garden City Shinagawa Gotenyama.

Flow Control Valve and Water-Saving Kitchen
FaucetWater-Saving Shower

Appropriate Waste Management
In recognition of our excellent performance in promoting the reduction andproper disposal of commercial waste, the Osaka City Environment Bureau
certified Honmachi Garden City as an excellent building for waste reduction
and awarded HK Yodoyabashi Garden Avenue a “Mark of Excellence for
Waste Reduction”.
Furthermore, in order to further reduce waste emissions, we have posted
awareness-raising posters for the three Rs (Reduce, Reuse, Recycle) aimed
at reducing waste emissions in Garden City Shinagawa Gotenyama. We willcontinue to strive for proper waste management through the operation of
owned properties.
HK Yodoyabashi Garden Avenue
Marks of Excellence for Waste
Reduction

Urban Revitalization / Urban Redevelopment
Sekisui House, the sponsor, focuses on environmental creation development that actively uses natural energy
and adopts advanced energy-saving technologies. SHR, in cooperation with Sekisui House, aims to provide
high-quality social capital and to create a sustainable city through the acquisition of environmentally friendly
properties developed by Sekisui House.
37

“Gotenyama Project”, a Large-Scale Complex Development by Sekisui House“Prime Maison Gotenyama East”, “Prime Maison Gotenyama West”, “Garden City Shinagawa Gotenyama”, and“Gotenyama SH Building” owned by SHR are properties planned and developed under Sekisui House’s large-scalecomplex development “Gotenyama Project”. It is not just a large-scale development that advocates only a sense ofscale, but is based on the revitalization of the original landscape of "Gotenyama", which is rich in nature, and creating
an expressive and intimate human-scale townscape. In addition, the project focuses on environmental considerations
and actively uses natural energy and adopts advanced energy-saving technologies.
In the “Gotenyama Project”, more than % of the total development area is greened through exterior planting androoftop greening. Based on Sekisui House’s proprietaryGohon no Ki Project, which takes into account the ecosystem
of Japan’s original “Satoyama” landscape, a green network that is integrated with the greenery in the surrounding area
is created through preservation of existing trees and planting over . thousand trees, mainly indigenous species.
＜“Gotenyama Project” Overview＞
Location

Site area
Overviewof thebuildings- - Kitashinagawa,Shinagawa-ku, Tokyo
Approx. , ㎡（Total offour sites）
For details of each property,
please refer to thefollowing.
Prime Maison Gotenyama
East
Prime Maison Gotenyama
West
Garden City Shinagawa
Gotenyama
Gotenyama SH Building＜Major Awards Granted to the Project＞
February
Sponsored by Shinagawa Ward, Tokyo
Greening Grand Prize at the Green Honoring
SystemSeptemberSponsored by Organization for Landscape and
Urban Green Infrastructure
Minister of Land, Infrastructure, Transport andTourism Award in the Rooftop Greening
Category at the “Rooftop / Wall / Special
Greening Technology Contest”
OctoberSponsored by Organization for Landscape and
Urban Green Infrastructure
Urban Greenery Organization Chairman’s
Award in the Green Community Development
Category at the Urban Green City Award38

“EGOTANOMORI Project”, a large-Scale Town Development“Prime Maison EGOTANOMORI” owned by SHR is a property planned and developed by Sekisui House through the“EGOTANOMORI Project”, a large-scale urban development project carried out on land owned by the Urban RenaissanceAgency. The property consists of ﬁve diﬀerent buildings: Prime Maison EGOTANOMORI EAST/WEST (rental condominiums forfamilies), MAST ONE EGOTANOMORI (a rental condominium for students and single-persons), GRAND MAST EGOTANOMORI(serviced housing for the elderly), and NICHII HOME Egotanomori (a paid nursing home with long term care).
The area where this property is located is blessed with a rich natural environment and has been designated as a wide-area
evacuation site in the Tokyo Metropolis. In the Nakano City urban planning master plan, the area is considered to have
suﬃcient evacuation routes and an environment that is harmonious with the abundant greenery in the surrounding area, andis positioned to promote the supply of good housing complexes, etc. In addition, the community was developed under theconcept of creating a sustainable community nurtured by multiple generations in order to take advantage of the many
schools, medical facilities, and facilities for the elderly in the area. We aim to develop a community that regenerates as anarea where diverse generations live together, including students, young family households starting to raise children, andelderly people who want a safe and comfortable life.
＜“EGOTANOMORI Project” Overview＞
Location

Site area
Overviewof thebuildings- - ~ Egota, Nakano-ku,
TokyoApprox. , ㎡
For details of the property,
please refer to thefollowing.
For details of the property,
please refer to thefollowing.
Prime Maison
EGOTANOMORI＜Major Awards Granted to the Project＞
May
Urban Landscape Award sponsored by the“Urban Landscape Day” Executive CommitteeAwarded the "Urban Landscape Day"
Executive Committee Chairman's Award in the
Urban Space category
OctoberGreen City Award sponsored by theOrganization for Landscape and Urban GreenInfrastructureAwarded the Minister of Land, Infrastructure,
Transport and Tourism Award in the Green
Business Activities category

The land for this project was provided by the Urban Renaissance Agency
as a site for rental condominiums and other facilities, taking advantage ofthe "rich natural environment" and developing roads and parks with theaim of “ensuring disaster prevention functions”, “creating a community
with excellent health and medical care”, and “creating a community
where a variety of households, mainly families, can continue to live”.
39Environmental Initiatives

Investing in Real Estatewith Excellent
Environmental Performance
Approach to the Acquisition of Green Certiﬁcations
SHR invests and manages real estate with excellent environmental performance, and is actively acquiring
green certiﬁcation to evaluate the environmental performance of its properties. Through these certiﬁcations,
SHR objectively assesses the environmental performance and refers to such assessment for improvement.
In addition, SHR has set a target (KPI) for the percentage of green certiﬁcations obtained. Progress and results
are as follows.
Green Certiﬁcation
KPI: Percentage of portfolio with green certiﬁcation Achieve % or more (Note ) by FY(%)
FY 2020

55.2

FY 202163.2

FY 2022(Target)

70

0

20

40

60

80

(Note ) The percentage of the portfolio with green certiﬁcation is calculated based on total ﬂoor area.
(Note ) The aggregation period is from May to the end of April of the following year, and the ﬁgures are as of the end of the ﬁscal year.

Status of Acquisition of Green Certiﬁcations(as of January ,Number of Properties

Cover Ratio

Total Floor Area(㎡)Cover Ratio

.%

, .

.%

DBJ Green Building Certiﬁcation

.%

, .

.%

Certiﬁcation for CASBEE for Real Estate

.%

, .

.%

Total Certiﬁed Properties)(Note ) The total ﬂoor area of compartmentalized properties is the sum of the leasable area and common areas multiplied by the ratio of ownership of oﬃce buildings. As for residences, the total ﬂoor
area of the entire building is shown.
(Note ) As for Hommachi Garden City, the oﬃce building portion and the hotel portion are treated as one property, and “Total Floor Area” of “Total Certiﬁed Properties” is calculated by the ﬂoor areaof the certiﬁed oﬃce building portion.
(Note ) As for the total ﬂoor area of "Akasaka Garden City", all portions owned by SHR except the th ﬂoor are calculated based on (Note ) above.
(Note ) Figures in the "Total Certiﬁed Properties" column do not match the sum of the DBJ Green Building Certiﬁcation and the Certiﬁcation for CASBEE for Real Estate as some properties obtained
both certiﬁcations.
40

Status of Acquisition by Certiﬁcation Rank
(as of January ,DBJ Green Building Certiﬁcation

properties

Certiﬁcation for CASBEE for Real Estate

properties★★★★★

property★★★★

properties

S rankproperties★★★

properties

A Rankproperty★★

property

B+ Rank

property

Click here for details of property names for each rank.

Overview of Green Certiﬁcations
DBJ Green Building Certiﬁcation

DBJ Green Building Certiﬁcation Program was launched by Development Bank of Japan Inc. (“DBJ”) in April, for the purpose of supporting the properties which give proper care to the environment and the society(“Green Building”).
The certiﬁcation is based on a comprehensive evaluation of the property's environmental performance as well
as how it responds to the needs of various stakeholders, including disaster prevention and community
considerations, and is awarded on a ﬁve-star scale from Star to Stars.
Since August , Japan Real Estate Institute (“JREI”) evaluates and certiﬁes properties and DBJ is in chargeof the entire system of the DBJ Green Building Certiﬁcation Program.
For details of the “DBJ Green Building Certiﬁcation System”, please click here.

Certiﬁcation for CASBEE for Real Estate
CASBEE (Comprehensive Assessment System for Built Environment Eﬃciency) is a system thatcomprehensively assesses the quality of a building, evaluating features such as interior comfort andconsideration for the surrounding scenery, as well as its environmental friendliness such as its use of materials
and equipment that save energy or achieve low environmental impact.
CASBEE for Real Estate Certiﬁcation was developed with the aim of making use of the results of theenvironmental assessment of buildings in real estate evaluation. It scores buildings under each of theevaluation items in ﬁve categories, comprising . Energy & Greenhouse Gases, . Water, . Use of Resources &Safety, . Biodiversity & Sustainable Site, and . Indoor Environment. Based on the scores, the evaluation
results are given one of four ranks: Rank S, Rank A, Rank B+, and Rank B.
For details of Certiﬁcation for CASBEE for Real Estate, please click here.

41)

Sponsor Initiatives
Sekisui House’s ZEH and ZEB Initiatives
Sekisui House is working to promote ZEH not only in detached houses, but also in rental housing,condominiums, and all multi-unit housing complexes.
The rental housing brand "Sha Maison" is promoting the increased adoption of "Sha Maison ZEH", which is theZEH of this brand. There are two types of ZEH: ZEH-M (ZEH Mansion), which aims for net zero energy
consumption for the entire building, including common areas, and ZEH, which aims for net zero energy
consumption in individual housing units. By primarily promoting ZEH for individual housing units whereresidents can enjoy beneﬁts such as increased comfort, reduced utility costs, etc. Sekisui House is working toincrease the adoption of rental housing that also meets ZEH-M standards. In addition, for the “Grande Maison”
condominiums, Sekisui House has announced that all housing units sold after will be ZEH, and allbuildings will be ZEH-M.
Furthermore, by clearly and concretely promoting the beneﬁts of ZEB when making proposals, Sekisui Houseis seeing increases in the number of orders and construction starts for ZEB in non-residential construction,
especially for oﬃce use, as well as an expansion of ZEB to nursing care facilities, clinics, and otherapplications. SHR will contribute to decarbonization by actively investing in ZEH/ZEB properties developed by
Sekisui House.

42

Environmental Initiatives

Collaboration with
Tenants and Property
Management Companies
Selection and Evaluation of Property Management Companies
In order to secure stable earnings and maintain and improve the value of assets, SHR has established criteria
for selecting property management companies to which such management may be entrusted. In principle,
SHR monitors and evaluates the performance of property management companies' management operations
once a year through external evaluation organizations, and veriﬁes their appropriateness.
In addition to the company's property management capabilities and operational systems, its organizational
structure for promoting corporate sustainability and the energy conservation promotion system for managed
properties are also subject to evaluation.

Initiatives to Reduce Energy Consumption
Initiatives to Reduce Energy Consumption

SHR asks property management companies to make suggestions for energy conservation in the managed
properties. We also share the results of the CO₂ emissions reduction potential diagnoses conducted by SHR
with property management companies to work together for the purpose of reducing environmental impact.
At Akasaka Garden City, tenant companies are regularly convened to hold the CO₂ reduction promotion
meeting. At the meeting, energy consumption and CO₂ emissions are reported to each tenant, andexplanations on energy conservation are provided in conjunction with these reports to raise environmental
awareness.
At Garden City Shinagawa Gotenyama, the initial illuminance of the illuminance sensor is adjusted to ensure
optimized brightness. In parallel with such eﬀorts,
efforts daylight is used during the daytime to reduce electricity
consumption.

Materials of the CO₂ Reduction Promotion Meeting (excerpt)

43Promotion of Green Leasing
Green leasing refers to the establishment and implementation of environmental provisions in leaseagreements with tenants at owned properties. With "promotion of green leasing" as a KPI, SHR has enteredinto green lease agreements with certain tenants, mainly for oﬃce buildings. From the perspective of energy
efforts by sharing oursaving and environmental consideration, we are accelerating our environmental eﬀorts
thoughts on maintaining and improving the comfort and productivity of our properties with our tenants, andestablishing a system for mutual cooperation. We will expand our eﬀorts
efforts to residential properties in the future
and promote green leasing while strengthening cooperation with tenants.
Percentage of Oﬃce
Buildings with
Green Lease Agreements(leasable area basis)(As of October , )Contracted％.

Contracted
Not Contracted

37.8%
62.2%

44

Social Responsibility

Initiatives for Residents
and TenantsRole of SHR with Respect to Residents and Tenants
In recent years, the significance of SHR’s efforts to provide resilient buildings that can withstand disasters, etc.,
and to minimize damage in the event of a crisis has become greater. We believe that our role is to make theproperties owned by SHR a place that provides safety and peace of mind, and to make it a comfortable placethat improves the quality of life on a daily basis.
SHR seeks properties that are located in suitable locations to provide a “sustainable base for living” forresidents and a “sustainable base for business operation” for tenant companies. Based on the recognition thatthe need for real estates that have high residential functionalities including comfort and safety or thecomponents desired by tenant companies is increasing, SHR designates “high quality” residential andcommercial properties, etc. located at “strategic locations” as “Prime Properties” and prioritizes investments
in such properties.
Through investments in properties that qualify as “Prime Properties”, SHR will pursue both sustainable
lifestyles and business activities for its residents and tenants, and the sustainable asset management of SHR.

Six Factors of Prime Property

45

Focus Points for Residences
Element

Focus Points

Economic Zones

Areas where stable rental demand can be expected in terms of commuting distance,
residential population, number of passengers who use nearby stations, etc.

Convenience

Good access to major transport routes and major terminals, and adjacent to commercial
stores, etc.

Livability

Designed to be comfortable as a living space and installed with functional equipment
Installation of comfortable common spaces and functional equipment, and provision ofservices

Environmental Consideration

Environmental performance is ensured by energy-saving equipment, etc. in common
areas and exclusive areas
Biodiversity-friendly planting and landscape design

SafetyBuildings with risk management considerations for disasters
Location with high safety, earthquake resistance of buildings, and disaster resilience

Brand

Popularity as an area and recognition of properties
High quality in terms of building grade, design, etc.

Focus Points on Oﬃce Building
Element

Focus Points

Economic Zones

Population of the commercial area, residential population, number of passengers who use
nearby stations, and thickness as an economic zone

Convenience

Good access from major transport routes
Convenience, commercial concentration, and prosperity that contribute to commuting
and attracting customers

Functionality

Functional design with comfort that leads to increased productivity for tenant companies
Suﬃcient standard ﬂoor space and comfortable spacious design, etc.

Environmental Consideration

Environmental performance is ensured by energy saving, rooftop greening, etc.

BCP

Provide important facilities as a foundation for “business continuity”
Resilience to disasters, in terms of both location and speciﬁcations

Brand

Dignity of the area, sense of luxury and cleanliness of the building46

Safety, Security, and Comfortability for Tenants
Measures against Earthquakes
SHR's investment criteria require that the company's domestic portfolio has a seismic PML (probablemaximum loss) of 10% or less in principle and that the addition of earthquake insurance is considered forindividual properties with a PML of 20% or more. The seismic PML of SHR's portfolio as of October 31, 2022,
was 2.0%; there were no individual properties with a PML exceeding 20%.

Seismic PML of Top Five Properties based on Investment Ratio (As of the end of October, 2022)
Property Name

Investment Ratio(Acquisition Price Basis)

Seismic PML

Garden City Shinagawa Gotenyama

13.0%

0.7%

Gotenyama SH Building

9.3%

1.2%

Akasaka Garden City

9.0%

4.3%

Hommachi Minami Garden City

7.9%

1.0%

Hommachi Garden City (office building
portion)

7.0%

3.1%

47

Measures against Flooding（As of the end of October,）

SHR has a system for minimizing damage from natural disasters by investigating the risks of inland ﬂooding,river ﬂooding and storm surge for our owned properties to assess our portfolio's ﬂood risk and use the ﬁndings
to improve our business continuity plan (BCP).
As of October , , properties with a ﬂood depth of . meters or more account for . % of our portfolio.
There have been no cases of any property experiencing ﬂooding above the lowest ﬂoor level during the timeowned.

Flood Depth Classification of Owned Properties (Acquisition Price Basis)（As of the end of
October, 2022）
Flood Depth

Total

<0.5m

≥0.5m

9.3%

38.8%

48.1%

Greater Tokyo

9.3%

22.0%

31.3%

Osaka Area

-

15.7%

15.7%

Nagoya Area

-

1.1%

1.1%

26.6%

22.1%

48.8%

Greater Tokyo

20.9%

17.5%

38.4%

Osaka Area

0.5%

1.0%

1.5%

Nagoya Area

3.0%

0.7%

3.7%

Others

2.3%

2.9%

5.2%

-

3.1%

3.1%

Osaka Area

-

3.1%

3.1%

Total

35.9%

64.1%

100.0%

Office Building

Residence

Hotel

48

Disaster-Resilient Oﬃce Buildings
Garden City Shinagawa Gotenyama was built with business continuity in mind. The building is located on anelevated terrain with low ﬂood risk and has a quake-absorbing structure for improved seismic resilience. Its
on-site emergency power generator can supply electricity to common areas during a disruptive event. In
addition, a disaster prevention center has been established to respond rapidly to incidents hours a day,days a year.
Quake-absorbing structure

Emergency power facility

Disaster prevention center

Similarly, Hommachi Minami Garden City takes business continuity into account by installing seismic braces
on each ﬂoor to absorb the forces that would act on the building in a major earthquake, and by situating its
mechanical room on the rd ﬂoor, above ﬂood level. Despite these features, it still oﬀers over , square
meters of column-less spaces and a ceiling height of . meters on standard ﬂoors.

49Residence in Preparation for Disasters
Prime Maison Shinagawa is a rental condominium developed by Sekisui House in response to rising concerns
about power conservation and disaster prevention performance following the Great East Japan Earthquake, in
addition to climate change. This property has an emergency power generator that was introduced to ensure ahigher level of safety and security in the event of an emergency. The generator is connected to solar batteries
and storage batteries, ready to serve as an emergency power supply system for use in the event of a blackout.

Conceptual Diagram of Emergency Power Supply System

When power is cut due to a natural disaster or similar event, the emergency power generator is activated andsupplies power to common areas for approximately hours. It can continue to supply power even longer
when connected with solar batteries and storage batteries. As a result, some lights for common corridors andthe entrance are illuminated, securing passageways and providing a sense of security even at night. In
addition, the generator also supplies power to the electrical outlets in the entrance, where residents would
gather, allowing them to charge mobile phones and other devices. The generator also permits the collection of
information via the monitor in the control room. Power is also supplied to the feed-water pump. This meansthat water will be supplied to common areas and dwelling units as long as the water supply has not been cut
oﬀ.
50

Examples of Disaster Prevention Equipment for Residences
Emergency cabinet forelevators

Distribution of stockpiled
emergency supplies totenants

Stockpile of emergency
toilets

Prime Maison Gotenyama East
Prime Maison Shinagawa
Esty Maison Ojima and others
and others
Bench with oven function

AED (Automated External
Defibrillator)

Esty Maison Kyobashi andothersPrime Maison Yokohama Nihon- Prime Maison Ginza East andodori and others
othersConducting Tenant Satisfaction Surveys
SHR regularly conducts tenant satisfaction surveys
with the aim not only to improve and stabilize leasing
operations, but also to communicate with residents
and tenants and build reliable relationships.
For the surveys conducted in ﬁscal year , weincorporated questions asking about their awarenessof ESG and how they are dealing with the COVIDpandemic such as their implementation status of
telework into the survey items.
The survey results are shared with property
management companies, building managementcompanies and others, and measures will be
developed to further improve services.
In addition, we will consider new ESG initiatives thatwill allow us to gain the cooperation and collaborationof residents and tenants.

51

Disaster relief vending
machines

Summary of Fiscal Year
SurveyperiodRespondents

Survey items
Response
rate

Fiscal Year

SurveyMarch to AprilOﬃce
building

tenants of owned oﬃce buildings

Residence, residents of Prime Maison, Esty Maison, etc.

Oﬃce
building

Overall satisfaction, items regarding ESG, the COVID- pandemic, etc.

Residence

Items regarding rooms and common area's satisfaction, residents needs, management
conditions, interest in environmental issues, the COVID- pandemic, etc.

Oﬃce
building

90.6％

Residence.%

Survey ResultsOﬃce buildings

Residence

All responding tenants answered that they were "satisﬁed".

A total of . % responded that they were "generally
satisﬁed" or "highly satisﬁed".

Major Highly
Acclaimed Points

Convenience oflocation
Good surrounding
environment
Design andatmosphere of theroom, etc.

Major Highly
Acclaimed Points

Building grade andspeciﬁcations
Exterior
Interior design ofentrances, etc.

Points Cited as
Areas of
Improvement

Expansion of homedelivery lockers
Expansion of bicycle
parking, etc.

52

Introducing Barrier-Free Facilities
Hommachi Minami Garden City was designed based on the Building Movement Facilitation Guidance Standard
required by the Act on Promotion of Smooth Transportation, etc. of Elderly Persons, Disabled Persons, etc.
(known as Barrier-Free Act) and is the ﬁrst oﬃce building in Osaka City to be designated as barrier-free under
the law.

Key Features
Two multipurpose restrooms accessible toostomates and wheelchair users on each oﬃce
ﬂoor
Wheelchair-accessible elevators
Wide hallways that allow two wheelchairs topass
Three wheelchair-accessible parking spaces in
the parking garage53

Social Responsibility

Contributing to Society
Sekisui House Group Philosophy and Guidelines forContributing to Society
The Sekisui House Group, to which SHAM belongs, has created a system that enables each and every
employee to engage in voluntary activities not only through its core business but also through “employee
volunteer activities and charity participation”, “collaboration with and support for NPOs and NGOs”,“educational support activities in cooperation with educational institutions”, etc., and continues to conduct
community-based activities. SHR and SHAM also carry out initiatives and environmentally friendly activities incollaboration with tenants and local communities where properties are located.
Sekisui House Group Philosophy and Guidelines for Contributing to Society

Contribution to Local Communities
SHR takes initiatives to harmoniously co-exist with local communities by introducing equipment available toanyone, in addition to deepening communication with local residents through participation in events of local
communities in which its owned properties are located.

Utilization of Common SpaceIn addition to opening the entrances, ground floor lobbies, building sites, and conference rooms of ourproperties to the public for use as event spaces, SHR has introduced Share Bikes and Food Trucks in someproperties so that they can be used not only by tenants but also by local residents.

54

Participation in Midosuji
Illumination Event

Providing Conference rooms
for Blood Donation Events

Introduction of Share Bikes

Hommachi Garden City

Garden City Shinagawa Gotenyama

Garden City Shinagawa Gotenyama andothersIntroduction of Food Trucks

Introduction of electric
kickboards

Introduction of digital signage

Akasaka Garden City

Esty Maison Minamiazabu and others

Garden City Shinagawa Gotenyama andothersParticipation in the Minato-ku Adopt Program
SHAM has agreed with Minato-ku, Tokyo, where the office is located, and regularly conducts cleanup activities
in the vicinity of the office through participation in the Minato-ku Adopt Program.
The Adopt Program refers to a series of activities involving the "adoption" of local roads, parks, etc. bydeeming them as "foster children", and groups or citizens, etc. consisting of ward residents, etc. as "foster
parents". The "foster parents" engage in beautification and cleaning activities of their "foster children". We willcontribute to our cooperation with tenants and local communities through cleanup activities.

Activities along with the Government and Industrial Groups
Sekisui House Group believes that it bears a significant role and responsibility in the development of housing
and the living environment in Japan, and thus participates in activities of many industry groups. As a fullmember of The Investment Trusts Association, Japan as well as a regular member of The Association for Real
Estate Securitization (ARES), SHAM takes action to further develop the industry.
55

Participation in “Sekisui House Matching Program”
The “Sekisui House Matching Program” is an employee-driven donation
program that has been implemented by Sekisui House Group since fiscal
year 2006 to support NPOs and other organizations. Under this system,
directors and employees of SHAM set aside the amount they wish to
donate, in units of 100 yen, and Sekisui House adds an equal amount as
subsidies to make donations.
The “Children's Fund” and the “Environmental Fund” have been
established, and employees can freely choose which one to donate to.
In fiscal year 2022, a total of approximately 45.8 million yen was raised andearmarked to support 94 civic groups from among those recommended by
employees nationwide, focusing on activities that lead to coordination
with our employees, collaborations and the SDGs.
For details on the "Sekisui House Matching Program", please click here.

Structure of Sekisui House Matching Program

KPI: Achieve a 40% participation rate in the “Sekisui House Matching Program” by FY 2023

FY 2021 Result

41.9％（Note） FY2021 result is the result from February 2021 to January 2022 in the fiscal year of SHAM.
56

Other donations
SHAM makes donations through activities, such as collecting plastic bottle caps and used stamps, giving out
unused calendars and notebooks for recycling.
In fiscal year 2022, through donating 6.4kg of plastic bottle caps to a NPO, we contributed providing
vaccinations to children around the world through UNICEF.

Relief Donation
When large-scale natural disasters occur inside or outside Japan, SHAM offers relief donations to be used for
rescue and restoration activities in the affected areas.

Endorsing “COOL CHOICE”
SHAM supports “COOL CHOICE”, a national campaign promoted by the Ministry of the Environment asmeasures against global warming, and takes the following initiatives as environmental measures.
Maintaining moderate temperature settings on air conditioners
Promoting Cool Biz and Warm Biz
Promoting a paper-free environment for internal materials by using smart
devices and a shared server
Stopped using paper cups in the company, making it a rule for individuals tobring their own cups

57

Social Responsibility

Respect for Human
RightsRespect for Human Rights
The Sekisui House Group has positioned respect for human rights as one of the key issues for promoting ESG
management. By asking all employees to practice our corporate philosophy rooted in ”love of humanity",
the Group works together to meet its responsibility to respect human rights. In accordance with the"SekisuiHouseGroup Human Rights Policy", established by Sekisui House in April, , SHAM strives to"SekisuiHouse
ensure that there are no infringements of human rights, including harassment, to contribute to the creation ofa workplace environment where all employees can work enthusiastically and lead to growth.
The Sekisui House Group Human Rights Policy applies to all directors and employees of the Sekisui HouseGroup. We also expect our business partners, including building constructors and suppliers, to understand andsupport this policy. The Sekisui House Group Human Rights Policy is also presented on the online informationsharing platform we maintain with our suppliers and we encourage them to comply with the policy.

Sekisui House Group Human Rights Policy (excerpt)
We are committed to respecting human rights as stipulated in the International Bill of Human Rights
and the ILO (International Labour Organization) Declaration on Fundamental Principles and Rights at
Work. We are a signatory of the United Nations Global Compact and we support its ten principles.
We strictly prohibit any form of forced labor and child labor.
We shall continue to promote the creation of a corporate structure with zero tolerance for any
discrimination or harassment based on birth, nationality, race, ethnicity, beliefs, religion, gender, sexual
orientation, gender identity, age, disabilities, preference, educational background, family or any otherground. We also strive to maintain a healthy working environment without discrimination in
employment or treatment of employees.
We respect the freedom of association and the right to collective bargaining. We comply with laborrelated laws and regulations and observe labor-management agreements. We are committed toengaging in employees or their representatives in good faith through dialogue and consultations andcontinuously work to build constructive relations.
58

We comply with national and regional laws and regulations in countries and regions where we operate.
Where national and regional laws and regulations conﬂict with international human rights standards,
we seek ways to honor the principles of internationally recognized human rights while complying withnational and regional laws and regulations.
Click here for all of Sekisui House Group Human Rights Policy.

Promoting Human Rights Policies
The "Sekisui House Group Human Rights Policy" must be complied with by all directors and employees(including short-time workers) of the Sekisui House Group, including SHAM, and to ensure that all directors
and employees are familiar with the policy, a three-hour "human relations training" is conducted annually. We
also provide an additional two hours of training for managers.

Human Rights Reporting System
The Sekisui House Group has established several reporting systems, including the Compliance Helpline, toidentify concerns and potential negative human rights impacts associated with its business activities, and is
working to enhance its consultation services through the appropriate operation of these systems. The "Sexual
Harassment and Power Harassment Hotline" has been established as a consultation desk system for all humanrights issues, including various types of harassment or any consultation for creating a comfortable working
environment for employees with disabilities. Furthermore, inquiries regarding human rights may be madethrough our public website as well.
SHAM also has one male and one female personnel in charge of the consultation desk.

59

Social Responsibility

Human Resource
Development
Basic Policy
In order to build an environment that embraces diversity and allows everyone to reach their full potential, Sekisui House
has declared its commitment to "Human Resource Sustainability". SHAM shares the basic philosophy of the Group
regarding the cultivation of human resources to nurture autonomous human resources through training and careerbuilding.

Securing Talented Personnel
SHAM works to recruit and secure great talent in line with changes in the business environment and the organization, andimplements job rotations to promote varied work experiences and skill development. In addition, by accepting
specialized seconded personnel from the Sekisui House Group who have a wide range of experience and know-how in realestate investment and management, SHAM aims to utilize their capabilities to achieve advanced asset management.
Click here for Status of directors and employees.

Strategy for Developing Human Resources
Based on its global vision to make home the happiest place in the world, the Sekisui House Group’s ideal vision for is
to maximize the happiness of its customers, employees and communities. To achieve this ideal vision, the Sekisui HouseGroup promotes the expertise and the self-directed career development of our employees and is working to cultivate
human resources who can create value for communities and stakeholders on their own initiative.
Being a part of this philosophy as a Sekisui House Group member, SHAM is focused on career building and developing
autonomous human resources. We follow a new kind of meritocracy, where job competency, roles (duties), and outcomes
make up the key elements of our HR practices.
Personnel evaluations are conducted from all perspectives, including ESG initiatives and compliance status, based on the"ability and behavior evaluation", which assesses the degree of ability and behavior expected of each grade, and the"performance evaluation", which assesses the degree of achievement and the process. Performance reviews include
multiple stages of discussion to foster understanding and motivation, thus tying the process to development. We also use
multifaceted reviews for managers, with employees providing feedback on their observations with the goal of eliciting
new understandings and behavior change.
60Performance Review Process Using Discussions

Support for Acquiring and Retaining Qualiﬁcations
SHAM helps and encourages employees to enhance their expertise by acquiring qualiﬁcations such as the "Association forReal Estate Securitization (ARES) Certiﬁed Master", an educational program that provides systematic study in the ﬁelds of realestate and ﬁnance. SHAM aims to improve the professional abilities of employees by covering the cost of training,
examinations, continuing education, and seminars for these qualiﬁcations.
Click here for the status of qualiﬁcations.

Training System
SHAM oﬀers a comprehensive training program for all directors and employees to develop their skills per the new principle
centered on job performance and roles/achievements, which are the basic policies of the personnel system. This tiered
professional development program builds leadership for raising organizational productivity by tailoring learning to the skills
and requirements of each job level. In addition, to develop human resources with expertise as real estate investment
management professionals with a broader perspective and insight, SHAM also oﬀers free voluntary training opportunities
such as seminars. Furthermore, to bring more comfort and ease to the workplace, all directors and employees of SHAM attend
an annual human relations training (training on human rights, power harassment, and sexual harassment).
In addition, SHAM has set the target (KPI) for the training system. The result is as follows.

KPI: Each employee to attend external training at least twice a year by FY

Result for FY. courses

KPI: Achieve % annual internal training participation rate by FY

Result for FY%(Note ) The number of external training courses attended per person is calculated based on the total number of external training courses
attended/number of directors and employees.
(Note ) The training participation rate is calculated based on the number of training participants/the number of directors and employees(excluding employees on childcare leave and maternity leave) as of the end of the ﬁscal year.

Click here for details on training attendance results.
61

Training System

General Training
This training is aimed at improving company-wide engagement and raising the level of business skills, humanskills, and specialized skills for all directors and employees (including part-time employees, and other nonregular employees). Themes are selected with reference to the results of governance awareness surveys
conducted by the Sekisui House Group, and in principle, once every two to three years, using an externalorganization.

Human Relations Training
This training is common to the Sekisui House Group and conducted every year for all directors and employees(including part-time employees, etc.) of the Sekisui House Group, with one of the purposes being to raiseawareness of human rights issues and foster a comfortable working environment. In addition to conducting
hours of “human relations training” every year, an additional hours of “promotion committee training” isconducted for managers to deepen awareness and understanding.

Compliance Training
This training is designed for all directors and employees (including part-time employees, etc.) to improve theirknowledge and ability in compliance, which is fundamental to conducting business as a member of society,and to acquire the knowledge necessary to conduct the investment management business.

ESG Training
This training is meant to deepen the understanding of the latest ESG information of the Sekisui House Groupand topics related to ESG in order for all directors and employees (including part-time employees, etc.) toshare common awareness and knowledge.

62

Tiered Training
This training utilizes external organizations and aims to improve various abilities (job posture,
specialization/advanced expertise, collaboration ability, etc.) based on the skills and requirements required foreach job level. It is intended for all directors and employees (including part-time employees, etc.)

Multi-faceted Observational Investigation
In addition to self-evaluations, this investigation aims to clarify objective “strengths” and “challenges” byevaluating individuals from various perspectives, including superiors, subordinates, and colleagues, to create
an open organization and workplace climate in which leaders and members can easily ﬂourish. It is conducted
once a year for managers using an external organization. By conducting the investigation every year, we carryout a cycle of understanding issues, veriﬁcation/feedback, setting goals, and implementing them.

Cafeteria Plan Training
From the perspective of personal activity planning and self-development, each employee is able to freely
select and attend seminars by ﬁeld, rank business skills, IT, etc. We recommend that all directors andemployees (including part-time employees, etc.) attend at least one seminar per year.

63

Social Responsibility

Creating Comfortable
Workplace Environment
Promoting Diversity
The Sekisui House Group Human Rights Policy stipulates that the Group will continuously promote thecreation of a corporate structure with zero tolerance for any discrimination or harassment based on birth,
nationality, race, ethnicity, beliefs, religion, gender, sexual orientation, gender identity, age, disabilities,
preference, educational background, family, etc., in order to promote diversity. As a member of the Group,
SHAM also implements initiatives in accordance with this policy.
Click here for more information on the Sekisui House Group's promotion of diversity.

Promoting of Active Participation by Women
The Sekisui House Group has formulated the goals of the “Sekisui House’s Action Plan for the Promotion of
Active Participation by Women”, and is proceeding with initiatives to promote the appointment of female
managers throughout the Sekisui House Group. SHAM has also set an increase in the ratio of female managers
as a KPI, and not only promotes the active participation of female employees, but also supports diverse
human resources so that they can receive fair opportunities.

KPI：Achieve a female manager percentage of 7% by fiscal year 2023

Result for FY 2021

3.6％

Supporting Active Participation of the Senior Employees
SHAM has introduced an age 65 mandatory retirement rule so that all individual employees can work moreenthusiastically, capably and energetically for a longer period. In addition, in April 2021, we introduced a postretirement re-employment system for employees aged 65 through 70 to support their active participation.
64

Supporting Active Participation of Persons with Disabilities
SHAM promotes the employment of persons with disabilities based on the Act to Facilitate the Employment of
Persons with Disabilities. We support their activities by creating opportunities for conversation so that
employees with disabilities, their supervisors and department members can communicate and consult witheach other. We aim to create a workplace where every employee, with or without disabilities, can work for along time.

Promoting Work-Life Balance
SHAM is working to realize a variety of work styles while stimulating communications in order to promote
work-life balance of our employees. In response to changes in working styles and lifestyles with the COVID-19
pandemic, SHAM will continue to emphasize the importance of work-life balance that we believe makes our
employees feel fulfilled and happy, utilizing telecommuting as well as sliding-scale work systems that allow
employees to work flexibly.

Improvement of Employees' Benefits
SHAM strives to provide a workplace environment where employees can enhance their motivation to work anddemonstrate their skills through various welfare programs for all employees.

65Key Beneﬁt Systems
System Name

Subject scope

Description

Childcare leave

All employees

Paid leave for raising children under three years of age (includes childrenof legal guardians, opposite-sex common-law spouses, and same-sex
domestic partners)

Family-care leave

All employees

Paid leave for providing nursing care to a family member

Sick childcareleave

All employees

Paid leave for nursing a sick or injured child or taking them to receive
medical services (vaccinations, checkups, etc.)

Short working
hours

All employees

System for working shorter hours to raise a child

Congratulatory or
condolence
payment

All directors and employees
except contract/part-timeworkers

One-time payment granted in the event of a marriage, childbirth, death,injury, illness, or damaging event experienced by employee or their family

Staggeredworking hours

All employees

Permits employees to move their daily start and ﬁnish times forward orback following designated patterns

By-the-hour
annual leave

All employees except contract/part-time workers

Allows up to ﬁve days of annual paid leave to be taken in hourly units

All employees who work without
a ﬁxed term
*Including contract employees who
have a contract for more than years

Allows recipients to accumulate annual leave past the legal two-year limit
and take as many as days oﬀ in combination with standard annual
leave

Credentialing
stipendAll employees except temporary,contract, and part-time workers

Payment granted to those who pass a national certifying exam or othereligible credentialing exam

Employee stock
ownership plan(with incentives)

All employees except temporary,contract, and part-time workers

Allows Sekisui House Group company employees to purchase Sekisui
House, Ltd. Stock through payroll deductions and provides an incentive of% of the purchase priceDeﬁnedcontribution
pension plan

All employees except part-timeworkers

Corporate pension plan in which future beneﬁts are determined based on
the total of contributed sum and investment earnings

Accumulated
annual leave

Encouraging Male Employees to Take Childcare Leave
SHAM encourages male employees who have a child under three years of age to take at least one month ofchildcare leave. SHAM began its childcare leave system for working fathers in September . The ﬁrst monthis paid, and leave can be taken in as many as four segments based on their respective situations. In April ,SHAM expanded the system into an eight-week postpartum beneﬁt that can be used in one-day increments, toenable more choices and ﬂexibility. SHAM has raised awareness of the importance of the father’s presence
during this period when new mothers are physically and emotionally taxed and at higher risk of postpartum
depression.
66

KPI: Achieve childcare leave take-up rate for eligible male employees by FY: %In FY , none of our male employees were eligible for this leave.
As of FY , eligible employees are systematically taking leave as planned.
planned.

Commitment to Well-Being
Initiatives for Health and Safety
SHAM has formulated the Rules of the Health Committee and established the Health Committee to promote
the safety and health management activities of employees. The committee includes an occupational physician
and meets monthly to discuss the workplace environment and gain insights for preventing health issues in theworkplace and promoting improvements in employee health.
The committee also set up working groups to discuss healthcare and hygiene management, held web
meetings aimed at creating opportunities to resolve the lack of communication between employees due toremote work, informed employees about inﬂuenza vaccinations, and distributed sanitizers to prevent COVIDinfections.
SHAM also conducts stress checks for all employees to prevent the occurrence of any mental health issues. We
encourage each employee to be aware of stress and provide consultation desk system from specialists(counselors). In this way, we provide support in dealing with stress and strive to improve the workplaceenvironment.

Conducting employee satisfaction surveys and ESG interaction
SHAM gauges employee satisfaction using an annual governance awareness survey of all Sekisui House Group
employees. Utilizing the survey, the company provides opportunities for all employees to share thoughts on
topics such as corporate ethics and the workplace environment, encouraging more-active communication in
the workplace.
Furthermore, as a member of the Sekisui House Group, we conduct a “Well-Being Survey” for all employees toanalyze the correlation between individual and workplace happiness, as well as an “ESG Dialogue” every six
months with the theme of making employees, customers and society happy through business. A virtuous cycle
is expected in which the creation of innovation through “visualization” of individual and workplace happiness,increased employee engagement through “ESG Dialogue”, and revitalized communication will lead toincreased corporate value.

67

Social Responsibility

Occupational Health and
SafetyLabor Relations

SHAM does not have a labor union, but respects “the freedom of association and the right to collective
bargaining” as stated in the Sekisui House Group Human Rights Policy .
In addition, SHAM complies with labor-related laws and regulations and labor-management agreements, andworks to build constructive relationships through sincere dialogue and negotiation with employees (including
workers with shorter working hours) or employee representatives, and our labor-management relations havebeen amicable.

Responding to Overwork
SHAM has set KPIs (targets) to reduce excessive working hours and overtime work, and is implementing thefollowing initiatives.

KPI: Reduce the average monthly work hours per person to 162 hoursor less by FY 2023

Result for FY 2021

164.9 hours

KPI: Achieve an annual paid leave take-up rate of 70% or more by FY 2023

Result for FY 2021

52%

Monitoring of working hours

When monthly overtime hours exceed 45 hours for more than three months throughout the year, notification
to the supervisor and hearings with employees are conducted. When the working hours subject to healthmanagement exceed 60 hours, a warning notification is sent to the supervisor and the person in question.
Furthermore, SHAM has set a KPI of hours for the average monthly working hours per person (to achieve
by ﬁscal year ), and is working to reduce overtime work throughout the company.

Encouragement of planned use of annual paid leave

We have set a KPI of an annual paid leave take-up rate of % (by ﬁscal year ), which exceeds the legally
mandated annual paid leave utilization of ﬁve days, and encourage all employees to take their leave in aplanned manner.
68

Wage System and Compliance with Equal Pay for Equal WorkSHAM complies with the minimum wage provisions of labor-related laws and regulations for all employees,
including part-time employees, etc., and pays wages that lead to maintaining and improving living standards,
taking prices into consideration. In addition, we apply a remuneration system that complies with equal pay for
equal work, and do not differentiate remuneration based on gender.
In addition, SHAM conducts evaluations for each evaluation item in personnel evaluations, and the results ofthe evaluations are appropriately reflected in employee promotions, salary increases, and bonuses. Bonuses
are paid twice a year, in the summer and winter, and the amount paid is determined according to attendance
rate and work performance.

Labor-Related Violations and Accidents
There have been no serious labor-related violations of laws and regulations or accidents during the period
from January 1 to December 31, 2021.
Click here for labor-related data.

69

Social Responsibility

Engagement withInvestors
SHR strives to disclose information that is appropriate and easy to understand for all investors through theenhancement of its website, timely disclosure, and the issuance of ESG reports, etc. In 2022, our information
disclosure was rated highly according to the GRESB disclosure evaluation (five-level evaluation from A to E),
which evaluates the degree of fulfillment of ESG information disclosure, and obtained the highest “A” rating forthree consecutive years. In addition, we place importance on dialogue with investors, and are implementing
the following initiatives.

Engagement with Institutional Investors
11th FP ended Apr.
2020 and12th FP ended Oct.
2020

13th FP ended Apr.
2021 and14th ended Oct.
2021

Financial results briefing for domestic institutional
investors, analysts, etc.

June/December

June/December

IR meetings for domestic institutional investors,
analysts, etc.

145 times

126 times

IR meetings for overseas institutional investors,
etc.

57 times

43 times

70

Engagement with Individual Investors

Events for individual investors

11th FP ended Apr.
2020 and12th FP ended Oct.
2020

13th FP ended Apr.
2021 and14th ended Oct.
2021

5 times

3 times

Click here for an archive of past events (Japanese only).
Click here for a special website for individual investors (Japanese only).

(Note) Regarding the number of IR meetings held for domestic and overseas institutional investors, analysts, etc., as well as
events held for individual investors, IR meetings and events held in 11th FP ended Apr. 2020 and 12th FP ended Oct.
2020 are counted as the number of IR meetings and events held in 2020, IR meetings and events held in 13th FP
ended Apr. 2021 and 14th FP ended Oct. 2021 are counted as the number of IR meetings and events held in 2021.

71

GovernanceCorporate Governance
Governance of SHR
SHR's governing bodies consist of a general meeting of unitholders, a board of directors with at least one
executive director and two supervisory directors, and an accounting auditor.
The executive director oversees SHR's operations and, as SHR's representative, has the authority to act in andout of court with respect to any and all of SHR's affairs. The supervisory directors supervise the executive
director's execution of duties. The Board of Directors is held at least once every three months and makes
important decisions regarding SHR's operations, including approval of the execution of important duties by
the executive directors and financial statements. The supervisory directors supervise the executive director's
work by means of reports provided by the executive director on the status of the management of SHR's assets
as needed and on investigations results and other tasks requested by the supervisory directors.
The accounting auditor audits SHR's financial statements and also serves legally mandated roles, such asreporting to the supervisory auditors in the event that, in its auditing process, it discovers an illegal action orserious violation of any law or regulation, or of SHR's Articles of Incorporation in connection with the executive
director's execution of duties.

72

Executive Director and Supervisory Directors
Attendance Status
Position

Executive
Director

Name

Reasons for Appointment

FP endedOct.
( th FP)FP endedApr.
( th FP)

Atsuhiro
Kida

We have appointed him as the Executive
Director because it is expected that he will
be able to accurately execute operationsof SHR, taking into accountcomprehensively his expertise in realestate, ﬁnancial accounting and extensive
experience in REIT operations.

times/
times（100%）

times/
times（100%）

Shigeru
NomuraIn addition to having his excellent
character, insight, and ability, he is wellversed in corporate management andother ﬁelds as a certiﬁed public
accountant. In light of his expertise andexperience in each of these ﬁelds, we
believe he is qualiﬁed to serve as a
Supervisory Director of SHR, and haveappointed him as a Supervisory Director.

times/
times（100%）

times/
times（100%）

TatsushiOmiya

In addition to having his excellent
character, insight, and ability, he is wellversed in corporate management andother ﬁelds as an attorney-at-law. In lightof his expertise and experience in each ofthese ﬁelds, we believe he is qualiﬁed toserve as a Supervisory Director of SHR,
and have appointed him as a Supervisory
Director.

times/
times（100%）

times/
times（100%）Yu YadaIn addition to having his excellent
character, insight, and ability, he is wellversed in corporate management andother ﬁelds as an attorney-at-law. In lightof his expertise and experience in each ofthese ﬁelds, we believe he is qualiﬁed toserve as a Supervisory Director of SHR,
and have appointed him as a Supervisory
Director.

-

times/
times（100%）Rei
Yamashita

In addition to having her excellent
character, insight, and ability, she is wellversed in corporate management andother ﬁelds as a certiﬁed public
accountant. In light of her expertise andexperience in each of these ﬁelds, we
believe she is qualiﬁed to serve as a
Supervisory Director of SHR, and haveappointed her as a Supervisory Director.

-

times/
times（100%）

Supervisory
Director (Note )(Note )

（Note ） Shigeru Nomura and Tatsushi Omiya retired on January , due to the expiration of their terms of oﬃce. Yu Yada
and Rei Yamashita were appointed as new Supervisory Directors, and they took oﬃce on February , .
（Note ） Supervisory Directors of SHR are independent oﬃcers who have no special interest with SHR based on Article of the
Act on Investment Trusts and Investment Corporations (Investment Trust Act) as well as Article of the Regulation for
Enforcement of the Act on Investment Trusts and Investment Corporations.

Click here for biographies of current directors.
73

Promoting Diversity among Directors

Based on the belief that diversity is important to SHR, we promote diversity in the composition of directors. In
January , a female Supervisory Director (Rei Yamashita) was appointed, and the ratio of female directors
rose to . %.

Restrictions on the Sale and Purchase of Investment Units, etc. by Directors
From the viewpoint of preventing insider trading, SHR’s “Insider Trading Management Regulation” prohibits
Directors of SHR from buying and selling investment units or investment corporation bonds issued by SHR.
Thus, none of our Executive Director or Supervisory Directors holds the investment units or investment
corporation bonds of SHR.

Director's Remuneration
The upper limit of remunerations for executive directors and supervisory directors is stipulated in the Articles
of Incorporation and the amount is determined at the Board of Directors (however, the upper limit per person
is 1,000,000 yen per month for an executive director, and 500,000 yen per month for a supervisory director).
Directors' compensation is as follows.
Remuneration Amount (Thousand yen)

Position

Name

Executive
Director

Atsuhiro
Kida

-

-

Shigeru
Nomura900-

Tatsushi
Omiya

900

-

Yu Yada

900

1,800

Rei
Yamashita

900

1,800

Supervisory
Director (Note)

FP ended Apr. 2022
(15th FP)FP ended Oct. 2022
(16th FP)

(Note) Shigeru Nomura and Tatsushi Omiya retired on January 31, 2022 due to the expiration of
their terms of office. Yu Yada and Rei Yamashita were appointed as new Supervisory
Directors, and they took office on February 1, 2022.
74

Accounting Auditor
Accounting auditor
NameErnst & Young ShinNihon LLC

Continuous Audit Period
From September
present

until

Accounting Auditor's Compensation

The compensation for the accounting auditor is set by the Investment Corporation's Board of Directors at a
maximum of 25 million yen for each fiscal period covered by the audit.
Accounting auditor

Ernst & Young ShinNihon LLC

Compensation Amount (Thousand yen)Compensation
Details

FP ended Apr.
( th FP)

Compensation
based on audit
attestation services

FP ended Oct.
( th FP),

Compensation for
non-audit
services (Note),-(Note) The compensation amount for the services of preparing comfort letters is stated.

75-

Organizational Structure
The organizational structure of SHAM, to which SHR entrusts the management of its assets, is as below.

Organization Chart of SHAM

< Overview of each organ >NameOverview
Composition
Chair: President & Representative Director
Members: All Directors and Auditors
Frequency of meetings
A meeting of the Board of Directors is held once a month.
An extraordinary meeting of the Board of Directors is called as needed

Board of Directors

Requirements for Resolution
Resolutions shall be adopted by a majority of the Directors present at a meeting where a majority of the Directors
who are entitled to participate in the voting are present. Also, Directors who have a special interest in theproceedings of the Board of Directors cannot participate in voting.
Resolutions
In addition to matters stipulated in laws and regulations or the Articles of Incorporation, the Board of Directors
decides the following matters;
Matters relating to the general meeting of shareholders of SHAM
Matters relating to Directors, employees, etc. of SHAM
Matters relating to the assets or ﬁnances of SHAM
Important matters relating to the business operations of SHAM
Important matters relating to the asset management of SHR
Matters relating to compliance
Other important matters related to the execution of business operations
76

Name

Overview
Composition
Committee Chairman: President & Representative Director
Committee members: All full-time Directors, including the Compliance Oﬃcer who holds the position of Director;
the Chief Manager of the ESG Promotion Dept.; the Chief Manager of the Internal Control Promotion Dept.; theChief Manager of the Investment Operations Div.; the Chief Managers of the Finance Dept., IR Dept., Accounting
Dept., and General Aﬀairs Dept.; and external committee members
For the current external committee members, a total of two people have been appointed: one real estate appraiser
and one attorney who have no particular interest with SHAM or the directors and employees, or interested partiesof SHAM （Note）
Frequency of meetings
In principle, held at least once every three months, and as needed

Investment
Committee

Compliance
Committee

Holding/Resolution requirements
Established with the attendance of a majority of members of the committee who can participate in voting
However, attendance of the following persons is required: the Committee Chairman, the Compliance Oﬃcer who
holds the position of Director, the Chief Manager of the Investment Operations Div., and at least one of the external
committee member with the qualiﬁcation of a real estate appraiser
Resolutions shall be adopted by all voting members present, including external committee members
Contents of deliberation
Development and revision of the investment policy and investment plan of SHR
Development and revision of SHR's management policy and management plan
Development and revision of the basic policy relating to the ﬁnancing of SHR
Decision to acquire and sell the assets of SHR
Decision to lease, outsource management, or carry out construction work of SHR's assets (limited to those
stipulated in SHAM's “Rules on Administrative Authorities”)
Development and revision of long-term repair plans
Determination of matters relating to the ﬁnancing of SHR
Determination of other transactions between SHR and interested parties as stipulated in the “Rules forTransactions with Interested Parties”
Important matters relating to the investment policy of SHR
Matters for which each committee member requested deliberation and resolution
Matters deemed necessary by the Committee Chairman and matters separately stipulated by the internal
regulations of SHAM
Other incidental matters
Composition
Committee Chairman: Compliance Oﬃcer
Committee members: All full-time Directors, including the President & Representative Director, and an external
committee member
For the current external committee member, one attorney who has no particular interest with SHAM or the
directors and employees, or interested parties of SHAM has been appointed （Note）
Frequency of meetings
In principle, held at least once every three months, and as needed
Holding/Resolution requirements
Established with the attendance of a majority of members of the committee who can participate in voting
However, attendance of the Committee Chairman and the external committee member is required
Resolutions shall be adopted by the aﬃrmative vote of the Committee Chairman and all voting members present,
including the external committee member
77

Name

Compliance
Committee

Overview
Contents of deliberation
Determination of transactions between SHR and interested parties
Development and revision of compliance regulations, compliance manuals, and compliance programs
Development and revision of Internal Audit Regulations
Matters relating to the risk management of SHAM
Matters for which the Committee Chairman requested deliberation and resolution
Matters deemed necessary by the Committee Chairman and matters separately stipulated by the internal
regulations of SHAM
Matters relating to the handling of complaints, etc. against SHAM and other matters relating to acts that are
inappropriate or suspected to be inappropriate in terms of complianceDecision to acquire and sell the assets of SHR
Other incidental matters（Note） The appointment or dismissal of external committee members is carried out by resolution of the Board of Directors of SHAM, but it is necessary to obtain approval
from the Board of Directors of SHR before or after the resolution of the Board of Directors of SHAM.

78

Asset Management Fee
Concerning the asset management fee paid by SHR to SHAM, the following management fee structure has
been adopted from the viewpoint of emphasizing linkage with unitholder proﬁts. Regarding the managementfee ①, SHR introduced a mechanism of “fees linked to total assets and unit price performance”, in which thefee rate ﬂuctuates by comparing the performance of the investment unit price of SHR with the performance of
the Tokyo Stock Exchange REIT Index. Through this process, we are further strengthening the incentives tomaximize the unitholder value of SHR by aligning the interests of SHAM and, consequently, Sekisui House, as astockholder of SHAM, with the interests of unitholders of SHR.
Compensation Amount (Thousand yen)
FP ended Apr.
( th FP)Management Fee ①(Fees linked to total assets and unit price performance)
Total assets x ( . % (annual rate) +Rates linked to the Tokyo Stock Exchange REIT Index) (Note )Management Fee ②(Fees linked to DPU and operating income)(Distributable amount per unit (Note ) ×
Operating income (Note )× . %）× (Note )FP ended Oct.
( th FP)
,

,

,

,

Management Fee ③(Acquisition fees)-

Trading value related to the acquisition ofreal estate-related assets (Note ) × . %(In the case of acquisition from interested parties,
there is no acquisition fee),Management Fee ④(Disposition fees)
Trading value related to the disposition ofreal estate-related assets (Note ) × . %(In the case of disposition from interested parties,
there is no disposition fee)Management Fee ⑤(Merger fees)
Value of real estate-related assets held by
the merger counterparty at the time of the merger x . %

-

-

-

-

(Note ) With regard to rates, unless otherwise speciﬁed, applicable rates or expected rates are stated instead of maximum
rates.
(Note ) The upper and lower limits of rates linked to the Tokyo Stock Exchange REIT Index performance is are . % and- . % respectively. * The rate ﬂuctuates depending on the performance of the investment unit price of SHR incomparison with the Tokyo Stock Exchange REIT Index.
79

(Note ) Calculated as the distributable amount before deduction of Management Fee ②divided by the total number ofissued investment units.
(Note ) Operating Income of before deduction of Management Fee ②.
(Note ) As SHR implemented a -for- split of the investment units with May , as the eﬀective date,Management Fee ②
formula includes multiplication , which is the split ratio.
(Note ) The trading value does not include consumption tax, etc. and expenses, etc.

Evaluation of the Effectiveness of SHR’s Board of Directors and
SHAM’s Board of Directors
SHR and SHAM set "Enhancing the effectiveness of SHR's Board of Directors and SHAM's Board of Directors" aswell as "Conducting effectiveness evaluation questionnaire" as KPIs, and conducted self-evaluation. With thisself-evaluation, we do not only confirm whether the respective Boards of Directors fulfill their roles
responsibly, but enhance the effectiveness of the respective Boards of Director.
Effectiveness evaluation questionnaire is conducted once a year so that Executive Director, Supervisory
Directors, Directors, and Auditors can identify issues to be addressed and make progress.

80GovernanceCompliance
Compliance Policy
At SHAM, compliance means that directors and employees accurately understand the purpose and contents oflaws and regulations, comply with them, and execute sincere and fair corporate activities that do not conflictwith social norms. SHAM has established compliance rules to provide a system for directors and employees tocomply with laws and regulations, properly manage the assets, and ensure proper business operations. Basedon the basic policy described below, SHAM is working to ensure thorough compliance.

【 Basic Policies 】
a. SHAM is fully aware that lack of compliance could undermine SHAM’s management base, and has
positioned thorough compliance as one of its most important management issues.
b. As a company that conducts financial instruments business and manages the assets of registeredinvestment corporations, SHAM recognizes its responsibility to strive to realize the value of the worksof SHAM, which is socially demanded. To increase the value of the work of SHAM qualitatively andquantitatively, SHAM will actively and constantly engage in compliance.
c. SHAM aims to contribute to the development of the economy and society by developing the abovementioned compliance activities, thereby enhancing the reputation from investors and establishing
the trust of society at large.
Sekisui House Group (the Group), to which SHAM belongs, regards compliance as a management issue thatshould be constantly addressed, and strives to ensure and promote thorough compliance. The group operates
the "Sekisui House Group Corporate Ethics Guidelines" as a set of matters concerning common corporate
ethics observed by the company, directors, and employees. The Group designates October as "Corporate
Ethics Month" every year, and works to further inform all group directors and employees of corporate ethics
through training and other means. As part of "Corporate Ethics Month", all directors and employees are
obliged to submit "Written Pledge to Comply with the Corporate Ethics Principles" every year and strive to act
in accordance with corporate ethics. The Group will continue to work together to thoroughly enforce corporate
ethics.
Sekisui House Group Corporate Ethics Guidelines81Compliance System
SHAM has established the following departments and institutions intending to ensure compliance.

[Internal Control Promotion Department and Compliance Officer]
SHAM has established the Internal Control Promotion Department which conducts work related to
SHAM's risk management, monitors the status of compliance with legislation and regulations, andmanages internal auditing. SHAM has also appointed a Compliance Officer as the person responsible foroverseeing the compliance of SHR and SHAM in addition to the operations of the Internal Control
Promotion Department. The Compliance Officer is appointed as personnel with sufficient screening andsurveillance capabilities to observe compliance with legislation and norms, develop SHAM's complianceregulations and cultivate compliance awareness among directors and employees of SHAM.

[Compliance Committee]
SHAM has established the Compliance Committee as a body to deliberate and decide on compliancematters in the management of SHR's assets.

[Investment Committee]
SHAM has established the Investment Committee as an organization that deliberates and decides on theinvestment policy of SHR and other matters related to asset management. In making resolutions at theInvestment Committee meetings, the Compliance Officer shall verify whether or not there is any
problem from the perspective of compliance with laws, regulations, rules and other compliance issues.
If Compliance Officer determines that there is a serious compliance problem, Compliance Officer shallorder the Investment Committee to suspend its deliberations or return the proposal to the drafting
department even during the deliberations of the Investment Committee.
Click here for the details of Investment Committee and Compliance Committee.

82Compliance Training
SHAM has established its compliance and internal control system in accordance with "the Financial
Instruments and Exchange Act", "the Comprehensive Guidelines for Supervision of Financial Instruments
Business Operators, etc." and "the Findings from Inspections". To gain the trust of stakeholders, SHAM
recognizes that directors and employees must understand the importance of compliance and act in acompliant manner in their daily operations in addition to the establishment of the compliance system.
Therefore, SHAM has set "Conducting compliance training by external experts for all directors and employees
four times a year, and achieving 100% participation rate" as a KPI, and is working to create the organizational
culture that emphasizes compliance, creating opportunities for all directors and employees to deepen theunderstanding of compliance and raise the awareness of compliance through compliance training.
Click here for the implementation status of compliance training.

fforts to Prevent Bribery, Corruption, etc.
Efforts
Sekisui House Group, to which SHAM belongs, operates the “Sekisui House Group Corporate Ethics Guidelines”
as a set of matters concerning common corporate ethics observed by the company, directors, and employees.
The “Sekisui House Group Corporate Ethics Guidelines” stipulates that when making political donations,executives and employees must comply with the Public Offices Election Law, the Political Funding Regulation
Law, and other relevant laws and regulations, strictly refrain from collusion with politics through bribery as
well as profiteering, and obtain approval per internal rules before making various donations andcontributions. We strive to build sound and highly transparent relationships while revising the content of the
Guidelines as appropriate in response to changes in the business environment.
Click here for Sekisui House Group Corporate Ethics Guidelines.
SHAM has formulated the “Compliance Manual” as a specific guide for directors and employees to implement
compliance, and has stipulated the prohibition of fraudulent acts, such as money laundering, insider trading,bribery, embezzlement for self-interest, etc. Directors and employees who engage in improper conduct are
subject to strict punishment/disciplinary action following internal regulations. In addition, SHAM has set up a
monitoring and consultation system, such as a whistleblower system, that allows directors and employees toanonymously consult or report, and by accepting consultations or reports on compliance issues such as actsthat violate laws and corporate ethics, to minimize problems and prevent risks.

83

Internal Reporting System
To prevent compliance risks from happening and minimize the impacts of noncompliance occurred, SHAM
established the system called "Compliance Hotline" (hereinafter referred to as the “Hotline”) which directors
and employees can consult with or report to about compliance issues related to violations of laws, regulations,and corporate ethics. The Hotline accepts and appropriately handles consultation or reporting oforganizational or individual violations of laws and regulations in accordance with the Whistleblower
Protection Act.
The Compliance Officer is selected as the person in charge of the Hotline. The Compliance Officer or theInternal Control Promotion Dept. functions as the contact point while the contact point may be entrusted toan external party (such as a law office) to protect whistleblowers from being exposed. Reports or consultations
are accepted face-to-face, in writing, by email, telephone, etc. from all directors and employees including
contract employees, part-time employees, temporary employees, and retirees who were employed within one
year before the reported date. Anonymous reporting is also accepted. Once a report is accepted from awhistleblower, a person of the contact point conducts necessary investigations to confirm facts and promptly
notifies the Compliance Officer with summarized details of the incident. If violations of laws or regulations are
revealed as a result of the investigation, SHAM will promptly take corrective measures to prevent the same orsimilar incidents from happening, and carry out internal disciplinary actions to related parties as needed.
The protection of the privacy of whistleblowers and the prohibition of unfavorable treatments from apersonnel, economic, daily life, or mental health standpoint, and other related matters are clearly stated on
the “Compliance Hotline Rules” . Even after reports are closed, SHAM continues to confirm that thewhistleblowers are not being harassed but being protected.
Directors and employees of SHAM have the access to the Sekisui House Group Compliance Helpline(hereinafter referred to as the “Helpline”) established by the Sekisui House Group. The Helpline is for directors
and employees of the Sekisui House Group as well as those of the Group's business partners who have theongoing business relationships with the Sekisui House Group, to consult on matters that are difficult to beresolved through normal reporting channels. A lawyer’s office has been set up as an external contact point,
and the Compliance Office in the Legal Department of Sekisui House has been established as an internal
contact point. Anonymous reporting is also accepted.

84Internal Audit System
Based on the concept of corporate ethics standards stipulated in the Sekisui House Group Corporate Ethics
Guidelines, SHAM aims to improve operations and ensure sound management by conducting internal audits ofall departments and their operations, twice a year in principle. Internal audits are conducted by theCompliance Oﬃcer and the Internal Control Promotion Department, headed by the Compliance Oﬃcer. For
the implementation of internal audits, SHAM will formulate an internal audit plan for each business year basedon the internal audit rules, and then verify whether the business is being carried out appropriately andeﬃciently in line with laws, internal regulations, etc. The results are then reported to the Compliance
Committee, President & Representative Director, and the Board of Directors, and a policy is in place to provide
recommendations and instructions for improvement to the relevant organizations and departments asnecessary.
SHAM has also introduced an evaluation system from external perspectives by conducting audits by external
specialist organizations as necessary.

Prevention Measures for Conﬂict-of-Interest Transactions
SHAM has stipulated the Rules for Transactions with Interested Parties concerning transactions between theInterested Parties of SHAM and SHR as an internal rule to exclude the adverse eﬀect of conﬂicts of interest. An
overview of Rules for Transactions with Interested Parties is as follows:【Scope of Interested Parties】
From the viewpoint of preventing conﬂict of interest transactions, the scope of "Interested Parties" in
SHAM has been expanded from the “interested persons, etc.” under the Act on Investment Trusts andInvestment Corporations (Investment Trust Act) as follows.
a. "Interested Parties, etc." as deﬁned in the Investment Trust Act
b. Shareholder of SHAM
c. Special Purpose Companies, etc. for which discretionary investment contracts are concluded bythose stipulated in (a) or (b) aboved. Special Purpose Companies, etc. in which the total amount of the contributions by those outlined in(a) or (b) above is a majority of the total contributions

85

Transaction Terms with Interested Parties
Acquisition of property fromInterested Parties

The acquisition price (excluding taxes, cost of acquisition and others)
must be no more than the amount of the appraisal value, etc.
determined by a real estate appraiser who is a non-interested party
appointed at the time of the acquisition. (However, in the event that a
SPC is temporarily formed on the assumption that the property will betransferred to SHR, the acquisition price must be no more than theamount adding such cost.)

Sale of property toInterested Parties

The sale price (excluding taxes, cost of transfer and others) must be noless than the amount of the appraisal value determined by a real estateappraiser who is a non-interested party appointed at the time of thesale.

Payment of an agency fee toInterested Parties

The amount of agency fee to be paid must be within the range of
remuneration set forth in the Building Lots and Buildings Transaction
Business Act and decided based on the level of contract terms and the
diﬃculty level of brokerage, etc.

Entrusting management,
etc. of real estate and otherassets to Interested Parties

Entrustment of management services, etc. for real estate and otherassets must be based on conditions considered adequate upon
comprehensive consideration of market levels of management
consignment fees, the content of services to be provided, total
workloads and so on. (The appropriateness of contractors is veriﬁed byindependent external evaluation organizations which have no interest
with SHAM once a year, in principle.)

Conclusion of leasing
contract for real estate andother assets with Interested
Parties

Lease contracts must be based on conditions considered adequate
upon investigation of market rent levels and prices of similartransactions in surrounding areas, etc. and by reference to the opinionsof third parties, who are non-interested parties, as needed.

Placing orders forconstruction work, etc. with
Interested Parties

If the contract amount exceeds a certain amount, placement of orders
with Interested Parties must be limited to cases in which the estimatedprice, content of services provided, etc. are not disadvantageous to SHR
upon comparison with third parties.

In addition, for the purpose of tightening examinations on transactions with interested parties, including theacquisition of portfolio assets and the entrustment of property management services, SHAM has adopted
frameworks under which each decision to be made by the Investment Committee and Compliance Committee
must be conditional upon the attendance and assent by external members appointed from professionals who
have no special interest with Interested Parties of SHAM, such as Sekisui House; and preliminary review by theCompliance Oﬃcer and the Internal Control Promotion Department, deliberations and resolution in respective
meetings of the Investment Committee and Compliance Committee, and deliberations and resolution for
approval of the Board of Directors of SHAM, and consent of SHR based on deliberations and resolution of theBoard of SHR are required.
86

An Example of Decision Making Flow

(Note) Approval includes consent of SHR on said approval.

Sekisui House Ownership of SHR's Investment Units (SameBoat Investment)
SHR has accepted same boat investment from Sekisui House to align the interests of the investors and thesponsor Sekisui House.
Click here to see the number and percentage of units held by Sekisui House.

87GovernanceRisk Management
Risk Management System
SHAM has stipulated in its Risk Management Regulations the methods of risk management, monitoring thestatus of risk management, and how to respond in the event of unforeseen serious contingencies, etc.
As shown in the cycle below, under the supervision of the directors in charge, each department identifies andassesses the risks facing that department. Each department implements measures according to the risk
management plan formulated based on the results for each business year.
The progress of the efforts is monitored semi-annually at the Risk Management Meeting, which is made up of
all full-time directors and head of department, and improvement instructions and improvement policies are
examined as necessary before reporting to the Compliance Committee and the Board of Directors.

88Enhancement of Information Security
To minimize the risks of information leakage, operation shutdown caused by cyber attacks, and other risks
that could hinder the continuation of business, the Sekisui House Group strives to strengthen Corporate
Governance System about information security regarding the establishment of the group-wide information
security governance system as a key initiative, based on "Information Security Policy" regarded as Sekisui
House Group's Basic Policy and "Conﬁdential Information Management Regulation".
Click here for the Sekisui House Group Information Security Policy (Japanese Only).
In preparation for security information incidents such as opening targeted attack emails intended to infect
SHAM's computer servers, mobile devices, etc. SHAM has established Response Procedures and conducts drills
for directors as well as employees to be prepared for such occasions.
In addition, SHAM established "Information Management Regulations", "In-house Information System
Management Manual" and "Mobile Device Operation Manual" as specific guidance for directors andemployees, clearly stating information management in daily operations, the proper way to use mobile devices
and what to do in case of an information security incident. SHAM strictly manages its information assets byensuring that employees and directors perform their duties in accordance with these manuals.
Violations by employees or directors of any of the above regulations and manuals, he or she will be punishedin accordance with the employment regulations.

89

Sustainability FinanceGreen FinanceGreen Finance
SHR, which conducts asset management with due consideration given to the environment, society, andgovernance (collectively referred to as “ESG”), advocates contributing to the realization of a sustainable
society as our Sustainability Policy. While utilizing the know-how on operation and management of real estate
possessed by the sponsor, Sekisui House, Ltd., SHR promotes such initiatives as energy saving, environmental
consideration, and ensuring living safety and business continuity to enhance the satisfaction of residents andtenants at owned properties.
As part of such initiatives, SHR procures funds through green finance (green bonds and green loans) in order tofurther promote real estate investment management with considerations given to ESG and strengthen its
financial base.

Green Finance Framework
SHR has formulated the Green Finance Framework as follows to implement green finance that conforms to theGreen Bond Principles and other various principles and guidelines.

1.Use of funds
The funds procured through green finance are scheduled to be allotted to funds for the acquisition of existingor new assets which satisfy the following eligibility criteria (“Eligible Green Projects”), funds for the refinancing
of borrowings required for the acquisition of Eligible Green Projects or funds for the redemption ofoutstanding investment corporation bonds required for the acquisition of Eligible Green Projects.

90

.Eligibility criteria
At the borrowing or payment date of green finance, assets that have acquired or are scheduled to acquire anyof the following evaluations in third-party certifications, shall be designated as Eligible Green Projects.
a. DBJ Green Building Certification: 3 Stars, 4 Stars, 5 Starsb. Certification for CASBEE for Real Estate: B+ Rank, A Rank, S Rank
c. BELS Certification: 3 Stars, 4 Stars, 5 Stars
d. BELS Certification: following assessment of ZEH and ZEB
ⅰ. ZEH-M, Nearly ZEH-M, ZEH-M Ready, ZEH-M Oriented
ⅱ. ZEB, Nearly ZEB, ZEB Ready, ZEB Oriented

3.Evaluation and selection process of Eligible Green Projects
Eligible Green Projects will be evaluated and selected by the Sustainability Committee, which is chaired by thepresident & representative director of Sekisui House Asset Management, Ltd., and participated by all full-time
directors, in accordance with its management policy, the Sustainability Policy and eligibility criteria.

4.Management of procured funds
SHR intends to allot the funds procured through green finance towards Eligible Green Projects. As long as thegreen finance balance exists, SHR will manage to ensure that the green finance balance does not exceed the
Eligible Green Liability (Note).
In addition, SHR will report that the total amount of funds procured through green finance has been fully
allocated to Eligible Green Projects and as long as the green finance balance exists, the allocated funds will be
tracked and managed internally on a portfolio basis.
In the event that all or part of the funds procured through green finance are not immediately allocated to
Eligible Green Projects, SHR will identify unappropriated funds and manage all or part of the funds raised in
cash or cash equivalents until the unappropriated funds are allocated to Eligible Green Projects.
(Note) Eligible Green Liability is calculated by multiplying total acquisition price of Eligible Green Projects by LTV (total asset
basis) as of the end of the latest fiscal period. The same applies hereinafter.

5.Reportinga. Reporting related to the status of allocation of funds

SHR will disclose that the funds procured through green finance has been fully allocated to Eligible Green
Projects according to the Framework and the green finance balance does not exceed the Eligible Green
Liability via SHR’s website. As long as the green finance balance exists, SHR will report the amount of Eligible
Green Liability and the green finance balance annually as of the end of March every year.

91

b. Impact reporting

As long as the green ﬁnancing balance exists, SHR will disclose following environment-related indicators, etc.,
annually as of the end of March every year via SHR’s website.
ⅰ. The number of Eligible Green Projects and acquired evaluations in third-party certiﬁcations
ⅱ. Total floor area of Eligible Green Projects
ⅲ. Eligible Green Liability
ⅳ. The following quantitative indicators for Eligible Green Projects (Note)(ⅰ) Energy consumption(ⅱ) CO₂ emissions(ⅲ) Water consumption(Note) Only properties for which SHR has the energy management authority.

Third-party evaluation
SHR acquired “Green 1(F)”, the highest rating in “Green Finance Framework Evaluation” from Japan Credit
Rating Agency, Ltd. (JCR) as a third-party evaluation of the Framework.
Click here for details of the “Green Finance Framework Evaluation”.

The Latest Reporting
Green Finance Reporting will be available soon.
Click here for Green Bond Reporting.

Green Finance Allocation Status(As of February ,Total Amount（Million yen）
Green Finance),Green Bonds,

Green Loans,

92Green Bonds
Issued Amount(million yen)

Issue Date

Redemption Date

The st Green Bonds(The rd Unsecured Investment Corporation
Bonds),

Jul. ,

Jul. ,The nd Green Bonds(The th Unsecured Investment Corporation
Bonds),

Jul. ,

Jul. ,The rd Green Bonds(The th Unsecured Investment Corporation
Bonds),

Nov. ,

Nov. ,The th Green Bonds(The th Unsecured Investment Corporation
Bonds),

Feb. ,

Feb. ,The th Green Bonds(The th Unsecured Investment Corporation
Bonds),

Sep. ,

Sep. ,The th Green Bonds(The th Unsecured Investment Corporation
Bonds),

Sep. ,

Sep. ,The th Green Bonds(The th Unsecured Investment Corporation
Bonds)

,

May ,

May ,

Total

,

-

-

(Note) SHR formulated the Green Bond Framework in , and the ﬁrst through seventh Green Bonds have been issued in accordance with theGreen Bond Framework. In addition, SHR has obtained a third-party opinion from Sustainalytics, an ESG rating agency, for the eligibility of its
Green Bond Framework.

Click here for the details of the Green Bond Framework.
Click here for Green Bond Assertions issued under the Green Bond Framework.

93

Green Loans
Lenders

Borrowing Amount(million yen)

Drawdown Date

Repayment Date,

Jan. ,

Feb. ,

Jan. ,

Feb. ,

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Mizuho Trust & Banking Co., Ltd.
Resona Bank, Limited.
The Shizuoka Bank, Ltd.
The Hiroshima Bank, Ltd.
Aozora Bank, Ltd.
The Joyo Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
The Norinchukin Bank
Shinkin Central Bank
The Bank, Ltd.
The Yamaguchi Bank, Ltd.
Nippon Life Insurance Company
THE NISHI-NIPPON CITY BANK, LTD.

,

Jan. ,

Feb. ,

Sumitomo Mitsui Banking Corporation
The Bank of Fukuoka, Ltd.
The Juhachi‐Shinwa Bank, Ltd.

,

Jan. ,

Feb. ,

Jan. ,

Feb. ,MUFG Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Mizuho Trust & Banking Co., Ltd.
Resona Bank, Limited.
The Shizuoka Bank, Ltd.

,

Feb. ,

Feb. ,

Mizuho Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.
The Norinchukin Bank
Development Bank of Japan Inc.
The Bank of Fukuoka, Ltd.
Shinkin Central Bank
The Bank, Ltd.
The Yamaguchi Bank, Ltd.
The Senshu Ikeda Bank, Ltd.
The Hiroshima Bank, Ltd.
Aozora Bank, Ltd.

,

Feb. ,

Feb. ,

Feb. ,

Feb. ,--MUFG Bank, Ltd.

Total

,

94

Sustainability FinancePositive Impact Finance
SHR received a loan under the Positive Impact Finance (“PIF”) scheme from the syndicate of lenders in which
Sumitomo Mitsui Trust Bank, Ltd. (“Sumitomo Mitsui Trust Bank”) acts as an arranger in accordance with the"Principles" for PIF and the model framework of the Principles (Model Framework for financial products forcorporates with unspecified used of funds and the Real Estate Investment Framework) issued by the United
Nations Environment Programme Finance Initiative (“UNEP FI”) .
PIF is a loan intended to continuously support corporations’ activities of which they comprehensively analyze
and evaluate the impacts (both positive and negative) on the environment, society and economy. The mostnotable feature of PIF is that the degree of contribution from corporate activities, products, and services inachieving Sustainable Development Goals (“SDGs”) is used as an evaluation indicator and is monitored basedon publicly disclosed information while supporting such corporate activities through engagement.
SHR has selected the themes among the materiality issues as activities that particularly have an impact on theachievement of SDGs, and received qualitative and quantitative evaluations from Sumitomo Mitsui Trust Bank.
SHR has also obtained a third-party opinion from Japan Credit Rating Agency, Ltd. regarding the compliance ofthe procedures related to this evaluation with the Principles as well as the rationality of the evaluation
indicators.
Loan amount

6,000 million yen

Applicable interest rate

0.665%

Drawdown date

May 31, 2022

Period7 years

Click here to view details about the PIF and the relevant press release.

95

ESG Library

ESG Report
ESG Report
An ESG report is issued once a year to engage with stakeholders and has readers
understand the efforts
eﬀorts made by SHR and SHAM toward realizing a sustainable
society.

Previous ESG Reports
December ,ESG Report

PDF( . MB)

December ,ESG Report

PDF

( KB)

Sekisui House, Ltd. Integrated Report "Value Report
Engagement"- Our

Sekisui House, Ltd. has released an integrated report, "Value Report - Our
Engagement," intending to tell the story of our corporate value from business,ﬁnancial, and non-ﬁnancial perspectives. "Value Report " was designed toshowcase to Sekisui House's values that have been built up since its foundation
through its corporate story, to identify materiality, and to produce a report thatshows the process of providing "Happiness" to customers, society, andemployees, and the value creation process that leads to our global vision.
The Sekisui House Group will continue to strive for timely, appropriate, andtransparent disclosure of information, and by solving social issues, we will meetthe expectations of our stakeholders and contribute to the realization of asustainable society.
96

ESG Library

ESG Data
Environment
CO₂
Entire Portfolio

Unit

Total CO₂ emission
Scope

t-CO₂

Scope

FY
(Base year)

FY

FY

FY

,

,

,

,

,

,

,

,

,

,

-

-

-

,

Scope

,

CO₂ emission intensity

t-CO₂/㎡.

.

.

Residence

Unit

FY(Base year)

FY

FY

Total CO₂ emission

t-CO₂

,

,

,

,

CO₂ emission intensity

t-CO₂/㎡

.

.

.

.

Oﬃce Building

Unit

FY
(Base year)

FY

FY

Total CO₂ emission

t-CO₂

,

,

,

,

CO₂ emission intensity

t-CO₂/㎡

.

.

.

.

Hotel

Unit

FY
(Base year)

FY

FY

Total CO₂ emission

t-CO₂

,

,

,

,

CO₂ emission intensity

t-CO₂/㎡

.

.

.

.

97

.
FY

FY

FY

Energy
Entire Portfolio
Total energy
consumption
Electricity

Unit

MWh

Fuel

FY
(Base year)

FY

FY

FY

,

,

,

,

,

,

,

,

,

,

,

,
.

Energy consumption
intensity

MWh/㎡

.

.

.

Residence

Unit

FY(Base year)

FY

FY

,

,

,

,

,

,

,

,

Total energy
consumption
Electricity

MWh

Fuel

-

FY

-

-

Energy consumption
intensity

MWh/㎡

.

.

.

Oﬃce Building

Unit

FY
(Base year)

FY

FY

Total energy
consumption
Electricity

MWh

Fuel

,

,

,

,

,

,

,

,

,

,

,

,
.

MWh/㎡

.

.

.

Hotel

Unit

FY
(Base year)

FY

FYElectricity

MWh

Fuel
Energy consumption
intensity

MWh/㎡

.
FY

Energy consumption
intensity

Total energy
consumption

-

FY

,

,

,

,

,

,

,

,

,

,

,

,

.

.

.

.

98

WasteEntire Portfolio

Unit

Total waste emission

FY(Base year)

FY

,

,

FY

FY

Landﬁll
Incineration
Recycled

t

Reuse

-

-

Other

-

-

-

Waste emission intensity

kg/㎡

.

.

.

Oﬃce Building

Unit

FY
(Base year)

FY

FY

.
FY

Total waste emission
Landﬁll
Incineration
Recycled

t

Reuse

-

-

Other

-

-

-

Waste emission intensity

kg/㎡

.

.

.

Hotel

Unit

FY
(Base year)

FY

FY

,
FY

Total waste emission
Landﬁll
Incineration
Recycled

t

Reuse

-

-

-

Other

-

-

-

Waste emission intensity

kg/㎡

.

.

99

.

.

WaterEntire Portfolio

Unit

FY
(Base year)

Total water use
Rainwater

FY

,
㎥
㎥/㎡

.

Residence

Unit

FY(Base year)㎥

City water

,

.
FY

FY

,

,

,

,

-

-

-

-

,

,

,

,

.

.

Oﬃce Building

Unit

FY
(Base year)

FY

FY

,

Water use intensity
Hotel

,

,

,
,

,
,

.

.

.

Unit

FY
(Base year)

FY

FY

,
.
FY

,

,

,

,

-

-

-

-

,

,

,

,

㎥/㎡

.

.

.

.

Unit

FY

FY

FY

FY

,

,

,

,

㎥

City water
Water use intensity,㎥/㎡

Total water use
Rainwater

,

.
FY

,

,

City water

.

FY

.

㎥

,

.

㎥/㎡

Rainwater,,

Water use intensity

Total water use

,

,

,

Total water use,,

Water use intensity

FY

,

,

City water

Rainwater

FY

Renewable Energy
Renewable energy
consumption
Generated
Purchased

MWh100

Introduction of LED Lighting (common areas of residences)
Unit

Cumulative no. of
implemented
properties

Properties

Prospected reductionof powerconsumption

MWhProspected reductionof CO₂ emission

t-CO₂

FP ended Apr.
（13th FP）

FP ended Oct.
（14th FP）

FP ended Apr.
（15th FP）,,,

（Note） The ﬁgures for each expected reduction are estimated by SHAM based on materials provided by the replacement contractor or materials published by the Agency
for Natural Resources and Energy of the Ministry of Economy, Trade and Industry. There is no guarantee that the expected reductions will be realized.

Introduction of Energy-Saving Air Conditioner Installations (exclusive area ofresidences)
Unit

FP ended Apr.
（13th FP）

FP ended Oct.
（14th FP）

FP ended Apr.
（15th FP）

Cumulative no. of
installations

Unit

,

,

,

Prospected reductionof powerconsumption

MWhProspected reductionof CO₂ emissiont-CO₂(Note) The ﬁgures for each expected reduction are estimated by SHAM based on materials provided by the replacement contractor or materials published by the Agency
for Natural Resources and Energy of the Ministry of Economy, Trade and Industry. There is no guarantee that the expected reductions will be realized.

Green Certiﬁcation
Unit

Percentage of theportfolio with green
certiﬁcation(total ﬂoor basis)％

End of FP ended Oct.
（14th FP）.

End of FP ended Apr.
（15th FP）.

101

End of FP ended Oct.
（16th FP）.

Information Related to Calculation of Environmental Performance Data

Scope

Properties held as of the end of March every year for which SHR has energy management authority(excluding properties disposed of during the period and areas for which it is diﬃcult to acquire data because
tenants have management authority, among other reasons)

Data Coverage（FY

）

CO₂

.%

Energy

.%

Waste

.%

Water

.%

(Note) Data coverage is calculated as total ﬂoor space of properties subject to data acquisition / total ﬂoor space.

Aggregation Period

From April of each year to the end of March of the following year
(Figures of LED lighting, energy-saving air conditioner, and green certiﬁcation are calculated for each period.)

Reference Guidelines

Ministry of the Environment “Greenhouse gas emission calculation / reporting / publication system”
Ministry of the Environment and Ministry of Economy, Trade and Industry “Basic Guidelines on Accounting forGreenhouse Gas Emissions throughout the Supply Chain (ver. . )”102

Calculation Standards
Classiﬁcation

CO₂

EnergyWater
Waste
Renewable
EnergyItem

Amount ofemissions

Calculation Method
Scope

Direct greenhouse gas emissions by the business operator itself where the amount of activity(amount of fuel use) in common areas × the emission factor

Scope

Indirect emissions associated with the use of electricity, heat, and steam supplied from othercompanies where the amount of activity in common areas (amount of energy purchased) ×
the emission factor

Scope

Leased assets (downstream) in category where the amount of tenants' activity (amount offuel use and amount of energy purchased) in exclusive area × the emission factor
Note that Scope is calculated separately from FY

Intensity

CO₂ emissions/Total ﬂoor area

Amount ofconsumption

Amount of fuel use and energy purchased × Energy conversion factor
Note that for city gas, MJ/㎥ applies uniformly, and for others factor under the reference
guidelines apply

Intensity

Energy consumption/Total ﬂoor area

Amount of usage

Total of rainwater and city water

Intensity

Water usage/Total ﬂoor area

Amount of emissions
Intensity
Amount of usage

Total amount of waste excluding valuables
Waste emissions/Total ﬂoor area
Total amount of renewable energy generated by solar power generation facilities at owned
properties and purchased renewable energy

103Third-Party Assurance (Veriﬁcation Statement)
In order to increase data reliability, we have acquired a third-party assurance for our environmental
performance data from SGS Japan Inc. with the exception of some data.

104

SocialStatus of Directors and Employees
Unit

FY

FY

FY

Total number of directors and employees
MaleFemaleDirectly hired employees
MaleFemalePersons

Seconded employees
MaleFemaleEmployees aged and over
Non-Japanese employees
Employees with disabilities
Under years oldMale- years oldyears old and overAgecomposition

Under years old
FemalePersons- years oldyears old and over

Percentage of female managers%

Average years of service
Male

Years

Female

105

.

.

.

.

.

.

.

.

.

.

.

.

Unit

FY

FY

FY

Number of newly hired employees
Under years oldMale- years oldyears old and over

Persons

Under years old
Female- years oldyears old and overNumber of employees who resigned
Under years oldMale- years oldyears old and over

Persons

Under years old
Female- years oldyears old and overTurnover rate
Voluntary turnover rate%

Number of employees taking childcare leave

Persons

Number of employees taking childcare leave(Male)%

Number of employees taking family care leave
Number of short-term workers

.

.

.

.

.

.

(no applicable
person)(no applicable
person)(no applicable
person)Persons

Average monthly work hours per person

Hours

.

.

.

Annual paid leave take-up rate

%

.

.

.

Frequency rate of accidents resulting in lost
worktime

%

.

.

.

Frequency rate of occupational illness in

%

.

.

.

106

Number of Qualifications Holders
Unit

As of Jan. ,As of Jan. ,As of Jan. ,

FY

FY

FY

ARES Certiﬁed Master
Real Estate Notary
Real Estate AppraiserFirst-Class Certiﬁed Architect
Chartered Member of the Securities
Analysts Association of Japan
Certiﬁed Building Administrator
Persons

MBA
Attorney at-law
Real Estate Consulting Master
CASBEE Accredited Professional forReal Estate
Licensed Strata Management
Consultant
Licensed Representative ofCondominium Management Company
Labor and Social Security Attorney

Training Achievements
Unit

Average hours of training per person

Hours

Average costs of training per person

Yen

.
,

.

.

,

,

.

.

Internal training participation rate
Male%

FemaleNumber of external training courses
attended per person

Times

.

107

Training Implementation
Unit

General training

Human relations
training

Compliancetraining

ESG training

Tiered training

FY

FY

FY

Number of
times

Times

-

-

Participation
rate

％

-

-

Number of
times

Times

Participation
rate％

Number of
times

Times

Participation
rate％

Number of
times

Times

Participation
rate％

Number of
times

Times

-

-

Participation
rate

％

-

-

.

Social Contribution Activities
Unit"Sekisui House Matching Program" (ajoint donation system for employees
and the company) participation rate
Cash donation
Time donation

FY

％

.
,

Yen

,

75,925108

Calculation Standards
Average years of service

Number of years of employee service from the date of hire prior to the merger/Number of
employees (excluding seconded employees)

Number of newly hired employees,
Number of employees taking
childcare leave,
Number of employees taking familycare leave andNumber of short-term workers

Calculated from February , the ﬁrst day of the ﬁscal year of SHAM

Turnover rate

Number of employees who resigned during the ﬁscal year / number of employees at the beginningof the ﬁscal year ×

Average monthly work hours perpersonAverage of one year from January each year

Annual paid leave take-up rate

Total paid leave taken / total paid leave granted × , during one year from March each year

Internal training participation rate

Number of training participants / number of directors and employees (excluding those on
maternity or childcare leave) as of the end of the ﬁscal year

Number of external training courses
attended per person

Total number of external training courses attended/Number of directors and employees

Time donations

Total amount paid to all employees (including seconded employees and excluding transportation
expenses) / number of employees enrolled at the end of the ﬁscal year / number of business days
per year / number of work hours per day / cumulative hours of social contribution activities

Frequency rate of accidents resulting
in lost worktime

Number of fatalities and injuries due to lost worktime injuries / total working hours × , ,Frequency rate of occupation illness in Number of occupational illnesses / total working hours × , ,lost worktime109

GovernanceStatus of Use of Internal Reporting System
Unit

Compliance Hotline

FY

FY

FY

FY

FY

FY

FY

FY

FY

Cases

Status of Legal Compliance
Unit

Number of serious violations of laws
and voluntary standards

Cases

Fines for violations of various laws
and regulations

Yen

Political Contribution
Unit

Amount of political contribution

Yen

110

ESG Library

External Certiﬁcation
Status of Acquisition of Green Certiﬁcations (As of December ,Property
No.

Asset Type

Property NameDBJ Green Building
Certiﬁcation

R-

Residence

Esty Maison Ginza

2020★★★

R-

Residence

Esty Maison Ebisu II

2020★★★

R-

Residence

Esty Maison Kyobashi

2020★★★

R-

ResidencePrime Maison Musashinonomori

2020★★★

R-

ResidencePrime Maison Higashisakura

2021★★★

R-

ResidencePrime Maison Kayabakoen

2020★★★

R-

Residence

Sha Maison Stage Hakata

2020★★★

R-

ResidencePrime Maison Gokiso

2021★★★★

R-

ResidencePrime Maison Yuhigaoka

2021★★★

R-

ResidencePrime Maison Kitatanabe

2021★★★

R-

ResidencePrime Maison Ginza East

2021★★★★

R-

ResidencePrime Maison Takami

2020★★★★

R-

ResidencePrime Maison Yadaminami

2021★★★★

R-

ResidencePrime Maison Teriha

2020★★★

R-

Residence

Esty Maison Nishitemma

2020 ★★★

111)

Certiﬁcation for
CASBEE for Real EstateProperty
No.

Asset Type

Property NameDBJ Green Building
Certiﬁcation

R-

Residence

Esty Maison Shirokanedai

2020 ★★★

R-

Residence

Esty Maison Akabane2020 ★★★

R-

ResidencePrime Maison Waseda

2021★★★

R-

ResidencePrime Maison Hatchobori

2021★★★

R-

ResidencePrime Maison Jimbocho

2021★★★

R-

ResidencePrime Maison Gotenyama East

2021★★★★

R-

Residence

Sha Maison Stage Akihabara

2021★★

R-

Residence

Esty Maison Kinshicho Ⅱ

2022★★★

R-

Residence

Esty Maison Ojima

2021★★★

R-

ResidencePrime Maison Fujimidai

2021★★★★

R-

ResidencePrime Maison Morishita

2021★★★

R-

ResidencePrime Maison Shinagawa

2021★★★★

R-

ResidencePrime Maison Odorikoen

2020★★★★

R-

ResidencePrime Maison Minami -jo

2020★★★

R-

ResidencePrime Maison Kamokamogawa

2020 ★★★

R-

ResidencePrime Maison Central Park

2020★★★★

R-

Residence

Sha Maison Stage Yahiro

2021★★★

R-

ResidencePrime Maison Ebisu

2020 ★★★

R-

Residence

Sha Maison Stage Kanazawa
Nishiizumi

2021★★★

R-

Residence

Sha Maison Stage Hino

2021★★★

R-

ResidencePrime Maison Yokohama Nihonodori

2021★★★

112

Certiﬁcation for
CASBEE for Real EstateProperty
No.

Asset Type

Property NameDBJ Green Building
Certiﬁcation

R-

Residence

Kobe Women’s Student Housing

2021★★★★

R-

ResidencePrime Maison Shibuya

2020★★★

R-

ResidencePrime Maison Hatsudai

2020★★★

R-

ResidencePrime Maison Shirokanetakanawa

2020★★★

R-

Residence

Esty Maison
Ichigayayamabushicho

2020★★★

R-

Residence

Esty Maison Morishita

2020★★★

R-

ResidencePrime Maison Shirokanedai Tower

2021★★★★

R-

ResidencePrime Maison Otsuka

2021★★★

R-

ResidencePrime Maison Asakusabashi

2021★★★★

R-

ResidencePrime Maison Daikanyama

2021★★★

R-

ResidencePrime Maison Gotenyama West

2021★★★★

R-

Residence

Esty Maison Toyosu Residence

2021★★★★

R-

ResidencePrime Maison Mitatsunamachi

2022★★★★

R-

ResidencePrime Maison Hongo

2022★★★★

R-

ResidencePrime Maison Kuramae

2022★★★★

R-

Residence

Sha Maison Stage Hirose-dori2021★★★

R-

ResidencePrime Maison Shimokitazawa

2021★★★★

R-

ResidencePrime Maison Meguro

2021★★★★★

R-

ResidencePrime Maison Ryogoku

2021★★★

R-

ResidencePrime Maison Nakameguro

2021★★★★

R-

ResidencePrime Maison Itabashi

2021★★★★

113

Certiﬁcation for
CASBEE for Real Estate

S RankProperty
No.

Asset Type

Property NameDBJ Green Building
Certiﬁcation

O-

Oﬃce
Building

Garden City Shinagawa
Gotenyama

S RankO-Oﬃce
Building

Hommachi Minami Garden City

S RankO-Oﬃce
Building

Hommachi Garden City（Oﬃcebuilding portion）

S RankO-Oﬃce
Building

HK Yodoyabashi Garden Avenue

S RankO-Oﬃce
Building

Hirokoji Garden Avenue

S RankO-Oﬃce
Building

Akasaka Garden City

S Rank114

Certiﬁcation for
CASBEE for Real EstateESG Library

GRI Standards Content
Index
GRI Standards Content Index
Universal Standards
Disclosure Items

Response

GRI : General Disclosures. The organization and its reporting practices
2-1

Organizational details

About SHR “Proﬁle of SHR”

2-2

Entities included in the organization’s sustainability
reporting

ESG Disclosure Policy and Reporting Framework

2-3

Reporting period, frequency and contact pointESG Disclosure Policy and Reporting Framework

2-5

External assurance

ESG Data “Third-Party Assurance (Veriﬁcation Statement)”. Activities and workers
2-6

Activities, value chain and other business relationships

About SHR “Proﬁle of SHR”

2-7

Employees

ESG Data “Status of Directors and Employees”

2-9

Governance structure and composition

Corporate Governance

2-10

Nomination and selection of the highest governancebody

Investor Relations “ th FP Securities Report (only in Japanese)”

2-11

Chair of the highest governance body

Corporate Governance “Organizational Structure”

2-12

Role of the highest governance body in overseeing themanagement of impacts

Sustainability Management “Sustainability Promotion System”

2-13

Delegation of responsibility for managing impacts

Sustainability Management “Sustainability Promotion System”
Measures for Addressing Climate Change “Risk Management”

2-14

Role of the highest governance body in sustainability
reporting

Sustainability Management “Sustainability Promotion System”
Measures for Addressing Climate Change “Risk Management”. Governance115

Disclosure Items

Response

Conﬂicts of interest

Compliance “Prevention Measures for Conﬂict-of-Interest
Transactions”

2-16

Communication of critical concerns

Compliance “Compliance System”
Compliance “Internal Reporting System”
Compliance “Internal Audit System”
Risk Management “Risk Management System”
ESG Data “Status of Use of Internal Reporting System”

2-18

Evaluation of the performance of the highest
governance body

Corporate Governance “Evaluation of the Eﬀectiveness of SHR’s Boardof Directors and SHAM’s Board of Directors”

2-19

Remuneration policies

Corporate Governance “Director's Remuneration”

2-20

Process to determine remuneration

Corporate Governance “Director's Remuneration”

2-15. Strategy, policies and practices
2-22Statement on sustainable development strategy

Message from Senior Management

2-23

Policy commitments

Sustainability Management “Sustainability Policy”

2-24

Embedding policy commitments

Sustainability Management “Sustainability Promotion System”

2-25

Processes to remediate negative impacts

Compliance “Internal Reporting System”

2-26

Mechanisms for seeking advice and raising concerns

Compliance “Internal Reporting System”

2-27

Compliance with laws and regulations

ESG Data “Status of Legal Compliance”. Stakeholder engagement
2-29

Approach to stakeholder engagement

Stakeholder Engagement

GRI : Material Topics
Disclosures on material topics
3-1

Process to determine material topics

Materiality (Important Issues) “Materiality Identiﬁcation Process”

3-2

List of material topics

Materiality (Important Issues) “Materiality”

3-3Management of material topics

Materiality (Important Issues) “Materiality”

116Topic Standards
Disclosure Items

Response

Economy GRI : Economic Performance-

Direct economic value generated and distributed

Investor Relations “Cash Distributions”
Investor Relations “ th FP Securities Report (only inJapanese)”
ESG Data “Social Contribution Activities”-

Financial implications and other risks andopportunities due to climate change

Measures for Addressing Climate Change

GRI : Anti-corruption-

Communication and training about anti-corruption
policies and proceduresCompliance “Eﬀorts to Prevent Bribery, Corruption,
etc.”

-

Conﬁrmed incidents of corruption and actions taken

Not Applicable

GRI : Anti-competitive Behavior-

Legal actions for anti-competitive behavior, anti-trust,and monopoly practices

ESG Data “Status of Legal Compliance”

Approach to tax

Investor Relations “ th FP Securities Report (only inJapanese)”

GRI : Tax-

Disclosure Items

Response

GRI : Energy-

Environment

Energy consumption within the organization

ESG Data “Energy”-

Energy intensity

ESG Data “Energy”
Our Approach to Environmental Considerations,
Environmental Performance “Environmental
Performance Data”-

Reduction of energy consumption

Our Approach to Environmental Considerations,
Environmental Performance

GRI : Water and Eﬄuents-Interactions with water as a shared resource

Environmental Performance Data-

Water consumption

ESG Data “Water”

GRI : Biodiversity-

Coexistence of Humankind and Nature, and Initiatives forEnvironmental Resources

Habitats protected or restored117

Disclosure Items

Response

GRI : Emissions

Environment-

Direct (Scope ) GHG emissions

ESG Data “CO₂”-Energy indirect (Scope ) GHG emissions

ESG Data “CO₂”-

Other indirect (Scope ) GHG emissions

ESG Data “CO₂”-

GHG emissions intensity

ESG Data “CO₂”-

Reduction of GHG emissions

Our Approach to Environmental Considerations,
Environmental Performance-

Management of signiﬁcant waste-related impacts

Our Approach to Environmental Considerations,
Environmental Performance
Coexistence of Humankind and Nature, and Initiatives forEnvironmental Resources “Appropriate Waste
Management”-

Waste generated

ESG Data “Waste”-

Waste diverted from disposal

ESG Data “Waste”-

Waste directed to disposal

ESG Data “Waste”

GRI : Waste

Disclosure Items

Response

GRI : Employment-

New employee hires and employee turnover

ESG Data “Status of Directors and Employees”-

Parental leave

ESG Data “Status of Directors and Employees”

GRI : Occupational Health and Safety

Society-Worker participation, consultation, and communication
on occupational health and safety

Creating Comfortable Workplace Environment-

Promotion of worker healthCreating Comfortable Workplace Environment-

Work-related injuries

ESG Data “Status of Directors and Employees”-

Work-related ill health

ESG Data “Status of Directors and Employees”

GRI : Training and Education-

Average hours of training per year per employee

ESG Data “Training Achievements”-

Programs for upgrading employee skills and transition
assistance programs

Human Resource Development “Training System”-

Percentage of employees receiving regular performanceand career development reviews

Human Resource Development “Strategy for Developing
Human Resources”

118

Disclosure Items

Response

GRI : Diversity and Equal Opportunity-

Diversity of governance bodies and employees

ESG Data “Status of Directors and Employees”

GRI : Non-discrimination-

Incidents of discrimination and corrective actions taken

Not Applicable

GRI : Freedom of Association and Collective Bargaining-

Operations and suppliers in which the right to freedomof association and collective bargaining may be at risk

Not Applicable

GRI : Child Labor-

Operations and suppliers at signiﬁcant risk for incidents
of child labor

Not Applicable

GRI : Forced or Compulsory Labor

Society-

Operations and suppliers at signiﬁcant risk for incidents
of forced or compulsory labor

Not Applicable

GRI : Rights of Indigenous Peoples-

Incidents of violations involving rights of indigenous
peoples

Not Applicable

GRI : Public Policy-

Political contributions

ESG Data “Political Contribution”

GRI : Customer Health and Safety-

Incidents of non-compliance concerning the health andsafety impacts of products and services

Not Applicable

GRI : Marketing and Labeling-

Incidents of non-compliance concerning product andservice information and labeling

Not Applicable-

Incidents of non-compliance concerning marketing
communications

Not Applicable

GRI : Customer Privacy-

Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

119

Not ApplicableESG Library

SASB Standards Content
Index
SASB Standards Content Index
Sustainability Disclosure Topics & Accounting Metrics
Topic

EnergyManagement

Accounting Metric

Code

Response, Relevant Content

Energy consumption data coverage as apercentage of total ﬂoor area, by property
subsector

IF-REa. .

ESG Data "Information Related to
Calculation of Environmental
Performance Data"( ) Total energy consumed by portfolio area withdata coverage, ( ) percentage grid electricity, and( ) percentage renewable, by property subsector

IF-REa. .

ESG Data "Energy"
ESG Data "Renewable Energy"

Like-for-like percentage change in energy
consumption for the portfolio area with data
coverage, by property subsector

IF-REa. .

ESG Data "Energy"

Percentage of eligible portfolio that ( ) has anenergy rating and ( ) is certiﬁed to ENERGY STAR,by property subsector

Water
Management.%
IF-REa. .

(Reference) Percentage of the Portfoliowith Green Certiﬁcation
Investing in Real Estate with Excellent
Environmental Performance

Description of how building energy management
considerations are integrated into property
investment analysis and operational strategy

IF-REa. .

SHR's Sustainability
Materiality (Important Issues)
Stakeholder Engagement
Collaboration with Tenants andProperty Management Companies

Water withdrawal data coverage as a percentageof ( ) total ﬂoor area and ( ) ﬂoor area in regionswith High or Extremely High Baseline Water
Stress, by property subsector

IF-REa. .

-( ) Total water withdrawn by portfolio area withdata coverage and ( ) percentage in regions withHigh or Extremely High Baseline Water Stress, byproperty subsector

IF-REa. .

-121

TopicAccounting Metric

Code

Response, Relevant Content

Like-for-like percentage change in water
withdrawn for portfolio area with data coverage,
by property subsector

IF-REa. .

-Description of water management risks anddiscussion of strategies and practices to mitigate
those risks

IF-REa. .

Materiality (Important Issues)
Coexistence of Humankind andNature, and Initiatives forEnvironmental Resources "Installationof Water-Saving Equipment"( ) Percentage of new leases that contain a cost
recovery clause for resource eﬃciency-related
capital improvements and ( ) associated leased
ﬂoor area, by property subsector

IF-REa.

-Percentage of tenants that are separately meteredor submetered for ( ) grid electricity consumptionand ( ) water withdrawals, by property subsector

IF-REa.

-Discussion of approach to measuring,
incentivizing, and improving sustainability
impacts of tenants

IF-REa.

Collaboration with Tenants andProperty Management Companies

Area of properties located in -year ﬂood zones,
by property subsector

IF-REa.

-Description of climate change risk exposure
analysis, degree of systematic portfolio exposure,and strategies for mitigating risks

IF-REa.

Measures for Addressing Climate
ChangeActivity Metrics

Code

Response, Relevant Content

Number of assets, by property subsector

IFRE.A

Portfolio "Portfolio Data"

Leasable ﬂoor area, by property subsector

IFRE.B

Portfolio “Acquired Properties”

Percentage of indirectly managed assets, by property subsector

IFRE.C

Average occupancy rate, by property subsector

IFRE.D

Water
Management

Managementof TenantSustainability
Impacts

ClimateChangeAdaptation

Activity Metrics

122

Portfolio “Acquired Properties”