ESG Report
March 2021

MC-UBS Group
Brand Message

The Logo
Symbol markThe logo evokes the idea of buildings and land
while representing both the "M" of Mitsubishi
Corporation and the "U" of UBS A.G. The logo
expresses the focus of our group, born from the
combined expertise and experience of the two
firms in real estate and finance.

Mission, Vision &Core Values

MISSION“Always Create New Value for People, the Community, and the World”
Through real estate investment management, we create new demand in our society
and new value that exceed people’s expectations.

VISION
We strive to be the leading group of professionals, trusted by people,
the community, and the world.

CORE VALUESM

Mastery

We act proactively and professionally and adhere to the highest standardsof compliance and discipline.

C

Challenge

We always challenge the unprecedented.

U

UniquenessWe think outside the box and dare to be original.

B

Belief in ourselves

We believe in ourselves and are committed to our “MCUBSR” values.

S

Stewardship and Sensitivity

 e take our dialogue with investors seriously, and fulfill our fiduciary duty.
W
We are sensitive to changes in the world and respond to them appropriately.

R

Respect

We respect our colleagues and partners so that we can all work with pride and a smile.

Corporate Profile
Corporate name:
Mitsubishi Corp.-UBS Realty Inc.
Capital fund:¥500 million
Shareholder composition: Mitsubishi Corporation 51%, UBS Asset Management AG 49%
Offices:	Head office	Tokyo Building 7-3, Marunouchi 2-chome,
Chiyoda-ku, Tokyo 100-6420, Japan	Kansai office	Herbis ENT Office Tower, 25th floor, 2-22, Umeda
2-chome, Kita-ku, Osaka-shi, Osaka 530-8602, Japan

Certifications(Note) THE INCLUSION OF MITSUBISHI CORP.-UBS REALTY INC. IN
ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN,
DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT ORPROMOTION OF MITSUBISHI CORP.-UBS REALTY INC. BY
MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE
THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCIINDEX NAMES AND LOGOS ARE TRADEMARKS ORSERVICE MARKS OF MSCI OR ITS AFFILIATES.

2

Contents

Editorial Policy
Mitsubishi Corp.-UBS Realty Inc. (MCUBS) and all of
the funds under management (also called The
MC-UBS Group) are actively engaged in practices
that promote sustainability within the J-REIT
industry, information on which they disclose to
stakeholders. For this term, information pertaining
to sustainability published on the websites of eachmanagement company and investment corporation
has been consolidated in this document, ESG
Report March 2021, in order to provide a clear
explanation of our initiatives as a Group.
ESG Report March 2021 serves as an informative tool for stakeholders with a high level ofinterest in sustainability and therefore makes
reference to GRI standards and SASB standards(real estate).
Going forward, we hope to gather opinionsfrom those who read this report in order to further
improve subsequent reports. In addition, we hopethat this report can be used as an effective means
to maintain a dialogue with our stakeholders.
Month of issuance: March 2021
Frequency of updates: Once annually
Reference guidelines: GRI standards,
SASB standards (real estate)
The GRI Guidelines and SASB Index will be posted
at the end of March 2021.
Contact Information
Tel: +81-3-5293-7000 (main)
E-mail: contact-us_mcubs@mc-ubs.com

4

Message from Management

22

Social2	Message fromPresident Okamoto

23	Communication with
Stakeholders

3	Massage from
Deputy President Suzuki (CSO)

24 Creating a Positive Impact
27 Health and Well-Being
30	Communication with Local
Communities

Opening Feature	Actions During the COVID-19
Pandemic

31	Communication with Tenants /Building Safety

632	Social Contributions by
Employees / IR Activities

Sustainability Strategy
6

Sustainability Strategy

8

ESG Materiality and the SDGs

33

Corporate Governance

10 ESG Materiality and KPIs

34 Corporate Governance

12 Supported Initiatives

36 Compliance
37 Risk Management

13

Environmental
14 Climate Change and Resilience38

ESG Data

17	Environmental Approvals and
Evaluations for Group Assets

40

Investment Corporation Overview

18 Energy
19 Water / Waste
20	Pollution Prevention / Biodiversity
21 The Green BondESG Report March 2021

1

Message from Management
established the sustainability vision of “aiming to improve
unitholder value through investment management andcontributing to solving global issues” and strive to realize
the vision by working on the three mid- to long-term goalsof “reducing environmental impact, creating social value,and practicing sound asset management for all
stakeholders.”
In 2020, a state of emergency was declared in Japan for
the first time ever due to the global outbreak of COVID-19,
completely changing our previous daily lives. In this situation, MCUBS continued to focus on ESG initiatives, and in
May we expressed our support for the Japan Climate
Initiative (JCI), which has made the declaration of “joining
the front line of the global push for decarbonization fromJapan.” The investment corporations managed by MCUBS
have also established materiality and actively pursued sustainability while incorporating the ideas of the Sustainable
Development Goals (SDGs) into the Group’s sustainability
vision and goals.
Within the materiality, responses to climate change are

The MC-UBS Group aims toan especially important issue. Aiming for the goal set underimprove unitholder value throughtoward that goal while monitoring the environmental per-the Paris Agreement, we implement specific measuresformance for each property.

investment management and con-Moreover, the COVID-19 pandemic has prompted us to
put a renewed emphasis on the element of safety, along

tributes to solving global issues.

with the health and well-being that have been included in
our materiality. Not only do we secure the health and safetyof our employees, but we respond in the same manner for

Message from President Okamoto

employees and users of the properties we manage. To

We at Mitsubishi Corp.-UBS Realty Inc. (MCUBS) aim toensure security and safety, our investment corporations

increase unitholder value by “creating, through real estateeach have a liaison system enabling quick contact, provide

investment management, new demand in our society andhygiene products, and ensure the confirmation and report-

new value that exceeds people’s expectations” under our

ing of health conditions. In commercial facilities, they havemission of “always creating new value for people, the com-assisted tenants in applying for governmental support andmunity, and the world.” To achieve this, we also under-

implemented various other support measures. We will con-stand that always being aware of whether our investment

tinue to work with a variety of stakeholders going forward

management activities are leading to the realization of aunder environments with COVID-19 and post COVID-19.
ESG initiatives, as well as our business, can only be put

sustainable society is the social responsibility required ofinto practice by building long-standing relationships andlong-term management.

collaborating with a variety of stakeholders, including unit-

Based on this idea, we firmly believe that the perspectiveof sustainability will affect our financial results, and haveholders, tenants, service providers, lenders, bondholders,

undertaken environmental, social, and governance (ESG)

local communities, and governments.

activities from early on, incorporating such a perspective

From the perspective of creating a prosperous society

into our investment and management processes. We havewhere people can live comfortably, real estate has great

ESG Report March 20212

potential in being able to contribute toward addressing

and we ask for your continued support and understanding

environmental and social issues. We hope to increase unit-

in our endeavors.

holder value through real estate asset management, and at
the same time, recognize social impact—such as responding to climate change and consideration toward society—and contribute toward addressing global issues. The
MC-UBS Group is committed to making further advances,



March 2021



Katsuji Okamoto
President & CEO

Message from Deputy President Suzuki (CSO)
As indicated by the recent rapid increase in awareness, thePromotion Office directly supervised by management.
Going forward, we will continue to make sure that we

importance of sustainability is growing day by day. The year
2020 in particular became a turning point as the outbreak

are able to create value exceeding the expectations ofof COVID-19 brought about major changes to the state ofour stakeholders.

society and social demands grew for more practical action
on consideration for the environment.
ESG is an extremely important issue for MCUBS as well,and it is part of our fundamental management policy. Amid
the increased social demands, we have renewed our determination to further enhance our ESG activities.
Aiming to strengthen our efforts to advance ESG activities,
we have recently created a structure that enables manage-

ment to be more directly involved in ESG promotion by

Naoki Suzuki

turning the Research, Marketing and ESG Department,

Deputy President andwhich was under the Corporate Division, into the ESG

Chief Sustainability Officer

Group Organizational Chart 
The sponsors of MCUBS, Mitsubishi Corporation and UBS AG,
carry with them knowledge of and experience in the real estateand financial markets, respectively, cultivated over many years.

Asset Management Company

With this as our base, we would like to build real estate

Mitsubishi Corp.-UBS Realty Inc. (MCUBS)

investment trusts and provide an abundance of investment

Asset
Management

opportunities for investors in Japan and overseas. Through thismanner of business, we can contribute to investors, contributeJapan’s largest diversified REIT

to the growth and development of domestic and overseas

Japan Metropolitan Fund
Investment Corporation (JMF*)

investment markets, and contribute to the real estate market.
This goal forms the basic management policy of our business.

Asset
Management

First REIT specializing in industrial
properties in Japan
Industrial & Infrastructure Fund
Investment Corporation (IIF)* Japan Metropolitan Fund Investment Corporation (JMF) was launched from the absorption-type merger of Japan Retail Fund Investment Corporation (JRF) as the surviving
corporation and MCUBS MidCity Investment Corporation (MMI) as the dissolving
corporation on March 1, 2021 as the effective date of the merger.

ESG Report March 2021

3

Opening Feature

Actions During the COVID-19 Pandemic
COVID-19, which had been recognized as a global-scale pandemic, has greatly affected our day-to-day lives andbusiness, and many people have likely spent the past year busy with measures to prevent infection. On the other
hand, the pandemic is proven to be an opportunity for us to examine optimal work formats and communications,and actions taken during the pandemic have resulted in a strong awareness regarding sustainability.

Health and Safety of Employees and Business Continuity
Implementation of our business continuity plan (BCP) commenced on February 28, 2020, and we established a COVID-19
countermeasures headquarters. We began implementing the following policies the following day.
1 Work Systems

We encouraged all employees to work from home, set attendance ratios according to the status of infection, instituted an attendance rotation
program, staggered working hours, and a flextime system, introduced satellite office working, restricted business travel and work-related dining,
encouraged online meetings, and thoroughly informed employees regarding precautionary measures to take when meeting face-to-face.
2 Modification of Office Specifications

We provided more space between desks, installed partitions, differentiated between entrance and exit doors, regularly sanitized doorknobs
and other contact points, and installed body temperature measurement devices in reception areas.
3 Employee Health Management

We supported day-to-day communication between supervisors and employees, confirmed health status, provided information on addressing the lack of exercise such as guidance on stretching that can be done at home, and provided courses on mental health management
training (the duty of supervisors to consider safety and confirmation of the roles of managers, line care methods) as a part of responses tochanges in work styles and dealing with stress during the COVID-19 pandemic.
4 Facilitation of Working from HomeWe distributed facemasks and lent employees laptop PCs, displays, and headsets.
5 Risk Management

We formulated action plans and guidelines when the pandemic broke out and thoroughly informed employees regarding cautionary
measures relating to the handling of information.

Tenant Responses

1.
Rent reductions

2.
Other support

Negotiated individually with each tenant Instead of a flat reduction during the period of business suspension, we implemented individual
support, taking into consideration the degree of impact on each tenant.
Subsidy application support With regard to applications for government support for tenants, we implemented free-of-charge
support by certified public accountant offices involved in business cooperation with the management company.
Coupon preparation assistance 
We assisted with preparation of coupons and accepted the burden of discount expenses to help to
attract prospective customers and increase sales.
Introduction of food delivery services 
To develop community-based delivery business operators, we accepted the burden of introduction
expenses and delivery costs (to create sales opportunities for restaurants).

ESG Report March 2021

4

3.
Infection prevention
measures for safe
and secure facility
operation

Ensuring the health and safety of tenant employees Daily health status confirmation, development of rapid communication systems, installation of temperature measurement equipment at entrances, and provision of sanitary supplies

mozo wonder city
Installation of temperature measurement equipment at all tenants’
employee entrances

Machinoma Omori
Provision of infection prevention reminder
posters for employees

Measures at commercial facilities To help avoid the “Three Cs” (Closed spaces, Crowded places, Close-contact settings), we
implemented antibacterial and antiviral measures through aerial disinfection of locations withfrequent opportunity for hand contact such as elevator buttons, escalator belts, and items in
employee break rooms, and provided information on customer safety and security.

Nara Family
Provision of information on social distancing in elevators

Abiko Shopping Plaza
Provision of information on crowded times
to prevent crowding

mozo wonder city
Installation of screens and droplet prevention panels in foodcourts and increasing space between seats

Attachment of stickers in places where
antibacterial and antiviral measures havebeen implemented

ESG Report March 2021

5

Sustainability Strategy

Sustainability Strategy
MCUBS’s Strategy

MCUBS’s Vision for Sustainability
Contribute to solve global-scale issues through achieving
enhancements to unitholder value by investment management

Mid- and Long-term Goals
Environmental

SocialGovernance

Reduce environmental impact

Create social value

Practice sound asset management
for all stakeholders

Response to
climate change

Introduction ofrenewableenergy use

Health andwell-being

Resilience

Pursuit ofdiversity

ESG Disclosure incompliance withinternational
standard

Sustainability Strategy• Set the ESG materiality and goals in response to the SDGs
• Continuous acquisition of environmental certifications and evaluations• Ensure transparency through information disclosure

Collaboration with Mitsubishi Corporation and UBS AG
advanced ESG activities on a global scale. By having employ-with our sponsor, Mitsubishi Corporation. Starting with theees seconded to the Company from UBS participate in UBS's

adoption of a sustainability strategy based on Mitsubishi’s

Sustainability Committee, we are able to learn about exam-

Three Principles, this communication has led to the sharing

ples of global initiatives and acquire relevant knowledge,of know-how and examples of successful initiatives between

which we then leverage within our own sustainability

the Company and Mitsubishi. In addition, examples of ouractivities. Furthermore, we mutually share know-how andGreen Buildings were showcased in Mitsubishi’s ESG Data

expertise with UBS, and examples of the MCUBS’s initiatives

階数：B2F-5F

地域、区域、地区：

構造：SRC+RC+S/SRC+RC+S造

北側 / NORTHSIDE：

建築面積：1532.28㎡

商業地域、防火地域、市街化区域

建ぺい率：86.61％＜94.56％

南側 / SOUTHSIDE：

延べ面積：8950.46㎡

第一種中高層住居専用地域、準防火地域、市街化区域

容積率：418.15％ ＜418.46％

ESG Report March 2021

6

tS

Ca

東京都渋谷区神宮前5-10-1

M

所在地：〒150-0001

eij

iS

t.

Book 2018, issued in December 2018.
have been introduced as best practices in the CSR reports
名称：GYRE（ジャイル）
主要用途：店舗
Meanwhile, our other sponsor, UBS AG, is engaging inpublished by UBS.
HarajukuSta.
開業：2007年
最高の高さ：29.95m (PH37.245m)

t.

Our Sustainability Committee keeps in close communication

Meiji
jingumae
Sta.

Om

ot

es

an

do

o

Sustainability Promotion Structure
The Sustainability Committee 

Chief Sustainability Officer 

The Sustainability Committee is the body that approves resolu-

The Deputy President & Representative Director has been

tions concerning environmental, social, and governance (ESG)

appointed as Chief sustainability Officer (CSO) to strengthen

policy, strategy, and structure, based on the Environmental

the sustainability promotion system. CSO as the committee

Charter and the Responsible Property Investment Policy. Details

chairman reports the matter confirmed by the Sustainabilityof matters resolved by the Committee are also reported to theCommittee to the Board of Directors, chaired by theboard of directors meeting.

President & CEO & Representative Director and works to

As a result, we’ll do our best to change the Sustainability

share awareness of issues and raise awareness levels.

Promotion Structure to which the Sustainability Committee
plays a central role in formulating strategies centered andPerson in Charge of ESG System 

monitoring the activities of two investment corporations

We have established the person in charge at each Division

and we’ll make effort to create value that exceeds theand by playing the role of driving ESG target activities, we’ll

expectations of our stakeholders.

integrate ESG considerations into its investment and asset
management processes.

Organizational Chart of the Sustainability Committee

Metropolitan Business Division(JMF*)

Committee chair: CSO (Deputy President)
Secretariat: ESG Promotion Office

Industrial Division(IIF)

Members of the Sustainability Committee
Committee chair:

CSO

Committee members: 	President, COO, Head of Metropolitan Business Division, Head of Industrial Division,
Head of Corporate Division, Head of Strategic Planning Office, Head of ESG Promotion OfficeSecretariat:

ESG Promotion OfficeFrequency of Meetings

Main Examination Items

The Sustainability Committee meets approximately four times a·	Sustainability policy, strategy, and structure

year. In addition, subcommittee meetings are held at an appropri-·	Sustainability targets

ate frequency, where more detailed discussion takes place from a·	Membership and signing of environmental organizations

practical and operational standpoint.

·	ESG Report approval·	Activity report·	Eligible Green Projects* Japan Metropolitan Fund Investment Corporation (JMF) was launched from the absorption-type merger of Japan Retail Fund Investment Corporation (JRF) as the surviving corporation and
MCUBS MidCity Investment Corporation (MMI) as the dissolving corporation on March 1, 2021 as the effective date of the merger.

ESG Report March 2021

7

Sustainability Strategy

ESG Materiality and the SDGs
Through the meetings of the Sustainability Committee, the MC-UBS Group has examined its vision and targets forsustainability and carried out efforts toward their realization. As the level of interest toward ESG is rising, we haveidentified and visualized ESG material issues related to sustainability (materiality). By doing so, we have further
clarified the dialogue we hold with global stakeholders and the efforts we pursue in collaboration with otherorganizations. These issues were identified based on the Group’s Corporate Philosophy and Environmental Charterbut also incorporate the ideas of the Sustainable Development Goals (SDGs), globally shared goals promoted by
the United Nations.

ESG Materiality Selection Process
STEP• Identification of Sustainability Issues

1	We compiled lists of sustainability issues related to REITs based on the SDGs, global ESG disclosure criteria, and benchmark studies by overseas companies in the same industry.

STEP• Establishment of Priority Order

2	We established an order of priority for the issues we identified by taking into account their levelof importance to asset management companies, each fund under the Company’s management,
overseas companies in the same industries, and external organizations.

STEP• Confirmation of Validity3	To ensure objectivity, we underwent a review by CSR Design Green Investment Advisory, Co., Ltd.
regarding our ESG materiality and its selection process.

STEP• Discussion and Approval by Senior Management

4	The Company’s Sustainability Committee discussed and approved the selected ESG materiality.

In 2018, through the ESG materiality selection processtenant employees about ESG, and strive to increase satis-

detailed above, we identified the ESG materiality shown on

faction to achieve this goal.

pages 10 to 11 as having a high level of importance to the

Next, in addition to responding to climate change and

MC-UBS Group. In 2019, we organized opportunities andenergy efficiency, we must work together with our tenants

risks about it, and set new KPIs.

and local community members to address the issues ofFirst, as a real estate asset management company, it isefficient water use and waste disposal. By doing so, we will

absolutely essential that MCUBS ensures the quality of thework to establish partnerships and build green communities.
Going forward, after further clarifying the level of priority

buildings it manages through certifications and othermeans and addresses issues related to climate change andof these issues and working to visualize them, we will strive

energy efficiency. Also, we will strive to improve building

to achieve their resolution while promoting dialogue with

comfort and convenience and to raise the awareness of

all of our stakeholders.

List of Sustainability Issues
Response to sustainability certifications

Employee cultivation and level of satisfaction

Employee diversity

Building resilience

Efficient water use

 ComplianceResponse to climate changeWaste disposal

Supply chain management

Energy efficiency

 Partnership with tenantsEnsuring of health and well-being of and Collaboration with local communities

convenience for people (tenants)

Biodiversity in areas surrounding our buildings

ESG Report March 2021

8

TOPIC

Provision of a place that generates and nurtures new “circulation” through food With the concept of “SHOP & THINK,” GYRE, a property owned by JMF in
Omotesando, continues to propose “living with awareness of what is happening in theworld.” “SHOP” means the circulation of consumption activities all through people’s
lives, while “THINK” means each and every visitor thinking and taking action.
With the aim of connecting the chain of living things on earth to daily lives, GYRE.
FOOD on the fourth restaurant floor implements various measures related to sustainability and disseminates information so that visitors and people in the community candeepen their understanding of sustainability. GYRE.FOOD won an award in the Good

GYRE

Design Awards 2020 organized by the Japan Institute of Design Promotion.

Earth, Plants, Soil – A Space that Reminds People of the “Chain of Living Things” Dietary education programs
Holding of dietary education
programs as the “eatrip seedclub,” using fresh ingredientswith changes from season toseason, as well as the workshop,“Seed program by eatrip soil”

1
4

3
2

1

4
Floor design
The floor and walls include alarge amount of soil andincorporate plants, thereby
designing a reusable space that
reminds people of the chain ofliving things such as “the earth,plants, and soil”

2

3

Sharing of sustainability
All tenants share the philosophy ofsustainability and have adopted a central
kitchen to take practical action on food loss
and other issues
Reduction of food loss
Turning food waste into compost (fertilizer)
and cooking vegetables harvested fromgardens within the GYRE facility in thecentral kitchen

Circulation of Food 

Cultivating herbs

Harvesting

Cooking and Selling

Making into fertilizer

Returning to soil

Supplying

ESG Report March 2021

9

Sustainability Strategy

ESG Materiality and KPIs

Level of Importance
Most important
ESG materiality

Target

*

KPI

JRF

IIF
IIF

· Acquiring certifications for 80% or more of the total portfolio(Total floor area basis) (Target year: 2021)· Setting KPI, the proportion of the properties acquiring the environmental certification of thetotal portfolio· Acquiring certifications for 60% or more of the total portfolio· Acquiring certifications for 70% or more of Logistics facilities (Target year: 2023)

Improving sustainability
activities throughparticipation in GRESB
and other external
evaluation institutions

JRF
JRF
MMI
MMI
IIF
IIF

· GRESB Acquiring “Green Star”· CDP Acquiring more than “B” score· GRESB Acquiring “5 Star”· MSCI Acquiring “AA” rank
· GRESB Maintaining “Green Star”· MSCI Acquiring more than “A” rank

Implementing disasterprevention measures

JRF
JRF
JRF
MMI
IIF

· Preparing emergency supplies at 100% of the properties where such supplies can be kept
· Developing an emergency communication network that covers 100% of properties· Collecting engineering reports (ERs) regularly for 100% of properties· BCP expansion· Completion of construction of emergency call tree

JRF
MMI
IIF

· Reduction in CO2 emission per unit by 23% compared with 2015 (Target year: 2030)· Reduction in GHG by 1% or more per year
· Reduction in CO2 emission per unit by 30% compared with 2015 (Target year: 2030)

JRF· Reduction in energy consumption per unit by 15% compared with 2015 (Directly Managed
properties) (Target year: 2030)· Reduction of the amount used of electricity and fuel for reduction in GHG by 1% or more per year
· Reduction in energy consumption per unit by 20% compared with 2015 (Target year: 2030)

Improving proportion ofenvironmental
certifications
Response to­sustainability
certifications

Building resilience

Response to climate
Reduction in CO2 emission
changeImprovement in energy
consumption
Energy efficiency

MMI

MMI
IIF
JRF

Introduction of renewableenergy use

JRF
MMI

Ensuring of health
Improvement in tenant
and well-being of
employee spaceand conveniencefor people (tenants) CASBEE-WO certification· Installing at least one renewable energy facility with economic rationality at directly managed
properties (Target year: 2030)· Fivefold increase in the number of directly managed properties that have introduced green
power compared with 2019 (Target year: 2030)· Purchasing Green power at the time of contract renewal when there is economic rationality

MMI· Renovating employee lounges and restrooms at 100% of directly managed properties(Target year: 2030)· Improving communication space and refresh space at the time of renewal

MMI· Considering additional acquisition of CASBEE-WO certification

JRF

Level of ImportanceImportant ESG
materiality

TargetEfficient water use

Reduction in water
consumption

Waste disposal

Reduction in wastes

*

KPI

JRF

· Reducing water consumption per unit by 5% at directly managed properties compared with2015 (Target year: 2030)· Reduction of the amount used of water for reduction in GHG by 1% or more per year
· Keeping water use per unit at the same level as 2015 (Target year: 2030)

MMI
IIF
JRF

Introduction of green
lease
Partnership withtenants

Collaboration withlocal communities

Execution of tenantsatisfaction survey

MMI· Implementing comprehensive waste management (waste amount, waste treatment operators,
final treatment sites) at 100% of directly managed properties (Target year: 2022)· Monitoring the amount of waste and disclosing the management status on the Web at properties with multiple tenants that it directly manages

MMI· Considering additional scheme of green lease

JRF· Conducting tenant satisfaction surveys at 100% of directly managed properties(Target year: 2025)

MMI· Improving tenant satisfaction by conducting the tenant satisfaction survey once a year

Promoting environmental
consideration to tenants

JRF· Proposing (environmentally friendly) interior design criteria for tenants at 100% of directly
managed properties (Target year: 2025)

Support for social welfareorganizations

MMI· Cooperating for UNICEF fundraising and campaign for United Nations Refugee Support
Activities

JRF
Providing land tocommunity events

MMI
IIF
IIF

· Conducting programs that contribute to communities at 100% of directly managed
properties where events can be conducted (Target year: 2025)· Planning uchimizu (watering) event and flower event and holding them in each property· Existing Property : Maintenance for the actual condition· New Property : Consideration of the plan based on the negotiation with tenants* Japan Metropolitan Fund Investment Corporation (JMF) was launched from the absorption-type merger of Japan Retail Fund Investment Corporation (JRF) as the surviving corporation and MCUBSMidCity Investment Corporation (MMI) as the dissolving corporation on March 1, 2021 as the effective date of the merger. The above table lists the materiality of JRF and MMI prior to the merger.

ESG Report March 2021

10

Risk

Opportunity· Decline in assessment among tenants and investors
who base their assessments on sustainability· Improve environmental performance of properties· Expand the range of investors· Increase in expenses for recovery, compensation, etc.,
after natural disasters· Increase in property competitiveness· Drop in tenant sales & increase in property damages
due to physical impact of climate change· Decline in assessment by tenants & investors· Cost reduction with efficient energy use· Increase in energy-related expenses· Reinforcement of environmental regulations· Cost reduction with efficient energy use· Decline in property competitiveness· Manpower outflow due to declining work conditions· Improved sustainability assessment by assessment
bodies and investors· Improvement in employee satisfaction and tenant
assessment & satisfaction

Risk

Opportunity· Impact of shortage or quality decline of water
resources on surrounding areas· Rise in cost with increase in water consumption
volume· Cost reduction with reduction in water consumption· Reputation risk caused by increase in wastes· Increase in processing cost

· Processing cost reduction with reduction in wastes· Greater tenant burden regarding safety and theenvironment· Decline in tenant satisfaction· Devolution into property attractive to the tenant· Generation of stable revenues· Degradation of the environment surrounding theproperty· Decline in reputation in the neighboring area

· Revitalization of neighboring areas· Improvement of corporate image

ESG Report March 2021

11

Closely related SDGs

Closely related SDGs

Sustainability Strategy

Supported Initiatives

Principles for Responsible Investment (PRI) 

Signatory since August 2013
First J-REIT asset managerIn solidarity with the fundamental ideas of the PRI, MCUBS became a signatory in August 2013.
MCUBS is the first J-REIT asset manager to become a signatory of the PRI.

Principles for Financial Action toward a Sustainable Society Signatory since June 2013
(Principles for Financial Action for the 21st Century)
In solidarity with these principles put forth by the Ministry of the Environment, MCUBS became a signatory in June 2013.

Montreal Carbon Pledge Signatory since September 30, 2015
First J-REIT asset manager

MCUBS became the first J-REIT asset manager to sign the Montreal Carbon Pledge on September
30, 2015.

United Nations Environment Programme 
Finance Initiative (UNEP FI)Signatory since October 2016
First J-REIT asset manager

Acknowledging the proactive sustainability initiatives of MCUBS, UNEP FI invited MCUBS to participate
in the UNEP FI’s Property Working Group (PWG). MCUBS became the first J-REIT asset manager to bothsign up to UNEP FI and join the PWG of the initiative in October 2016. Through UNEP FI, for the asset
management of each investment corporation, MCUBS is sharing best practice cases globally and continues striving to reduce its environmental load and realize a sustainable society.

United Nations Global Compact (UN Global Compact)

Signatory since October 2016
First J-REIT asset manager

MCUBS became the first J-REIT asset manager to sign up to the UN Global Compact in October 2016. As asignatory and respecting the principles of the UN Global Compact, MCUBS has further strengthened its
corporate governance in the areas of human rights, labor, the environment, and anti-corruption, based on
its corporate mission to “always create new value for people, the community, and the world.”

Task Force on Climate-related Financial Disclosures (TCFD)

Signatory since August 2019

MCUBS supports the spirit of the recommendations published in June 2017 by the Task Force on
Climate-related Financial Disclosures (TCFD), which was established by the Financial Stability Board, andin August 2019, MCUBS declared that support.
Recognizing that climate change is an important environmental issue that significantly affects our business activities, we will aim to take measures in line with the TCFD framework.

Japan Climate Initiative (JCI)MCUBS participated in Japan Climate Initiative (JCI) in May 2020 in support of the JCI's declaration"Joining the front line of global trend for decarbonization from Japan.”
JCI was established in July 2018 as a network of Japanese companies, local governments, organizations,NGOs, etc. that are actively engaged in climate change countermeasures toward the realization of adecarbonized society aimed at by the Paris Agreement.

Japan Association for UNHCR and UNICEF
MCUBS has received a letter of appreciation from the Japan Association for UNHCR (United Nations
High Commissioner for Refugees), which closely coordinates with UNHCR Representation in Japan, formaking JMF’s vacant space from existing properties available to the Campaign for United Nations
Refugee Support Activities free of charge. Similarly, we’ll support UNICEFF campaigns.
MCUBS will continue to hold a high level of interest in reducing its environmental load and making
contributions to local society.

ESG Report March 2021

12

ENVIRONMENTAL

Environmental Charter
MCUBS formulated the Environmental Charter, which sets out our environmental principles and action plans, in June 2013.

Environmental Charter
At Mitsubishi Corp.-UBS Realty Inc., we consider the Earth itself to be our most important stakeholder and are continuously working
toward the realization of a sustainable society through our business activities.
• We will strive to reduce greenhouse gas emissions by continuously implementing new efficiency measures and embracing newtechnologies.
• We will promote the sustainable use of natural resources including energy, minerals, food stocks, and water throughout our global business operations.
• We recognize the critical importance of what ecosystems can provide and are committed to protecting ecosystems and mitigating any
potential impacts on biodiversity.
• We will strive to create and enhance environmental benefits by undertaking conservation activities and reducing our environmental
footprint.
• We will continue to actively engage and work with our various stakeholders openly and transparently and disclose information on theenvironmental impacts of our business operations in an appropriate and timely manner.
• We will conduct all of our activities in compliance with environmental laws while adhering to international rules and social standards.

ESG Report March 2021

13

Environmental

Climate Change and Resilience
Developments Related to Climate Change
The Paris Agreement is an international framework onreports that an increase of 2.5°C in average temperatureclimate change adopted in 2015. Its long term goal is

may lead to global economic losses of 0.2 to 2% and thatstated as holding the increase in the global average tem-decarbonization must be achieved by around 2075 to holdperature to well below 2°C above pre-industrial levels andglobal warming below 2°C and by 2050 to limit it to 1.5°C.

sharing efforts to limit the temperature increase to 1.5°C,

Toward the achievement of these goals, initiatives toand aiming to turn global greenhouse gas emissions down-

reduce greenhouse gas emissions are accelerating in many

ward as soon as possible so as to achieve a balancecountries, regions, and industries. Japan has also declared

between emissions and their removal (effectively zero emis-that it aims to become carbon neutral by 2050, and has

sions) in the second half of this century.

been discussing the possibility of tightening greenhouse

The Intergovernmental Panel on Climate Change (IPCC)

gas emissions regulations.

Initiatives for Task Force on Climate-related Financial Disclosures (TCFD)
Policy 
In light of the commitment on climate change that is

efficiency and building resilience of properties owned bycommon worldwide, MCUBS recognizes the importance of

our investment corporations by cooperating with all our

information disclosure and expressed support for the rec-stakeholders so as to reduce the impact of climate changeommendations of the Task Force on Climate-related

through real estate asset management.

Financial Disclosures (TCFD) in August 2019.
To realize a virtuous cycle of environmental protectionand economic growth, we aim to improve the energy

GovernanceManagement Structure 
As indicated in “Sustainability Promotion Structure” on page 7 of this Report, decisions on ESG policy, strategies, systems, and other matters are made centered on the Sustainability Committee chaired by the Chief
Sustainability Officer (CSO). The committee meets once every quarter and uses the PDCA cycle, including
confirmation of the climate change measures and targets and progress status of each investment corporation, for ESG promotion. The result of the matters confirmed are reported as needed to the Board of
Directors, chaired by the President of MCUBS, and the Board of Directors of each investment corporation.
In addition, under the committee, subcommittees—comprising ESG staff from the ESG Promotion Office
and investment corporations—meet as appropriate to enhance their recognition and awareness of issues
through the consideration of individual issues and sharing of information.

Strategy

Risks and Opportunities of Climate Change 
The TCFD recommendations classify climate change risks into “transition risks” and “physical risks.”
Responses to climate change are likely to provide not only risks but also business opportunities throughnew economic activities and the creation of social value.

ESG Report March 2021

14

RisksRisk Category Narrow Classification
Based on TCFD

PeriodUnderstanding of Issues

Transition risks

Policies, andlegal· Reinforced energy regulations including manda- Medium
tory energy-saving performanceterm· Costs incurred from the expansion of emissions Long term
trading systems and introduction of a carbon tax· Higher costs to respond to regulations· Energy efficiency· Renewable energy· Quantification of the risk of higher costs to
respond to future regulations· Environmental management systems (EMS)· Improved energy efficiency through the use of
facilities with high energy-saving performance· Higher costs from introduction of facilities withhigh energy-saving performance

Mediumterm
Long term· Adoption of advanced technologies

Technology

Markets· Competitive advantage at properties with highenvironmental performance· Decrease in asset value· Decrease in share price

Short term
Mediumterm
Long term· Green building certification· Environmental performance of buildings· Engagement

Society· Increased social demands to curtail GHG emissions Medium
term· Socioeconomic changes from expanded ESG
investment, etc.
Long term· Introduction of renewable energy· Quantification of future increases in operating costs· Sustainability finance· Decline in reputation due to delayed measures
to respond to climate change

Short term
Mediumterm
Long term· Monitoring status of target achievement· Gaining tenant cooperation· ESG risk management systems· Increased severity of typhoons, floods, etc.

Short term
Mediumterm
Long term· Building resilience· Quantification of future climate disaster risks· Increase in insurance premiums· Climate change such as higher temperaturesand sea level riseLong term· DD process when selecting properties· Flooding damage from temperature increase(sea level rise)· Higher future operating costs and quantificationof risks

Reputation

Physical risks

Acute

Chronic

Opportunities• Enhancement of energy efficiency through technological development• A variety of funding methods (Green Bonds, sustainability finance, etc.)• Resolution of environmental issues for tenants and local communities, among others
Scenario Analysis 
In its World Energy Outlook 2017 (WEO 2017), the International Energy Agency (IEA) presents the main
scenario (4°C Scenario) assumed based on measures necessary for the realization of the targets presented
by each country under the Paris Agreement, as well as the Sustainable Development Scenario (2°C
Scenario) premised on holding the increase in temperature to below 2°C above pre-industrial levels.
An IPCC report also presents the view that “global warming of 4°C or higher would pose risks to foodsecurity and water availability worldwide. … cause the extinction of species, greatly restrict human activities,
and in some cases, may exceed the tolerable limitations.” There is a growing shared recognition worldwide
that greenhouse gas emissions have a significant impact on the mechanisms of global warming and reductionof CO2, which accounts for a large portion of greenhouse gas emissions, will help to address global warming.
The MC-UBS Group undertakes simulations of the Value at Risk (VaR) and greenhouse gas emissions of
its properties through participation in the United Nations Environment Programme—Finance Initiative (UNEP
FI) TCFD Pilot Project and utilization of Carbon Risk Real Estate Monitor (CRREM).
Such simulations have revealed that the situation differs among properties and greenhouse gas emissions
can be reduced by introduction of renewable energy. We recognize that these findings can help us to set up
concrete reduction targets and formulate measures to increase energy efficiency.

ESG Report March 2021

15

Environmental

Climate Change and Resilience

Source: IPCC 5th Assessment Report (AR5)Japan Center for Climate Change Actions

WEB

https://www.jccca.org/chart/chart02_01.html(Japanese only)

Risk Management Related to Climate Change 

RiskManagement

The Sustainability Committee identifies and evaluates important risks and opportunities related to climatechange and confirms the status of progress.
In addition, the Risk Management Committee, in which MCUBS management personnel serve as members, checks the risk scenario related to responses to sustainability once every two months using a Risk
Control Matrix (RCM), thereby implementing evaluation and management.
Indexes and Goals 

Indexes and

The MC-UBS Group seeks to hold down the increase in average temperature in line with the Paris

Goals

Agreement. The investment corporations have established reduction targets for CO2 emissions, etc.
for the years up to 2030 and disclose a wide range of data. Going forward, we will again set up longterm targets after closely examining the results of simulations and thoroughly considering scenario
analysis.

Resilience
The MC-UBS Group sees financial risks from climate change as medium to long term risks. We understand the short term risk
is limited as we conduct due diligence when acquiring properties. However, when taking into consideration factors such as
the increased severity of typhoons and floods from torrential rains exceeding expectations that have occurred in recent years,
we believe it has reached a point where it should be recognized as an even more severe physical risk.
To reduce the impact of the physical risk as much as possible, we are taking measures to improve the building resilience ofour properties, such as the installation of waterproof boards and portable storage batteries. We will also respond to climatechange by introducing renewable energy.

For examples of the environmental initiatives for each fund, please refer to the links below.

WEB

JMF

	https://jmf-reit_sustainability.disclosure.site/en/themes/127/

IIF

https://iif-reit_sustainability.disclosure.site/en/themes/79/

ESG Report March 2021

16

E nvironmental Approvals and Evaluations forGroup Assets
At the MC-UBS Group, we make active efforts to achieve sustainability, but we also believe in the importance ofacquiring positive ratings and appropriate certifications for these efforts. To meet the demand of investors, tenants, and other stakeholders worldwide, we acquire a wide range of domestic and overseas certifications, fromperformance assessments of individual buildings to evaluations of entire funds.

Conditions Regarding the Acquisition of Certifications
We have received several positive overall ratings of our

Carbon Disclosure Project) climate change program in 2016.

funds under management from GRESB (Global Real Estate

Regarding performance evaluations on real estate, we have

Sustainability Benchmark), the current global standard for

acquired certifications for CASBEE for Real Estate, DBJ Green

real assets. Our funds received certification in their early

Building, and BELS. Furthermore, former MMI received the firststages, including IIF, which became the first J-REIT to becertification of J-REIT for “CASBEE for Smart Wellness Office”

selected as a Sector Leader in 2013. In 2020, IIF received 5

newly established from Institute for Building Environment andstars and the former JRF and the former MMI each received

Energy Conservation (IBEC) in December 2019.

4 stars. In addition, the former JRF, IIF and the former MMI

Going forward, the MC-UBS Group will maintain its

received the Green Star for the sixth, eighth, and fifth con-policy of improving the ratings of its overall funds under

secutive years, respectively. In addition, former JRF became

management while increasing its proportion of properties

the first J-REIT to participate in the CDP (formerly, thewith certifications from external parties.
JMF

GRESB

As of February 28, 2021

Former JRF

Former MMI

IIF

Real Estate Rating
4 stars
Green Star:  (sixth consecutive year)

Real Estate Rating
4 stars
Green Star:  (fifth consecutive year)

Real Estate Rating
5 stars
Green Star: (eighth consecutive year)

Public Disclosure RatingA(fourth consecutive year)

Public Disclosure RatingA(fourth consecutive year)

Public Disclosure RatingA(third consecutive year)A:1
 property(first rating acquired in 2008)
B+ : 3
 properties(first rating acquired in 2018)S

CDP Climate Change Program

B–	

CASBEE Certifications for Real
Estate, Buildings, & Wellness OfficeS

DBJ Green Building
Certification

5 stars : 1
 property(first rating acquired in 2015)
4 stars : 7
 properties(first rating acquired in 2014)
3 stars : 7
 properties(first rating acquired in 2014)
2 stars : 6
 properties(first rating acquired in 2014)
1 stars : 2
 properties(first rating acquired in 2016)

4 stars: 3
 properties(first rating acquired in 2012)

4 stars: 3
 properties(first rating acquired in 2012)
3 stars: 2
 properties(first rating acquired in 2014)

BELS Certification

4 stars : 1
 property(first rating acquired in 2017)

3 stars: 1
 property(first rating acquired in 2016)
2 stars: 4
 properties(first rating acquired in 2016)

5 stars: 5
 properties(first rating acquired in 2016)
4 stars: 2
 properties(first rating acquired in 2014)
3 stars: 1
 property(first rating acquired in 2021)
2 stars: 4
 properties(first rating acquired in 2016)* Including acquisition of ZEB Ready fortwo propertiesA(fifth consecutive year):1
 5 properties(first rating acquired in 2015):2
 properties(first rating acquired in 2015)

Detailed examples of our environmental approval and evaluation

WEB

JMF

https://jmf-reit_sustainability.disclosure.site/en/themes/127/

IIF

https://iif-reit_sustainability.disclosure.site/en/themes/79/

ESG Report March 2021

17

:8
 properties(first rating acquired in 2018)
A :1
 1 properties(first rating acquired in 2014)
B+ : 1
 property(first rating acquired in 2013)

Environmental

EnergyThe MC-UBS Group implements environmentally friendly and energy-saving measures and makes efforts toward
more efficient energy use for the properties held by each investment corporation under management to show
greater consideration for the environment and lessen its environmental impact. We collectively manage energy,
fuel, and water consumption and analyze the accumulated data, which is both accurate and highly transparent toactively manage reduction of energy use.

Initiatives

Renewable Energy 
JMF

Through the introduction of solar power (100 kW), geother-In May 2020, JMF replaced the power supplier of MARINE &mal heat utilization (400 kW) and other measures, as well as

WALK YOKOHAMA to use renewable energy as electricity

effective use of unutilized energy such as exhaust heat fromfor the entire facility. This is in line with RE100, a global

air conditioning and heat from recycled waste water, we haveinitiative committed to sourcing 100% renewable electricity

converted to 100% renewal energy usage for our power

throughout entire business operations, and JMF has effec-

needs. In cooperation with the neighboring Yokohama City

tively achieved zero CO2 emissions from the electricity used

Hall Building, this helps to increase community resilience byin the entire facility, including its behind-the-scenes areas.

energy saving and also avoidance of power supply disruptions
during local disasters. These initiatives have been rated highly,
and we have received a new energy silver award, the Agency
for National Resources and Energy Commissioner’s Award(Community Coexistence Sector) Silver Award.
Yokohama City Kitanakadori, Southern Area
MARINE &WALK YOKOHAMA

Yokohama City HallWEB

Yokohama i-land Tower

https://www.nef.or.jp/award/kako/r02/s_01.html(Japanese only)

Solar Power 
JMF

IIF

Solar panels are installed on the roofs of facility buildings tosave energy by using renewable sources.

USC Bldg.

The amount of energy generated from solar power on theroof is displayed in real time to enable office workers within

IIF Tosu Logistics Center

the building to personally experience the effect of renewable energy.

ESG Report March 2021

18

Initiatives

Green Lease JMF

A “green lease” refers to an agreement made via a contract

lighting in its facilities, which allows

of memorandum between building owners and tenants totenants to enjoy lower energy fees,

cooperate toward reducing environmental impact andin exchange for the tenants paying

making a more environmentally friendly facility throughJMF a fixed portion of the savings

various means, including energy conservation on properties.

to JMF as a green lease payment.

Green leases are entered into on a voluntary basis, withboth parties agreeing to uphold the terms of the arrangement. For example, JMF has borne the costs of installing LEDTwin 21Water
The MC-UBS Group strives for sustainable resourceuse. The Group makes active efforts to utilize water
resources effectively as part of a greater effort towardsustainable resource use. JMF returns over 6,000m2 ofrainwater to groundwater every year through means
such as permeable pavement, while IIF works with

Oyama Yuen Harvest Walk

tenants to promote effective water use by utilizing
on-site well water pumped from 100m underground,drawn using an automatic water supply apparatus.
IIF Mitaka Card Center
Automatic water supply
apparatus

Waste
The MC-UBS Group is advancing an initiative to minimize the amount of waste produced by its properties.
At Kyoto Family, which is owned by JMF, we have set
up waste measuring equipment in an effort to reduce
waste. At Osaka YM Bldg., we monitor the amount ofwaste generated and manage it appropriately while
using composting, implementing monitoring of the

Osaka YM Bldg.
Certificate of Appreciation from
Osaka City

amount of waste, waste recycling, separation andmanagement, and periodic auditing of waste disposal,

Kyoto Family
Waste measuring equipment

in order to use resources effectively and appropriately
dispose of hazardous waste.

ESG Report March 2021

19

Environmental

Pollution Prevention
The MC-UBS Group strives to create and enhance environmental benefits by undertaking conservation activities
and reducing its environmental footprint.

Assessments When Acquiring Real Estate Properties
When acquiring real estate properties, MCUBS takes vari-

Pre-Investment Assessment Workflow

ous environmental factors into consideration before making

Phase 1: Historical record review

investment decisions: property inspections, land history*1

investigations, and other related research on environmental

Phase 1’: Interviews*2

risk factors.

Phase 2: Soil and groundwater contamination survey(Determining presence or absence of problems by surveying the soil)

During soil and environmental investigations, third-party
experts perform environmental pollution investigations.

*3

Prior to executing any purchase agreement, IIF will have

No concerns

experts conduct a soil and environmental contamination

Adjust offer
price

*4
Phase 3:Site remediation

survey to assist it in assessing a property’s environmental

Investment Committee

risks. IIF will use the pre-investment assessment workflow

Purchase agreement / Closing

Rejectchart indicated on the right to determine whether theinvestment would be appropriate.

*1	If we are unable to determine solely from a review of historical records that there is norisk of soil contamination or that no other environmental contamination exists (forexample, a manufacturing facility that utilized toxic or other hazardous substances in
the past), we will conduct interviews with the seller.
*2	If we are unable to determine from interviews with the seller that there is no risk ofsoil or other environmental contamination, we will conduct a soil and groundwatercontamination survey.
*3	If a contamination concern exists, but the necessary remediation would be technically or
economically infeasible (for example, remediation is extremely difficult due to structures
existing above the contaminated area), we will recommend a price adjustment.
*4	If, after discussions with the seller, remediation is deemed technically and economicallyfeasible, we will conduct site remediation or require the seller to do so.

Concerning soil contamination, its property acquisition
manual stipulates that investment targets shall be, in
principle, properties “that are very unlikely to have soil
contamination or that cannot eliminate the possibility of
having soil contamination but are very unlikely to carryenvironmental damage risk.”

Biodiversity
The MC-UBS Group recognizes the critical importance of what ecosystems can provide and is committed to protecting ecosystems and mitigating any potential impacts on biodiversity. We strive to put a green spaces environment in place in our properties and increase the kinds of plants and green spaces, while including local trees, etc.
when planting.

Machinoma Omori

Oyama Yuen Harvest WalkESG Report March 2021

20

The Green BondIn May 2018, as part of its efforts to maintain sustainability for the environment and society as a whole, JMF has
issued the Green Bond, the first such issuance from a J-REIT. Through the issuance of the Green Bond, JMF conducts investment contributing to the implementation and realization of a sustainable environment and society.

About the Green Bond
The Green Bond Framework Overview
1. Project evaluation/selection
With regard to the Green Bond issuance process, which is based on the Green Bond Principles, MCUBS selects new or existing properties (“Eligible Green Projects”) from its portfolio, which satisfy the eligibility criteria*1 of MCUBS Sustainability Committee, as subject
assets for the Green Bond.
*1 To be eligible for Green Bond proceeds, Eligible Green Projects must meet one of the following eligibility criteria:• On the payment date of each investment corporation bond, buildings that have received 3, 4, or 5 stars under the DBJ Green Building Certification Program within two years
preceding the Green Bond issuance date, and/or buildings that are expected to receive the certification after issuance. At the time of reporting, buildings that meet the same
criteria as of the end of February of each year.
• On the payment date of each investment corporation bond, buildings that have received B+, A, or S rank under the CASBEE Certification Rank within two years preceding theGreen Bond issuance date, and/or buildings that are expected to receive the certification after issuance. At the time of reporting, buildings that meet the same criteria as ofthe end of February of each year.

2. Use of proceeds
The Green Bond totaling the same amount will be allocated toward one or more of the following.
The acquisition of existing and/or new Eligible Green Projects.
The refinancing of existing debts that have already been allocated to Eligible Green Projects.
The redemption of the issued investment corporation bonds (including Green Bonds) required to acquire Eligible Green Projects.
3. Management of Green Bond proceeds
JMF has an internal process in place to track and monitor the amount of outstanding Green Bond proceeds and the allocation thereof,
which is in line with market practice. The maximum outstanding amount of the proceeds (“Debts of Eligible Green Projects”) is calculated bymultiplying the total book value of Eligible Green Projects by JMF’s interest-bearing liabilities ratio (45.6% as of the end of August 2020*).
The maximum outstanding amount of Green Bond proceeds is ¥158.6 billion, and JMF currently issues ¥15 billion (as of the end of
August 2020).
* Figure is for former Japan Retail Fund Investment Corporation

Second-Party Opinion

The Green Bond Summary

JMF has obtained a second-party opin-

The 1st Green Bond
(The 12th Unsecured
Investment Corporation
Bonds)The 2nd Green Bond
(The 13th Unsecured
Investment Corporation
Bonds)

Issued Amount (million yen)

8,000

7,000

Interest Rate

0.210%

0.200%

Issue Date

May 25, 2018

June 25, 2019

Maturity Date

May 25, 2023

June 25, 2024

Remarks

Unsecured, Unguaranteed

Unsecured, Unguaranteed

Assessment*3

GA1

ion from Sustainalytics, an ESG rating
agency, for the eligibility of Green
Bond*2 proceeds. For more information,please refer to the second party opinion.
*2 Green Bond eligibility entails a Green Bondframework that aligns with the four pillars (use ofproceeds, project evaluation and selection,
management of proceeds, and reporting) of theGreen Bond Principles 2017.

WEB

JMF
https://jmf-reit_sustainability.disclosure.site/
en/themes/135/*3 Assessment is a rating opinion provided by R&I with regard to the extent to which the Green Bond proceeds areused to invest in projects that resolve environmental issues.

Green Bond details

WEB

JMF

—

https://jmf-reit_sustainability.disclosure.site/en/themes/135/

ESG Report March 2021

21

S O C I A L

ESG Report March 2021

22SocialCommunication with Stakeholders
The MC-UBS Group stakeholders cover a wide range of roles, from investors, lenders and bondholders, to tenants
making use of its properties and service providers related to property management (PM) and building
management (BM), to members of the surrounding community, and to various government administrations.
Furthermore, we consider our employees to be stakeholders just as important as those mentioned above.
We believe that it is our mission to build long-lasting relationships with this wide variety of stakeholders andto continue sustainable management of the Group.
Employees•

Improving worker health and benefits (counselingservices from outside experts such as medical
examinations, lectures by industrial doctors,
establishment of the Health Committee, improved
employee benefits, etc.)•

Establishing a positive work environment•

Cultivating human resources (qualification acquisition

support, providing training, etc.)•

Providing employee opinion polls

Tenants and service providers(PM / BM / engineers, etc.)•

 orking on energy-saving and CO2
W
reduction measures•

Holding periodic workshops•

Conducting tenant satisfaction survey

•

•
•

•

Cooperation inconsideration ofsustainability

MC-UBS GroupParticipating in local cleanup activities

Proactive
disclosure
activities

MCUBS

•

•

JMF

Improving energy efficiency(Installing LED lighting, solar powersystem, etc.)

Local communities

Investors, lenders, andbondholders

Efforts to further
enhance the company

Operating websites and preparing

communication tools (asset management reports, etc.)

IIF•

Responding to environmental

certification system

Cooperation with local
governments as theowners and managers
of facilities

Continued contributions to local
communities

Organizing facility visits incooperation with tenants

Governments••P roviding spaces for community
events••

Detailed examples of our initiatives

WEB

Holding briefing sessions on financial results and giving presentations
to investors

JMF

https://jmf-reit_sustainability.disclosure.site/en/themes/129/

IIF

https://iif-reit_sustainability.disclosure.site/en/themes/82/

ESG Report March 2021

23

P articipating in town planning­project led by municipality
Developing and disseminating
demonstration projects promotedby the government
Obtaining “Comprehensive
Assessment System for Built
Environment Efficiency”(CASBEE) ratingsP roviding open public spaces andplanting trees

SocialCreating a Positive Impact
Since the Positive Impact Manifesto of the United Nations Environment Programme Finance Initiative (UNEP FI)
was issued in October 2015, calls from financial markets for positive impact investment to address ESG issues havebecome a global trend, and we recognize that it is now become a societal demand.
The MC-UBS Group seeks sustainable growth while striving as a global business enterprise to contribute to the
Sustainable Development Goals (SDGs) by focusing on the material issues that it has identified from the perspective of the degree of impact on society and on creating economic and social value through corporate activities toaddress ESG undertaken from a long-term perspective. We also seek positive impact investment as one means ofsolving problems, and we are taking action from this perspective as well.

Impact-Based Real Estate Investment Framework 
UNEP FI has developed action-oriented framework based on four Investment Objectives for real estate investors to practicethe Positive Impact Principles.
Positive Impact Real Estate Framework Investment Objectives

Market and Sustainable
Returns

Clarity of Impact
Identifying and creating impact
from investment activity

No trade-off in financial results
while generating economic, social,environmental benefits

Additional Finance and/or
Impact Flows

Measurement of Impact

To underserved products andmarkets; supporting physical andsocial factors that contribute tolong-term economic performance

Positive and negative attributes
and mitigating the negative; linking ex-ante and ex-post intent
with impact

Source: POSITIVE IMPACT REAL ESTATE INVESTMENT FRAMWORK

Acquisition of OTA Techno COREIn January 2019, IIF decided on an impact investment project (a silent partnership, herein referred to as the“Tokumei Kumiai”) related to the OTA Techno CORE building. This is the first case of a J-REIT making such an
agreement based on the Principles for Positive Impact Finance.

Measures Based on the Sustainable Development Goals (SDGs)
and the Principles for Positive Impact Finance
The investment is in line with the materiality of the SDGs,
which is emphasized by MCUBS and will contribute to thecreation of a sustainable society.
Furthermore, a third-party opinion has been obtained
stating that the project is in accordance with the Principles
for Positive Impact of the United Nations Environment
Programme Finance Initiative (UNEP FI).

ESG Report March 2021

24

Measures for the Creation of a Sustainable Society
OTA Techno CORE
Providing space to work

Dividends

Payment of rent
HR development
supportEquity investment in
the Tokumei Kumiai

Ota-ku, Tokyo
•
•

IIF

A manufacturing industry hub in Tokyo• n accumulation of human resources, including engineersAand craftsmen

ResultSite secured to develop bothhuman resources and thesuccession of technologies topromote industry over the
medium to long term•

The only J-REIT that specializes in industrial properties
E stablished track record of acquiring manufacturing and
R&D facilities

Measures in support of regional economic
development from the perspective ofreal estate investment (PRE)Cooperation with J-REIT as along-term owner

ResultSecured high profitability overthe medium term
Ensured future acquisition
opportunities

Positive Impact Investment Monitoring Policy 
We perform regular monthly or annual measurements concerning the impact set at OTA Techno CORE in accordance with thefollowing monitoring policy.
Impact Category

Details

Employment anda Comprehensive
and Sound
Economy(Positive impact)

Securing sites forhuman resource
development
and skill­succession forindustrial development over the
medium tolong-term

Climate(Negative impact)

Soil(Negative impact)

Risk of rising
CO2 emissions
from inefficientenergy use atproperties
Risk of contamination of nearby
areas by hazardous waste
released fromplants of tenantcompanies

KPI

Monitoring
Timing & Specific Methods
Methods(1) Change in(1) Determination ofcontracted
contracted floor area by
floor area
Management Report from
Property Manager and(2) Number ofmonitoring of changes on
employees inan annual basis
lease space(2) (3) Collection of necessary(3) Number of
information using apatents andtenant questionnaireawards ofadministered at the end
each type wonof February of each year(1) Provision of inexpensive lease space
to small andmedium enterprises(2) Number of jobs
maintained andcreated by tenantcompanies(3) Number of innovations created orawards won bytenant companies
Energy consumption
Grasp of amountintensity, CO2 emissions of electric power
intensity
used

Hazardous waste
release volume

Interviews oftenants onwhether hazardous waste isreleased

Observed of each tenant on amonthly basis using centralized
metering devices. Changes inusage for the building as awhole are monitored on anannual basis.
Identification of hazardous
waste items added to theindustrial waste volume survey
collected from each tenant at
the end of April of each year
for submission to the Bureauof Public Cleansing

Property details

WEB

IIF

https://www.iif-reit.com/english/portfolio/f-99.html

ESG Report March 2021

25

FY2019 Results(1) Lease area (end tenant)Leasable area (m2)6122.38
Leased area (m2)6122.38
Occupancy rate (%)
100%* Excluding warehouse(2) No. of employees
in leased premises(3) Patents / various
awards received

Electricity
consumption (kwh)Ascertained hazardousand non-hazardous
waste: Waste oil (L)187
12,059,668

3,200

SocialCreating a Positive Impact

TOPIC

IIF Shonan Health Innovation Park
Provision of Land to Priority Healthcare Institutions in Kanagawa Prefecture 
IIF is making contributions to local communities throughof contributing to the health of prefectural and national

COVID-19 countermeasures. In April 2020, IIF provided

citizens. IIF received promises from the prefecture and hospi-(lented) the land as a site for construction of a temporary

tal that the project will proceed with maximum care for the

medical facility for addressing COVID-19 infections free ofsafety of tenants and local residents.

charge for a fixed term in response to a request from

IIF will continue to cooperate closely with Kanagawa

Kanagawa Prefecture made in conjunction with the declara-

Prefecture at the property to ensure that tenants and mem-tion of state of emergency by the national government.

bers can commute to work with peace of mind.

The adjacent Shonan Kamakura General Hospital was
designated a priority healthcare institution (a facility that
accept moderate patience) under the Kanagawa Model, andIIF received the above request for cooperation so that thehospital could construct a temporary medical facility.
During what has been referred to as a crisis of healthcarecollapse in Kanagawa Prefecture too, IIF decided to cooper-

IIF Shonan Health InnovationPark

ate and provide the site for a healthcare facility with the aim

COVID-19 measures at Shonan Health Innovation Park 
At Shonan Health Innovation Park, the spread of COVID-19 is prevented by the following measures without stopping everyone’s
research and business activities.

Commuting / working

Common areas•R equests for working from home / staggered
working hours• E xpand common spaces(prevent crowding of occupied rooms)• E nsuring parking (for persons
wishing to commute by car)• Place disinfectant solutions in each facility•R equests for shorter length of stay

NEW NORMAL
Provision of informationon Actions

Dining• S et timing dining hall usage times
for each company• Install screens between tables in dining halls

Pre-work attendance bodytemperature measurement
Social distancing
Frequent hand washingand disinfecting• L imit available numbers of seats in dining halls• S et limits on numbers of persons using
elevators

Meetings / events•R ecommend use of 1/3 or less of
capacity in meeting places•R ecommend and support virtual
holding of meetings / events• P rovide outdoor eating spaces (in gardens)

Information• E stablishment of various guidelines (return to work criteria, etc.) and procedures forresponding to occurrence of infections• P rompt collection of information on infected persons and those with a fever

ESG Report March 2021

26

Health and Well-Being
The MC-UBS Group considers its employees to be its most important management resource and essential forc­arrying out its activities. We are actively working to create conditions where each and every employee can­perform their work in a lively manner and to cultivate them accordingly. In addition, we regularly conduct
employee opinion polls with the aim of building an even better company. (For “Actions During the COVID-19
Pandemic,” see page 4.)

Work Environment
MCUBS is working to ensure that all employees can work with peace of mind and to improve the benefits it provides to them.
Heath of Employees 
Besides meeting the legal requirements in Japan for employee

Moreover, we provide various wellness programs to main-

health and safety, including labor and risk management,

tain and improve the mental and physical health of our

MCUBS emphasizes the prevention of excessive work andemployees and their families. We have also established theunderstanding the appropriateness of working hours, and isin-house Health Committee comprising employees repre-

enhancing its system for managing working hours throughsenting each division and the Human Resources Department.

an original monitoring framework. In addition to an emphasis

The committee meets once a month to exchange opinions

on measures aimed at reducing overtime, we require employ-on working conditions alongside industrial physicians and to

ees to take long-term leave and are taking steps to increase

gain health-related insight. Through these initiatives, we are

the rate that paid leave is used (with a target of 70%).

supporting employees in the preservation of their health.

 orking time monitoring system
WCheck and report on deviation in working hours(every month)Report on long working hours to secure health(professional employees/once per half month)Flextime system
Teleworking (working from home, satellite offices) nnual paid leave (15 to 20 or 25 days granted,
A
depending on the length of employment(thenumber of days granted by law is 10 to 20 days)
A variety of special leave programs, including
family care special paid leave
Acquisition of paid leave in units of hours
Mandatory acquisition of long-term consecutive leave ealth checkup/complete medical checkup
HInfluenza immunization shotVarious counseling services (EAP) by external experts
Health consultations by industrial physicians/
health nurses
Health Committee
Conducting of stress checks

Improving Employee Benefits 
In addition to completely supplying a social insurance system,group long-term income compensation insurance, andwe have introduced an original retirement pension system,

member welfare services, and have established a congratula-

have entered into general welfare group term life insurance,

tory and condolence payments system and other systems.

Diversity and Work-life Balance 
MCUBS emphasizes diversity and work-life balance. We

and raising children. We ensure that we have an organiza-

promote both of those aspects by, for example, offering

tional climate enabling even male employees to naturally

support and welfare services to help all employees, regard-take childcare leave, and employees cooperate with eachless of whether men or women, who are starting families

other in allocating the work of those who are on leave.

Work Environment 
In January 2018, MCUBS renovated its office space andWe also conduct environmental checks periodically to pro-created an environment that allows employees to work

vide comfortable working conditions for employees.

comfortably and actively. Natural light enters the work

Moreover, in an effort to reduce waste, we have gone

space through windows and plants have been arranged

70% paperless and turned the reduced cabinet space into athroughout this new, bright office. Employees’ desks arecommunal space. We have improved our communication

larger than those at a standard Japanese office*, and weenvironment, enabling work to be carried out anywhere inhave upgraded communal spaces to promote communica-

the office, and have worked to reduce printing and papertion with fellow co-workers and have incorporated rest

costs through using electronics to host meetings.

areas where employees can relax and refresh themselves.

* Desk width per person is 1,200mm in a standard Japanese office (as of December
2018, according to the website of Kokuyo Co., Ltd.).

ESG Report March 2021

27

SocialHealth and Well-Being

Human Capital Development—Job-Specific Development Training Programs
Support for Acquiring Further Qualifications In order to cultivate professional human resources in realknowledge in the fields of real estate and finance).

estate finance, MCUBS encourages employees to pursue

Moreover, employees are also encouraged to undergo

higher qualifications by providing financial assistance andtraining and participate in seminars after obtaining thistraining opportunities.

qualification. Employees are also dispatched as lecturers

Specifically, MCUBS is actively utilizing the specialist qual-

when requested by ARES.
The Company also covers some or all of the costs ofification system by the Association for Real Estate
Securitization (ARES), of which we are an official member.

work-related training and tests for obtaining qualifications

The Company covers the costs for employees to obtain theand maintaining them. As a result, several employees are

ARES Certified Master qualification (educational program

taking on the challenge of improving their qualifications.

enabling systematic learning of practical specialized

The number of employees with qualifications at MCUBS is shown below.
Real estate transaction specialists
ARES Certified MastersLicensed senior architects

66
61
11

As of December 31, 2020

 eal estate appraisers
R
6
CMAs10
Lawyers1

CPAs7
Tax accountants
5
MBAs1

Improved Training 
MCUBS has improved employee training by instituting a

In addition, to support improving the skills of each andvariety of programs aimed at enhancing occupational

every person through enhancing off-job training (Off-JT), we

expertise and leadership skills.

provide employee training services which allows all officers

Employees in managerial positions are dispatched toand employees to easily participate in business seminars

various leadership programs, such as the Program for(open seminars) by a professional group of lecturers.
In addition, we conduct seminars in order to raise aware-

Leadership Development by Mitsubishi Corporation (training over a total of five days in which skills as a manager canness of sustainability, and offer improved training to

be obtained in coordination with overseas businessincrease understanding of compliance and IT literacy. We

schools). Furthermore, we support employees after theyalso provide support several times a year through e-learning

enter the Company by providing management training,

so that employees are aware of the latest information andwhich includes inviting outside lecturers to provide inter-can utilize it effectively.

viewer training.

Communication with Employees
MCUBS has measured employee satisfaction on an annual

understanding of the presence of a wide range of views

basis since 2011 as part of our engagement. In addition,(diversity) within the company, to foster greater solidarity

communication improvement is being promoted throughand to resolve issues.
In addition, MCUBS is executing strict action on all

dialogues between the employees and management.
Through casual lunch meetings, discussions at the Divisions

forms of harassment by boosting employee awarenessand direct dialogues with the General Managers and otherthrough in-house training, consultation desk andtop management officers, action is taken to assure mutual

whistle-blowing system.

ESG Report March 2021

28

Measures for Health and Well-Being
Space and Interior

Rest

Sound

Interiors decorated with a clear concept,
including spaces that incorporate nature

In-office cafeteria

Soundproofed spaces where people can concentrate on their work

Light

MaintenanceExercise

Office that actively incorporates natural light

Regular air quality inspections

Furniture that is adjustable to various healthconscious configurations

Investment Corporation Initiatives
Investment corporations collaborate with tenants in working to improve the environment so that tenant employees are able
to work comfortably.
Development of Productive Work Environments Good use of Courtyard Area 

JMF is putting effort into developing better working envi-

At the IIF Mitaka Card Center, which is one of the proper-

ronments for tenant employees, such as renovating theties owned by IIF, there is an interior courtyard which is used

employee lounge and creating a powder room for tenantby tenant employees as a place for meetings and having

employees at mozo wonder city.

lunch. IIF is putting effort into maintaining the courtyard,
such as by changing the flowers and trees planted there.

Employee lounge

Interior courtyard at IIF Mitaka Card Center

Powder room

ESG Report March 2021

29SocialCommunication with Local Communities
The MC-UBS Group works to create important bonds with local communities by implementing disaster prevention
measures and performing activities that contribute to society at every one of its wide range of properties.

Initiatives by FundJMFJMF carries out day-to-day management of its properties

transportation during a disaster and evacuation drills havebased on the Property Management Policy so that custom-

been carried out in anticipation of people being unable toers can shop safely, and is mindful of making contributions

return home due to a large-scale earthquake. Throughto society and local communities. We aim to provide com-

participating in such initiatives, we are working with themercial facilities that exist as part of the local community bycommunity and the government to reduce environmental

having our properties fulfill a role as hubs for disaster pre-impact and increase resilience.

vention activities in areas where disasters are prone to occur.
We have introduced “Park & Ride Shopping” at mozo

Railway operators(PA)wonder city as an effort to alleviate traffic jams in thesurrounding area and to be environmentally friendly. We
Government(PA)

cooperate with nearby railway companies and offer ben-MSMS

efits to customers who visit the shopping center by train

BCD

after parking in a designated parking lot.
To provide peace of mind to our customers, we have

Lifeline operators(PA)

added greenery to our facilities and opened up parks andother communal spaces. We have also opened up theMSMS
Wide-area disasterprevention bases (PA)rooftop of our Abiko Shopping Plaza as one of the largest
OBP area future targets image

viewing spots during fireworks festivals, as part of ourcontinuous effort to provide safe spaces for the local community and to coordinate with local events. Through these
efforts, we are working to create an environment where
local residents see our facilities as part of their community.
We are also cooperating in public rescue and assistanceand mutual help initiatives through public-private partnerships at Twin 21, located in Osaka Business Park.
Demonstrations of next-generation energy supply systems
have been conducted to promote electric vehicle use
toward realization of a low-carbon society, and based onplans for ensuring safe urban regeneration of the entire

Implementation ofdisaster-preparedness drills

area, rules have been established for maintaining
IIF

IIF provides neighboring communities and governmentswith spaces and public open spaces at the real estate properties it owns. In addition, we provide tours of our facilities
and other services to ensure that local residents are awareof the functions performed by our properties in the area.
IIF Haneda Airport
Maintenance Center

ESG Report March 2021

30

Communication with Tenants
The MC-UBS Group operates a wide variety of properties, including retail facilities, industrial facilities, and officebuildings, which means the attributes of our tenants are also diverse. We make efforts in consideration of ourtenants’ safety and the facility environment. Furthermore, we promote measures that consider the global environment as well.

Initiatives by FundJMF

JMF services more than 1,400 tenants over 128 properties.

win-win relationship is created between JMF and tenants.

Despite this large number, JMF proactively takes measures

Also, tenant satisfaction surveys are conducted once a

to save energy and reduce CO2 emissions at the properties

year. Based on the results of these surveys, efforts are madeit owns. For example, JMF improves the environmental

to create comfortable working spaces for those working in

efficiency of properties. In some cases, it makes initialoffice buildings by improving the surrounding environments

investments in energy-saving equipment and recovers theand enhancing the convenience of building facilities andinvestment costs from the rent payments, while tenants

equipment as well as safety.

save utility costs without any capital outlay. Therefore, aIIFBy providing value to tenants, IIF continues to manage its

while creating value that meets the needs of tenants.

portfolio using its “3C Management Cycle,” which is designed

In periodic tenant workshops held by IIF, sustainability

to realize internal growth through stable, long-term manage-

themes are actively selected to promote responses to cli-ment that goes beyond the norm. The three “Cs” of the 3C

mate change and disaster countermeasures.
These activities serve as a foundation for IIF’s cooperation

Management Cycle are Communicate: acquire an accurate
understanding of tenant needs through close communication

with tenants in initiatives such as provision of portablewith tenants; Customize: strategically put forth customized

batteries and conclusion of green lease agreements.

proposals according to individual needs; and Create: employ a

Communication with tenants details

concept of portfolio management that creates unitholderWEBvalue through long-term, superior property management

IIF	
h ttps://iif-reit_sustainability.disclosure.site/en/themes/82/

Building Safety
The MC-UBS Group is working to maintain the safety of its buildings by conducting building and earthquake risk
assessments at the time of acquisition as well as collecting engineering reports on a regular basis.

Seismic Reinforcements 

Measuring Air Environment 

JMF

JMF

JMF conducts a building and earthquake risk assessment at

Asbestos is a naturally occurring mineral fiber sometimes

the time of property acquisition, and calculates earthquake

called sekimen or ishiwata, and breathing it is highly likely

risk in held properties whenever standards are revised.

to be hazardous to health, thus implementation of some

When necessary, secondary assessments are performed asmeasures is required. JMF measures the air environmentwell. When results of those assessments conclude thatonce a year to confirm the dispersal status of asbestos.

earthquake-resistant reinforcement construction is required,
we make environmentally conscious choices that will provide the necessary seismic retrofitting while minimizing
waste. At the same time, we also work to reduce CO2 emissions and energy consumption in the updated facility.
ESG Report March 2021

31

SocialSocial Contributions by Employees
MCUBS undertakes social contribution activities in partnership with sponsors. We will continue to deepen our
employees’ understanding about contributing to local communities, and support social welfare groups and otherorganizations.

Examples of Initiatives
Support for Social Welfare Organizations 

Volunteer Activities 

We undertake support by selling within the company prod-

We participate in volunteer activities being conducted byucts produced by social welfare groups that UBS AG gives

Mitsubishi Corporation in support of disaster areas, andcontinuous support, disaster areas, and others.

cooperate in supporting reconstruction.

Volunteer activities forreconstruction support

Sales of Kamaishi rugby pie

IR Activities
IR Briefing Sessions
Briefing Sessions for Individual Investors 

ESG Briefing Sessions 

In addition to each investment corporation participating in

MCUBS is putting efforts into helping investors to better

major events organized by the Tokyo Stock Exchange, we

understand our initiatives by holding joint briefing sessions

are putting effort into helping individual investors betteron ESG initiatives involving JMF and IIF.

understand investment corporations, while capitalizing on
the strength of managing two investment corporations.
This includes holding online briefing sessions.

Joint seminar for theinvestment corporations

ESG briefing session

For IR information pertaining to each fund
WEB

JMF

https://www.jmf-reit.com/english/ir/

IIF

https://www.iif-reit.com/english/ir/

Example of the social initiatives for each fund, please refer to the links below.

WEB

JMF
IIF

https://jmf-reit_sustainability.disclosure.site/en/themes/129/	https://iif-reit_sustainability.disclosure.site/en/themes/82/

ESG Report March 2021

32

C O R P O R A T E
G O V E R N A N C E

As asset management companies, MCUBS receives asset management consignments from JMF and IIF and are committed to
upholding their fiduciary duties to investment corporations.

ESG Report March 2021

33

Corporate GovernanceCorporate Governance
As an asset management company, MCUBS receives asset management consignments from JMF and IIF, and is committed to upholding its fiduciary duty to investment corporations.

Decision-Making Process
Mitsubishi Corp.-UBS Realty Inc., the asset manager of JMF

relating to stakeholder transactions of the Asset Manager

and IIF (hereinafter, the “Asset Manager”), has five commit-

must first be approved by the Compliance Committee

tees: the Investment Committee, the Risk Management

before they are submitted to the Investment Committee

Committee (the Risk Management Committee acting as an(excluding “Minor Transactions,” as stipulated in theadvisory board to facilitate decision-making, not a decision-

Regulations for Transactions with Stakeholders). In addition,

maker), the Compliance Committee, the Compensation

subsequent to approval by the Board of Directors of theCommittee, and Sustainability Committee.

Asset Manager, approval from our board of directors is

In the course of making decisions regarding investment

required prior to a transaction involving the acquisition,

policy and standards, operation and management policy

disposal, or lending of securities or real estate between us

and standards, budget and financing, as well as the acquisi-

and a related party (as defined in Article 201-1 of thetion, disposal, or operation and management of assets for

Investment Trust Act) of the Asset Manager, except certain

each investment corporation, a proposal will be submittedof such transactions determined not to have a significant

to the Asset Manager’s Board of Directors for approval in

impact on each investment corporation under theaccordance with rules of the Board of Directors. Proposals

Ordinance for Enforcement of the Investment Trust Act.

Front Division*5
Proposal*3*1Compliance Committee*2*3
Investment Committee*2*3

Board of Directors

Board of Directors (supermajority voting)Transaction with a related party as defined in Article
201-2 of the ITA*4
Board of Directors of each Investment Corporation*4
Consent of Investment Corporation(note) Approval, rejection or sending back of each agenda*1 With regard to matters relating to the acquisition, disposition, operation and management of assets, the approval of the Investment Committee will be obtained based on the Guidelines
for the Investment Committee.
*2 With regard to the investment policy and standards, operation and management policy and standards, budget and financing, etc. for each Investment Corporation, the approval of theInvestment Committee and the Board of Directors will be obtained in accordance with the Guidelines for the Investment Committee and the Rules for the Board of Directors.
*3 With regard to matters relating to transactions with stakeholders stipulated in the Regulations for Transactions with Stakeholders, the approval of the Compliance Committee, theInvestment Committee and the Board of Directors (supermajority voting) will be obtained in accordance with the Regulations for Transactions with Stakeholders, the Guidelines for theCompliance Committee, the Guidelines for the Investment Committee and the Rules for the Board of Directors. In the case of Minor Transactions, the approval at the Compliance
Committee and the Board of Directors (supermajority voting) is not required.
*4 With regard to matters relating to transactions with a related party as defined in Article 201-2 of the ITA, the approval of the Board of Directors of each Investment Corporation and theconsent of Investment Corporation will be obtained. In the case of transactions determined not to have a significant impact on asset of the investment corporation under the Ordinancefor Enforcement of the Investment Trust Act, consent of each investment corporation based on the approval by its board of directors is not required.
*5 Metropolitan Business Division or Industrial Division is referred to as the Front Division.

For information regarding corporate governance for each fund, please visit the websites below.

WEB

JMF

https://jmf-reit_sustainability.disclosure.site/en/themes/130/

IIF

https://iif-reit_sustainability.disclosure.site/en/themes/84/

ESG Report March 2021

34

Governance of Investment Corporations
The organization of each investment corporation consists of

The number of directors and their compensation is

executive directors, supervisory directors, an Officers

decided by each investment corporation, and monthly

Meeting, which is comprised of all directors, a General

remuneration is determined by the Officers Meeting.

Meeting of Unitholders, which is comprised of investors,

Pursuant to the Investment Trust Act, investment corpora-plus an accounting auditor.

tions are prohibited from having employees. Accordingly,
none of our investment corporations have any employees.

As a typical example, the mechanism of IIF is as follows.
A female executive officer was appointed in October 2020.

Asset Manager(1)

Industrial & Infrastructure Fund Investment Corporation(2)

Mitsubishi Corp. – UBS Realty Inc.
(51% Owned)
Specified Affiliated Company(Parent Company of the Asset Manager)
Mitsubishi Corporation*

Asset Custodian /General Administrator
Sumitomo Mitsui Trust Bank, Limited

General Meeting of Unitholders

Board of Directors
Executive Director:(3)

General Operation Agent ofCorporate BondMUFG Bank, Ltd.

Kumi Honda

Supervisory Director: Katsuaki Takiguchi
Supervisory Director: Yutaka Usami
Supervisory Director: Koki Ohira(4)

Administrator of Unitholder Registry /Special Accounts Administrator
Mitsubishi UFJ Trust andBanking Corporation

Independent Auditor
Ernst & Young ShinNihon LLC(5)

Tax
Administrator
Ernst & Young Tax Co.

Name of contracts(1) Asset Management Agreement / Trademark License Agreement(2) Asset Custodian Contract / General Administrative Services Agreement(3) Fiscal Agency Agreement(4) Account Administration Service Agreement / Special Accounts Administration Agreement(5) Tax Service Agreement* Mitsubishi Corporation is the parent company of the Asset Management Company (the parent company prescribed in the Ordinance on Terminology, Forms and Preparation Methods ofFinancial Statements, etc. (Ministry of Finance Ordinance No. 59 of 1963; including subsequent revisions), Article 8, Paragraph 3; the same hereinafter), and falls under a specified
affiliated company of the Asset Management Company, which is prescribed in the Cabinet Office Ordinance on Disclosure of Information, etc., of Regulated Securities (Ministry of FinanceOrdinance No. 22 of 1993; including subsequent revisions), Article 12, Paragraph 3.

ESG Report March 2021

35

Corporate GovernanceCompliance
MC-UBS Group committed to the thorough implementation of compliance measures. The COO also serves as thecompliance officer, and we have adopted a basic policy on compliance and established compliance systems that
include coordination with the Risk Management Committee and a whistle-blowing system.

Main Compliance Systems• Compliance Committee• Compliance training(in principle, meets once every two months)• Periodic external audits• Compliance officer system• Audits by Mitsubishi Corp. and UBS• Compliance monitoring (self-assessment)
Basic Policy on Compliance
Mitsubishi Corp.-UBS Realty Inc. (hereinafter, “the Asset Manager”) and each Investment Corporation are striving to ensure the appropriateness of asset
management and the soundness and adequateness of operations, as well as the protection of investors at the discretion and responsibility of each entity,
by strengthening and facilitating maximum functioning of the internal control system based on the highest quality standards of laws and regulations under
the real estate investment fund system. In addition, the Investment Corporation and the Asset Manager are of a highly public nature and also assume thesocial responsibility of extensively making contributions to the economy and society. Given such a business environment and in view of the fact that theAsset Manager is a joint venture company between a Japanese company and a foreign financial institution, and characteristically has an international
corporate culture, it has developed the following compliance system with the aim of achieving a high level of compliance in the industry.

• In order to ensure that the performance of duties by directors and employees of the Asset Manager complies with laws and regulations and the articles ofincorporation, the Asset Manager shall establish the Compliance Office, which shall seek to, in operation with the Compliance Office, develop the systemfor directors and employees to act in compliance with laws and regulations, the articles of incorporation and social norms, and identify problems thereof.
• The Risk Management Committee shall identify investment management risks, administrative risks, system risks, and any other risks relating to thebusiness operations of the Asset Manager and investment corporations on a regular basis.
• Based on the “Whistle-Blowing Rules,” the Asset Manager shall avoid any disadvantageous treatment on a whistle-blower. Any whistle-blower isentitled to appropriate protection and may contact the internal inquiry counter. The employees may contact external legal counsel, using the “MCGroup Lawyers’ Opinion Box,” which is designated as the external inquiry counter for consultation and reporting.* By such means, the Asset Manager
shall prevent violations of laws and regulations or the articles of incorporation and, if any such violation has occurred, shall seek to quickly gather
information and address it.
* The Confidentiality Legal Counsel will confirm the affiliation of whistle-blowers, but will not disclose their name or organizational position to the Compliance Administration
Office without their consent.

• If any violation of laws and regulations or the articles of incorporation has been discovered, the Compliance Office shall, pursuant to the“Administrative
Incident Handling Rules,” investigate the cause of such violation and handle and settle it, and then establish measures.

Anti-Corruption
The MC-UBS Group eliminates all forms of transactions

We conduct compliance training several times each yearwith antisocial forces. In addition to checking against laws

for our employees to increase their compliance knowledge

and paying the greatest attention to suspicious transac-

and awareness, including the above. In addition, employees

tions, we prohibit all forms of dealings which may be inter-pledge to observe our code of conduct by submitting com-preted as bribery. Also, MCUBS signed up to the UN Global

pliance pledges each year.

Compact (UNGC), endeavors to strengthen corporate governance against anti-corruption through supporting the
UNGC’s ten principles.

For information regarding compliance and risk management for each fund, please visit the websites below.

WEB

JMF

https://www.jmf-reit.com/english/about/compliance03.html

IIF

https://www.iif-reit.com/english/about/compliance03.html

ESG Report March 2021

36

Risk Management
MC-UBS Group committed to the thorough implementation of these risks under the following organization structure.

Structure on Risk Management
To protect investors and implement the investment man-investment management business. The asset manager hasagement business appropriately, the Asset Manager of theclassified the major risks associated with asset management

Investment Corporation shall in principle executeinto investment management risk, clerical work risk, system

operations related to asset management for investment

risk, etc. and is striving to cope with and continuously

corporations as its clients, faithfully and with the care of areduce such risks through the following activities.

good manager in accordance with the purposes of the
[4]

[1]

Risk Management CommitteeStanding members:	Chief Operating Officer* (Chairman),President, Deputy President,
Head of each Division,
Head of Risk Management Department,
Head of Compliance Office,Head of Strategic Planning OfficeSecretariat:
	Risk Management Department,
Corporate Division[3]
Investment Committee

Board of Directors

Making Decision

ReportPutting
togetheropinions[2]
President & CEO
Chief Officer for Risk Management

Section for making proposals:
	Head of Metropolitan Business Division
or Head of Industrial Division
Committee members:	President (Chairman), Deputy President,
Executive Officer, Head of Compliance
Office, external estate appraisers and otherpersons nominated by the chairman
Secretariat:
	Risk Management Department,
Corporate Division

ReportAudit the adequacy and effectiveness of the risk management[6]
Internal Audit Office[7]

Informationexchange

Risk Management Department,
Corporate Division[8]
Compliance Office[5]
Risk Management Officer
Head of each Division and Officer

Monitoring, etc.
* From April 1, 2021, Head of Corporate Division is going to be the chairman of the Risk Management Committee.

[1] Board of Directors

Understanding of the overall management, etc[2] P resident & CEO,
Chief Officer for Risk Management

President & CEO: Supervision of the overall risk management, etc.
Chief Officer for Risk Management: Execute necessary measures to properly manage risks[3] Investment Committee

Examines, discusses and makes decisions regarding overall risks affecting the portfolio as a whole (e.g.
acquisition, disposal and management of assets by the investment corporations, investment policy
and standards, management policies and standards, budgets, funding, etc.)[4] Risk Management Committee

When required, identifies, examines and formulates responses and policies for matters that pose
major risks (excluding those matters that are dealt with by the Investment Committee)[5] Risk Management Officer••P erson responsible for managing major risks, etc. in his/her department
Reports the state of risk management to the Risk Management Committee[6] Internal Audit OfficePlanning and implementation of internal audit[7] R isk Management Department,
Corporate Division•[8] Compliance Office

Accumulating risk information through, but not limited to, the management of operational accidents
and the review of the approval documents


Plans
and makes proposals concerning risk management for the company as a whole
Monitors, evaluates, and analyzes the extent to which risk management is in place and functioning• Runs the Risk Management Committee•

ESG Report March 2021

37

ESG Data

Environmental
Former JRF
(FY)

2016

2017

2018

2019

CO2 emissions (Thousand tCO2)

205

196

179

172

CO2 emissions per unit (tCO2/m2)

0.09

0.08

0.09

0.08

Energy consumption (Mwh)358,745

347,921319,663319,346

Energy consumption per unit (kwh/m2)

162.24149.54153.15146.71

Fuel consumption (fuel only) (Mwh)

94,97398,891

82,27783,803

Fuel consumption per unit (kwh/m2)

42.94

42.50

39.42

38.50

Water Use (Thousand m )

2,172

2,073

1,995

2,121

Water use per unit (m3/m2)

0.95

0.89

0.96

0.98

32,774

26,12819,87325,6183

Total waste (t)Former MMI
(FY)

2016

2017

2018

2019

CO2 emissions (Thousand tCO2)

43

44

44

39

CO2 emissions per unit (tCO2/m2)

0.13

0.13

0.12

0.11

Energy consumption (Mwh)

73,72775,86280,27775,125

Energy consumption per unit (kwh/m2)

228.77226.67223.90211.05

Fuel/gas consumption (Mwh)

31,80635,01636,31033,420Fuel/gas consumption per unit (kwh/m2)

98.69

104.63101.2793.89

Water Use (Thousand m3)

519

542

546

500

Water use per unit (m3/m2)

1.61

1.62

1.52

1.41

Volume of non-hazardous waste (t)

4,607

3,778

4,362

3,826

Volume of hazardous waste (t)

199

245

221

41

Recycling rate (%)

57.2

61.6

62.7

54.2

IIF
(FY)

2016

2017

2018

2019

CO2 emissions (Thousand tCO2)

66

75

75

74

CO2 emissions per unit (tCO2/m2)

0.09

0.08

0.08

0.07

Energy consumption (Mwh)

125,801

139,627

146,045

151,381

Energy consumption per unit (kwh/m2)

177.46159.02

157.79134.05

Fuel/gas consumption (Mwh)

12,435

12,997

12,977

11,241

Fuel/gas consumption per unit (kwh/m2)

17.54

14.80

14.02

9.95

Water Use (Thousand m3)

362

543

549

532

Water use per unit (m3/m2)

0.51

0.61

0.59

0.47

Volume of non-hazardous waste (t)

3,505

5,827

6,403

5,422

94

105

104

33

33.2

31.6

32.1

45.2

Volume of hazardous waste (t)Recycling rate (%)

SocialNew hires(Employees who joined between January 1
and December 31, 2020)
Diversity of employees
Women in managerial posts
Total workforce

Men

89.5%

Women

10.5%

Under 30 years old
30 to 50 years old
50 years old or older
Women
Men
Women

4.0%
80.5%
15.5%
25.7%
63.1%
36.9%

As of December 31, 2020, results of MCUBS-wide survey

ESG Report March 2021

38

* Excluding executives, seconded employees, andtemporary employees* Excluding executives and temporary staff

Environmental Performance Data
Data and emissions per unit are calculated based on the total leasable floor area (after considerations for rate of occupancy).
Data collection rate Aggregation period Former JRF 	CO2 emissions and energy amount

Former JRF 	2019: March 2019– February 20202018: March 2018–February 2019

2019: 91.9% 2018: 89.1% 2017: 92.7% 2016: 88.4%

2017: March 2017–February 2018		Water consumption

2016: March 2016–February 2017

2019: 91.8% 2018: 89.0% 2017: 92.7% 2016: 90.1%
		Waste generated

Former MMI 	2019: January 2019–December 20192018: January 2018–December 2018

2019: 84.7% 2018: 61.7% 2017: 88.5% 2016: 99.1%

2017: January 2017–December 2017

Former MMI 	2019: 100% 2018: 100% 2017: 100% 2016: 100%
IIF

2016: January 2016–December 2016	2019: 100% (Volume of waste: 93.4%) 2018: 100%
IIF

2017: 100% 2016: 100%

	2019: February 2019–January 20202018: February 2018–January 20192017: February 2017–January 20182016: January 2016–December 2016

Listing on ESG Indices
MSCI Japan ESG Select Leaders Index 
MSCI, an American stock index provider listed on the New
York Stock Exchange, launched a index called the MSCI
Index
launched inJapan ESG Select Leaders Index, taking into account highenvironmental, social, and governance (ESG) performance.

June 2017

Incorporation

The index covers the top 700 equities by market capital-

JMF

ization size, and it is built by selecting relatively good ESG

IIF

evaluation stocks in the industry. In addition, theGovernment Pension Investment Fund (GPIF) has selected

Former JRF Incorporated since June 2017
Former MMI Incorporated since December 2018

Incorporated since June 2017

(Note) THE INCLUSION OF MITSUBISHI CORP.-UBS REALTY INC. IN ANY MSCI INDEX, AND
THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMESHEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTIONOF MITSUBISHI CORP.-UBS REALTY INC. BY MSCI OR ANY OF ITS AFFILIATES. THE
MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCIINDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR
ITS AFFILIATES.

MSCI Japan ESG Select Leaders Index as one of its ESG index
and implemented passive investment tracking the index.
JMF and IIF, all funds of the MC-UBS Group, have been
listed on the index since its establishment in 2017.
Euronext® Reitsmarket GRESB Global Sustainable NR Index This is an index created by Reitsmarket, a real estateEuronext® Reitsmarket GRESBGlobal Sustainable NR Index

investment trust research company of Luxembourg, in collaboration with GRESB and Euronext, to invest in the top
30 REITs according to the score prepared by GRESB. The
index was set up on June 7, 2018.

Index
launched inJune 2018

Incorporation

JMF

More than six REITs have been selected from respective
areas in North America, Europe, and Asia Pacific, and JMF
accounts for the second-largest composition ratio in the
Global sector, as of the establishment of this index on June 7.

ESG Report March 2021

39

Incorporated since June 2018

Investment Corporation Overview

J MF

Japan Metropolitan Fund Investment Corporation

As a top-ranking domestic diversified REIT, JMF is listed on the Tokyo Stock Exchange. With its vision of “Support
metropolitan life (live, work, and consume) in Japan from the perspective of real estate,” it mainly acquires and operates
retail facilities, office buildings, residences, hotels and mixed-use facilities operated for such uses located in urban areas,
including commuter-town areas.
Characteristicsof the REIT

1. Opportunity to see the actual properties while­shopping in them

GYRE

G-Bldg. Midosuji 01

IIF

2. Portfolio stability supported by diversified asset
portfolio with top-class scale in Japan

Twin 21

Yokohama i-land Tower

Industrial & Infrastructure Fund Investment Corporation

Listed on the Tokyo Stock Exchange, the Industrial & Infrastructure Fund (IIF) is a unique REIT that focuses on industrial properties in Japan. IIF invests in real estate anticipated for stable use over the medium to long term while upholding a philosophy
of investing in social infrastructure as a source for generating Japan’s economic strength and supporting industrial activities inJapan through real estate.
Characteristicsof the REIT

1. Investing in properties that play a vital role in industrial activities across a broad range of sectors

2. Stable cash flows based on lease agreements over
10 years

IIF Shonan Health Innovation ParkIIF Haneda Airport Maintenance Center

IIF Shin-Kawasaki R&D Center

IIF Atsugi Manufacturing Center

IIF Shinonome Logistics Center

IIF Kawasaki Science Center

ESG Report March 2021

40

JMF

TSE code

Fund listing

8953
OfficeRetailproperties

2002/3/12

Urban offices

Favorable locations, high building specifications

Commuter-town offices

Properties that can also be used as retail space

Facing high street

Located on main thoroughfares in major retail areas

Urban retail properties

Those that can be turned into mixed-use properties

Residential station

With supermarkets being the main tenants

Office x Retail
Major types ofproperties

Mixed-use
properties

OthersResidence x Retail
Office x Residence
Complex for three ormore uses
Residence in urban areas

Located within 30 minutes from key business areas and within a
10-minute walk from the nearest station

Hotels in urban areas

Limited to those with fixed rent, in favorable locations and highly versatile

New categories
Portfolio details
WEB

https://www.jmf-reit.com/english/portfolio/map.html

IIF

TSE code

Major types ofproperties

3249

Fund listing

Logistics facilities

Facilities used to provide intercompany distribution and sales distribution services, including transportation, shipping, storage, stockpiling,cargo handling, packaging, sorting, distribution processing, andinformation functions

Manufacturing and R&D facilities

Facilities for research and development, raw material procurement,
stockpiling, storage, manufacturing, production, assembly and processing, recycling, and other purposes

Infrastructure facilities

Facilities developed as bases for industrial activity, such as transportation, communication, energy, water, and public facilities

Portfolio details
WEB

https://www.iif-reit.com/english/portfolio/map.html

ESG Report March 2021

41

2007/10/18

Disclaimer• This document may contain information such as statements on future performance, plans, management targets, and strategies.
Such statements with regard to the future are based on current hypotheses and assumptions about future events and trends of thebusiness environment. However, these hypotheses and assumptions are not necessarily correct. Actual results may vary significantly
due to various factors.
• Unless otherwise specified, this document was created based on Japanese generally accepted accounting principles.
• J apan Metropolitan Fund Investment Corporation (JMF), Industrial & Infrastructure Fund Investment Corporation (IIF), and Mitsubishi
Corp.-UBS Realty Inc. (MCUBSR) shall not be liable for any errors, inaccuracies, loss or damage, or for any actions taken in reliance
thereon, or undertake any obligation to publicly update the information contained in this document after the publication date thereof.
Asset Management Company: Mitsubishi Corp.-UBS Realty Inc.
(Financial Instrument Firm under License No. 403 of the Director of the Kanto Local Finance Bureau)