ESG report
2023.3

Table of Contents

About This ESG Report

Overview of Companies

P3

Message from Top Management

P5

Sustainability Policy and Structure
IRM-Endorsed Initiatives

・Advance Residence Investment Corporation (“ADR”), Advance Logistics
Investment Corporation (“ADL”), and their asset management company, ITOCHU

Environment

sustainability initiatives. This report was written to provide information

P8

regarding sustainability policies and the implementation status of its initiatives

External Assessment and Certification
Materiality and Targets

REIT Management Co., Ltd. (“IRM”) strive to disclose the status of its

P6

understand manner.

P11

・The disclosure in this report was prepared with reference to the GRI

P14– Response to Climate ChangeStandards（GRI 1: Foundation 2021）. For comparisons, please refer to the

P15– Environmental Performance Data

– Cooperation with Stakeholders

Comparative Table with GRI Standards.

P16– Environmentally Conscious Asset Management

Socialas disclosed on ADR, ADL and IRM websites to our stakeholders in an easy-to-

P9

P18

・All numerical information included in this report is as of the end of February
2023, unless otherwise noted.

P19

Date of Issue: March 16, 2023

P20

– Initiatives for Tenants and Regional Contribution– Human Rights Policy

P24– Initiatives for Employees
Governance

P25

Green Finance
ESG Data

TEL: 03-3518-0480 (Main)

Disclaimer

P28– Fraud and Corruption Prevention

Inquiries:
Sustainability Promotion Department, ITOCHU REIT Management Co., Ltd.

P27

– Compliance Structure

P21This report contains forward-looking statements on future operating results, plans, business objectives and

P29

Forward-looking statements provide current expectations of future events based on number of assumptions
and include statements that do not directly relate to any historical or current facts. Forward-looking

P33

statements are not guarantees of future performance and the Company's actual results may differ
significantly from the results discussed in the forward-looking statements.

P35

Comparative Table with GRI Standards

strategies of the company.

Although the financial figures in the report are based on Japanese GAAP, the report does not necessarily

P40

follow any official rules or regulations on financial disclosures.
This report was not created for the purpose of soliciting investment in the company. Investments should bebased on your own judgment and responsibility.

Overview of Companies

An investment corporation that boasts one of the largest asset holdings in Japan among REITs specializing in rental housing. Rooted in thebasic policy of realizing stable, long-term profit sharing, investments are diversified nationwide, mainly in central Tokyo. Types of dwellings
are also diversified, from single to family-type units, to make investments in a well-balanced manner.
Name of Investment
Corporation

Advance Residence Investment Corporation

Representative

Wataru Higuchi, Executive Director

Address of Head Office

17th Floor, Jimbocho Mitsui Building
1-105 Kanda-Jimbocho, Chiyoda Ward, Tokyo

Type of Assets underManagement

Residential Property

Fiscal Term End

Six-month period from Feb.1 to Jul.31, and Aug.1 to Jan.31

Aiming to develop a logistics infrastructure for which demand is revitalized due to the expansion of EC transactions, etc., mainly throughtheir ownership and operation of the “i Missions Park” logistics facilities. In addition, they strive to stabilize profits over the long term by
utilizing the customer network and logistics operations experience that the ITOCHU Group has with logistics companies and shippers.
Name of Investment
Corporation

Advance Logistics Investment Corporation

Representative

Tomoyuki Kimura, Executive Director

Address of Head Office

17th Floor, Jimbocho Mitsui Building
1-105 Kanda-Jimbocho, Chiyoda Ward, Tokyo

Type of Assets underManagement

logistics facilities

Fiscal Term End

Six-month period from Mar.1 to Aug.31, and Sep.1 to end of Feb.

3

Overview of Companies

An asset management company that provides asset management services for Advance Residence Investment Corporation and Advance
Logistics Investment Corporation, J-REITs, Advance Private Investment Corporation, a private placement REIT, and private funds, as well asprivate placement services for overseas real estate funds.
Management Company ITOCHU REIT Management Co.,Ltd.
Representative

Junichi Shoji, Representative Director, President & CEO

EstablishedFebruary 2, 2005

Capital¥300 million

Shareholders

ITOCHU Corporation 80%
ITOCHU Property Development, Ltd. 20%

Licenses andRegistrations

Building Lots and Building Transactions Business License, Governor ofTokyo (4) No. 84325
Entrustment-based Agency Services for Transactions, etc. License,
Minister of Land, Infrastructure, Transport and Tourism License No. 37
Financial Instruments Business Operator Registration, Director-Generalof the Kanto Local Finance Bureau (Financial Instruments) No. 309
First-class Architect Office: Governor of Tokyo Registration No. 58856

Memberships

The Investment Trusts Association, Japan
Type II Financial Instruments Firms Association
Japan Investment Advisors Association

Headquarter Address

17th Floor, Jimbocho Mitsui Building
1-105 Kanda-Jimbocho, Chiyoda Ward, Tokyo

4

Message from Top Management

Advance Residence Investment Corporation (“ADR”) and Advance Logistics Investment Corporation (“ADL”) are listed investment corporations
managed by ITOCHU REIT Management Co., Ltd. (“IRM”), which was established on June 1, 2022 with the merger of AD Investment
Management Co., Ltd. and former ITOCHU REIT Management Co., Ltd. ADR and ADL are sponsored by ITOCHU Corporation Group, which has
strengths particularly in the lifestyle and consumption-related businesses.
Moves towards the realization of a sustainable society have been accelerating both domestically and globally, beginning with the adoption of
the SDGs by the UN in 2015, and followed by the adoption of the Paris Agreement at the UN Climate Change Conference (COP), theestablishment of goals and continuing discussions for implementation of the Agreement, and the commitment of the Japanese government toachieve carbon neutrality by 2050 and to provide financial support to Asian nations for decarbonization.
ADR, ADL and IRM are strongly aware that the promotion of sustainability initiatives such as eco-friendliness, contribution to regional societies,
and enhancement of tenant experiences are all important agendas to address as a business entity and are essential to maximize shareholder
value. To achieve these agendas, IRM reviewed, reorganized, and revised its sustainability policy at the time of the above merger.
ADR and ADL also set targets and KPIs to establish materiality (important issues in sustainability) and enhance the effectiveness of thesemateriality initiatives towards the implementation the sustainability policies.
Recently, in the GRESB real estate assessment in 2022, both ADR and ADL received high acclaim. ADR was the first ever housing-related REIT
to be awarded four stars and was also chosen as the Asian Listed Housing Sector Leader for the third consecutive year. ADL was awarded fivestars, the highest rating, and was chosen as the Global Listed Logistics Sector Leader. We believe this assessment is attributable to our steadyefforts to date and are committed to continue promoting sustainability programs.
This ESG Report aims to provide investors and other stakeholders with a wide understanding of the current state of sustainability measurestaken by ADR, ADL and IRM by summarizing the details of the sustainability policy and the structure to promote it, as well as providing
specific initiatives, external assessments of the results of such initiatives, and various data.
We will continue to contribute to the realization of a sustainable society to the best of our ability, and to communicate to investors and otherstakeholders the implementation status of our efforts in an easy-to-understand manner.
Your continued support is highly appreciated.

Wataru Higuchi
Executive Director
Advance Logistics Investment Corporation

Tomoyuki Kimura

Junichi Shoji

Executive Director
Advance Logistics Investment Corporation

Representative Director, President & CEO
ITOCHU REIT Management Co., Ltd.

5

Sustainability Policy and Structure

Sustainability Policy
Based on the understanding that addressing global environmental challenges and social issues is one of the most important items in management
policy, we have established our Sustainability Policy for real estate investment management operations with the intention of contributing to theachievement of a sustainable society.

1.Legal compliance and the establishment of an organizational structure
We will establish an appropriate organizational structure to ensure compliance with laws and regulations onenvironmental, social, and governance (ESG) factors and to prevent risks.
2.Efforts toward achievement of a decarbonized society
We will contribute to achieving a decarbonized society and to mitigating climate change by reducing greenhouse gas
emissions from the operation of our property holdings by installing energy efficient equipment and adopting
renewable energy.
3.Resource conservation and waste reduction
We will contribute to the achievement of a society that conserves and recycles resources by encouraging tenants toconserve power and water and to recycle waste.
4.Employee education
We will foster employee awareness of environmental considerations and promote environment-friendly practices
through education and awareness-raising activities.
5.Contribution to local communities
We will strive to offer high quality properties to tenants and contribute to local communities through collaboration
with our employees and other stakeholders including property management companies.
6.Transparent disclosure
When disclosing our ESG-related policies and initiatives, we will take the perspective of unitholders and makedisclosures easy to understand.

6

Sustainability Policy and Structure
Promoting Sustainability
We have defined the direction that we will take in promoting
sustainability based on our Corporate Philosophy andManagement Policy and on changes in our operating environment
as our Sustainability Policy, and we are pursuing it as anorganization in a systematic manner. In doing so, we haveestablished KPIs for material issues, which are the priority
challenges that the Company and our investment corporations
must find solutions to, and we are implementing a PDCA cycle fortarget achievement.

Sustainability Promotion Framework
In order to systematically pursue sustainability improvement activities,
we have established the Sustainability Promotion Committee, which ischaired by the representative director, and the Sustainability Practical
Committee, which is composed of employees responsible for actual
operations in each department. The Sustainability Promotion
Committee meets twice a year to implement a PDCA cycle with theaim of improving asset value over the medium to long term. The
PDCA cycle consists of the following steps: formulate sustainability
goals and initiatives, identify and evaluate climate-related risks andopportunities, analyze climate-related risks and manage themcompany-wide, monitor environmental performance as well as theresults of ESG evaluation by external organizations, verify the degreeof achievement of goals, and reset goals for remaining challenges andnew challenges. In addition, the Sustainability Practical Committee is
responsible for pursuing the various measures necessary to achieve
the goals.
Goals are set by the representative director, who is the chief executive
officer of sustainability, and the progress made toward goals and on
initiatives is reported to the Board of Directors and to each investment
corporation’s executive committee once every six months.

7IRM-Endorsed Initiatives
IRM recognizes that climate change is an important issue that may bring about drastic changes to the natural environment and social
structure and substantially affect overall business activities. With this in mind, IRM aims to secure sustainable and stable earnings on a longterm basis by appropriately evaluating the risks and opportunities brought about by climate change and by incorporating evaluation results inthe operations and management policies of IRM, ADR and ADL.
IRM therefore endorses the following initiatives.

Recommendations of Task Force on Climate-related Financial Disclosures (TCFD)In March 2020 IRM expressed support for the recommendations issued by the Task Forceon Climate-related Financial Disclosures (TCFD)*. We recognize climate change as a criticalissue that will affect the continued growth of IRM as well as the investment corporations wemanage in the years to come. Based on the TCFD recommendations, we will continue tocontribute to the achievement of a sustainable society by assessing the impact of climatechange on our businesses, counteracting risks and taking advantage of opportunities, andproactively disclosing related information.
In addition to supporting the TCFD, we also became a member of the TCFD Consortium(composed of Japanese companies and organizations that support TCFD).
* TCFD was established in 2015 by the Financial Stability Board, which consists of central banks andfinancial regulators of the world’s major countries. In June 2017, TCFD issued recommendations urging
companies to disclose information on climate-related business risks and opportunities in the medium tolong term, their impact on corporate finances, specific actions and strategies to address those risks, andother factors in order to mitigate risks that could destabilize financial markets. Please refer to the TCFD
website for details.

Japan Climate Initiative (JCI)
Subscribing to the fundamental principles of the Japan Climate Initiative (JCI), IRM
became a member in July 2019.
* JCI: Following the adoption of the Paris Agreement for the prevention of global warming in 2015, JCI
was established by a coalition led by Japanese corporations, municipalities, NGOs, and other bodies
actively working to address climate change. It is intended to serve as a network for voluntary efforts
toward the decarbonization of society. JCI is aiming for the achievement of a decarbonized society bycreating a nationwide movement, supporting the activities of its member organizations while urging
the government to take action, and cooperating with the international community.
For more information, please visit the JCI (Japan Climate Initiative) website.

8

External Assessment and Certification
Participation in GRESB Assessment
ADR and ADL have continuously participated in the GRESB real estate assessments and both ADR and ADL were rated highly inthe 2022 assessments.
First residential J-REIT to receive a 4 star rating; selected as the "Asia Sector Leader“ for Three

Consecutive Years *Awarded the highest ５ star rating; selected as the "Asia Sector Leader“ andSector Leader" *"Global* Ratings for Listed Residential sector for ADR and Listed and Logistics sector for ADL

Acquisition of Environmental Certification
ADR and ADL are proactively seeking environmental certification, such as the Green Building Certification and energy efficiency ratings.
Certification

DBJ Green Building
Certification

CASBEE Certification for Real Estate

BELS

ADR
Certification Status
Certified properties：10 properties
Percentage of properties certified：
6.9％ of total floor space 、3.6％ of
total number of property（as of January 2023）
Certified properties：13 properties
Percentage of properties certified：
21.7％ of total floor space 、4.7％of total number of property（as of January 2023）

ADL
Sample Properties

Certification Status

4Stars：RESIDIA RoppongiHinokichokoen、RESIDIA TOWER
Azabujuban etc.
3Stars：RESIDIA Yutenji、
RESIDIA Sasazuka II etc.

Certified properties：9 properties
Percentage of properties
certified：84.9％ of total floor
space 、69.2％ of total number ofproperty（as of March 25,2022）

S Rank ：RESIDIA TOWER
Meguro-Fudomae、RESIDIATOWER KamiIkebukuro(Tower)etc.
A Rank：Park Tower Shibaura
Bayward Urban Wing, RESIDIATOWER Kami-Ikebukuro(Park) etc.

Acquired 1 Star at Residia Ochanomizu II

Sample Properties
4Stars：i Missions Park Inzai、iMissions Park Kashiwa2 etc.
3Stars：i Missions Park Noda、i Missions Park Kashiwa

Acquired S Rank at i Missions Park IchikawaShiohama

Certified properties：8 properties
Percentage of properties
certified：68.1％ of total floor
space 、61.5％ of total number ofproperty（as of November 30,2021）

5 Stars：i Missions Park Inzai、i Missions Park Kashiwa2 etc.
4 Stars：i Missions Park Misato

9

External Assessment and Certification
Acquisition of SBT Certification

ADR obtained SBT* certification in March 2023 for our GHG emissions reduction target, as
Science Based Targets, which is consistent with the level required by the Paris Agreement.
【 Certificated GHG emissions reduction target 】
Scope 1 & 2:
FY2030 to date (vs. FY2018) 51% reduction (total)*SBT (Science Based Targets: emission reduction targets based on scientific evidence) is GHG
emission reduction targets set by companies that are consistent with the levels required by theParis Agreement (which aims to limit the global temperature increase to well below 2°C above
pre-industrial levels and and pursuing efforts to limit warming to 1.5°C). The SBT Initiative is aninternational initiative of CDP, the United Nations Global Compact (UNGC), the World Resources
Institute (WRI), and the World Wide Fund for Nature (WWF) to certify companies that set SBT.

10

Materiality and Targets
ADR and ADL have identified the following ten materiality items as important issues to be solved as a priority in promoting sustainability
and are executing the PDCA cycle to achieve our goals. Also, in September 2022, ADR and ADL established targets and KPIs to enhance theeffectiveness of materiality.

Environment
Materiality
Management andreduction of energy
consumption, CO2
emissions, water
consumption, andwaste emissions

Related SDGs

6,7,11,13

Targets and KPIs
ADR

Targets and KPIs
ADL

【Energy consumption】
FY2030 to date (vs. FY2018)
20% reduction (intensity)【Energy consumption】
FY2030 to date (vs. FY2020)
10% reduction (intensity)【CO2 emissions (GHG)】
Scope1&2
FY2030 to date (vs. FY2018)
51% reduction (total)
Net zero by FY2050
Scope3
Identification of corresponding categories
and scope determination and calculation【CO2 emissions (GHG)】
Scope1-3
FY2030 to date (vs. FY2020)
10% reduction (intensity)【Water consumption】
Do not increase (common areas)

Acquisition ofenvironmental andenergy-saving
certifications
Collaborate withstakeholders on
environmental
friendliness

11、13

11、12、13、17

Scope3
Identification of corresponding categories
and scope determination and calculation【Water consumption】
Do not increase (intensity)【Waste】
Recycling rate 65% (emissions related toconstruction of exclusive use areas)【Waste】
Do not increase (intensity)

Proportion of environmental and energysaving certifications acquired by FY2030
30% or more (by total floor space)

Proportion of environmental and energy-saving
certifications acquired by FY2030
90% or more (by total floor space)・Conduct periodic training and monitoring of suppliers
・Conclusion of contracts with green lease clauses for new tenants
・Conducted periodic training for employees of asset management companies

11Materiality and Targets
SocialMateriality

Improvement of
tenant satisfaction,
engagement withtenants

Contributing to local
communities

Pursuit of unitholders'interests throughcustomer-firstbusiness management
Utilize diverse humanresources, develop
skillsDevelopment of
workplaceenvironment thatoffers job satisfaction

Related
SDGs

Targets and KPIs
ADR

Targets and KPIs
ADL

3,11,13・Conduct periodic tenant satisfaction surveys
・Install disaster prevention maps in all properties
・Make disaster prevention goods available at nocharge for all
・Distribute sustainability guidelines to all units
・Conduct education on sustainability and disasterprevention at all properties

・Conduct periodic tenant satisfaction surveys
・Install disaster prevention maps in all properties andexpand emergency supplies
・Distributed Sustainability Guide to all tenants
・Conduct education on sustainability at all properties
・Conduct disaster drills and lifesaving drills
・Promote new amenity services

3、11・Promote installation of AED equipment at all
properties
・Promote installation of donation vending machines
・Support employees' volunteer activities, donate tocharitable organizations, etc.
・Participate in regional activities,Local revitalization
through dialogue with local communities

・Promote agreements with municipalities for disasters
・Install AED equipment in multiple properties
・Promote installation of donation-type vending
machines
・Support employees' volunteer activities, donate tocharitable organizations, etc.
・Consider holding events to promote local employment

8,17

・Establish system for managing conflicts of interest in the oversight of multiple funds
・Conduct honest, transparent disclosure
・Pursue unitholders' interests through the establishment of an asset management fee structure linked toinvestment performance

4、5、8・Average years of service: 5 years or more
・Proportion of female employees: 30% or more
・Proportion of female managers: 15% or more・Organize and encourage employees to attend training and acquire qualifications for continuous employee
skill development

3、8・Leave acquisition ratio: 70% or more・Zero turnover due to life events, including use of childcare and nursing care leave systems
・Percentage of employees taking childcare leave: 50% or more・Frequency rate of occupational accidents: Zero・Conduct employee satisfaction surveys and undertake improvements
・Average monthly overtime / Less than 45 hours (Compliance with 36 agreements)
12Materiality and Targets
GovernanceMateriality

Firm corporate
governance structure

Strengthening ofresilience

Related
SDGs

Targets and KPIs
ADR/ADL

16

・Development of governance structure
・Increase in the number of fund officers and appointment of female officers comprising 25%
・Conduct in-house compliance training, achieve 100% participation rate
・Maintain and improve the effectiveness of committees and the Board of Directors
・Conduct an internal audit once a year to ensure the feasibility of internal controls.

13

・Response to severe disasters (earthquakes, floods, etc.)
・Response to TCFD (assessment and calculation of climate change-related risks and opportunities)
・Conduct annual BCP training
・Acquire CDP and SBTi certification *ADR only

13

Environment

Environment

ー Response to Climate Change

IRM recognizes climate change as a critical issue that will bring about dramatic changes in the natural environment and social structure andwill significantly impact business activities overall. Based on this recognition, we will aim for sustainable and stable earnings over the longterm by appropriately assessing the risks and opportunities posed by climate change and incorporating them in the business management
and the investment management policies of both IRM and the investment corporations that we manage. The climate-related risks andopportunities identified and the strategies are as shown below.

Identified climate-related risks, opportunities and response*

Risk Category

Term

Finamcial Implicatuins

Medium-term

・Increased CO2 emission costs due to introduction ofcarbon tax and expansion of emissions trading system.
・Increased renovation costs for existing properties due totightening energy conservation regulations.

・Upgrading properties systematically.
・Introduced green power certificate and renewable energy.
・Acquiring properties that comply to energy saving
standards.

Technology
changeMedium-term

・Increased costs for introducing new technologies toprevent portfolio obsolescence due to the evolution andspread of renewable energy and energy-saving
technologies.

・Upgrading properties systematically.
・Acquisition of new properties with new technology
introduced.

MarketchangeMedium-term

・Price increase of energy-saving property, possibility ofprice decrease of unsupported property.
・Rise in funding cost・Promotion of acquisition of green building certification forexisting properties and newly acquired properties. (expansionof qualified real estate in issuing green bonds)

Reputations

Short
-term

・Development of disclosures that investors place importance・Being discredited from investors.
on when investing in ESG, including TCFD.
・Decrease in occupancy rate due to changes in reputation
・Providing tenants with services to heighten satisfaction
from tenants.
（Disaster prevention / energy saving support）.

Acute

Short
-term

・Increases in flooding from torrential rain, rising sea level ・Implementation of disaster risk assessment for each property.
and etc.
・Disaster countermeasures for both hardware and software.
・Increase in insurance cost.
・Acquiring properties with disaster risks.

Long
-term

・Property in the area of zero meters above sea level may
be flooded due to sea level rise.
・Decreased comfort due to rising average temperatureand rising indoor temperature due to the increase in hot
days.

Political
and Legal

Transition
Scenario

Physical
Scenario
Chronic

Opportunity

Resilience

Short
-term

Strategy

・Implementation of disaster risk assessment for each property.
・Disaster countermeasures for both hardware and software.
・New acquisition of properties with high energy-saving
efficiency and heat insulation.

・As inundation measures, necessary measures are taken from both
hardware and software according to the disaster risk evaluation resultsof each property. Installation of waterproof boards, implementation of・Demand for properties prepared for natural disasters will increase. disaster training, distribution of disaster prevention goods, etc.(*ADL

only, in addition, emergency power generation equipment,
solar panels, raising of power receiving equipment)* Applicable to ADR and ADL, unless otherwise stated.

15

Environment

ー Environmental Performance Data

The graphs below show ADR’s environmental performance data up to FY2021. Detailed data can be found in the ESG Data section of this report.

Energy consumption

CO2 emissions (GHG)

Target：FY2030 to date (vs. FY2018) 20% reduction (intensity)

Target：Scope1&2 FY2030 to date (vs. FY2018) 51％ reduction (total)
Net zero by FY2050

(原単位)
(MWh)

Fuel

DHC

Electricity

Intensity

20,0000.088

15,0000.086

10,0000.084(t-CO₂)scope1scope2

total

9,000

6,000

3,000
5,000

0.082

0

0.080

2018

2019

2020

Base Year

0

2018

2021

Waste
Target ： Recycling rate 65%(emissions related to construction of exclusive use areas)(㎥)

Intensity

Recycling rate

100%

0.080

12,000

9,000

0.070

80%

Target ：65%

60%
40%

6,000

0.060

3,000

20%
0%

0

2021

% Change in FY2021：△96.0％% Change in FY2021：△4.5％

Target ：Do not increase (common areas)

total

2020

Base Year

Water consumption

(㎥)

2019

2018

2019

2020

2021

0.050

2018

2019

2020

2021

16

Environment

ー Environmental Performance Data

The graphs below show ADL’s environmental performance data up to FY2021. Detailed data can be found in the ESG Data section of this report.

CO2 emissions (GHG)

Energy consumption
Target：FY2030 to date (vs. FY2020) 10% reduction (intensity)

(MWh)

Total

Target：FY2030 to date (vs. FY2020) 10% reduction (intensity)

Intensity

Total(t-CO₂)0.06

25,000

Scope1-3

Intensity
0.03

12,00020,0009,000

15,000

0.05

0.02

6,000

10,000
3,000

5,000
0

2018

2019

2020

Base Year

0.04

2021

(t)

Intensity
0.08

9,000

0.06

6,000

0.04

3,000

0.02

2018

2020

Base Year

2021

0.01

% Change in FY2021：△13.7％

Target ：Do not increase (vs. FY2020)

12,000

0

2019

Waste

Target ：Do not increase (vs. FY2020)
Total

2018

% Change in FY2021：△11.1％

Water consumption

(㎥)

0

2019

2020

Base Year

2021

0

Total

Intensity
0.01

3,000
2,500
2,000

0.005

1,500
1,000
500
0

2018

2019

2020

Base Year

2021

0

17

Environment

ー Environmentally Conscious Asset Management

Environmentally Conscious Asset Management

Investments Towards Urban Revitalization

ADR and ADL strive to reduce environmental burdens by implementing energysaving, water-saving, and other environmentally friendly initiatives.

Large-Scale Repair/Maintenance(Environmental contribution byextending property lifespan)

Installation of LED Lighting

Water-saving Toilets

ADR invests in various types of properties, promoting the
reduction of environmental burdens and contributing to therevitalization of towns and communities.
〇Investment in Mixed-Use/Multi-Use Properties
Through investments in mixed-use or multi-use properties (84properties accounting for about 30% of the portfolio as ofJanuary 31, 2023) ADR promotes convenience for residents ofthe properties and those living near the properties as well as
reductions in environmental burdens. Some properties haveshops and public spaces that attract people, thereby
contributing to the revitalization of towns and communities.

Installation of Heat-shielding
Paint Roofing

Encouraging Tenants to Conserve
Energy Usage (Distribution ofsustainability guidebook, etc.)• Investments in properties close to railway stations, promoting
the use of public transportation to reduce CO2 emissions.
• Investments in properties with amenities for daily life such as
supermarkets and convenience stores.
• Investments in properties that have public spaces for use by
nearby residents.
• Investments in properties that accommodate the elderly suchas those with barrier-free facilities.
〇 Investments in properties developed as part of urban
regeneration projects*, etc.

Installation of LED Lighting

Use of Renewable Energy

Installation of Water-saving
Toilets and Washbasins

Through investments in properties developed as part of urban
regeneration projects, etc. we contribute to the revitalization of
towns and communities and the enhancement of convenienceto nearby residents.
* Laws and regulations restrict J-REITs from development activities including theconstruction of properties.

Promotion of Green Spaces(Installation of green parking lots)

Reduction of CO2 Emissions in
Collaboration with Tenants(Example) Pianetta Shiodome
Residents of the area proposed ideas for new
manufacturing activities and the creation of acommunity for lifestyle improvements.
Agreeing with this, ADR invested in theproperties located in this area developed byurban regeneration projects.

18

EnvironmentーCooperation with Stakeholders and Sponsor Group

Cooperation with Stakeholders
Green Lease Clause
ADR and ADL have lease clauses with tenants concerning energy and water conservation. Green lease clauses are also set forth in the
management agreement with the all property management companies.
Supply Chain Management
To realize the items listed in the Sustainability Policy, IRM collaborates with its suppliers and has in place a Sustainability Procurement Policy.
Based on this policy, IRM has administered a questionnaire with questions related to sustainability initiatives to all property managementcompanies and evaluates the results. This questionnaire is administered at the beginning of the partnership as well as once every year
thereafter and, by doing so, strengthens the transactions with the suppliers. IRM also believes it is important that all suppliers understandand cooperate with the procurement policy and we again notified the Sustainability Procurement Guideline to the property management andbuilding management companies who are our key business partners.

Cooperation with Sponsor GroupRegarding environmental friendliness, ADR and ADL is collaborating with its sponsor, ITOCHU Group.
Property Development and Purchase
Proactive promotion of transactions including logistics facilities and mixed/multi-purpose for Residential Property, etc. that can contribute to
the environment and region. Acquisition of green building certifications.
Property Management
Contribution to the region through environmental consciousness such as energy-saving awareness campaigns and installation of AEDs.
Example of Cooperation with Sponsor Groupi Missions Park Ichikawa-Shiohama (ADL)
At i Missions Park Ichikawa-Shiohama, developed by our sponsor, ITOCHU Corporation, LED
lighting is used exclusively throughout the building.
Solar panels provided by VPP Japan, one of ITOCHU Corporation’s investments, are installed on
the roof and all electrical power to the property is provided carbon dioxide free.
Furthermore, the building is equipped with offices, meeting rooms, break rooms, and employee
restrooms on every floor to create a considerate work environment.
19SocialSocialーInitiatives for Tenants and Regional Contribution

ADR and ADL recognize that enhancing the satisfaction of tenants leads to stable and improved earnings from the properties and therefore
are implementing the following initiatives.

Customer Satisfaction Survey
A survey of satisfaction and desire for the RESIDIA brand is carried out
periodically (about every three years) for the residents of RESIDIA
properties.

Date ofthe survey
12
3

Between April
to July 2014
Between Sept.
to Nov. 2017
Between Apr.
to Jun. 2020

Total No.
Total No.
No. ofofResponseof
Respondents People
Rate
Leasable
Surveyed
Units

SurveyCoverage

3,106

14,15521.9%

19,078

74.2%

3,945

16,44524.0%

20,842

79.0%

7,705

18,00042.8%

21,332

74.2%

Installation of Disaster Prevention Map and Distribution ofDisaster Kits
At all the properties, disaster evacuation sites are clearly
displayed in the common area to provide support in the case ofa disaster and to foster anti-disaster awareness.
In some of the RESIDIA properties, disaster kits area
distributed free of charge to those that are interested.

Disaster Prevention Map

Tenant Services

Installation of AEDs and Vending Machines with Donation Function

To enhance customer satisfaction and tenant retention, residents
are offered a wide range of services including a dedicated support
desk, RESIDIA Customer Support, which provides residents with avariety of services, as well as the discount program “Moving Style”
for tenants moving from one RESIDIA property to another.

Several properties are installed with AEDs that can be used byresidents in the neighboring area and vending machines that donate
part of its sales to pediatric cancer facilities.

AED

Vending Machines with
Donation Function21SocialーInitiatives for Tenants and Regional Contribution

Tenant Satisfaction Survey
A tenant satisfaction survey regarding the facilities and management is carried out twice a year so that corporate tenants can use thefacilities more comfortably.
Conclusion of Disaster Prevention Agreement
ADL and Noda City of Chiba Prefecture executed an Agreement for Acceptance of Evacuees and Relief Supplies at the Time of Disaster at IMP Noda.
In the event of a disaster, if Noda City is unable to secure space to receive relief supplies and evacuees, ADL will provide a part of the grounds andbuilding of IMP Noda as a temporary evacuation space to store and manage relief supplies and to accept evacuees, thereby enabling rapid responses
to the support needs of local residents and citizens.

Signing Ceremony (May 2022)

22SocialーInitiatives for Tenants and Regional Contribution

IRM actively implements social contribution activities, including employee-participatory activities, in addition to company initiatives.

Support Social Participation of People With Physical Disabilities
In 1987, ITOCHU Corporation, the parent company of IRM, founded a special subsidiary company ITOCHU Uneedus Co., Ltd. to provide
motivational and rewarding work to people with physical and mental disabilities.
IRM supports ITOCHU Uneedus by placing orders for its company’s business cards and envelopes. Please refer to this page for company
details.(In Japanese)
Supporting ITOCHU Foundation

Supporting Students

ITOCHU Foundation, founded in 1974 by ITOCHU Corporation,
the parent company of IRM, has continued to promote social
contribution activities aiming for the sound development ofyoung people. Current projects include the Children's
Literature Collection Grant and the Project for Promotion of Ebook Libraries, which contribute to the healthy growth ofchildren. IRM supports the Foundation through donations.

To provide opportunities for and support architecture and design
students as well as to create interest in IRM and the REIT industry,
IRM sought renovation ideas for its RESIDIA leased residences byholding a student competition. Renovation based on the best design
was actually carried out.

Periodic Cleaning of the Area Surrounding the Office

Participation in Eco-Cap Campaign

As a member of the area, IRM employees have proactively
and continuously participated in the cleanup of Chiyoda Ward
where the IRM office is located.

In an endorsement of the Eco-Cap Campaign, IRM collects caps
from used PET bottles for recycling purposes. The collected bottle
caps are sold to recyclers via the certified NPO, the Japan
Committee for Vaccines for the World’s Children, and the proceeds
are used to help children around the world suffering from diseases.
The campaign also promotes the employment of people withdisabilities who are tasked with separating the collected caps.

Participating in Cleanup Activity

23

SocialーHuman Rights Policy

Human Rights Policy
IRM has established a Human Rights Policy to fulfill its responsibility of respecting the human rights of all people involved in its business
operations. As part of implementing this policy, IRM is advancing initiatives such as positive action initiatives to support the active
participation of women as a means of increasing diversity.
１．Support for international norms and guidelines
We support international norms on human rights, including the Universal Declaration of Human Rights, the Declaration on Basic Principles andRights in Labor of the International Labor Organization (ILO), and the United Nations Global Compact. In addition, we respect human rights inaccordance with the United Nations’ Guiding Principles on Business and Human Rights.
Furthermore, the parent company ITOCHU Corporation’s Itochu Group Human Rights Policy applies to all officers and employees of IRM.
２．Non-complicity in human rights violations
We endeavor not to violate human rights ourselves or be complicit in human rights violations by others.
３．Respect for freedom of association and collective bargaining rights
We respect the freedom of association and the right to collective bargaining in accordance with relevant laws and regulations, and we do not
engage in illegal or improper discrimination in employment and occupation.
４．Elimination of forced labor
We strive to eliminate and prevent all forms of forced labor at IRM and in our supply chain.
５．Effective abolition of child labor
We support and practice the effective abolition of child labor from IRM and our supply chain. We do not hire children who are not above thelegal minimum working age.
６．Elimination of discrimination in employment and occupation
We do not treat people differently or disadvantage them based on characteristics that are irrelevant to their capabilities or specific job
requirements. Those characteristics include ethnicity, skin tone, gender, religion, political views, nationality (country of birth), social origin, age,disability, HIV infection/AIDS, trade union membership, and sexual orientation.

24

SocialーInitiatives for Employees

Based on the awareness that the stable growth of each investment corporation and investment fund is dependent on our personnel, IRM is pursuing
a human resource strategy with the aims of enabling people to unleash their full potential and of achieving overall human resource optimization.
* The investment corporations managed by IRM are, under the laws pertaining to investment trusts and investment corporations, prohibited from hiring employees and therefore outsource asset
management, storage, and administrative functions.

Career development
In addition to a job rotation program, IRM has a system for employees to indicate their desired career path once a year and discuss it with
their superior. Moreover, each new hire is assigned a senior employee as an instructor as well as a separate employee to act as a mentor who
can be consulted on work and other various matters.

Performance appraisals and feedback process
Our personnel evaluation consists of "performance evaluation," which evaluates the degree ofachievement against one's own business goals, and "behavioral evaluation," which evaluates theperformance required by each organization and position.
Goal management interviews are held three times a year at the beginning of the fisical year (goal setting),
middle of the term (review), and at the end of the fisical year (feedback) to establish a transparent goalsetting process with good communication between supervisors and subordinates, and an evaluation
system to support employees' achievement of goals, expansion of results, and growth. In particular,
during the review process, the supervisor and the subordinate confirm "GOOD (what went well, what was
accomplished)" and "MORE (what can be improved further)," which leads to concrete actions to achievegoals.
Fixed salaries and bonuses are determined based on the evaluation, and bonuses for employees (including
non-executive officers and non-operating departments) are partially linked to the performance of each
investment corporation and fund under management. In addition, through individual interviews, we
provide feedback on evaluations and dialogue on individual career development, which is used toformulate personnel strategies.

Human Resource Strategy

Support and financial aid for acquiring certifications
IRM has a system in place to subsidize the cost of acquiring qualifications in order to improve work performance and acquire specialized
knowledge. All executives and employees (including contract employees) are eligible for this program.

Professional development
and training programs
We have set up a wide range of training
programs and self-development support
systems matched to job levels and otherfactors.

Examples ofTraining

Details

Training for New
Managers

Participants acquire knowledge and skills essential for leaders, such as management, trust building,team building, human resource development, and labor management, through a total of six sessions.

Next Generation
Business Leader
Training

To foster a sense of management as a mid-level employee. To recognize the role required of them as
the core of the organization, based on their own strengths and weaknesses.

Follow-up Training
for Young Employees

A 3-day course for young employees to consider and design their own careers and learn the ability to
set issues and grasp the essence of issues in order to become mid-level employees.

25SocialーInitiatives for Employees

Promotion of Health Management
In October 2020, IRM established the Health and Productivity Management Policy and declared that
we will advance efforts towards the maintenance and improvement of employees’ and their families’
health in mind and body.
These programs received recognition by external organizations and health and productivity
management-related certifications were acquired.

Health and Productivity
Management
Organization2022(SME category )Silver authorization
Certification No.
Kengin No. 903 (2)Human Resources System
Childcare leave, shortened work hours for childcare, nursing leave
To assist employees in balancing work and childcare, we offer childcare leave that can be taken
until the child turns two, and shortened work hours for childcare that can be taken until thechild enters elementary school. In addition, we treat nursing leave taken to care for sick or
injured preschool children as paid leave.

Caregiver leave, shortened work hours for caregivers, caregiver absence

To assist employees in balancing work and caregiving, we offer caregiving
leave, shortened work hours for caregivers, and caregiver absence.

Hourly paid leave
Each year, employees may take paid leave by the hour for up to five days’ worthof hours (40 hours).

Working from home
In response to the COVID-19 pandemic, since FY2020 we have enabled
employees to work from home.We determine the number of remote workdays based on the state of the spread of infection, the social climate, andother factors, and for employees with preschool children, we make sucharrangements as allowing them more remote work days.

Congratulatory and condolence money
We provide congratulatory benefits for employees’ marriages and childbirths,
and we also have a system of providing condolence money in preparation ofloss of family members.

Continued employment
We have set the retirement age at 60, but eligible employees may choose to
be reemployed as a commissioned employee under a renewable annual
contract.

Welfare Program
Cafeteria-style benefits package

Employee investment unit ownership program

The cafeteria-style benefits package offers employees preferential rates for theunlimited use of a broad range of services provided by various partners, suchas hotels, fitness clubs, and childcare providers. The objective is to support
employees in balancing work and family life, and in improving their health.

We have established an investment unit ownership program for investing in units of
the investment corporations whose assets we manage (Advance Residence
Investment Corporation and Advance Logistics Investment Corporation). The aim is
to further align the interests of our employees with those of the investment
corporations’ unitholders and to expand employee benefits.

Periodic monitoring of employee satisfaction
To be a company where employees can work with pride and satisfaction, we conduct annual employee satisfaction surveys and apply the results tosuch efforts as improving the workplace environment.
26

GovernanceGovernanceーCompliance Structure

IRM has established a corporate governance framework by clearly defining our commitment to our fiduciary duty, setting up compliance and investment committees,
and other means. The framework enables us to ensure risk management and compliance in our operations, fairly handle transactions involving conflicts of interest,
and work toward improving and further enhancing our corporate governance.

Supervision by the Board of Directors and other bodies
The status of risk management is reported to the Board of Directors of IRM and each investment corporation as required.
IRM formulates a compliance program each term to serve as a detailed plan of action for putting into practice the compliance manual, which is our code of conduct.
The program is finalized after deliberation by the Compliance Committee and approval by the Board of Directors. The results of verification of the program’s progressand other factors are reported to the Compliance Committee and the Board of Directors.
In addition, the results of internal audits and the operational status of the whistleblowing system are also reported to the Compliance Committee and the Board of
Directors.
IRM also has a system in place in which the Compliance Committee and the Boards of Directors of IRM and each investment corporation can offer opinions and makeother suggestions regarding the reported matters as needed to ensure that improvement efforts are effective.
Furthermore, the Sustainability Promotion Committee identifies and evaluates climate-related risks and opportunities, formulates strategic plans for key challenges,
and verifies the results of measures based on the Climate Change and Resilience Policy, after which it reports these matters to the CEO and to the Board of Directors.
Attendance
・ Over the past year, attendance rates at the board meetings of ADR and ADL have been 100%. *1
・ The attendance rate at Board of Directors meetings of the asset management company was 98% in FY2021. *2*1 The figures for the terms ending July 2022 (24th term) and January 2023 (25th term) are used for ADR. The figures for the terms ending July 2022 (8th term) and February 2023 (9thterm) are used for ADL.
*2 Attendance rate of the Board of Directors of AD Investment Management during FY2021

Basic Policy on Customer-Oriented Business Conduct
IRM places the highest priority on faithfully managing the funds entrusted to us by investors and have establishedthe Basic Policy on Customer-Oriented Business Conduct and publish the appropriate management of conflicts ofinterest transactions, clarification of fees, and other relevant matters on the website.
Please refer here for the Basic Policy on Customer-Oriented Business Conduct on the IRM website(in Japanese).

Directors and Officers investment unit ownership program
IRM has introduced an investment unit ownership program for directors and officers with the objective of achieving growth in unitholder value over the long term bystrengthening the alignment of interests between our officers and the unitholders of ADR and ADL, both listed companies. The executive compensation of IRM’srepresentative director is partly linked to the progress of ESG-related initiatives.

28GovernanceーPreventing Misconduct and Corruption

IRM recognizes that legal compliance is a given, and that we must ensure compliance to continue being an organization that is trusted bysociety. We have therefore established our Anti-Corruption Policy as part of our Compliance Manual. Our Anti-Corruption Policy stipulates that
we will maintain sound relationships with our stakeholders and that we will not provide entertainment or gifts that may lead to the suspicion
or distrust of society.
As specific measures, IRM implements guidelines related to bribery and internal audits are conducted every year to confirm that expenses
are not being misused every year.
The ITOCHU Group has also established the ITOCHU Group Anti-Corruption Policy based on the Corporate Ethics Code of Conduct. It
prohibits the provision of money and goods, entertainment, convenience and other profits to public officials and officers and employees ofprivate entities, in Japan or overseas, for the purpose of gaining an illegal advantage.

Anti-corruption Policy
1. We will not engage in or be complicit in any form of corruption, including embezzlement, fraud, money laundering, or
the obstruction of justice.
2. We will not provide money, services, conveniences, or other benefits to civil servants or persons in similar positions inJapan or elsewhere for the purpose of obtaining illicit gains.
3. We will not provide money, services, convenience, or other benefits to the officers and employees of private-sectorbusiness partners for the purpose of obtaining illicit gains.
4. We will not request business partners and others to provide entertainment or gifts that go beyond personal benefits orcommon sense.

ITOCHU Group Policy

The ITOCHU Group ensures the implementation of compliance principles, that is, legal compliance, and recognizes that it must continue to be
an organization with acceptable standards in a modern society. We have no tolerance for any gain obtained through illegal means.
To address the risk of bribery and corruption, the ITOCHU Group has established rules that cover, among others, application and approval
procedures and recording methods. These rules describe behaviors that are commonly found in scenarios where bribery or corruption takeplace and instruct the strict observance of those rules. The rules were established based on the Regulations Concerning the Prohibition of
Giving Illicit Benefit, as well as four related guidelines about public officers, foreign public officers, business partners, and investments.
[ITOCHU Group Anti-Corruption Policy]• No money, entertainment, gifts, or anything of value shall be given to any public or quasi-public official inside or outside of Japan, to obtain
illicit gains.
• No money, entertainment, gifts, or anything of value shall be given to any director, officer or employee of any private entity, to obtain illicit
gains.
For more information on the ITOCHU Group Anti-Corruption Policy, please click here.

29GovernanceーPreventing Misconduct and Corruption

Internal audit structure
We have an Internal Audit Office under the direct control of the president. Based on our Internal Audit Regulations, the Internal Audit Officeconducts internal audits on the overall operations of all departments once a year to verify the status of their compliance with laws, regulations,
the Articles of Incorporation, and internal regulations, as well as the procedures for executing duties and the validity of the work done. It also
carries out unannounced inspections of information management and other operations two times a year. Furthermore, a system audit of IRM
and property management companies is conducted by an external third-party organization once every five years. The Internal Audit Officeitself is also evaluated by an external third-party organization once every five years.
If problems are identified or requests for improvement are made in audits, the audited department is required to formulate a plan forimprovement and have it approved by IRM’s Board of Directors. Later, the Internal Audit Office conducts a follow-up audit and reports the
progress made on improvement to the Board of Directors.

Whistleblowing system
We have set up whistleblowing contacts where all officers and employees can directly report misconduct (four internal, two at the parent
company, and one at an independent third-party). Under the whistleblowing system, we have established an appropriate handling mechanism,protect whistleblowers, and maintain the confidentiality of information. The system is designed to strengthen compliance management
through the early detection and correction of improper acts, including bribery. The operational status of the whistleblowing system is reported
to the Compliance Committee and the Board of Directors once a year.
The Compliance Officer immediately investigates the facts when report or consultation concerning a fact that is the subject of a report isreceived, unless there is a valid reason not to investigate the subject matter. The results of the investigation are reported to therepresentative director, president & CEO and to the general manager of the General Affairs and Management Division, and corrective action
and measures to prevent recurrence are decided through discussion. If an internal disciplinary action is deemed appropriate, We will impose
an appropriate disciplinary action on the officers and employees involved in the subject case in accordance with the Company's internal rules
such as the Employment Regulations.
In addition, in compliance with the Whistleblower Protection Act, we prohibit disadvantageous treatment against whistleblowers.

30

GovernanceーPreventing Misconduct and Corruption

Implementation of compliance training
IRM continuously provides education and awareness-raising programs on compliance to ensure that each officer and employee understands
the purpose of laws and regulations, social norms, business rules, and other standards and complies with them with an enhanced compliancemindset.
IRM offers a variety of compliance training for all officers and employees (not just full-time employees but also temporary employees andothers) several times a year. To date, we have covered topics such as responding to legal amendments, measures to prevent power
harassment and sexual harassment, and personal information management. By focusing on issues of interest in society in a timely manner, weare continuously working to enhance the compliance knowledge of officers and employees and to foster a mindset of compliance.
Initiatives
General Training

Details
Training sessions held for all officers and employees
In FY2021, we offered the following series of six training sessions: Act on the Protection of Personal
Information, General Meeting of Investors, Merger Procedures, IRM’s Compliance-Related Efforts,
Sustainability, and Harassment. We also conducted web exams on compliance every other month.

Training at Time of For new hires (including mid-career hires, dispatched employees, and others), we provide training and
Hirereview exams over a total of nine sessions on matters that they need to understand for their work at IRM.
Training by
Department andRank

Rank-based training is provided for newly appointed managers.

Other

Compliance-related information (including matters linked to preventing corruption) such as internal rules
and regulations, revision of laws and regulations, and compliance incidents and efforts at othercompanies is provided as appropriate.
As part of ITOCHU Group compliance, ITOCHU Corporation conducts on-site compliance training once a
year.

Case in IRM
・In FY2021 (April 2021 to the end of March 2022), there were no incidents of compliance violations disciplinary action based on our Employment
Regulations or Board of Directors Regulations.
・There have been no incidents of violations of our Anti-corruption Policy, nor were any officers or employees disciplined or dismissed for this reason.
・IRM has never paid any fines or settlements related to corruption.
・No payments of fines or settlements have been identified as ESG issues in our audited accounts.
・IRM complies with the Political Funds Control Act, the Public Offices Election Act, and other relevant laws and regulations, and has never paid any
political contributions.

31GovernanceーPreventing Misconduct and Corruption

Disclosure
In order to ensure disclosure transparency, in addition to statutory disclosures, ADR and ADL will disclose information it deems useful andvaluable on a timely basis in an easy-to-understand form. Specifically, ADR and ADL will actively disclose information on its website in addition
to disclosing on the Tokyo Stock Exchanges disclosure system .

Management Fee StructureManagement fee structures for ADR and ADL are linked to unitholders’ interests. Moving forward, we aim to further align the interests ADR and
ADL unitholders with the interests of IRM.

Fee Category

Fees Linked To

Maximum Rate

Fee Category

Fees Linked To

Maximum Rate

AM Fee I

NOI*

7.00％

AM Fee I

Total Assets

0.05％

AM Fee II

AM FeeⅠ X
Adjusted FFO Per Unit*

0.05％

AM Fee II

NOI

5.00％

AM Fee III

Net Income Before Tax
X
Adjusted EPU*

0.004％* NOI = Gross Operating Income minus Gross Operating Expense (excluding
depreciation and loss from fixed asset retirement)* Adjusted FFO per Unit＝(net profit excluding AM Fee II + depreciation expense gains on transfer of real estate + losses on transfer of real estate + impairment losses)/ Number of investment units issued as of the closing date of the accounting term

* Adjusted EPU = Net profit excluding AM Fee Ⅰ,Ⅱ,III / Number of investment units
issued as of the closing date of the accounting term

Disclosure of rewards
The executive compensations of ADR and ADL officers are determined based on the Investment Corporation Agreements. Specific compensation
amounts are found in the asset management report of the respective corporations.
ADR Asset Management Reports: Click here to see the asset management reports of ADR for previous fiscal terms.
ADL Asset Management Reports: Click here to see the asset management reports of ADL for previous fiscal terms.

32Green FinanceGreen FinanceGreen finance refers to financing (i.e., issuance of bonds (green bonds) and/or procurement of loans (green loans)) for which use of proceeds
is limited to environmentally-conscious projects.
IRM intends to use the proceeds from green financing for implementing sustainability-promoting initiatives in line with its Basic Sustainability
Policy, and will proactively recognize the required level of environmental, social, and governance (ESG) practices through a dialogue withinvestors and apply such knowledge to its asset management strategy.

Green Financing Framework
Category

Purpose of funds procured throughgreen financeeligibility criteria

Green Finance Framework Evaluation*Please see below for details of the evaluation
results of each investment corporation.
ADR
ADL

ADR

ADL

・Costs of acquisition of green eligible assets
・Costs of renovation work which meets the eligible criteria
or costs of the repayment of loans or redemption of
investment corporation bonds that initially funded suchacquisitions or renovations

・Costs of acquisition of green eligible assets
・Repayment of loans borrowed for acquisition of green
eligible assets
・Redemption of investment corporation bonds issued for
acquisition of green eligible assets

The green eligible assets are selected from assets for which
ADL has obtained or plans to obtain one or more of thefollowing third-party certifications

The green eligible assets are selected from assets forwhich ADL has obtained or plans to obtain one or more of
the following third-party certifications

・5,4,or 3stars of the DBJ Green Building Certification
・S,A or B+,rank of CASBEE Certification
・5,4,or 3stars of BELS Certification

・ 5 or 4 stars of the DBJ Green Building Certification
・ S or A rank of CASBEE Certification
・ 5 or 4 stars of BELS Certification

ADR and ADL received the “Green 1 (F)” rating, the highest rating in the JCR Green Finance Framework Evaluation by
the Japan Credit Rating Agency, Ltd. (JCR), which assesses if a framework is in line with the requirements of the Green
Bond Principles of the International Capital Market Association, the Green Bond Guidelines of the Ministry of theEnvironment of Japan, and the Green Loan Principles of the Loan Market Association and the Asia Pacific Loan Market
Association.

Reporting
The status of funds raised with green financing is updated annually and uploaded on the websites of ADR and ADL. Reporting on theeffectiveness of environmental improvement (impact reporting) of green eligible assets is also uploaded on the ADR and ADL websites on anannual basis.

34

ESG DataEnvironmental performance data

Category
EnergyConsumption
Total

Electricity

Fuel

Ditrict Heaing
andCooling
GHG
Emission(CO2)
Total(scope1+2)

Direct Emission
Scope1In-direct
Emission
Scope2

Water Usage

Water itake

Displacement

Waste Volume

Unit
Total Usage(MWh)Intensity(MWh/㎡)
Total Usage(MWh)Intensity(MWh/㎡)
Total Usage(MWh)Intensity(MWh/㎡)
Total Usage(MWh)Intensity(MWh/㎡)

FY 2019

FY 2018(Base Year)

FY 2021

FY 2020% Change% Change

15,842

15,624

0.086

0.086

14,30013,951

0.078

0.077

1,247

1,364

0.059

0.063

294

308

0.020

0.021

Total Usage
(t)

7,781

8,143

Intensity
(t/㎡)

0.042

0.045

0.038

0.001

Total Usage
(t)

218

239

221

230

Intensity
(t/㎡)

0.01

0.011

0.007

0.010

Total Usage
(t)

7,563

7,904

6,850

80

Intensity
(t/㎡)

0.041

0.043

0.037

0.000

Total Usage (㎥)11,076

10,852

11,326

9,956

Intensity
（㎥/㎡）

0.069

0.068

Total Usage (㎥)11,076

10,852

0.0%

-1.3%

6.8%

5.0%

15,4450.083
13,887
0.075
1,263
0.042
294
0.020

Total Usage (㎥)11,076

10,852

Intensity
（㎥/㎡）

0.069

Total
Volume(㎡)

-4.8%

-2.0%

-

0.083
13,734
0.073
1,313
0.061
390
0.027

11,326% Change（vs FY2018）

100.0%

0.0%

-4.5%

100.0%

-2.7%

-5.9%

100.0%-20.8%

2.3%

100.0%

35.0%

32.6%

100.0%-95.6%-96.0%

100.0%-13.3%

0.070% Change

310

-7.5%

4.5%

0.068

-33.3%

15,438-13.2%

9.6%

0.069

-2.6%

7,071
4.7%

Intensity
（㎥/㎡）

-3.5%

Coverage

4.4%-

100.0%

0.061
9,956

100.0%-

10.0%-98.8%-12.1%-

5.5%-98.9%-10.1%
-

0.070

-

0.061

-

-

-

-

11,326

-

9,956

-

-

-

0.068

-

0.070

-

-

-

-

288

399

38.2%

482

-9.6%

336

-30.3%

16.6%

Recycling
Volume (㎡)

264

328

24.3%

422

-9.5%

336

-20.3%

27.2%

Recycling Rate
(%)

91.6％

82.4%

-10.1%

87.5%

6.2%

78.0%

-10.9%-14.9%

0.061

100.0%

1.Review period
The fiscal year starts on April and end on
March of the following year.
2. Calculation method
・“Intensity” is calculated as follows.
Total Usage or Emission (MWh) ÷ Total
Property Floor Space (m2)・“Coverage” is calculated as follows.
Total Floor Space of Data Collected (m2) ÷
Total Property Floor Space (m2)・The calculation of the waste recycling rateis as follows
Recycling rate (%) = (1) Total amountrecycled ÷ (2) Total amount x 100(1) Total amount of waste recycled The
amount of waste recycled out of the total
amount of waste generated by the
restoration work ordered by ITOCHU Urban
Community, a group company of the asset
management company (㎥).
(2) Total amount of waste generated fromthe same work (㎥).
3. Target of aggregation
IRM compare the properties owned for thefull year in each fiscal year.

36

Environmental performance data

Category

EnergyConsumption

GHG
Emission(CO2)
※１

Unit

FY2018※２

FY2020(Base Year）

FY2019FY2021

Total amount (MWh)8,317

19,91923,12722,327intensity (/㎡)

0.052

0.049

0.054

0.048

Coverage rate (%)

100%

100%

100%

100%

Total amount (MWh)

3,961

9,619

10,291

9,667

intensity (/㎡)

0.02470.02400.02410.0208Coverage rate (%)

100%

100%

100%

100%

※１

※２

Water Usage

Waste Volume※3

Total amount (㎥)10,52027,15030,69326,554intensity(/㎡)0.07080.07140.07540.0572

Coverage rate （%）

92%

95%

95%

96%

※３

Total volume (t)52.62

2,432.41

2,088.30

864.09※４

Generation intensity (/㎡)0.00063

0.007540.005520.00186

44%

80%

89%

100%

Coverage rate (%)※５

Total CO₂ emissions were calculated using the emission
coefficients indicated in the "Standards for Greenhouse Gas
Emissions Calculation, Reporting, and Disclosure," of Japan’s
Ministry of Environment .
From fiscal 2019, GRESB's environmental data disclosure
guideline requires that properties held in quasi-co-ownership arealso calculated as 100% ownership. Accordingly, the fiscal 2018
figures have also been revised. Specifically, i Missions Park Inzai
was 70% owned by us as of fiscal 2018, so we have revised thefigures.
With respect to the basic unit of waste volume for fiscal 2018,
the figures appear low due to the acquisition of properties thatwere not yet in operation during the period.
For fiscal 2019, total amount figures of i Missions Park Kashiwa 2
acquired on February 3, 2020, in accordance with GRESB's
environmental data disclosure guideline, are based on operations
for one year (April 1, 2019 - March 31, 2020).
The coverage rate was calculated as follows:
Square meters of floor area for which data was collected ÷square meters of total portfolio floor area

Independent assurance statement
ADR and ADL obtained limited assurance from a third party (Sustainability Accounting Co., Ltd.) for environmental performance data (April 2021 March 2022).

37

Human Resource Data
Key Human Resource Data
Category

FY2017Workstyle Reforms ・ Diversity
FY2018FY2019FY2020FY2018FY2019FY2020

FY2021

61

Average overtime(Length of time)

16 hrs29 min17 hrs31 min20 hrs35 min23 hrs46 min20 hrs41 min50

Paid leave acquisition rate
(Percent)

77.2%

79.9%

68.4%

68.2%

59.8%

Share of female
executives (Percent)

0.0%

0.0%

0.0%

0.0%

0.0%

Share of female managers(Percent)

0.0%

0.0%

3.7%

6.3%

11.4%

Users of childcare leavesystem (No. of people)

1

1

1

1

1

Users of shortened work
hours for childcare(No. of people)

3

2

1

1

0

Users of nursing leave(Percent of males)

62.5％

69.2％

72.7％

58.3％

45.5％

Users of nursing leave(Percent of females)

100.0％

100.0％

100.0％

100.0％

100.0％

Employees*1(No. of people)

67

Males
(No. of people)

53

Females(No. of people)

14

11

10

12

11

Percentage of females(Percent)

20.9%

18.0%

16.7%

20.0%

18.0%

Average years ofservice (No. of years)

7 yrs
5 mths

8 yrs
1 mths

7 yrs
9 mths

7 yrs
11 mths

8 yrs
2 mthsMales(No. of years)

7 yrs
7 mths

8 yrs
3 mths

7 yrs
10 mths

7 yrs
12 mths

8yrs
4mths

Females(No. of years)

6 yrs
11 mths

7 yrs
6 mths

7 yrs
6 mths

7 yrs
2 mths

7 yrs
3 mthsNo. of new hires(No. of people)

5

2

6

6

6

Males
(No. of people)

3

2

5

4

5

Females(No. of people)

2

0

1

2

1

9.0%

4.9%

8.3%

6.7%

3.3%

Turnover*2(Percent)

61
50

60
50

60
48

Employee Health and Safety
Employee Health and
SafetyWorkstyle
Reforms/Diversity

FY2017

FY2021

Employees with professional certification
Certification

Number of people certified

Real Estate Transaction Agent

45

ARES Certified Master

26

Certified Building Administrator

3

FY2017FY2018FY2019FY2020

FY2021

Annual medical exam
taken (Percent)

100%

100%

100%

100%

100%

First-Class Architect

5

Occupational accident
frequency rate*3(Percent)

0.00

0.00

0.00

0.00

0.00

Lawyer1

Securities Analyst

5

Certified Public Accountant

2

U.S. CPA

1

Labor and Social Security Attorney

1

Certified Internal Auditor

1

CASBEE Building Evaluator

１

Coverage: Full-time employees and contract employees
1. Number of employees as of April 1. Information is before the asset management company merger on June 1,
2022, and therefore does not include the number of employees of the former ITOCHU REIT Management Co.,Ltd.
2. Turnover is calculated by dividing the number of employees that left IRM during the fiscal year by the number of
employees as of April 1. Additionally, there were no workforce reductions due to corporate mergers or acquisitions
involving restructuring, or for other reasons during the fiscal years listed above. Also,and the same applies to themerger between asset management companies on June 1, 2022.
3. Occupational accident frequency rate is calculated as follows: number of fatalities and injuries due to accidents ÷
cumulative work hours x 1 million hours.
For details, please refer to the following Ministry of Health, Labour and Welfare site (in Japanese).

*As of March 31, 2022

Real Estate Transaction Agent and CASBEE Building Assessor are based on successful applicants.

38

Human Resource Data
General training

Career Support System

Category

Overview

Managers

Generalemployees

New officer training

Responsibility and role recognition
required of officers－－

Non-regular
Hours/people
employees－－

Category
Mentor system
Career path reporting system

Manager training
Future manager training

Training of future executives
Management training

5
－

－
4

－
－

18

Managers

Generalemployees

System of support by senior employees(expenses borne by company)
System for employees to indicate career path
intentions

－

3

－

25

Aid for self- development through businessschool attendanceTraining through adult education institutes ofuniversities

1

3

Support for certification

System of financial aid toward the costs ofacquiring certification to improve businessexecution skills and gain expertise6

2

Language learning support

System of financial aid for part of the costs oflanguage classes to improve language skills
required for business

4

2

14

Next generation Businessleader training

Leadership training

－

3

－

14

Fourth-year training

Training for fourth-year employees

－

－

－

－

Instructor training

Training for appointees as instructors of
new hires

－

1

－

16

New hire training

Basic training for new graduate hires(ITOCHU Group)

－

1

－

48

Bookkeeping training

Training on basic bookkeeping knowledge
for new hires

－

1

－

－

Training on officemachinery

Training for new hires and some junioremployees

－

－

－

－

Compliance training andexams

Comprehensive compliance training(For all officers and employees Apart fromtraining, compliance exams are conducted
once a month, in principle.)－

Cumulative
total: 300－－

Harassment prevention
training

Training aimed at preventing workplaceharassment

39

26

12

3

39

26

12

1

Sustainability training and Training aimed at raising the awareness ofofficers and employees
exams

Overview* FY2021 actual results

Business productivity
improvement training

Excel macro and VBA training

－

－

－

－

Internal study groups

In-house seminars held by departments(lectures by outside analysts, latest
knowledge on finance and tax systems,
etc.)

Held
frequentlyHeldfrequentlyHeldfrequently

N/A

Cafeteria-style training

Training provided by the ITOCHU Group.
Participants have a choice of approx. 200
courses.

4

4

－

－

Real Estate Transaction
Agent exam prep training

In-house training for exam applicants

1

4

－

－

* FY2021 actual results

39Comparative Table
with GRI Standards（GRI content index）

Comparative Table with GRI Standards（GRI content index）
Universal Standards

GRI 3: Material Topics 2021

GRI 2: General Disclosures 2021

3-1
3-2
3-3

1.The organization and its reporting practices
2-1

Organizational details

P3 Overview of Companies

2-2

Entities included in the organization’s sustainability
reportingP2 About This ESG Report

2-3

Reporting period, frequency and contact point

2-4
Restatements of information
2-5
External assurance
2.Activities and workers

P2 About This ESG Report、Inquiries
Not applicable
P37 Independent assurance statement

2-6

Activities, value chain and other business relationships ー

2-7

Employees

2-8Workers who are not employees
3. Governance

P38 Key Human Resource DataーGovernance structure and composition
Nomination and selection of the highest governancebody
Chair of the highest governance bodyRole of the highest governance body in overseeing
the management of impacts

P7 Sustainability Promotion Framework

2-13

Delegation of responsibility for managing impacts

P7 Sustainability Promotion Framework

2-14

P7 Sustainability Promotion Framework

2-15

Role of the highest governance body in sustainability
reporting
Conflicts of interest

2-16
2-17

Communication of critical concerns
Collective knowledge of the highest governance body

2-18

ー

2-19

Evaluation of the performance of the highest
governance body
Remuneration policies

2-20

Process to determine remuneration

P32 Management Fee Structure

2-21

Annual total compensation ratio

P32 Management Fee Structure

2-9
2-10
2-11
2-12

ー
P7 Sustainability Promotion Framework
P7 Sustainability Promotion FrameworkーP31 Case in IRM
ー

P32 Management Fee Structure

4.Strategy, policies and practices

Process to determin material topics
List of material topics
Management of material topics

P11 Materiality and Targets
P11 Materiality and Targets
P11 Materiality and Targets

Topic Standards (Economic)
GRI201: Economic Performance 2016
Direct economic value generated and201-1
distributed
Financial implications and other risks
201-2
and opportunities due to climatechange201-3

Defined benefit plan obligations andother retirement plans

Financial assistance received fromgovernment
GRI 202: Market Presence 2016
Ratios of standard entry level wage by
202-1
gender compared to local minimum
wage
201-4

202-2

ー
P15 Response to Climate Changeー
Not applicable－

Proportion of senior management hired－from the local community

GRI 203: Indirect Economic Impacts 2016
Infrastructure investments and services－
203-1
supported
203-2
Significant indirect economic impacts－
GRI 204: Procurement Practices 2016
Proportion of spending on local
204-1－
suppliers
GRI 205: Anti-corruption 2016
Operations assessed for risks related to P29 Preventing Misconduct and205-1
corruption
Corruption
205-2

Communication and training about
P31 Implementation of complianceanti-corruption policies and procedures training

2-22

Statement on sustainable development strategy

P5 Message from Top Management

2-23

Policy commitments

2-24
2-25

Embedding policy commitments
Processes to remediate negative impacts

P5 Message from Top Management
P6 Sustainability Policy,P24Human Rights Policy P29
Anti-corruption Policy
P7 Sustainability Policy and Structure

Confirmed incidents of corruption andactions taken
GRI 206: Anti-competitive Behavior 2016
Legal actions for anti-competitive
206-1
behavior, anti-trust, and monopoly
practices
GRI 207: Tax 2019

P30 Whistleblowing system

207-1

Approach to tax

－

2-26

Mechanisms for seeking advice and raising concerns

207-2

Tax governance, control, and risk
management

－

2-27

Compliance with laws and regulations

P28 Supervision by the Board of Directors and otherbodies
P30 Whistleblowing system

2-28
Membership associations
5. Stakeholder engagement
2-29
Approach to stakeholder engagement
2-30

Collective bargaining agreements

205-3

P31-32

P31 Case in IRM

P31 Case in IRM

Preventing Misconduct and Corruption

P4 Overview of Companies
P28 Basic Policy on Customer-Oriented BusinessConductー41Comparative Table with GRI Standards（GRI content index）

Topic Standards (Environmental)

GRI 308: Supplier Environmental Assessment 2016

GRI 301: Materials 2016
301-1

Materials used by weight or volume

－

301-2

Recycled input materials used

－

301-3

Reclaimed products and their packaging materials

－

308-1

New suppliers that were screened using
environmental criteria

ー

308-2

Negative environmental impacts in the
supply chain and actions takenー

GRI 302: Energy 2016
302-1

Energy consumption within the organization

－

302-2

Energy consumption outside of the organization

－

302-3

Energy intensity

P36,37 Environmental performance data

302-4

Reduction of energy consumption

P36,37 Environmental performance data

302-5

Reductions in energy requirements of products and services

P36,37 Environmental performance data

GRI303: Water and Effluents 2018
303-1

Interactions with water as a shared resource

ー

303-2

Management of water discharge-related impacts

P36,37 Environmental performance data

303-3

Water withdrawal

P36,37 Environmental performance data

303-4

Water discharge

P36,37 Environmental performance data

303-5
Water consumption
GRI 304: Biodiversity 2016
Operational sites owned, leased, managed in, or adjacent to,
304-1
protected areas and areas of high biodiversity value outside
protected areas
Significant impacts of activities, products, and services on
304-2
biodiversity
304-3
Habitats protected or restored
IUCN Red List species and national conservation list species
304-4
with habitats in areas affected by operations
GRI 305: Emissions 2016

P36,37 Environmental performance data

Not applicableNot applicableNot applicable

305-1

Direct (Scope 1) GHG emissions

P36,37 Environmental performance data

305-2

Energy indirect (Scope 2) GHG emissions

P36,37 Environmental performance data

305-3

Other indirect (Scope 3) GHG emissions

ー

305-4

GHG emissions intensity

P36,37 Environmental performance data305-5

Reduction of GHG emissions

P36,37 Environmental performance data

305-6

Emissions of ozone-depleting substances (ODS)
Nitrogen oxides (NOX), sulfur oxides (SOX), and other305-7
significant air emissions
GRI 306: Waste 2020

ー
ー

306-1

Waste generation and significant waste-related impacts

ー

306-2

Management of significant waste-related impacts

ー

306-3

Waste generated

P36,37 Environmental performance data

306-4

Waste diverted from disposal

P36,37 Environmental performance data

306-5

Waste directed to disposal

P36,37 Environmental performance data

GRI 307: Environmental Compliance 2016
307-1

Non-compliance with environmental laws and regulations

P31 Case in IRM

42Comparative Table with GRI Standards（GRI content index）
Topic Standards (Social)

GRI 411: Rights of Indigenous Peoples 2016

GRI 401: Employment 2016

Incidents of violations involving rights of
Not applicableindigenous peoples

401-1

New employee hires and employee turnover

401-2

Benefits provided to full-time employees that are not
P26 Human Resources Systemprovided to temporary or part-time employees

GRI 412: Human Rights Assessment 2016

401-3

Parental leave

P26 Human Resources System

412-1

Operations that have been subject tohuman rights reviews or impact
assessments

－

－

412-2

Employee training on human rights
policies or procedures

P39 General training

412-3

Significant investment agreements andcontracts that include human rights
clauses or that underwent human rights
screening－

GRI 402: Labor/Management Relations 2016

Minimum notice periods regarding operationalchanges
GRI 403: Occupational Health and Safety 2018

402-1

403-1
403-2
403-3

P38 Key Human Resource Data

411-1

Occupational health and safety management system －Hazard identification, risk assessment, and incident
investigation
Occupational health services

－
ー

403-4

Worker participation, consultation, andcommunication on occupational health and safety

－

403-5

Worker training on occupational health and safety

ー

403-6

P26 Promotion of Health Management403-9
403-10

Promotion of worker healthPrevention and mitigation of occupational health andsafety impacts directly linked by business
relationships
Workers covered by an occupational health andsafety management system
Work-related injuries
Work-related ill health404-1

Average hours of training per year per employee

P39 General training

404-2

Programs for upgrading employee skills andtransition assistance programs

P25 Professional development andtraining programs
P25 Performance appraisals and feedback
process

403-7
403-8

GRI 404: Training and Education 2016

Percentage of employees receiving regularperformance and career development reviews
GRI 405: Diversity and Equal Opportunity 2016

404-3

405-1

Diversity of governance bodies and employees

Ratio of basic salary and remuneration of women tomen
GRI 406: Non-discrimination 2016

405-2

ー
－
P38 Employee Health and Safety
P38 Employee Health and Safety

409-1

ー

GRI 410: Security Practices 2016
410-1

Security personnel trained in human rights policies
or procedures

415-1

Political contributionsーーー

P31 Case in IRM

GRI 416: Customer Health and Safety 2016
416-1

Assessment of the health and safety
impacts of product and service categories

416-2

417-2
417-3

Requirements for product and service
information and labeling
Incidents of non-compliance concerning
product and service information andlabeling
Incidents of non-compliance concerningmarketing communicationsー
Not applicableーNot applicableNot applicable

GRI 418: Customer Privacy 2016
Substantiated complaints concerning
breaches of customer privacy and lossesof customer data
GRI 419: Socioeconomic Compliance 2016
418-1

ー

P21 Initiatives for Tenants and Regional
Contribution

GRI 415: Public Policy 2016

417-1

GRI 409: Forced or Compulsory Labor 2016
Operations and suppliers at significant risk forincidents of forced or compulsory labor414-2

New suppliers that were screened usingsocial criteria
Negative social impacts in the supply
chain and actions takenーOperations and suppliers in which the right tofreedom of association and collective bargaining may ー
be at risk
Operations and suppliers at significant risk forincidents of child labor

414-1

P38 Workstyle Reforms ・ Diversity

GRI 408: Child Labor 2016
408-1

Operations with local community
engagement, impact assessments, anddevelopment programs
Operations with significant actual and413-2
potential negative impacts on local
communities
GRI 414: Supplier Social Assessment 2016
413-1

Incidents of non-compliance concerning
the health and safety impacts ofproducts and services
GRI 417: Marketing and Labeling 2016

Incidents of discrimination and corrective actions
Not applicable
406-1
taken
GRI 407: Freedom of Association and Collective Bargaining 2016
407-1

GRI 413: Local Communities 2016

419-1

Non-compliance with laws andregulations in the social and economic
area

Not applicableNot applicable

P39 General training

43