PRINCIPAL ADVERSE IMPACT STATEMENT
The following is the adverse sustainability impact statement with respect to Daiwa Securities Living Investment
Corporation (“DLI”) and Daiwa Office Investment Corporation (“DOI”) pursuant to Regulation (EU)2019/2088 (“SFDR”). Neither DLI nor DOI has any employees in accordance with the prohibition on having
employees under the Act on Investment Trusts and Investment Corporations of Japan, and each of DLI and DOI
therefore relies on Daiwa Real Estate Asset Management Co., Ltd. (the “Asset Manager”) to manage andoperate the properties in our portfolio. The Asset Manager, DLI and DOI are hereinafter referred to collectively
as “we”, “us” or “our”. References to “fiscal year” or “FY” are to the 12 months began or beginning April 1of the year specified in line with the fiscal year of the Asset Manager, unless noted otherwise.
1. Summary
We consider principal adverse impacts of our investment decisions on sustainability factors. The present
statement is our consolidated statement of the principal adverse impacts on sustainability factors (“PAI”). The
statement covers the reference period from October 1, 2021 to March 31, 2022 for DLI and December 1, 2021
to May 31, 2022 for DOI. The statement will be reviewed at least once during every year.
DLI’s goal is to support everyone’s life and lifestyle, and seeks to serve as society’s infrastructure that provides
comfortable living spaces, rental housing and healthcare facilities, suited to each life stage. Toward this goal,
DLI proactively makes sustainable investments in healthcare facilities. These healthcare facilities include elderly
care facilities, medical care facilities and life science facilities throughout Japan, and DLI’s target is to establish
a portfolio up to 40% of which constitutes such healthcare facilities. Especially in Japan, where the population
is rapidly aging, healthcare facilities that primarily serve the elderly population have significant social value, as
recognized by the United Nations Sustainable Development Goals (SDGs). Furthermore, we focus on promoting
environmental, social and governance, or ESG, characteristics in managing all of DLI’s properties on the belief
that emphasis on ESG contributes to the enhancement of DLI’s medium- to long-term unitholder value. DLI hasimplemented a number of environmental initiatives, including resource and energy-saving measures, as
described in more detail below.
We also focus on promoting ESG characteristics in managing all of DOI’s properties on the belief that emphasison ESG contributes to the enhancement of DOI’s medium- to long-term unitholder value. DOI has implemented
a number of environmental initiatives, including resource and energy-saving measures, as described in moredetail below, and disclosed certain ESG-related data on our website.
We use the definition of PAI as described in Recital 20 of SFDR being “those impacts of investment decisions
and advice that result in negative effects on sustainability factors,” with sustainability factors referring toenvironmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters
as defined in article 2 (24) of SFDR.
We believe that investment decisions that negatively affect climate or other environment-related resources, or
have negative implications for society, can have a significant impact to risk and value creation for our unitholders.
To this end, we consider PAI of our investment decisions throughout all major steps of the investment decisionand property management process throughout the lifecycle of the properties in our portfolio.
Please note that SFDR requirements, including the scope of their application to issuers outside the European
Economic Area, continue to evolve. We are therefore taking a principles-based approach to compliance with theSFDR disclosure standards, which are subject to change.
2. Description of principal adverse sustainability impacts
Nearly all types of economic activity have the potential to impact various PAI indicators, both positively andadversely. We aim to manage the risk connected to PAI from our investment decisions in several ways, including

general screening criteria, due diligence and our proprietary ESG risk rating system. Some of the PAI indicators
listed below are currently already being monitored and reported. As the availability of data improves, it is ourintention that more indicators will be added.
Table 1
Principal adverse sustainability impacts statement
DLI and DOI do not invest in investee companies but in real estate. As adverse sustainability indicators 1-16
as contained in Table 1 of Annex 1 of the draft Delegated Regulation pertain to investee companies, these are
not included in this PAI statement, which pertains to real estate investments.

Indicators applicable to investments in real estate assets
Adversesustainability
indicator
Fossil17.
fuels
Exposure
to fossil
fuels
through
real estate
assetsEnergyefficiency

18.
Exposure
to energyinefficient
real estate
assetsMetricShare ofinvestments
in real estate
assetsinvolved in
the extraction,
storage,transport ormanufactureof fossil fuels
Share ofinvestments
in energyinefficientreal estate
assets

Impact in2021

Impact in2020

N/A

As of
December31, 2021,
38.7% for
DOI and
97.0% forDLI of ourproperties
were notGreenqualified
Assets (asdefined tothe right)
based ontotal grossfloor area.

Explanation

Actions taken

N/A

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

N/A

As of
December31, 2020,56.6% for
DOI and
96.7% forDLI of ourproperties
were notGreenqualified
Assets (asdefined tothe right)
based ontotal grossfloor area.

To track theenvironmental
performance ofour properties,
we rely oncertifications
issued by thirdparty
organizations,such as thegreen building
certification oftheDevelopment
Bank of Japan(“DBJ”),
Comprehensive
Assessment
System for
Built
Environment
Efficiency(“CASBEE”)
and BuildingHousing
Energyefficiency

We implement
as appropriate
measures toreduce theirenvironmental
impactfollowingacquisition,
including by
obtaining
environmental
certifications
such as DBJ
green building
certification,
CASBEEcertification or
BELS
certification,
installing LED
lighting andintroducing
renewableenergy.

LabelingSystem(“BELS”)andotherequivalentcertifications.
We call ourproperties thathas acquired
DBJ Green
Building
Certification,
CASBEEcertification
and BELS
certification,“GreenqualifiedAssets”.
Table 2
Additional climate and other environment-related indicators
DLI and DOI do not invest in investee companies but in real estate. As additional climate and otherenvironment-related indicators 1-17 as contained in Table 2 of Annex 1 of the draft Delegated Regulation
pertain to investee companies, these are not included in this PAI statement, which pertains to real estate
investments.
Adversesustainability
impactClimatechangeAdverse sustainability impact (qualitative or quantitative)

MetricIndicators applicable to investments in real estate assets
18. GHG emissions
DOI:Total (Scope 1 + Scope 2) GHG emissions generated by DOI’sproperties were 44,771 t-CO2 (in FY2019), 38,250 t-CO2 (inFY2020) and 37,063 t-CO2 (in FY2021).
Scope 3 GHG emissions are not applicable to DOI’s properties.
We aim to reduce CO2 emissions intensity from DOI’s portfolio by
5% in FY2024 compared with the FY2019 level and 46% inFY2030 compared with the FY2013 level, and to become carbonneutral by FY2050.
DLI:
Total (Scope 1 + Scope 2) GHG emissions generated by DLI’s
rental housing properties were 3,768 t-CO2 (in FY2020) and 3,387
t-CO2 (in FY2021).
Total (Scope 1 + Scope 2) GHG emissions generated by DLI’s
healthcare facilities was 16,238 t-CO2 (in FY2021).
Scope 3 GHG emissions are not applicable to DLI’s properties.

Scope 1 GHG
emissions generated
by real estate assets
Scope 2 GHG
emissions generated
by real estate assets
From 1 January2023, Scope 3 GHG
emissions generated
by real estate assets
Total GHG
emissions generated
by real estate assets

We aim to achieve 5% reduction in CO2 emissions intensity fromDLI’s portfolio by FY2022 compared with the FY2017 level.
Energyconsumption

19. Energy consumption intensity
DOI:
Energy consumption intensity of DOI’s properties was 0.207
MWh/m2 (in FY2019), 0.181 MWh/m2 (in FY2020) and 0.178
MWh/m2 (in FY2021).

Energy consumption
in GWh of owned
real estate assets persquare meterWe aim to achieve 5% reduction in energy consumption intensityfrom DOI’s portfolio by FY2024 compared with the FY2019 level.
DLI:Energy consumption intensity of our rental housing properties was
0.110 MWh/m2 (in FY2020) and 0.109 MWh/m2 (in FY2021).
Energy consumption intensity of our healthcare facilities was
0.236 MWh/m2 (in FY2021).
We aim to achieve 5% reduction in energy consumption intensityfrom DLI’s portfolio by FY2022 compared with the FY2017 level.
For both DOI and DLI, we will continue implementing
environmental initiatives such installing eco-friendly equipment
such as LED lighting and energy-efficient heating and coolingequipment, and introduction of renewable energy.
Waste

20. Waste production in operations
DOI:
The amount of waste generated at DOI’s properties was 4,388 tons
(in FY2019), 3,594 tons (in FY2020) and 3,373 tons (in FY2021).
The recycling rate at DOI’s properties was 57.03% (in FY2019),
58.20% (in FY2020) and 55.21% (in FY2021).

Share of real estate
assets not equippedwith facilities for
waste sorting andnot covered by awaste recovery or
recycling contract

Table 3
Additional indicators for social and employee, respect for human rights, anti-corruption and anti-bribery
matters
Each of DLI and DOI has no employees in accordance with the prohibition on having employees under the Act
on Investment Trusts and Investment Corporations of Japan, and relies on the Asset Manager to manage andoperate the properties in our portfolio. Accordingly, additional indicators for social and employee, respect forhuman rights, anti-corruption and anti-bribery matters in this PAI statement pertain to the Asset Manager andthe tenants of the properties in our portfolio, to the extent available.
SOCIAL AND EMPLOYEE, RESPECT FOR HUMAN RIGHTS, ANTI-CORRUPTION AND
ANTI-BRIBERY MATTERS
Adversesustainability
impactAdverse sustainability impact (qualitative or quantitative)

MetricIndicators applicable to investments to the Asset Manager or tenantsSocial andemployeematters

5. Lack of grievance/complaints handling mechanism related
to employee matters
Tenant Satisfaction Survey
We conduct a survey on a regular basis. We are working toimprove tenant satisfaction by understanding their level ofsatisfaction and applying it to the operation and managementof our properties.

Share of investments ininvestee companies
without any
grievance/complaints
handling mechanism
related to employee
matters

Employee satisfaction survey
The Asset Manager believes that it is important to reflect theviews of employees in organizational management and utilize
them in various measures, etc., in order to build a better
workplace environment, and conducts employee satisfaction
surveys on a regular basis and utilizes the survey results toimprove the internal environment.
Evaluation system of employees
The Asset Manager conducts semi-annual performanceevaluations and reviews of all employees, with bonuses paid
based on the degree of achievement of semi-annual goals.
Through periodic performance evaluation measurements andfeedback, the Asset Manager encourages employee careerdevelopment and has established a transparent personnel
evaluation system.
6. Insufficient whistleblower protection
Employees and officers of the Asset Manager are obliged tosubmit a report as provided in the Rules of the Internal
Whistleblower System of the Asset Manager when they noticea violation or suspect a violation of any laws or regulations oran action which would damage the brand of Daiwa Securities
Group. This system is overseen by the General Manager, who
is appointed by the Chief Executive Officer of the AssetManager.
Human Rights

9. Lack of a human rights policy
The Compliance Manual of the Asset Manager stipulates that
all officers and employees shall respect human rights and shallnot engage in discrimination based on race, creed, gender,age, nationality, religion, place of birth, social status, or
physical or mental disability and such discrimination shall not
be tolerated. .

Anti-corruption
and anti-bribery

15. Lack of anti-corruption and anti-bribery policies
The Compliance Manual of the Asset Manager stipulates thatentertainment and gifts to business partners shall not exceed

Share of investments inentities without policies
on the protection ofwhistleblowers

Share of investments inentities without ahuman rights policy

Share of investments inentities without policies
on anti-corruption andanti- bribery consistent
with the United Nations

what is socially acceptable and reasonable, and that no bribes
or improper benefits shall be given, offered, or promised.

Convention against
Corruption

In principle, before any entertainment is to be provided orreceived, an "Application for Entertainment or Receiving
Entertainment" must be submitted and approved in advance.
After the entertainment is provided or received, a report must
be made on the same application form.
The Compliance Manual stipulates that the Asset Manager
shall not have any relationship with antisocial forces, and if
the Company has a relationship with antisocial forces without
knowing that the other party is an antisocial force, theCompany shall terminate the relationship as soon as possible
upon discovering that the other party is an antisocial force.
When we or the investment corporations we are entrusted tomanage conduct new transactions, we must conduct priorscreening in accordance with the "Manual for Anti-SocialForces". According to the manual, for leases of investment
corporations that we manage, we shall conduct hearings, etc.
with the property management company as part of themanagement of outsourcing, and confirm whether the lessee
and the relevant property management company haveappropriately cut off any relationship with antisocial forces.

For descriptions of actions which DLI and DOI take and will take with respect to the PAI indicators, please refer
to our ESG website with respect to each of DLI and DOI:
DLI: https://www.daiwa-securities-living.co.jp/en/esg/
DOI: https://www.daiwa-office.co.jp/en/plan/environment.html
3. Description of policies to identify and prioritize principal adverse sustainability impacts
Subject to data availability, we monitor the selected PAI indicators for the existing properties in our portfolio.
Prior to our investment in a property, we conduct due diligence on the property, including ESG due diligence,
which includes selected PAI indicators. The due diligence findings related to selected PAI indicators are reportedand reviewed prior to the investment decision.
Moreover, the Asset Manager established the Sustainability Promotion Framework Rule and introduced theSustainability Promotion Committee in November 2017. To specify the detailed management policy based on
the Sustainability Promotion Framework Rule, the Sustainability Promotion Committee established the EnergySaving Policy, Greenhouse Gas Emissions Reduction Policy, Water-Saving Policy, Sustainable Procurement
Policy and EMS Management Manual for DLI in February 2018 and DOI in March 2021, respectively.
Furthermore, the Asset Manager has designated its President & CEO as the Chief Executive for Promoting
Sustainability, who is responsible for establishing a sustainability framework, goals and priority policies andexecuting them, in addition to establishing a Chief Sustainability Officer in DLI and DOI, respectively, who isa general manager of a management division appointed by the Chief Executive for Promoting Sustainability topromote sustainability and responsible for executing sustainability measures.

The Asset Manager tracks and monitors on an ongoing basis consumption of energy, greenhouse gas emissions
and water consumption at properties in portfolios of DLI and DOI by acquiring data by itself as well as fromtenants, property managers and facility operators. The Asset Manager’s Sustainability Promotion Committee
uses the data to assess progress made against targets, and deliberates on necessary action plans every threemonths. The Chief Sustainability Officer is responsible in executing the action plans and reporting the process
to the committee on a timely basis. The Chief Sustainability Officer reports the results for each year to the Chief
Executive Officer, who establishes the targets for the following year. The Chief Sustainability Officer also
reports the results to the Sustainability Promotion Committee, which evaluates the results and provides
sustainability-related instructions.
For further information, please refer to our ESG website with respect to each of DLI and DOI:
DLI: https://www.daiwa-securities-living.co.jp/en/esg/
DOI: https://www.daiwa-office.co.jp/en/plan/environment.html
4. Engagement policies
Due diligence and screening
DLI and DOI invest only in properties that have no significant environmental risks by conducting significant
due diligence review prior to each acquisition. Additionally, the Asset Manager conducts an environmental
investigation every five years and addresses any environmental risks discovered in such investigation byimplementing appropriate action plans. With respect to a healthcare facility, DLI enters into a long-term leaseagreement with a facility operator to mitigate risks associated with unstable operation. The Asset Manager
currently has an agreement with AIP Healthcare Japan GK, which provides the Asset Manager with informationand proposals on healthcare facility management to help the Asset Manager to monitor sustainability factors forhealthcare facilities and mitigate ESG risks.
Engagement
In accordance with the Sustainable Procurement Policy, the Asset Manager selects products and services, on apreferential basis, which meet the following criteria in addition to required quality and economic efficiency: (i)low-consumption of fossil fuels and energy, (ii) low usage and emissions of substances with adverse effects onenvironment and human health, (iii) designed to conserve biodiversity and ecology, (iv) designed for long-term
usage, (v) designed to be reusable and recyclable, (vi) uses reclaimed material and has environmentalcertification, (vii) easily disposable, and (viii) reduced procurement amount to reduce waste. Furthermore, theAsset Manager selects property managers and suppliers based on their sustainability framework and ability tocooperate with the Asset Manager’s ESG practices, in addition to their creditworthiness, product or service
quality and price.
In addition, the Asset Manager plans to introduce various measures to promote cooperation with stakeholders ofDLI and DOI, respectively, including green lease clauses, which requires tenants’ cooperation on reduction ofenvironmental burdens through energy saving programs and improvement of the residential environmental inlease contracts between tenants and DLI or DOI.
5. References to international standards
We follow the United Nations’ 17 Sustainability Development Goals, a reference framework adopted at theUnited Nations Summit held in September 2015.
The Asset Manager established the "Climate Change and Resilience Policy", in order to promote clarification of
the policy and system for addressing climate-related issues and expansion of disclosure of the initiatives, andannounced its support for the TCFD recommendations in December 2021. In January 2022, the Asset Manager
joined TCFD consortium, a group of domestic companies that support TCFD recommendations.
As we recognize that climate change is an important issue that has a significant impact on their operations, bothof them will gradually promote information disclosure related to climate change, while identifying and analyzing
risks and opportunities of the change based on the TCFD recommendations and continuously working to reduce
the environmental impact of their business.
6. Historical comparison
See Table 1 and Table 2 above.