ESG Report 2023

Basic Information

Top Commitment

Basic Information

JMF/IIF Overview

Sustainability Strategy

Key Issues and Initiatives

Environment
J

SocialGovernance

JMF/IIF Overview I

J

J

Data

01

I

History of Sustainability I

J

External evaluation I

I

JJapan Metropolitan Fund Investment Corporation
Largest Diversified J-REIT investing in realestate properties serving as a foundation ofurban lives (live, work and consume)

Major types of assets(JMF), one of the largest diversified J-REITs in Japan,

Retail properties
Mixed-use properties
Office(live, work and consume) in Japan from the perspective

Number of properties

Japan Metropolitan Fund Investment Corporation

will hold up as its vision, “Support metropolitan lifeof real estate”, and realize improvement of unitholder
value (sustainable growth) through investment inurban real estate in Japan.

127 Properties

Only J-REIT specializing in industrial realestate that supports Japan's industrial
activities from a real estate perspective& Infrastructure Fund Investment Corporation (IIF) are
been striving to develop original asset classes.

Number of properties

First J-REIT specializing in industrial properties, Industrial
committed to long-term stable management and IIF havesocial infrastructure as a source of power for the Japanese

75 Properties

the perspective of real estate " through the development

Occupancy ratio

IIF will continue to realize our philosophy of " Invests ineconomy and supports Japan’s industrial activities from

Occupancy ratio

99.1％

37

Other

16

Propertiesof asset classes based on our unique CRE proposals.

Properties

1,207.4 billion yen
1.4

62.4 ％％
OthersTokyo area
Nagoya area

470

Properties

Properties

https://www.jmf-reit.com/english/Oﬃce

Osaka area

Other

Properties

Properties

14

15

374.9 billion yen
44.7％

19.6％

Logistics
facilities

Asset allocation

Nagoya area

6

17.4 ％

Mixed-use
properties

Properties(As of August, 2022)

98.6％
Assets size based on acquisition price

Retailproperties

18.8％

Major types of assets

Infrastructure facilities
Manufacturing and R&D
Logistics facilities

Assets size based on acquisition price

Osaka area

Ref.

Industrial & Infrastructure Fund Investment Corporation

Ref.

Tokyo area40

Properties

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

Infrastructure
facilities

Asset allocation

35.7％
Manufacturing
and R&D(As of July, 2022)

Basic Information

History of Sustainability at JMF
JInitiatives at JMF

2013

E Participated in GRESB for the first time

Basic Information

Top Commitment

2016

E Participated in CDP Climate Change Program

for the first time First J-REIT- Included in MSCI Japan ESG Select Leaders Index

Certification for the first timeFirst retail property

Became the first J-REIT to acquire DBJ Green
Building Certification for retail properties,
which was established in 20142015

E Acquired CASBEE Certifications forReal Estate for the first time

2018

E Issued Green Bonds- Established Environmental Charter- Established the Responsible Property
Investment Policy (RPI)- Signed Principles for Financial Action forthe 21st Century- Signed Principles for Responsible
Investment (PRI)2015- Established the Corporate philosophy “Mission, Vision & Core Values”
First J-REIT asset manager

First J-REIT

E Received Special Award of the Principles for Financial Action for the

21st Century for Green Bond issuanceE Selected as “Sector Leader” of Retail sector in Asia by the GRESB

2019

Social

JMF/IIF Overview I

Governance
J

02

I

History of Sustainability I

J

External evaluation I

2021

E Established new CO2 reduction targets toward carbon neutrality

by 20502022

E Publication of Positive Impact Real Estate Investments based on

the Principles for Positive Impact FinanceE Implemented scenario analysis based on TCFD

recommendations

E Certification and Registration for the “Eco Action 21”(For an Environmental Management System)

認証番号0013755(Eco Action 21)

2016–20192016- Signed United Nations Environment Programme Finance Initiative (UNEP FI) *First J-REIT asset manager*The investment group of UNEP FI was transferred to PRI on January 1, 2022.

-S igned the United Nations Global Compact
First J-REIT asset manager

Since 2016, KJR Management has supported the business

responsibility initiatives and the principles in the areas of humanrights, labor, environment, and anti-corruption in the United Nations
Global Compact (UNGC).

2019

E Declared support for Task Force on Climate-

Related Financial Disclosures (TCFD)First J-REIT asset manager- Issued ESG Report

J

Data

- Issued ESG Report

2012–20152013

EnvironmentJ

2017

E Acquired DBJ Green Building

Initiatives at KJRM

Key Issues and Initiatives

E Acquired BELS Certification for the first time

2014

E Signed Montreal Carbon Pledge

Sustainability Strategy

2020–
2020

E Participated in Japan Climate Initiative

(JCI)

2022

G Elected first female director

S Established systems for diverse workstyles（Well-being）

S Established childcare leave for male

employees, and other systems（Diversity）- Signed PRI AdvanceFirst J-REIT asset manager

Basic Information

History of Sustainability at IIF
Initiatives at IIF

2012

Basic Information

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

J

Certification for the first timeFirst logistics facility

Selected as Sector Leader in Asia
Industrial property sector

E Acquired BELS Certification for the firsttime First logistics facility- Established Environmental Charter- Established the Responsible Property
Investment Policy (RPI)- Signed Principles for Financial Action forthe 21st Century- Signed Principles for Responsible
Investment (PRI)2015- Established the Corporate philosophy “Mission, Vision & Core Values”
E Signed Montreal Carbon Pledge

First J-REIT asset manager

TCFD recommendations

Program for the first time2016

- Signed United Nations Environment Programme Finance Initiative (UNEP FI) *First J-REIT asset manager*The investment group of UNEP FI was transferred to PRI on January 1, 2022.

-S igned the United Nations Global Compact
First J-REIT asset manager

Since 2016, KJR Management has supported the business

responsibility initiatives and the principles in the areas of humanrights, labor, environment, and anti-corruption in the United Nations
Global Compact (UNGC).

2019

E Declared support for Task Force on Climate-

Related Financial Disclosures (TCFD)- Issued ESG Report

IIF Shonan Health

E Participated in CDP Climate Change

2023

E Certification and Registration for the “Eco Action 21”(For an Environmental Management System)

2016–2019

First J-REIT asset manager

Initiatives at KJRMS Issued social bonds

E Implemented scenario analysis based on

OTA Techno CORE

2020–
2020

E Participated in Japan Climate Initiative

(JCI)

2022

G Elected first female director

S Established systems for diverse workstyles（Well-being）

S Established childcare leave for male

employees, and other systems（Diversity）- Signed PRI AdvanceFirst J-REIT asset manager

J

03

I

J

External evaluation I

I

2022

S Implemented an impact investment

2012–2015
2013

History of Sustainability I

RE100 at IIF Shonan Health Innovation Park2019

- Issued ESG Report

Data

Innovation Park
toward carbon neutrality by 2050
E Switched to electricity from renewable energy in line withFirst J-REIT

2014

J

E Established new CO2 reduction targets

project based on the Principles for
Positive Impact FinanceFirst J-REIT

JMF/IIF Overview I

E Acquired CASBEE Certifications forFirst logistics facility

E Participated in GRESB for the first timeGovernance

2021

Real Estate for the first time

2013

Social2017- Included in MSCI Japan ESG Select Leaders Index

E Acquired DBJ Green Building

Environment

認証番号0013762(Eco Action 21)

Basic Information

Basic Information

External evaluation

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment
J

Social

JMF/IIF Overview I

Governance
J

J

Data

History of Sustainability I

04

I

J

External evaluation I

JI

JMF and IIF make active efforts to achieve sustainability, and also believe in the importance of acquiring positive ratings and appropriate certifications for these efforts.

External evaluation
TargetKPIs

External evaluation

Improving sustainability activities through participation in GRESB and other external evaluation institutions

GRESB: Acquiring“5 Star”

GRESB Real Estate rating

5

stars

(highest rank)

CDP Climate Change Program

B

MSCI ESG Rating

BBB

CDP : Acquiring more than “B” score

Target
KPIs

Improving sustainability activities through participation in GRESB and other external evaluation institutions

MSCI : MSCI Acquiring more than “A” rank

JMF was designated by the GRESB Real Estate rating

IIF was designated by the GRESB Real Estate rating which

position relative to global participants as the highest rank

relative to global participants as “four stars” (five-star

which is based on GRESB Overall Score and its quintile“five stars” (five-star scale) in 2022. JMF was also rated as“A”, the top rating in the GRESB Public Disclosure Levelevaluation scheme for the six consecutive years.

JMF received a score of “B” from the CDP Climate Change
Program for the disclosure of information regarding its
climate change activities in 2022.

The MSCI ESG rating as of December 31, 2022 is "BBB"is based on GRESB Overall Score and its quintile position
scale) in 2022. IIF was also rated as “A”, the top rating in

the GRESB Public Disclosure Level evaluation scheme forthe five consecutive years.

IIF participated in the Carbon Disclosure Project (“CDP”)
Climate Change Program for the first time in 2022 andreceived a score of " A- Score", the highest “Leadership”
level.

The MSCI ESG rating as of December 31, 2022 is "BB"GRESB: Acquiring“5 Star”

GRESB Real Estate rating

4

stars

CDP Climate Change ProgramA-(“Leadership” Level)

MSCI ESG RatingBBHow to View Each Page
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Index part of the header

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JMF contents

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JMF and IIF contents

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For the JMF contents, click here to read.
For the IIF contents, click here to read.

You will be redirected to the CONTENTS page.

IIF contentsI

KJRM contents related to JMF and IIF

I

CONTENTS
Japan Metropolitan Fund Investment Corporation
Basic Information

01 JMF Overview
02 History of Sustainability at JMF
04 External evaluation

How to View Each Page
Contents

Industrial & Infrastructure Fund Investment Corporation
Basic Information

01 IIF Overview
03 History of Sustainability at IIF
04 External evaluation

How to View Each Page
Contents

Top Commitment

Top Commitment

Sustainability Strategy

Sustainability Strategy

Key Issues and Initiatives

Key Issues and Initiatives

Environment

Environment

SocialSocialGovernance

Governance

Data

Data

07 Top Commitment
08 KJRM / KKR Overview
09 Sustainability Strategy
10 Sustainability Promotion Structure
11 Materiality
12 Highlights
13 ESG Materiality and KPIs
16
21
22
23
24
25

Climate Change and Resilience
EnergyWater / Waste / Biodiversity
Environmental Approvals and Evaluations for Assets
Green Bonds
Pollution Prevention

27
28
29
31
32
33
34
35

Communication with Tenants
Building resilience
Communication with Local Communities
Creating a Positive Impact
Human rights
Diversity, equity, and inclusion
Human Capital Development
Health and Well-Being

37 Corporate Governance
39 Compliance / Anti-Corruption
40 Risk Management
41 ESG Data

Disclaimer / Editorial Policy

07 Top Commitment
08 KJRM / KKR Overview
09 Sustainability Strategy
10 Sustainability Promotion Structure
11 Materiality
12 Highlights
14 ESG Materiality and KPIs
16
21
22
23
25
27
28
29
30
31
32
33
34
35

Climate Change and Resilience
EnergyWater / Waste / Biodiversity
Environmental Approvals and Evaluations for Assets
Pollution Prevention
Communication with Tenants
Building resilience
Communication with Local Communities
Social Bonds
Creating a Positive Impact
Human rights
Diversity, equity, and inclusion
Human Capital Development
Health and Well-Being

37 Corporate Governance
39 Compliance / Anti-Corruption
40 Risk Management
42 ESG Data

Disclaimer / Editorial Policy

Top Commitment

Basic Information

Top Commitment

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment

SocialGovernance

Data
Top Commitment

J

07

I

KJRM / KKR Overview

Aims to improve unitholder value

through investment management andcontributes to solving global issues.

KJR Management
President & Representative Director

Japan Metropolitan Fund Investment Corporation
Executive Director

Naoki Suzuki

KJR Management Message from President

Masahiko Nishida

Industrial & Infrastructure Fund Investment Corporation
Executive Director

Kumi Honda

Japan Metropolitan Fund Investment Corporation (JMF) and Industrial & Infrastructure Fund Investment Corporation (IIF),

Considering the growing social demand for responses from the corporate sector in relation to respect for human rights,

actively working on, environmental, social, and governance (ESG) initiatives.

respecting the human rights of the stakeholders involved with our business, we will set out our intention to promote thisand their asset management company KJR Management (Company), are highly aware of the importance of, and are

We believe that conducting business activities aiming for the realization of a sustainable society based on the Company’ssustainability vision of “aiming to increase unitholder value through investment management and contributing to solving
global issues,” while addressing ESG issues of JMF and IIF, will lead to higher unitholder value of both JMF and IIF.

On the environmental front, while major disasters, including record-breaking extreme heat and droughts, have occurred
on a global scale, there have been extreme weather events such as localized torrential rain in many areas in Japan.

Recognizing that climate change is an important issue that significantly affects their business activities, in 2022, JMF and
IIF disclosed the results of the scenario analysis based on the recommendations of Task Force on Climate-related
Financial Disclosures (TCFD). Additionally, in the disclosure of GHG emissions, which is also required in the TCFD

recommendations, we will promote measures to achieve the targets toward carbon neutrality announced in 2021.

the Company has established the KJR Management Human Rights Policy. Based on our recognition of the importance ofpolicy as the basis of all our business activities, and will continuously monitor compliance with the policy. In addition, forthe promotion of DEI (diversity, equity, and inclusion), we have formulated an action plan and are working to create awork environment in which each and every employee can fully demonstrate his or her abilities and work energetically.
To ensure sound management based on high ethical standards and maintain the firm trust of society, as well as

contributing to the development of society, we established the Code of Ethics in April 2001, consisting of the Corporate

Ethics Charter and the Code of Conduct for Officers and Employees, and have been working diligently in compliance withthem in our daily business.

We will continue to contribute to creating a sustainable society by responding to climate change, enhancing the health,well-being and convenience of tenants, and providing safe and secure spaces, while aiming to achieve the medium- tolong-term growth and increase the unitholder value of both JMF and IIF.

Top Commitment

Basic Information

KJRM / KKR Overview

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment

SocialGovernanceJ

Data
Top Commitment

KJR Mana g e m e n t

KJR Management (Company) was established in 2000 and is one of the largest asset management companies in Japan.

It became a group member of KKR & Co. Inc. ("KKR"), which is a leading global investment management firm, as of April 28,
2022, and changed its trade name to KJR Management, as an abbreviation for KKR Japan Realty Management.

It aims for further growth by leveraging the KKR group's network and strengths while actively implementing ESG initiatives
in collaboration with the KKR group toward the realization of a sustainable society.

(��� million Yen)

KJRM / KKR Overview

KKR & Co. Inc.
Credit & Liquid Strategies

213bn.

USD

Private Equity & Real Assets

283bn.

USD

Assets undermanagement

496 bn.

Leveraged Credit
Alternative Credit
Hedge Fund
Strategic Partnerships

Assets under management

08

I

Private Equity
Infrastructure
Growth Equity
Real Estate
EnergyUSD

18,00016,00014,000

JMF

1,206.7bn

12,00010,000
8,000
6,000

IIF

4,000
2,000
0
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Topics

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379.1bn

KJR Management established the “Private Solutions Division” in October 2022 to develop a structure toprovide discretionary investment and advisory agency services to private real estate investors,
including funds managed by KKR.

KKR ＆ Co. Inc listed on the New York Stock Exchange and is a leading global investment firm that boasts USD496bn of assets
under management. With over 45 years of investment experience, the firm invests in a wide range of assets, including
private equity, credit, and real estate.

KKR has provided solutions across business and capital strategies and completed more than USD 4bn of corporate
investments in Japan, including bolt-on acquisitions.

KKR’s investment strategy has included real estate for over 40 years. The firm has on-the-ground presence in Japan with an
office in Tokyo since 2006.

In assets under management
across real estate equity & debt

USD

64 15
bn

Officescities in

11

countries

Dedicated investment and asset
management professionals

165+(As of September 30, 2022)

Sustainability Strategy

Basic Information

Sustainability Strategy

Sustainability Strategy

Key Issues and Initiatives

Environment

Governanceenhancements to unitholder value by investment management

Realize its vision based on environmental charter and responsible property investment policy

SocialReduce environmental
impactCreate social value

Health and wellbeing

The Company established the "Responsible Property Investment Policy (RPI),"in June 2013. The Company believe that RPI adds value to an investment bylimiting the risks of regulatory non-compliance and losing its competitive

position in the market, by making a property more appealing to tenants andpurchasers and, in some cases, by reducing expenses and improving returns.

09

Sustainability Promotion Structure

Operations and MaintenanceCollaboration with KKR

KKR, which is the Company's sponsor, established its Responsible Investment

Policy in May 2020, believing that the thoughtful management of Environmental,
reputational issues, is essential to success in long-term business in a rapidlychanging world.

In the collaboration between KKR and the Company, their respective expertiseand know-how are shared regularly through monthly working-level meetings

ESG Disclosure incompliance withinternational
standard

and measurable

environmental issues from a long term perspective. The Company believe that

Social, and Governance (ESG) issues, as well as regulatory, geopolitical, andPursuit of diversity

・Set objectives in order to make achievements transparent

Refurbishment

issues should be considered in our asset management strategies.

Practice sound asset
management for all
stakeholders

・Develop and integrate RPI into fund management strategy

The concept of RPI for us is to make it a first priority is to deliver improved

Environmental, Social and Governance issues will have an impact and these

Governance

RPI Portfolio Management

Investment Decisions

will bring about a more desirable result for our environmental and society.

and the Senior Advisory Board to promote ESG initiatives based on the idea ofResilience

I

Therefore, RPI is important strategy for us. The Company also believe that RPI
profitability of the investment corporations and also consider social andMedium- and Long-term Goals

Environmental

J

Data

Responsible Property Investment Policy

Contribute to solve global-scale issues through achieving

Introduction ofrenewable energyuseSocialSustainability Strategy

Our Vision for Sustainability

Response to
climate change

Top Commitment

ESG integration.

Sustainability Strategy

Sustainability Promotion Structure

Basic Information

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment

SocialGovernance

J

Data

Sustainability Strategy

I

10

Sustainability Promotion Structure

The Sustainability Committee

The Sustainability Committee is the body that approves resolutions concerning environmental, social, and governance (ESG)

Chief Sustainability Officer

information on the status of activities, valuation results, and analysis of the sustainability of the investment corporations.

Sustainability Officer (CSO) to strengthen the sustainability promotion system. CSO as the committee chairman reports

policy, strategy, and structure, based on the Environmental Charter and the RPI Policy. It also functions as a body that shares

The Company established the Sustainability Committee and appointed President & Representative Director as the Chiefthe matter confirmed by the Sustainability Committee to the Board of Directors, chaired by the President &Representative Director and works to share awareness of issues and raise awareness levels.

Japan Metropolitan Fund
Investment Corporation
Executive meeting
Oversight andsupervision

ReportIndustrial & Infrastructure Fund
Investment Corporation
Executive meeting
Oversight andsupervision

ReportKJR Management Meeting ofBoard of Directors
Oversight andsupervision

ReportThe Sustainability Committee : The Committee meeting shall be held once a quarter in principle
Committee chair
Committee
members

Chief Sustainability Officer (CSO)
President, Head of Metropolitan

Division, Head of Industrial Division,
Head of Corporate Division,

Head of Strategic Planning Office,Head of ESG Promotion Office

Referral / Report

Metropolitan Division

Main Examination Items
・Sustainability policies, strategies, and systems
・Establishment and change of materiality
・Sustainability objectives
・Joining and signatures to environment-relatedorganizations
・Establish framework and identify eligible assets for asustainable finance・Approval of ESG Reportetc.

Referral / ReportIndustrial Division

Referral / Report

Secretariat(ESG Promotion Office)

Person in Charge of ESG

The Company has appointed a person in charge of ESG in each division, who is responsible for driving activities in linewith the sustainability goals. In addition, ESG officers lead and hold meetings as necessary to discuss and review ESG-

related issues and promotion methods in detail at the working level (hereinafter referred to as “subcommittees”), either
within the division or in cooperation with other divisions. Through the subcommittees, individual issues are discussed,
and information is shared to raise awareness and understanding of the issues among those in charge, and to integrate
ESG considerations into the daily investment and management process.

Key Issues and Initiatives

Basic Information

Materiality

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

SocialGovernanceMateriality

Through the meetings of the Sustainability Committee, the Company has examined its vision and targets for sustainability and carried out efforts toward their realization.
As the level of interest toward ESG is rising, the Company has further clarified the responses to be taken by identifying and visualizing ESG material issues related tosustainability (materiality) through dialogue with global stakeholders and collaborative efforts with other organizations. These issues were identified based on the
Company's Corporate Philosophy and Environmental Charter but also incorporate the ideas of the SDGs.

Continuous Risk
Management

Environment

Identification of
Sustainability Issues

List of Sustainability Issues

・Response to sustainability certifications
・Building resilience・Response to climate change
・Energy efficiency
・Ensuring of health and well-being of andconvenience for people (tenants)
・Employee cultivation and level of satisfaction
・Efficient water use

J

J

Data
Highlights I

I

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ESG Materiality and KPIs I

・Waste disposal
・Partnership with stakeholders
・Biodiversity in areas surrounding our buildings
・Human rights
・Diversity, equity, and inclusion
・Compliance・Supply chain management

Continuous Risk Management

The Company manages risks by checking the risk status of each division once every two months using a Risk Control Matrix (RCM).

Identification of Sustainability Issues

The Company compiled lists of sustainability issues related to REITs based on the SDGs, global ESG disclosure criteria, and benchmark studies by overseas companies in the same
industry. (Issues are discussed by the Sustainability Committee in principle once every three years.)

Establishment of Priority Order
Committee
Deliberation

Establishment ofPriority Order

The Company established an order of priority for the issues by taking into account their level of importance to the Company, each fund under the management, overseas
companies in the same industries, and external organizations.

Committee Deliberation

Discussion and Approval of Validity. To confirm validity, the Company underwent a review by a third party organization, as necessary.

Through the ESG materiality selection process detailed above, the Company identified the ESG materiality shown on pages 13 to 14.
The Company also organizes opportunities and risks about it, and set KPIs.

11

Key Issues and Initiatives

Basic Information

Highlights

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment

SocialGovernanceMateriality

J

J

Data

12

I

Highlights I

J

ESG Materiality and KPIs I

I

J

JMF Highlights

IIF Highlights

Achievements in ESG Initiatives (as of August 31, 2022)

Achievements in ESG Initiatives (as of July 31, 2022)

5

B

stars

(The highest rank)
GRESB Real Estate
Assessment Results

37.9
Decreased byapprox.

CO2 emissions per unit
(Compared to 2015)

CDP Climate Change Program%

Major ESG Initiatives (2022)

approx.

%Energy consumption per unit
(Compared to 2015)

Conduct scenario analysis based on TCFD
recommendations
See p17 for details

19.6
Decreased by

76.8

4

%

Building Certified Ratio(Based on Total Floor Space)

11.5

approx.

%

Percentage of renewable energy
installed(Percentage of portfolio)

Oyama Yuen Harvest WalkPower Purchase Agreement (PPA) to start operation in March 2022
Started supplying electricity without capital investment
through the solar PPA scheme, contributing to a significant
reduction in electricity costs.

Oyama Yuen Harvest Walk

A-

stars

(“Leadership” level)

GRESB Real Estate
Assessment Results

27.3
Decreased byapprox.

CO2 emissions per unit
(Compared to 2015)

CDP Climate Change Program%

Major ESG Initiatives (2022)

19.4
Decreased byapprox.

%Energy consumption per unit
(Compared to 2015)

Conduct scenario analysis based on TCFD
recommendations
See p19 for details

30.9

%

Building Certified Ratio(Based on Total Floor Space)approx.

94%

Progress in switching to electricity
procured from renewable energy in
IIF’s directly managed properties

Sourcing electricity from renewable energy based on
RE100

Following IIF Shonan Health Innovation Park and IIF
Sagamihara R&D Center, IIF Osaka Toyonaka Data Center
partially switched tonon-FIT electricity with
non-fossil certificate
derived from 100%
renewable energy.
Switchover has been
completed at
approximately 94% of
directly managed
properties.
IIF Osaka Toyonaka Data Center

Key Issues and Initiatives

Basic Information

ESG Materiality and KPIs

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment

SocialGovernanceMateriality

J

J

Data

13

I

Highlights I

J

ESG Materiality and KPIs I

J

Response to sustainability certifications
Building Certified
Ratio

Building resilience

Emergency supplies, Emergency
communication network

76.8% 5stars B
Level of Importance
Most important
ESG materiality

Response tosustainability
certifications

GRESB

Collecting engineering
reports

Response to climate change

100% 100%

CDP

TargetImproving proportion of environmental
certifications

・Acquiring certifications for 75% or more of the total portfolio (Total floor space basis)

・GRESB Acquiring “5 Star”
・CDP Acquiring more than “B”

・Preparing emergency supplies at 100% of the properties where such supplies can be kept
・Developing an emergency communication network that covers 100% of properties
・Collecting engineering reports (ERs) regularly for 100% of properties

Response to climatechangeReduction in CO2 emission

・Reduction in CO2 emission per unit* by 50% compared with 2015 (Target year: 2030)

Improvement in energy consumption

・Reduction in electric consumption per unit* by 20% compared with 2015 (DirectlyManaged properties) (Target year: 2030)

Improvement in tenant employee space・Improving communication space and refresh space at the time of renewal

Introduction of renewable energy use
Visualization of health and comfort
KJRM
KJRM

Diversity, Equity, andInclusion

Employee cultivation

KJRM

KJRM

I mplementation of employee satisfaction
survey evelopment of working environments
Dwhere employees can fulfill their potential
and achieve a work-life balance urther promotion of women’s active
F
participation in the workplace to continue
fostering groundbreaking innovation

 mployee participation in complianceE
training

・Renewable energy ratio of electricity used in business activities to 20% (Target year: 2030)
・Considering acquisition of wellness certification

・Survey conducted annually・Achievement of a 50% utilization rate of parental leave by male employees(at least one employee taking parental leave)・Raise the percentage of female employees in management roles to 20%(target year: 2027)
・100% Training conducted annually* Calculated based on the total floor space (after considerations for occupancy rate)
Please refer to the JMF

and KJRM

37.9%(Compare to 2015)

KPI

Implementing disaster prevention measures

Ensuring of health andwell-being of andconvenience for people(tenants)

approx.

Electricity consumption (per unit)
Decreased by

Percentage of renewable energy(Compare to 2015)

Estimated value based on electricity consumption

approx.

19.6% approx. 11.5%★★★

Building resilience

Energy efficiency

CO2 emission (per unit)
Decreased by

Energy efficiency

websites for more information on Level of Importance★★ and ★.

Risk

Opportunity

Reported
Location

Closely related
SDGs・Decline in assessment among tenants andinvestors who base their assessments onsustainability

・Improve environmental performance ofproperties
・Expand the range of investors

P.17, P.18, P.23

9

11・Increase in expenses for recovery,
compensation, etc., after natural disasters

・Increase in property competitiveness

P.28

9

11

・Drop in tenant sales & increase in property
damages due to physical impact of climatechange・Decline in assessment by tenants & investors

・Cost reduction with efficient energy use

P.18

13

・Increase in energy-related expenses
・Reinforcement of environmental regulations

・Cost reduction with efficient energy use

P.21

7

・Decline in property competitiveness・Manpower outflow due to declining work
conditions

・Improved sustainability assessment byassessment bodies and investors
・Improvement in employee satisfaction
and tenant assessment & satisfaction

P.35

3

・Outflow of talent・Achievement of work-life balance andsupport for continued employment
・Recruitment of talent

P.33

5

・Outflow of talent・Emergence of risks with decline in complianceawareness

・Development & recruitment ofcompetitive human resources
・Assurance of customer trust throughimproved compliance awarenessP.34, P.41

88

Key Issues and Initiatives

Basic Information

ESG Materiality and KPIs

Building Certified Ratio(Logistics facilities)

Building resilience

Construction of
emergency call tree

100%

GRESB

MSCI

(As of December 31, 2022)

Most important
ESG materiality

Response tosustainability
certifications

TargetImproving proportion of environmental certifications

・Acquiring certifications for 60% or more of the total portfolio
・Acquiring certifications for 70% or more of Logistics facilities (Target year: 2023)

Building resilience

Implementing disaster prevention measures

・Completion of construction of emergency call tree

Response to climatechangeReduction in CO2 emission

・Reduction in CO2 emission per unit* by 50% compared with 2015
(Target year: 2030)

Diversity, Equity, andInclusion

Employee cultivation

Improvement in energy consumption
Introduction of renewable energy
KJRM

Implementation of employee satisfaction survey

KJRM

Development of working environments where

KJRM

KJRM

employees can fulfill their potential and achieve awork-life balance・Reduction in energy consumption per unit* by 30% compared with 2015
(Target year: 2030)
・Switching to electricity procured from renewable energy in
IIF’s directly managed properties (Target year:2030)

・Survey conducted annually・Achievement of a 50% utilization rate of parental leave by
male employees (at least one employee taking parental leave)Further promotion of women’s active participation in theworkplace to continue fostering groundbreaking innovation

・Raise the percentage of female employees in management
roles to 20% (target year: 2027)

Employee participation in compliance training・100% Training conducted annually* Calculated based on the total floor space (after considerations for occupancy rate)
Please refer to the IIF

and KJRM

Response to climate change

CO2 emission (per unit)
Decreased bySocialGovernance

Highlights I

J

J

Data

14

I

J

ESG Materiality and KPIs I

Energy efficiency

Electricity consumption (per unit)
Decreased by

Percentage of renewable energy
in properties directly managed(Compare to 2015)(As of July 2022)

approx.

19.4 % approx. 94 %Opportunity

Reported Location

・Decline in assessment among tenants andinvestors who base their assessments onsustainability

・Improve environmental performance ofproperties
・Expand the range of investors

P.19, P.20, P.23

9

11・Increase in expenses for recovery, compensation,etc., after natural disasters

P.28

9

11

・Drop in tenant sales & increase in property
damages due to physical impact of climate change・Decline in assessment by tenants & investors

・Increase in property competitiveness・Cost reduction with efficient energy use

P.20

13

・Increase in energy-related expenses
・Reinforcement of environmental regulations

・Cost reduction with efficient energy use

P.21

7

・Decline in property competitiveness・Manpower outflow due to declining work
conditions

・Improved sustainability assessment byassessment bodies and investors
・Improvement in employee satisfaction
and tenant assessment & satisfaction

P.35

3

・Outflow of talent・Achievement of work-life balance andsupport for continued employment
・Recruitment of talent

P.33

5

・Outflow of talent・Emergence of risks with decline in complianceawareness

・Development & recruitment ofcompetitive human resources
・Assurance of customer trust throughimproved compliance awarenessP.34, P.42

8

approx.

27.3%(Compare to 2015)

KPI

・MSCI Acquiring more than “A” rank
・GRESB Acquiring “5 Star”

Ensuring of health andwell-being of andconvenience for people(tenants)

Environment★★★

Improving sustainability activities through participation in
GRESB and other external evaluation Institutions

Energy efficiency

Key Issues and Initiatives

I

30.9% 55.6% BB 4stars
Level of Importance

Sustainability Strategy

Materiality

Response to sustainability certifications

Building Certified
Ratio

Top Commitment

websites for more information on Level of Importance★★ and ★.

Risk

Closely related
SDGs

8

Environmental Charter

At KJR Management, we consider the Earth itself to be our most important stakeholder and are continually working towards the realization of asustainable society through our business activities.

Environment

We consider a healthy global environment to be essential for the continuation of our business activities, and by implementing new
efficiency measures and technologies, engaging in dialogue with stakeholders, and other efforts, we will help achieve net zero while
reducing greenhouse gas emissions and taking on climate change via both mitigation and adaptation.
We will promote the sustainable use of natural resources.
We recognize the critical importance of what ecosystems can provide and are committed to protecting ecosystems and mitigating
any potential impacts on biodiversity.

We will strive to create and enhance environmental benefits by undertaking conservation activities and reducing our environmental
footprint.

We will continue to actively engage and work with our various stakeholders and disclose information on the environmental impactsof our business operations in an appropriate and timely manner.

We will conduct all of our activities in compliance with environmental laws while adhering to international rules and social standards.

16
21
22
23
24
25

J

Climate Change and Resilience I

J

Water / Waste / Biodiversity I

J

J
J
J

Energy I

Environmental Approvals and Evaluations for Assets I
Green Bonds

Pollution Prevention I

Environment

Basic Information

Climate Change and Resilience
J

Recognition Regarding Climate Change

Top Commitment

Sustainability Strategy

J Climate Change and Resilience I

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

J Environmental Approvals and Evaluations for Assets I

J

Data

16

I

J Green Bonds

J Pollution Prevention I

I

The Company recognizes that climate change is an important environmental issue that significantly impacts our business activities. Global warming is becoming more severe
with increasing economic activities, and various researches have made clear that this leads to abnormal weather such as torrential rains, floods, and droughts.

Our mission is “creating, through real estate investment management, new demand in our society and new value that exceeds people’s expectations.” To achieve our mission,
it is necessary to create a sustainable society, and we recognize that the shift to a low-carbon society is a social responsibility required from long-term management.

The Company expressed support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in August 2019 and has been advancing initiatives
based on the recommendations.

Information Disclosure Based on TCFD Recommendations
1.Governance

System of Supervision by the Board of Directors of the Company / each investment corporations

The matters resolved by and reported to the Sustainability Committee chaired by the Chief Sustainability Officer (CSO) areoverseen and supervised by being reported as needed to the Board of Directors, which meets at least once every threemonths and is chaired by the President of the Company, as well as the Board of Directors of each investment corporation,
which meets at least twice a month in principle.

2.Risk Management

Organizational Process of Identifying and Evaluating Risks

With regard to climate change-related risks and opportunities for each investment corporation, led by the ESG staff ofeach division, we first examine their impact on our portfolio and the possibility of their occurrence, and then identify therisks and opportunities closely related to each investment corporation and examine their impact. The identified risks,
opportunities and their degree of impact are reported to and discussed at the Sustainability Committee and theidentification and evaluations of risks and opportunities are confirmed.

Process of Managing Risks of Climate Change and Organizational Initiatives

The Company led by the person in charge of ESG issues, holds meetings (hereinafter referred to as "subcommittees") as
necessary to discuss and examine in detail ESG-related issues and promotion methods at the working level, either within
the division or in cooperation with other divisions. Through the subcommittees, individual issues are discussed, andinformation is shared to raise awareness and understanding of the issues among those in charge, and to integrate ESG
considerations into the daily investment and management process.
Matters considered by the subcommittees are reported to the Sustainability Committee on the basis of submissions fromthe divisions, and the Sustainability Committee reviews progress in addressing the assessed risks and opportunities.
Moreover, each investment corporation collects and monitors monthly environmental data for properties. To work on
initiatives for environmental matters, including metrics and targets and efforts to address climate change, and collectenvironmental data, we have established an environmental management system and strive to continually strengthen andimprove our initiatives by implementing a PDCA cycle.

The Sustainability Committee

The Sustainability Committee, which held once a quarter in principle, identifies material risks and opportunities related tosustainability including climate change, and plays a central role in sustainability activities by resolving policies, strategies,
systems, and sustainability goals and monitoring performance.
Please refer to the page 10 for further details.

Integration into Overall Risk Management

The Company operates the Risk Management Committee, in which senior management personnel serve as members. The
Committee grasps and investigates matters related to major risks and formulates countermeasures and management
policies. It checks the risks affecting business operations, including climate change, at each division once every two months
using a Risk Control Matrix (RCM), and reports to the committee for evaluation and management.
Board of Directors
Oversight and supervision

ReportChair: President & Representative Director

Oversight and supervision

Sustainability Committee Chairman: Chief Sustainability Officer
ReportPersonnel in charge at each division and subcommittee
Identification of risks
and opportunities
regarding sustainability

Evaluation of risks andopportunities regarding
sustainability

Consideration of
measures

Monitoring

Grasping of results

Implementation of
measuresReportPresident & Representative Director Chief Officer for Risk Management
Putting together opinions

Risk Management Committee Chairman: Head of Compliance & Risk Management Office
Risk Management Officer
Understanding of external
and internal environments

ReportHead of each Division and Officer

Consideration of risk
scenarios and measures

Risk evaluation

Environment

Climate Change and ResilienceJ

3.Strategy

Basic Information

Top Commitment

Sustainability Strategy

J Climate Change and Resilience I

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

J Environmental Approvals and Evaluations for Assets I

J

Data

I

J Green Bonds

17

J Pollution Prevention I

Scenario analysis based on climate change-related scenarios

In examining the medium- to long-term financial impact of climate change, we assume world views surrounding J-REIT Industry (including “JMF”) based on both 4°C and 1.5°C scenarios related to climate change.

World view assumed under 4°C scenario

World view assumed under 1.5°C scenario

Transition to adecarbonized society has not progressed much from the present, with high physical risk
and low transition risk
・Evaluation of decarbonization responses does not translate directly into
increased occupancy needs or rents

・Evaluate and prefer BCP for climate change and comfort and safety of real estae
・Increased climate change response and increased outsourcing costs
Climate & Weather

・Increase in the number ofextremely hot days

・Increased frequency of heavy rain
and short duration heavy rain
・Increased tyhoon intensity
・Rise in sea level

・Increased work related to BCP, such as evacuation drills and disaster prevention
stockpiling・Increased appreciation for portfolios with low physical risk
・BCP function in the portfolio is factored into valuations
・Exit from investing in assets vulnerable to physical risk
・Improved assessment weighting of physical risks

・BCP function affects lending attitude and spreads

・Withdrawal from financing assets vulnerable to physical risk
・No carbon tax will be introduced beyond the current measures

・Regulations regarding disaster prevention and mitigation measures against riverflooding and storm surges are strengthened・There will be moves to compare disaster prevention aspects in terms oflocation and building performance・Property profitability will decline due to increased property insurance
premiums and repair costs from climate change responses

Referenced climate change-related scenarios
Transition Risk : Sources IEA (International Energy Agency) World Energy Outlook 2021, 4°C scenario : IEA STEPS, 1.5°C scenario : IEA NZE2050
Physical Risk : Sources IPCC (Intergovernmental Panel on Climate Change) Sixth Report, 4°C scenario : IPCC SSP5-8.5, 1.5°C scenario : IPCC SSP1-1.9

Increased transition to a decarbonized society, lower physical risk but increased transition risk
Tenant

PM/BM Company

・Rising demand for occupancy in properties with high environmental performance
・Screening for environmental certification or lack thereof occurring at move-in
・Progressive decarbonization in exclusively-owned areas

・Increased work to comply with new laws and regulations such as carbon tax

・increase in outsourcing costs due to decrease in number of PM and BM companies
capable of responding to decarbonization

Investor

・Valuations reflect the ratio of renewable energy installation and the ratio ofenvironmentally certified properties

Lender・Ratio of renewable energy installation and ratio of environmentally certified
properties are reflected in loan terms and conditions

Administration

・Emissions controls tightened through the introduction of a carbon tax andemissions trading

J-REIT industry(JMF)

・Acceptance of cost increases due to decarbonization measures

・Increased activity in green finance・Expanded incentives through subsidies, etc for ZEB and low-carbon buildings

・Increased importance of the existence of environmental certification at
the time of acquisition

・Increased compliance with stricter building energy regulations, including
compliance with ZEB standards
・Environmental performance is factored into appraisals
・Increased decarbonization response costs

Climate & Weather

・Chronic physical risks portion
progresses slowly compared to the
4℃ scenario
・Reduced frequency of acutephysical risks compared to the 4℃
ScenarioEnvironment

Basic Information

Climate Change and ResilienceJ

3.Strategy

Top Commitment

Sustainability Strategy

J Climate Change and Resilience I

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

J Environmental Approvals and Evaluations for Assets I

Data
J Green Bonds

J
I

18

J Pollution Prevention I

Financial impact study and response measures

JMF assesses the financial impact on the entire portfolio based on climate change-related scenarios, with 2030 as the medium term and 2050 as the long term. Based on the assessment results, JMF's efforts and measures
to respond to potential risks and opportunities are as described below.

Financial impact
Classification

Risk / Opportunity Items

Policy and Regulations
Technology

Transition Risks / Opportunities

Increase in legal
compliance costs

Diffusion of low-carbon /energy-saving
technologies

Risk

Change in cash flow (qualitative expression)

4°C scenario

Opportunity

1.5°C scenario

Medium term 2030

Long term 2050

Medium term 2030

Long term 2050

Increase in CO2 emissions costs due to introduction of CO2 emissions regulations and carbon tax

Small

Small

MiddleLarge

Increase in cost of acquiring environmental certifications/energy conservation ratings

Small

Small

Small

MiddleImproved competitiveness of properties by complying with laws and regulations

Small

Small

MiddleLarge

Increase in various costs for ZEB conversion

Small

Small

MiddleMiddleIncreased costs associated with retrofitting low-carbon and energy-efficient facilities

Small

Small

Small

MiddleReduction of utility costs through ZEB and energy-saving construction

Small

Small

MiddleLarge

Increase in building management outsourcing costs due to increase in PM and BM companies' work to comply with laws and regulations

Small

Small

Small

Small

MarketReputation
Acute
Chronic

Physical Risks / Opportunities

Increased social importanceregarding the environmental
performance of buildings

Decreased rental income due to decreased needs and occupancy rates for properties with low environmental performance (e.g., not certified, not energy efficient, etc.)
Increase in appraised value and average rent for properties with high environmental performance
Lower financing costs through green finance

Small
Small
Small

Small
Small
Small

MiddleMiddleMiddleMiddleMiddleMiddleIncreased importance oftransition risk

Increased cost of financing from investors and financial institutions due to the assessment of high transition risk

Small

Small

Small

MiddleImproved reputation for transition risk response will improve the brand value of owned properties in response to climate change and increase rental income through improved use by tenants and facility users

Small

Small

Small

MiddleIncreased work by PM and BM companies related to BCP, such as evacuation drills and disaster prevention stockpiling, and also increased building management outsourcing costs
Gaining market competitiveness by increasing the number of tenants who appreciate BCPs for climate change and the comfort and safety of real estate

Small
Small

Small
Middle

Small
Small

Small
Small

Increasing number of companies
going carbon neutral

Increase in typhoons,
torrential rain,
flooding and inundation
Progression of averagetemperature increase

Progressive sea level rise

4.Indexes and Goals

Increase in renewable energy installation and response costs

Increase in repair costs, proactive measures and property insurance premiums due to flooding of owned properties
Decrease in property values of properties at high risk of flooding
Decrease in rent from tenants and percentage rent from commercial facilities due to loss of business opportunities due to flooding of owned properties
Increased air conditioning operation, maintenance and repair costs due to increased demand for cooling
Increase in utilities costs due to higher energy use
Decrease in property values of properties at high risk of flooding
Repair costs and loss of business opportunities due to flooding of owned properties

・Aim to reach carbon neutrality by 2050

・Reduce CO2 emissions per unit by 50% by 2030 compared with 2015

Small

Small

Small
Small
Small

Large
MiddleMiddle

Small
Small
Small
Small

MiddleMiddleMiddleMiddleAchievements and Progress

Middle

Small
Small
Small
Small
Small
Small
Small

Middle

Small
Small
Small

Small
Small
Small
Small

JMF’s efforts and measures
・Carbon neutrality goal for 2050
・50% reduction per unit of production compared to 2015 (target year: 2030)

・Introduction of renewable energy-derived electricity in directly managed properties
・Promotion of switching to renewable energy-derived electricity for tenants of indirectly managed properties
・Reduction of total emissions from strategic replacement of large suburban properties with smaller urban properties
・Target 75% environmental certification acquisition rate for the entire portfolio
・Planned acquisition of environmental certifications/energy conservation ratings・Conduct ESG training for PM and BM companies, including climate change response・Installation of renewable energy-derived electricity and solar panels at directly managed properties
・Energy consumption management by proprietary EMS・Planned acquisition of environmental certifications/energy conservation ratings・Consideration of acquiring new properties that have already been converted to ZEB・Study of planned ZEB conversion of existing properties

・Conduct energy efficiency and conservation audits by outside specialists.
・Energy saving in lighting, air conditioning, etc. through systematic facility renovation
・Implement systematic introduction of energy-saving equipment
・Installation of solar panels using the PPA method

・Regularly obtain environmental certifications to maintain and improve environmental performance・Set KPI for percentage of environmental certifications obtained・Continued issuance of green bonds

・The bidding system will allow for the introduction of renewable energy sources under cost-effective conditions
・The PPA method, which does not incur any cost, is used to install solar panels to generate renewable energy
・Disclosure of ESG-related initiatives through the ESG website
・Disclosure of Environmental Performance Information
・Active participation in various ESG assessments

・Actively inform tenants and facility users about ESG

・Flooding risk assessment in the DD process・Periodically check hazard maps of owned properties to identify flooding risks

・Emergency communication network is 100% in place to quickly respond to confirm the status of disaster damage and to restore operations
・Conduct evacuation drills and other BCP measures on a regular basis
・Conduct disaster risk surveys through non-life insurance companies

・Renewal of energy-saving equipment such as LED lighting and energy-efficient air-conditioning equipment
・Introduction of renewable energy sources such as solar power generation
・Flooding risk assessment in the DD process・Construction and equipment upgrades to enhance resilience performance

Please refer to "ESG Data" on page 41 for achievements and progress since 2015.

Environment

Climate Change and Resilience
3.Strategy

Basic Information

Top Commitment

Sustainability Strategy

J Climate Change and Resilience I

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

Data

J Environmental Approvals and Evaluations for Assets I

J Green Bonds

J

19

I

J Pollution Prevention I

I

Scenario analysis based on climate change-related scenarios

In examining the medium- to long-term financial impact of climate change, we assume world views surrounding IIF based on both 4°C and 1.5°C scenarios related to climate change.

World view assumed under 4°C scenario

World view assumed under 1.5°C scenario

Physical risk increases with the severity of natural disasters(or wind and flood damage), whiletransition risk is relatively small
・Significant increase in risk assessment weights for physical risks

・Growing importance of disaster prevention performance in investment decisions
・Withdrawal from investments in assets vulnerable to physical risk
・Growing importance of physical risk in loan approval
Climatic condition

・Chronic and steady temperature
increase
・Intensifying disasters caused bytyphoons, heavy rains, and floods

・Decrease in available land due tosevere sea level rise・Decline in lending attitude toward properties with poor disaster prevention
performance・Withdrawal from lending for assets vulnerable to physical risk

Unlike under the 4℃scenario, transition risk is higher while physical risk is lower
Investor

Financial
institutions

Government

・Preference for properties with safety against weather disasters and with a highlevel of comfort against sudden temperature rises

Tenant・Increase in outsourcing costs due to increase in BCP response operations such as
evacuation drills/emergency stockpiling to cope with climate change

Property Manager /Building Manager

・Significant increase in construction and insurance premiums in order toenhance disaster prevention functions

・Restriction of investment in assets with poor disaster-prevention capabilities
・Improvement of BCP functions and conducting disaster prevention and evacuation drills
・Improvement of measures against health hazard(heat stroke, etc) caused by rising temperatures, etc

Referenced climate change-related scenarios
Transition Risk : Sources IEA (International Energy Agency) World Energy Outlook 2021, 4°C scenario : IEA STEPS, 1.5°C scenario : IEA NZE2050
Physical Risk : Sources IPCC (Intergovernmental Panel on Climate Change) Sixth Report, 4°C scenario : IPCC SSP5-8.5, 1.5°C scenario : IPCC SSP1-1.9

・Growing importance of environmental certifications in investment decision making
・Expansion of disclosure requirements for climate risk

・Withdrawal from investments in assets vulnerable to transition risk

・Tightening laws and regulations in line with disaster prevention and mitigation

・Tightening compliance with laws and regulations for disaster prevention and mitigation

・Increase in monitoring and confirmation of implementation status for energy
conservation and renewable energy introduction

・Growing importance of environmental certification in loan screening
・More flexible and active lending attitude in green finance・Expansion of disclosure requirements for climate risk

・Withdrawal from lending for assets vulnerable to transition risk
・Introduction of a carbon tax to curb GHG emissions
・Mandates/regulations strengthened towards ZEB

・Support promotion for energy-saving and renewable energy technologies

Climatic condition

・Chronic but gradual rise intemperature

・Certain level of increase intyphoons, heavy rainfall, and flood
disasters

・Preference for properties with high environmental performance, including energy efficiency
・Increase in green lease contracts

・Voluntary occupancy restrictions on properties without environmental certifications
・Increase in outsourcing costs due to increasing decarbonization measures,
including compliance with carbon tax and other laws and regulations

・Increase in support for replacement of equipment under owner management

・Increase in initiatives to understand and respond to tenant needs in relation to climate change

・Tightening compliance with various environmental laws and regulations, including the introduction of carbon tax
Industrial & Infrastructure
Fund Investment
Corporation

・Increase in cost due to various construction works to improve energy conservation performance, introduction of renewable energy, etc
・Investment restrictions on assets with poor environmental performance

・Increase in activity towards green finance, green leasing, and other measures, leading to environmental preservation
・Lobbying to expand programs for asset classes without existing environmental certification programs

・Increase in risk of higher service costs and declining demand due to violations of climate change laws and regulations and litigation
・Increase in measures to respond to litigation risk from unitholders and others due to inappropriate disclosure of climate risk

Environment

Basic Information

Climate Change and Resilience
3.Strategy

Top Commitment

Sustainability Strategy

J Climate Change and Resilience I

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

Data

J Environmental Approvals and Evaluations for Assets I

J Green Bonds

J

20

I

J Pollution Prevention I

I

Financial impact study and response measures

IIF assesses the financial impact on the entire portfolio based on climate-change related scenarios, with 2030 as the medium term and 2050 as the long term. Based on the assessment results, IIF's efforts and measures to
respond to potential risks and opportunities are as described below.

Financial impact
Classification

Risk / Opportunity Items

Policy andRegulations

Increase in legal compliance costs

Technology
Market & Reputation

Transition Risks / Opportunities

Diffusion of low-carbon /energy-saving technologies
Soaring renovation / equipment costs

Risk

Change in cash flow (qualitative expression)

4°C scenario

Increase in CO2 emissions costs due to introduction of CO2 emissions regulations and carbon tax

Improvement of properties’ competitiveness through complying with laws and regulations

Increase in costs to acquire ZEB properties, to convert existing properties to ZEB, and to research new technologies for
introduction, etc.

Increase in retrofit costs associated with the introduction of energy-saving equipment and renewable energy and thepromotion of carbon neutrality of real estate
Reduction of utility costs through ZEB and energy-saving construction

Increase in costs to rebuild or update facilities on introduction of new technology to meet future environmental needs

Changes in market participants' awareness andperception towards climate change response
Changes in tenants’ needs for environmental
performance

Decrease in lease revenue due to relative decline in environmental performance of owned properties and decrease inincome due to stranded assets

Increase in asset value through improvementof greening performance

Increase in financing costs from investors and financial institutions due to inability to obtain environmental certifications
and evaluations from global evaluation agencies

Changes in social value for environmental
performance

Increase in financing costs due to assessed high transition risk

Increase in costs due to renewable energy installation
Lower financing costs through green finance

1.5°C scenario

Medium term 2030

Long term 2050

Medium term 2030

Long term 2050

Small

Small

Small

MiddleSmall

Increase in costs of acquiring environmental certifications/energy conservation ratings

Opportunity

Small

Small

Small

Small

Small

Small

Small

Small

Small

Small
Small

Small

Small

Small

Small

Small

MiddleMiddleSmall

MiddleMiddleMiddleAcute
Chronic

Physical Risks / Opportunities

MiddleDecrease in brand value due tounderdevelopment of green buildings

Decrease in rent premiums due to brand value decline of building types with no environmental certification programs

Small

Small

Small

Increase in typhoons, torrential rain,storm surges, floods, and inundation
Progressive rise in average temperatures
Progressive rise in sea level4.Indexes and Goals

Increase in costs for repair, proactive measures and insurance premiums due to flooding of owned properties

Small

MiddleMiddleMiddleMiddleMiddle

Small

Small

Middle

Small

Small

Small

Large

MiddleDecrease in property value and average rent due to lack of progress in acquiring environmental certifications such as ZEB
and DBJ Green Building certification
Decrease in occupancy rates of buildings due to lack of energy creation and energy conservation function

MiddleMiddleIncreases in value for environmental
performance

Increases in number of companies goingcarbon neutral・Energy consumption management through proprietary EMS・Introduction of renewable energy-derived electricity at properties under direct electricity management

Large

Small

Small

Large

Middle

Small

Small

・50% reduction per unit of production compared to 2015 (target year: 2030, already reduced by 30% as of 2020)・Introduction of renewable energy-derived electricity in properties under direct electricity management

MiddleMiddleSmall

Middle

Small

Small

Small

Large

Middle
Small

Loss of business opportunities due to flooding of owned properties

Small

Middle

Small

Small

Further improvement of market competitiveness through highly resilient portfolio

Small

Middle

Small

Small

Decrease in property values with high flooding risk

Small

Middle

Small

Small

Increase in maintenance and repair costs for air conditioning and utility costs due to increasing cooling demand

Small

Middle

Small

Small

Increase in repair costs and property insurance premiums for countermeasures against sea level rise, etc.

Small

Middle

Small

Small

・Aim to reach carbon neutrality by 2050

・Reduce CO2 emissions per unit by 50% by 2030 compared with 2015

Achievements and Progress

IIF’s efforts and measures

・Planned acquisition of environmental certifications/energy conservation ratings
・Target to obtain environmental certifications : 60% of the entire portfolio
・Target to obtain environmental certifications for logistics facilities : No less than 70% (target year: by 2023)
・Consideration of acquiring new properties that have already been converted to ZEB・Study on possibility of ZEB conversion at property acquisition stage
・Study on planned ZEB conversion of existing properties

・Energy saving in lighting, air conditioning, etc. through systematic facility renovation
・Conclusion of memorandum (green lease) with tenants to share the effect of reduced utility costs on installation of energy-saving equipment such as LED lighting, etc.
・Reduction of utility costs through planned energy-saving construction

・Implementation of planned development projects
・Energy saving in lighting, air conditioning, etc. through planned facility renovation
・Planned reduction of portfolio energy intensity on per-unit basis

・Improvement of portfolio competitiveness through introducing ESG assessments, including measures for climatechange, into DD of property acquisitions, and through acquiring properties with high environmental performance・Introduction of renewable energy-derived electricity at properties under direct electricity management(approximately 94% switchover completed based on electricity consumption)
・Utilization target for green finance in the future

・Disclosure of ESG-related initiatives, including climate change initiatives, through the ESG website
・Disclosure of environmental performance information
・Active participation in various ESG assessments (GRESB, CDP, MSCI, etc.)

・Improvement of portfolio competitiveness through introducing ESG assessments, including climate change responses,
into DD of property acquisitions, and through acquiring properties with high environmental performance・Installation of solar panels on the roofs of properties
・Survey of existing tenants to research tenant needs for introduction of renewable energy and future needs
・Introduction of renewable energy-derived electricity at properties under direct electricity management
・Planned acquisition of environmental certifications/energy conservation ratings
・Lobbying for expansion of environmental certification systems
・Assessment of flooding risk in the DD process
・Periodical check of hazard maps for owned properties to examine flooding risk

・Establishment of full emergency communication network to respond promptly to confirm the status of damage from disasters and take recovery measures
・Validation of damage prediction by inundation risk assessment
・Construction and equipment upgrades to enhance resilience performance・Target for obtaining resilience certification
・Establishment of full emergency communication network to respond promptly to confirm the status of damage from disasters and take recovery measures
・Introduction of high-efficiency air conditioning (implemented as one of the energy conservation measures)
・Introduction of renewable energy sources such as solar power generation
・Adoption of building design anticipating the use of natural energy
・Validation of damage prediction by inundation risk assessment
・Area diversification of portfolio assets
・Implementation of construction and facility upgrades to enhance resilience performance

Please refer to "ESG Data" on page 42 for achievements and progress since 2015.

Environment

Top Commitment

Basic Information

EnergySustainability Strategy

J Climate Change and Resilience I

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

J Environmental Approvals and Evaluations for Assets I

Data
J Green Bonds

J

21

I

J Pollution Prevention IJ

At JMF and IIF, we implement environmentally friendly and energy-saving measures and make efforts toward more efficient energy use at our properties to show greater consideration for the environment and lessen its environmentalI

impact. We collectively manage electrical power, fuel, and water consumption and analyze the accumulated data, which is both accurate and highly transparent to actively manage reduction of energy use.

Target
KPI

Improvement in energy
consumption
Reduction in electric
consumption per unit by
20% compared with 2015
(Target year: 2030)

19.6％
Decreased byapprox.

Electricity consumption (per unit)
Period: March 2021-February 2022
See ESG Data on p41 for details

TargetKPIIntroduction ofrenewable energy
Renewable energy
ratio of electricity usedin business activities to20%(Target year: 2030)

approx.

11.5％

Percentage of renewable energy

Estimated value based on electricity

consumption from March 2021 to February 2022

Actively promoting renewable energy introduction
Oyama Yuen Harvest WalkThe Power Purchase Agreement (PPA) scheme, which enables electricity supply with no capital
investment, started in March 2022 and is contributing to a significant reduction in electricity costs.
Reduction inelectricity costs

Secured amount of
renewable energy
Reduction in CO2emissions

KPI

Compared to without
introduction of PPAApprox.

-3.9million yen

approx.

*1

Expected*2-350 t-CO /year

Oyama Yuen Harvest Walk

2

*1 Calculated based on actual electricity consumption at the facility for the period ended Aug. 31, 2022
*2 Approx. 10% of the facility's total electricity consumption

GYRE

By combining the Green Electricity Certificates previously held and the Non-Fossil
Certificates newly purchased this year, we reached effectively 100% renewableenergy.
Green Electricity Certificates

500,000kWh

Total amount of electricity used in FY2021

19.4％

Electricity consumption (per unit)

Mar–Aug/2022 PV power generated

509,058kWh

Improvement in energy
consumption
Reduction in electric
consumption per unit by
30% compared with 2015
(Target year: 2030)
Decreased by

Non-Fossil Certificates

2,429,177kWh

See ESG Data on p41 for details

Please refer to JMF website
for other initiatives.

TargetEquivalent to

CO2 emissions Zero

2,929,177kWh

Period: February 2021-January 2022

Sourcing of Renewable Energy inLine with RE100

IIF Shonan Health Innovation Park has environmentallyfriendly building design and is the first research facility to be
selected by the Ministry of Land, Infrastructure, Transport
and Tourism’s Model Project for Promoting CO2 Reductionin Housing and Building. In addition, as a new initiative, thefacility switched to electricity derived from renewable
resources in electricity procurement in line with RE100
standards from August 1, 2021, thus contributing to IIF’s
newly established CO2 emissions reduction targets toward
carbon neutrality by 2050.
Daylighting with natural light

See ESG Data on p42 for details

TargetKPIIntroduction ofrenewable energy
Switching to electricity
procured from renewableenergy in IIF’s directly
managed properties(Target year:2030)

approx.

94％

Progress rate

Rooftop greening

Solar panels

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

Progress in switching to electricity procured fromrenewable energy in IIF’s directly managed properties
As of July 2022
See ESG Data on p42 for details

Please refer to IIF website
for other initiatives.

Ventilation

IIF Tosu Logistics Center

Environment

Basic Information

Water / Waste / Biodiversity
J

Water

Top Commitment

Sustainability Strategy

J Climate Change and Resilience I

J Energy I

Significant reduction in water use by newly introducing cleaning robots

Abiko Shopping Plaza introduced cleaning robots in March 2022. This introduction is expected to reduce water use andcleaning costs and also improve the work quality, which was a concern due to staff aging and retiring.

Improved
efficiency
Reduced cost

Water use
Cleaning time
Daily cleaningcost-14t/year expected*
Approx. -67 ％Approx. -4.0 ％Approx.

Executed green leaseagreement with a tenant* Compared to the quantity used for cleaning the equivalent area by existing cleaners

Waste

TargetKPIReduction in waste

Implementing comprehensive waste management(waste amount, waste treatment operators, final
treatment sites) at 100% of directly managed
properties by 2023

Installed recycling boxes in retail properties to visualize recycled waste amountIn April 2022, mozo wonder city started to use a new type of recycling boxes for visitors thatenables timely visualization of the amount of recycled waste.
Recycled amount can be read from 2D bar codes
Aim to improve visitors' environmental literacy
Monthly recycled
amountAccumulated
recycled amount

Please refer to JMF website

for other initiatives on water, waste, and biodiversity.

J Water / Waste / Biodiversity I

Environment

SocialGovernance

J Environmental Approvals and Evaluations for Assets I

Data
J Green Bonds

J

22

I

J Pollution Prevention I

I

Cooperative initiatives with tenants

Environmental
consideration

Key Issues and Initiatives

430kg

JMF recognizes thecritical importance ofwhat ecosystems canprovide, and we arecommitted toprotecting ecosystems
and mitigating any potential impacts on
biodiversity.
In addition, to provide peace of mind to
our customers, we are actively adding
greenery to our facilities and creating
parks and other communal spaces.

Biodiversity

Greening of main entrances and wall
surfaces of parking lots

(Aug. 2022)

TargetWater+19.6%

KPI

Water use per unit

Reduction in water consumption

Keeping water use per unit at the same level as 2015(Target year: 2030)

The use per unit increased due to the impact of new properties, while there wasno major change in existing properties.

Effectively using water resources by tapping
intermediate water
The IIF Mitaka Card Center uses water resources
effectively by tapping intermediate water, which ishauled from a well through automated pumping
machine, for the premises' sprinkler systems.
Intermediate water is also used as daily water in theevent of an emergency or disaster.

Waste

We manage waste properly by means such as appropriately separating the waste
produced by the properties to improve the recycling rate and advancing initiatives
to minimize the amount of waste by monitoring the amount of waste generated.
Establishing Green Zones

Biodiversity
IIF recognizes the critical importanceof what ecosystems can provide andis committed to protecting
ecosystems and mitigating any
potential impacts on biodiversity.

4,180kg(Dec. 2021–Aug. 2022)

La Porte Aoyama

Please refer to IIF website

IIF Yokosuka Technology Centerfor other initiatives on water, waste, and biodiversity.

Environment

Basic Information

Environmental Approvals and Evaluations for Assets

Top Commitment

J Climate Change and Resilience I

J

Conditions Regarding the Acquisition of Certifications
Improving proportion of environmental certifications

TargetAcquiring certifications for 75% or more of the total portfolio (Total floor area basis)

KPI

76.8
August 2022%

Percentage of the combined value of Certification
for CASBEE for Real Estate, DBJ Green Building
Certification and BELS Certification

Certification for
CASBEE for Real Estate

35

properties

S

A

B＋

Sustainability Strategy： 23 properties(first rating acquired in 2015)： 9 properties(first rating acquired in 2018)： 3 properties(first rating acquired in 2018)

Includes properties that meet the CASBEE
for Wellness Office

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

J

Data

J Environmental Approvals and Evaluations for Assets I

J Green Bonds

J Pollution Prevention I

I

Conditions Regarding the Acquisition of Certifications
Target
KPI

S

A

B＋

Improving proportion of environmental certifications

Acquiring certifications for 60% or more of the total portfolio： 9 properties(first rating acquired in 2018)： 12 properties(first rating acquired in 2017)： 1 property(first rating acquired in 2020)

Certification for
CASBEE for Real Estate

22

properties

30.9
July 2022%

Percentage of the combined value of Certification
for CASBEE for Real Estate and DBJ Green Building
Certification

5 stars： 1 property
Percentage of properties withenvironmental certiﬁcations

76.8%
75.9%

75.0%
74.0%

Target
75%

71.2%
Aug.
����

Mar.
����

Aug.
����

Feb.
����

Aug.
����

DBJ Green Building
Certification25

properties(first rating acquired in 2015)

4 stars： 8 properties(first rating acquired in 2014)

3 stars： 11 properties(first rating acquired in 2014)

2 stars： 2 properties(first rating acquired in 2017)

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

3 stars： 1 property(first rating acquired in 2014)

1 star ： 3 properties

DBJ Green Building
Certification

5

properties

6

properties

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

3 stars： 2 properties(first rating acquired in 2016)

2 stars： 3 properties(first rating acquired in 2016)

Percentage of properties withenvironmental certiﬁcations

30.9%

Target60%(first rating acquired in 2016)

BELS Certification

23

I

5 stars： 7 properties(first rating acquired in 2016)

4 stars： 4 properties(first rating acquired in 2014)

3 stars： 1 property(first rating acquired in 2021)

2 stars： 2 properties(first rating acquired in 2016)*Two properties also acquired ZEB Ready.

BELS Certification

14

properties

29.0%

27.3%

31.7%

25.3%
Jul.
����

Jan.
����

Jul.
����

Jan.
����

Jul.
����

Environment

Basic Information

Green Bonds

Top Commitment

Sustainability Strategy

J Climate Change and Resilience I

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

J Environmental Approvals and Evaluations for Assets I

J

Data

24

I

J Green Bonds

J Pollution Prevention IJ

As part of its efforts to maintain sustainability for the environment and society as a whole, JMF has issued the Green Bond, the first such issuance from a J-REIT in May 2018. Green Bonds refer to bonds that are issued by business companies, funds, local
governments, and other entities in order to procure funds for green projects (environmental investments and loans). Typically, the bonds are issued according to the Green Bond Principles*1 laid down by the International Capital Market Association(ICMA). Through the issuance of the Green Bond, JMF conducts investment contributing to the implementation and realization of a sustainable environment and society.

JMF
portfolio
book value

Book �,���.� billion yen
��� properties
value

Eligible Green Projects(*�)���.� billion yen�� properties

Extracted
Eligible
Green Projects
from portfolio

Overview of eligible green projects
Number of properties

Eligible
Green
Projectbalancesheet

Debts of
Eligible Green
Projects**
���.�
billion yen

Maximum of outstanding
amount of Green Bond

Total floor space*2

22 properties

Eligible Green Projects(*�)���.� billion yen�� properties

Eligible green projects: Energy consumption

1,015thousand ㎡（Total floor space ratio:32.6%）

Green Bonds outstanding** Debts of Eligible Green Projects(���.� billion yen)
=Eligible Green Projects × LTV ratio(���.� billion yen)(��.�%)(*1) The Eligible Green Projects are that the Company selects new or existing properties from its

portfolio, which satisfy the eligibility criteria of the Company’s Sustainability Committee. The
Eligible Green Projects are calculated by subtracting the duplication of properties that have

Number of issuances

6件

2022/2

Electricity
Fuel
Water

146,134MWh 219,243
55,086MWh
84,527
1,298thousand ㎥ 1,452

Total amount issued

35,500million yen

2018/2CO2 emissions*3

60thousand tCO

2

MWh
MWh
thousand ㎥

129thousand tCO

both DBJGreen Building Certification and Certification for CASBEE for Real Estate.
(*2) As of the end of February 2022

Project evaluation/selection

With regard to the Green Bond issuance process, which is based on the Green Bond Principles, “Eligible Green Projects” are eligible for the Green Bond.

Green Bond eligibility criteria

One of the following ratings must have been obtained within the past two years or will be obtained in the future as of the payment date of each bond.
DBJ Green Building Certification

Buildings that have received 3, 4, or 5 stars*1：

Certification for CASBEE for Real Estate

Buildings that have received B+, A, or S rank

For more information on ICMA Green Bond Principles, please click here.

*2：Excluding land with leasehold interest*3：When converting energy consumption into CO2 emissions, we use the calculation methods and emissions factors stipulated by the Act on Promotion of Global Warming Countermeasures.

Second-Party Opinion

JMF has obtained a second-party opinion from Sustainalytics, an ESG rating agency, for the eligibility ofGreen Bond*4 proceeds.
*4：Green Bond eligibility entails a Green Bond framework that aligns with the four pillars (use of proceeds, project evaluationand selection, management of proceeds, and reporting) of the Green Bond Principles 2018
For more information on Second-Party Opinion, please click here.

2

Environment

Pollution Prevention

Basic Information

Top Commitment

Sustainability Strategy

J Climate Change and Resilience I

J Energy I

Key Issues and Initiatives

J Water / Waste / Biodiversity I

Environment

SocialGovernance

J Environmental Approvals and Evaluations for Assets IJ

Data
J Green Bonds

J Pollution Prevention I

I

J

Pollution Prevention

The Company and each Investment corporations are working to maintain the safety of its buildings by conducting
building and earthquake risk assessments at the time of acquisition as well as collecting engineering reports on a

Pre-Investment Assessment Workflow

regular basis.

Phase 1

Assessments When Acquiring Real Estate Properties

making investment decisions: property inspections, land history investigations, and other related research on

Recognizing that hazardous substances related to soil contamination and buildings (PCB, asbestos, etc.) are one of
the risk factors in real estate transactions. Adequate and reasonable measures are taken in light of socially

Phase 2

accepted ideas and trustee obligations, and legal regulations, complaints, and other risk management are

No concerns

Adjust offer
price

environmental contamination survey to assist it in assessing a property’s environmental risks. Investment

having soil contamination but are very unlikely to carry environmental damage risk.”Phase 3Site remediation

RejectPurchase agreement / Closing

Corporations will use the pre-investment assessment workflow chart indicated below to determine whether the
principle, properties “that are very unlikely to have soil contamination or that cannot eliminate the possibility of*4

Investment Committee

Prior to executing any purchase agreement, Investment Corporations will have experts conduct a soil andConcerning soil contamination, its property acquisition manual stipulates that investment targets shall be, inSoil and groundwater contamination survey*3

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

investment would be appropriate.

*2(Determining presence or absence of problems by surveying the soil )implemented in relation to hazardous substances related to soil contamination and buildings.

3. Compliance with laws and regulations regarding soil contamination, etc. after acquisition of realestate (soil contamination countermeasures laws)

Interviews

Phase 1'environmental risk factors.

2. Minimize risk in acquiring real estate

Historical record review*1

When acquiring real estate properties, the Company takes various environmental factors into consideration before

1. To accurately calculate the risk for the judgment materials for the acquisition of real estate25

I*1 I f we are unable to determine solely from a review of historical records that there is no risk of soil contamination or that no other environmental

contamination exists (for example, a manufacturing facility that utilized toxic or other hazardous substances in the past), we will conduct
interviews with the seller.
*2 I f we are unable to determine from interviews with the seller that there is no risk of soil or other environmental contamination, we will conduct asoil and groundwater contamination survey.

*3 I f a contamination concern exists, but the necessary remediation would be technically or economically infeasible (for example, remediation isextremely difficult due to structures existing above the contaminated area), we will recommend a price adjustment.
*4 I f, after discussions with the seller, remediation is deemed technically and economically feasible, we will conduct site remediation or require theseller to do so.

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

Examples of Dialogue Opportunities

Social- Holding periodic workshops- Conduction tenant satisfaction survey

Examples of Dialogue Opportunities

28
29
30
31
32
33
34
35

Communication with Tenants I

Key Themes- Working on energy-saving and Co2 Reduction measures- Improving energy efficiency- Building resilienceJ

Communication with Local Communities I

J

Building resilience I

Social Bonds I
J

Creating a Positive Impact I

Human rights

Diversity, equity, and inclusion
Human Capital Development
Health and Well-Being

Employees- Holding briefing sessions on financial results and giving
presentations to investors- Participating in local cleanup activities

Key Themes

Examples of Dialogue Opportunities- Providing employee opinion polls

Key Themes- Cultivating human resources- Improving worker health and benefits- Operating websites and preparing communication tools(asset management reports, etc.)

Key Themes- Providing spaces for community events- Economic contribution to the community

Efforts to further enhance thecompanyJ

Examples of Dialogue Opportunities- Organizing facility visits in cooperation withtenants

Cooperation in considerationof sustainability

27

Investors, lenders, andbondholders

Local communities- Establishing a positive work environment- Understanding and promotion of stakeholders- Responding to environmental certification
systemContinued contributions
to local communities

JMF

IIF
KJRM

Proactive disclosure activities

Cooperation with local governments as
the owners and managers of facilities

Governments

Examples of Dialogue Opportunities- Participating in town planning project led by municipality

Key Themes- Developing and disseminating demonstration projects
promoted by the government- Obtaining “Comprehensive Assessment System for Built
Environment Efficiency” (CASBEE) ratings- Providing open public spaces and planting trees

SocialCommunication with Tenants

Basic Information
J Communication with Tenants I

Top Commitment

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

SocialHuman rights

GovernanceDiversity, equity, and inclusion

J

Data

27

I

Human Capital Development

J

JMF and IIF operate a wide variety of properties, including retail facilities, office buildings and industrial facilities, which means the our tenants are also diverse. We make efforts in consideration of our tenants’ safety and the facility

Health and Well-BeingI

environment. Furthermore, we promote measures that consider the global environment as well.

Working with Tenants

3C Management Cycle

and reduce CO2 emissions with our tenants. For example, JMF improves the environmental efficiency ofdesigned to realize internal growth through stable, long-term management that goes beyond the norm.

JMF services more than 1,400 tenants. Despite this large number, JMF proactively takes measures to save energy
properties. In some cases, it makes initial investments in energy- saving equipment and recovers the investment

By providing value to tenants, IIF continues to manage its portfolio using its “3C Management Cycle,” which iscosts from the rent payments, while tenants save utility costs without any capital outlay. Therefore, a win-win
relationship is created between JMF and tenants.

Conduct tenant satisfaction surveys

Tenant satisfaction surveys are conducted once a year for office buildings and retail facilities. Based on the

results of these surveys, efforts are made to create comfortable working spaces for those working in buildings byimproving the surrounding environments and enhancing the convenience of building facilities and equipment
as well as safety.

m
Co
Needs

ni
mu

Grasp tenants’ needs
through close communication
Long-term
use

Cost
reduction

Renovation/
CAPEX

Facility
specs

Location

ize

Customized solutions
leveraging our accumulated expertise
Tenants

Create value through providing
solutions to tenants’ needs

JMF holds ESG study sessions with tenants and propertyomPropose customized solutions
that comply with tenants’ needs

Enhancedusability

ESG Study Sessions＜Expertise on industrial real estate＞
・Full knowledge of characteristics of theproperty and location
・Understanding of tenants’ usability

Long-term stable management + enhanced profitability
and asset value“Stability +Added-value”

management companies in order to deepen theirunderstanding of sustainability initiatives. JMF are also

Createworking to raise ESG awareness by introducing JMF's
efforts at events conducted by commercial facility

These activities serve as a foundation for IIF’s cooperation with tenants in initiatives such as provision of portable batteries and conclusion of green lease agreements.
In addition, IIF conducts ESG-related surveys of tenants in order to promote initiatives with tenants regarding climate change measures.

operators.

ESG study session

Please refer to the JMF website

Cust

cate

for additional information on tenant communication and other initiatives.

Health and Well-Being
Good use of Courtyard Area

At the IIF Mitaka Card Center, which is one of the properties owned by IIF, there is an interior
courtyard whch is used by tenant employees as a place for meetings and having lunch. IIF is putting
effort into maintaining the courtyard, such as by changing the flowers and trees planted there.
Please refer to the IIF website

for additional information on tenant communication and other initiatives.

Courtyard at
IIF Mitaka Card
Center

Social

Basic Information

Building resilience

J Communication with Tenants I

Top Commitment

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

SocialHuman rights

Governance

J

Data

Diversity, equity, and inclusion

28

I

Human Capital Development

Health and Well-Being

I

J

Building Safety

JMF and IIF are working to maintain the safety of its buildings by conducting building and earthquake risk assessments at the time of acquisition as well as collecting engineering reports on a regular basis.

Seismic Reinforcements

JMF and IIF are conduct a building and earthquake risk assessment at the time of property acquisition, and calculates earthquake risk in held properties whenever standards are revised. When necessary, secondary assessments are

performed as well. When results of those assessments conclude that earthquake-resistant reinforcement construction is required, we make environmentally conscious choices that will provide the necessary seismic retrofitting while
minimizing waste. At the same time, we also work to reduce CO2 emissions and energy consumption in the updated facility.

JMF's building safety goals and KPIs

Disaster countermeasures

IIF invests in Japanese real estate. Japan is prone to earthquakes, and we thus promote disaster prevention

Targetmeasures for tenants of our investee properties from an investor point of view. Specifically, we are contributing
to the occupational health and safety of our tenants through efforts such as monitoring the implementation of

Implementing disaster prevention measures
KPI-Preparing emergency supplies
at 100% of the properties wheresuch supplies can be kept

-Developing an emergency
communication network thatcovers 100% of properties-Collecting engineering reports(ERs) regularly for 100% of
properties

2022 Results

2022 Results

2022 Results

100％

100％

100％

Measuring Air Environment

Asbestos is a naturally occurring mineral fiber sometimes called sekimen or ishiwata, and breathing it is highly
likely to be hazardous to health, thus implementation of some measures is required. JMF measures the air
environment once a year to confirm the dispersal status of asbestos.

disaster-preparedness drills.
Example ofInitiatives

ObjectProviding portable batteries and lifelines

IIF is proactively developing disaster prevention measures for the tenants of its real estate properties(such as by equipping all of its properties with portable accumulator batteries and providing lifeline
facilities in the event of a disaster).
Installation of portable storage batteries

Provision of lifeline facilities in event of disaster

Installation of portable storage batteries

Conclusion of an agreement for preferred supplyof lifeline facilities with Nikken Corporation

Secure means of communication in emergencies
at portfolio properties

PC/Server etc.

Our
activities
Smartphone etc.

Portable storage battery

BCP support for tenantsin portfolio properties

Disaster occurs

Disruption of lifeline

Business resumption
Support・Assurance employees’ security
・Support recovery work

Temporary toilet

Recovery of lifeline

・Secure minimum lifeline
・Support crime prevention

Inverter-type Generator and lighting

SocialCommunication with Local Communities

Basic Information
J Communication with Tenants I

Top Commitment

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

SocialHuman rights

GovernanceDiversity, equity, and inclusion

Data

J

29

I

Human Capital Development

Health and Well-BeingIJ

JMF and IIF are working to create important bonds with local communities through social contribution activities, such as strengthening the resilience of buildings, including disaster prevention measures, and providing community space andopen space to the public administration for each of the various properties under management. The JMF and IIF are promoting initiatives to strengthen and improve links with the local community.
Realized community-based renewal

mozo wonder city has attracted mainly locally based tenants
and uses many locally sourced materials for its store
interiors. It has also carried out a community-based renewal,
including mural art and event wagons created in businessacademia collaboration with local universities.

Initiatives through public-private partnerships

We are cooperating in public rescue and assistance and mutual help initiatives
through public-private partnerships at Twin 21, located in Osaka Business Park
(OBP). Based on plans for ensuring safe urban regeneration of the entire area, rules
have been established for maintaining transportation during a disaster andevacuation drills have been carried out*1 in anticipation of people being unable toreturn home due to a large-scale earthquake. Through participating in suchinitiatives, we are working with the community and the government to reduce
environmental impact and increase resilience.
*1 Evacuation drills were implemented remotely in Fiscal Year 2022.
Railway operators(public assistance)

Government, police andﬁre departments(public assistance)

Old materials used forpillars and locally madetiles used for store
designs

Wagon made byuniversity students

Support for art activities of local students

As its 50th anniversary event in collaboration with local
schools in Nara, Nara Family provided its event space forstudents, who had few places for activities in the COVID-19
situation, to exhibit their art work and performance.

Mutual aid

Lifeline operators(public assistance)

Companies
located in the area
(Self-help)
Mutual aid

Companies
located in the area
(Self-help)

Lights-Down Campaign

Center provides a shared open space as asidewalk-like open space in a pocket park underan agreement with Shinagawa-ku. IIF's activities inthis pocket park, including providing meals using afood truck for employees working for tenants of IIF

Shinagawa Data Center and neighboring residents,
Additionally, green areas are set aside forrestoration of the natural environment, and to

BCD

OBP area future targets image

administrative authorities. IIF Shinagawa Data

community.

Mutual aid

Companies
located in the area
(Self-help)

Wide-area disasterprevention centers(public assistance)

communities in collaboration with government

are contributing to the liveliness of theCompanies
located in the area
(Self-help)

Companies
located in the area
(Self-help)

IIF is engaging in activities that contribute to local

prepare for earthquake emergencies, a fireproof
water tank has been installed for earthquake

Mutual aid

Implementation of disasterpreparedness drills

JMF conducted the Light-Down campaign at a total of 34 properties,
including offices, hotels, and commercial buildings. 18 new properties
participated, including 15 office properties. This initiative is expected toresult in a reduction of approximately 447kWh (+36% compared to lastyear).

disaster prevention.

Furthermore, to ensure that local residents areaware of the functions performed by our properties in the area at IIF Shonan Health Innovation
Park, we provide tours of our facilities and other services, hold events for local residents, andopen some sites to the public* to enjoy the cherry blossoms planted on site as well as otherseasonal events.

* Events have been cancelled as of today

IIF Shonan Health Innovation Park

Cherry Blossom Festival

Social

Basic Information

Social Bonds

J Communication with Tenants I

Top Commitment

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

SocialHuman rights

GovernanceDiversity, equity, and inclusion

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As part of initiatives to resolve social issues, IIF has issued the first social bonds in September 2021. Social Bonds refer to bonds that are issued by business companies, funds, local governments, and other entities in order to procure funds for social

Health and Well-BeingI

projects. Typically, the bonds are issued according to the Social Bond Principles*1 laid down by the International Capital Market Association (ICMA). IIF promotes further ESG initiatives and expands financing methods by expanding investor base who areproactive in ESG investment by implementation of social financing through the Social Bond issuance.

Impact (Qualitative Targets)

IIF portfolio
book ValueTo contribute to the establishment and development of a stable social

infrastructure by promoting industrial promotion and R&D activities as a

IIF’s
Portfolio

JPY ���.� bn.
(�� properties)

Eligible Social Projects
JPY ���.� bn.
(�� properties)

Number of properties

practice under the philosophy “Invests in infrastructure and industrial properties
that and the source of the Japanese economy, and support Japanese industry
from a real estate grand point.”

Impact Reporting

While social financing including social bonds remain outstanding, IIF reports

SocialBalanceSheetannually the total amount of Eligible Social Projects, Debts of Eligible Social

Projects and the outstanding amount of social financing as of the end of Januaryof each year, as well as the following KPI on Impact Reporting on the IIF website
or in ESG reports published by the Company.

KPI on Impact Reporting

Summary of Properties and Leases of Eligible Social
Projects, Profit and Loss of Eligible Social Projects
and Occupancy rate of Eligible Social Projects areto be reported.

For more information on the above output indicators, please click here.

Overview of Eligible Social Projects

Eligible Social Projects
JPY ���.� bn.
(�� properties)

Debts of
Eligible Social
Projects
JPY ��.� bn.

Maximum outstanding
amount ofsocial ﬁnancing

17 properties

Total floor space

55thousand ㎡（Total floor space ratio:35.4%）

Total outstanding amount of social bonds
Debts of Eligible Social Projects=Eligible Social Projects × LTV ratio(LTV based on book value:��.�% as of January ��,����

* As of the end of January 2022

Number of issuances2

Total amount issued

5billion yen

Outcome indicators
As facilities for the development of medical technology treatment such as medicine, pharmaceuticals, and drug discovery, etc., the report covers trends in social security benefits, thenumber of researchers and R&D expenditures in the pharmaceutical manufacturing industry and the number of particular medical expenses (designated intractable disease) recipients.
As facilities for job creation and development of reginal economies through industrial promotion, etc., the report covers number of business establishments, amount of shipments ofmanufactured goods, and number of employees in areas where facilities are located.

As facilities for maintenance and improvement of social life networks, the reports covers trends of the diffusion index (D.I.) for employment conditions, in IT investment and in food loss andwaste.
As facilities for maintenance and improvement of public lifelines, trends in energy consumption of gas, electric power, etc., the number of traffic accidents and population of themunicipality in which the facility is located.

*1 For more information on the ICMA Social Bond Principles, please click here.
For more information on Social Finance, please visit the IIF website.

As facilities contributing to development of disaster prevention technologies for disasters, maintenance of redundancies and maintenance of logistics networks for daily necessities in theevent of disasters, and facilities for temporary evacuation, etc., trends in the amount of damage from nature disasters.

SocialTop Commitment

Basic Information

Creating a Positive Impact

J Communication with Tenants I

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

SocialHuman rights

GovernanceDiversity, equity, and inclusion

J

Data

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Human Capital Development

Health and Well-Being

I

J

Investing under the Principles for Positive Impact FinancePrinciples adopted in January 2017 by members of the United Nations Environment Programme Finance Initiative (UNEP FI), namely, financial institutions, to achieve sustainable development and the SDGs as a series of shared principles forfinancing that will lead to efforts to maximize the positive impact on the economy, society, and the environmental while addressing any negative impacts thereon.
JMF and IIF are implementing the following initiatives in accordance with these Financial Principles.

JMF decided to acquire "Karuizawa Commongrounds (land with leasehold interest)" in March 2022. JMF will

In February 2019, IIF carried on an impact investment project (a silent partnership, herein referred to as theto the creation of a local community in Karuizawa, and will simultaneously contribute to improving theagreement based on the Principles for Positive Impact Finance.

participate in the creation of the local community in Karuizawa as a land owner. This acquisition will contributesustainability of the local community and generate stable income.
Improve the sustainability of the local community

Secure stable earnings

Sustainable cycle to create
a community with the local
residents

Cycle to utilize and grow
JMF’s management
experience while securing
stable earnings

Surrounding areas

Advantages

Promote the use of various facilities

・Promote social interactions within the community
・Secure jobs and workplaces
・Secure diversified learning environment
・Share energy

Karuizawa
Commongrounds

JMF

Provide business stability and management know-how

Advantages

・Secure earnings that exceed the NOI yield after
depreciation of the portfolio average on a long-term basis
・Improve area management capabilities
・Expand investment areas
・Develop new investment methodologies

Core impacts of the Acquisition (Identified pursuant to the Positive Impact Real Estate Investment Framework)
Core Impacts

Increase positive
impacts

Reduce negative
impacts

Reduce carbon emissions indevelopment and operation
Contribute to improving thewellbeing of users throughoperation of a community“hub”
Reduce carbon emissions inoperation

KPIs to Identify Impacts

・Energy consumption
・CO2 emissions
・Renewable energy generation by solar panels
・Self-sufficiency ratio through renewable energy
・BEI value by new construction or renovation
・Percentage of local building materials used in new construction or renovation
・Number of EV-sharing introduced and used
・Approximate number of visitors to the entire facility
・Number of registered users of shared offices, their attributes andsatisfaction levels
・Number of events held in the facility and their characteristics

・Energy consumption and intensity
・CO2 emissions and intensity
・Percentage of LEDs in all lighting equipment in the facility“Tokumei Kumiai”) related to the OTA Techno CORE building. This is the first case of a J-REIT making such an

Measures in Support regional economic development fromthe Perspective of Real Estate investment(PRE)Ota-ku, Tokyo

Payment of rent HR
development support

・A manufacturingindustry hub in Tokyo・An accumulation ofhuman resources,
including engineers

OTA Techno CORE

Providing space
to work

Dividends
Equity investment in
the Tokumei Kumiai

Cooperation with J-REIT as a long-term owner

ResultSite secured develop bpth humanresources and the succession oftechnologies to promote industry
over the medium to long term

IIF

・The only J-REIT thatspecializes in industrial
properties

・Established track record ofacquiring manufacturing
and R&D facilities
ResultHave secured high profitability overthe medium term
Have ensured future acquisition
opportunities

Positive Impact Investment Monitoring Policy

We perform regular monthly or annual measurements concerning the impact set at OTA Techno CORE in
accordance with the following monitoring policy.
Positive impact
Negative impact

Employment and a Comprehensive and Sound Economy
It reports on provision of inexpensive lease space to small and medium
enterprises and number of jobs maintained and created by tenant companies

Climate: It reports on energy consumption intensity and CO2 emissions intensity
Soil: It reports on hazardous waste release volume*For more information on monitoring, please click here.

Social

Basic Information

Human rights
Basic Policy

J Communication with Tenants I

Top Commitment

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

Human rights

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Data

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Human Capital Development

Health and Well-Being

The Company recognizes that the pursuit of improvements in the areas of human rights, labor, the environment, and the prevention of corruption is a social responsibility that is expected and required of us, we aremoving forward with such initiatives. In 2016, we signed the United Nations Global Compact (UNGC), and have carried out initiatives to put its 10 principles into practice. With the aim of continuously improving ourcommitment to human rights, we have established the Human Rights Policy and take action in accordance with the United Nations Guiding Principles on Business and Human Rights (UNGP).

Human Rights Policy

The Company established the KJR Management Human Rights Policy in December 2022. Under this Policy, the Company
supports international human rights norms such as the Universal Declaration of Human Rights, the International Bill of
Human Rights, the International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work, the
UNGC and the UNGP, and applies this Policy to the Company’s officers, employees, dispatched employees, and all otherpersons who engage in work for the Company. At the same time, the Company expects its business partners to support thisPolicy and cooperate with the implementation of measures regarding respect for human rights by complying with this Policy.
For the full text of the KJR Management Human Rights Policy, please click here.

Human Rights Due Diligence (Human Rights DD)
Human Rights Risk Management and Monitoring

The Company operates the Risk Management Committee, in which
senior management personnel serve as members. The Committee
understands and investigates matters related to major humanrights risks and formulates countermeasures and management
policies. Regarding business risks, including priority issues related
to human rights risks, it checks the risk status of each division once
every two months using a Risk Control Matrix (RCM), and reports
the results at the Committee, thereby implementing evaluationand management.
In addition, We conduct monitoring to prevent any negative impact
on human rights and to understand the current situation.

Publication of Initiatives

Implementation of
Monitoring

Regular
Implementation of
Questionnaires for andExchange of Opinionswith Employees,
etc.

Implementation of
Education andTraining

Implementation ofPreventive/Corrective
Measures

Assessment of Impacts on
Human Rights
Specification,
Analysis, andAssessment ofNegative Impacts

Establishment ofInternal Environment/
Systems

Implementation ofPreventive/Corrective
Measures

We will disclose information on the status of our response to human rights issues on the Company’s website as appropriate.

Remedial Measures

We have established an internal inquiry counter for all executives and employees as well as our business partners in order toreceive consultations and reports regarding violations of laws and regulations, information management violations, various
types of harassment, human rights, and the working environment. In addition, we have designated the internal inquiry
counter of KKR & Co. Inc., and an external law firm as an external point of contact for these matters, for consultation andreporting, and have secured a route for external consultation and reporting.
When the internal inquiry counter receives a whistle-blowing report, the Head of the Compliance & Risk Management Officeassumes responsibility and the Compliance & Risk Management Office investigates the facts.

Our Approach to Human Rights DD
Human Rights Risk Assessment
The Company has developed a human rights due diligence mechanism, with reference to the UNGP. In fiscal 2022,
we identified human rights risks that may impact stakeholders related to the Company, investment corporations
which entrust the Company with asset management, and various funds for which entrust the Company withdiscretionary investment management or investment advice (the “Funds”), and ranked those risks by priority level.
(1) Identification of
stakeholders(2) Identification ofhuman rights risks(1) Identification of stakeholders
We have identified the following four types of stakeholders who
may be impacted:
Employees, Supply chain, Customers and Community(3) Assessment of human rights risks
In order to assess the impact and severity of human rights risks, we
conducted an analysis of human rights risks from two perspectives:“impact on human rights” and “connection with the Company.” For
the impact on human rights, we considered the severity of the risk
(severity of human rights violations). For the connection with theCompany, we considered whether the Company is a direct source of
impact or whether the impact occurs in its supply chain. We thenprepared human rights risk mapping based on the selected risk items.

(3) Assessment of
human rights risks(4) Prioritization ofhuman rights risks(2) Identification of human rights risks
For each type of stakeholder, we identified human rights risk items
relevant to the Company and the Funds, with reference to human rights
risks listed in major international rules and frameworks, includinginternational guidance on human rights (UNEP FI: United Nations
Environment Programme Finance Initiative Human Rights Guidance Tool).
(4) Prioritization of human rights risks
We have identified those issues that have a greater impact onhuman rights and connection to the Company as high priority
issues. As a first step in addressing human rights issues, we aredeveloping responses to the matters identified as priority issues
within the Company.

Please refer to the Process of Human Rights Due Diligence for further details.

Implementation of preventive and corrective measures
We conduct compliance training for all officers and employees, including seconded employees and dispatchedemployees, four times a year. With this compliance training as a base, we provide in-house education on mattersrelated to human rights and various types of harassment.
Please refer to the Diversity, Equity & Inclusion section on page P33 for more details on the indicators and our performance.

Monitoring
Based on indicators related to priority issues, monitoring of overtime work and stress checks, we urge relevant
divisions to improve the situation where necessary.

SocialDiversity, equity, and inclusion
Basic Policy

Basic Information
J Communication with Tenants I

Top Commitment

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

SocialHuman rights

GovernanceDiversity, equity, and inclusion

Data

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Health and Well-Being

Positioning the promotion of diversity, equity and inclusion (“DEI”) as an important part of its management strategy, the Company is working to create a work environment in which each and every employee canfully demonstrate his or her abilities and work energetically, regardless of age, nationality, gender, values or disabilities.

Initiatives to Promote DEI
Prohibition of Discrimination

The Company believes that it is essential to ensure a safe and comfortable work
environment in which each and every officer and employee can fully demonstrate
their abilities and concentrate on performing their duties. To this end, in order toclarify our stance that unfair discrimination among officers and employees mustnot be tolerated, our Code of Ethics stipulates that “officers and employees of theCompany shall endeavor to ensure a pleasant work environment and to maintainorder in the workplace in which each officer and employee is respected as anindividual and can trust each other.” Our Rules of Employment also stipulate that
there shall be no unreasonable discrimination or harassment based on race,
ethnicity, skin color, nationality, place of birth, sexual orientation, physicalcharacteristics, status as a person with disabilities, or political or religious beliefs.

DEI in Hiring Activities

In hiring activities, it will actively hire people with disabilities and returners* sothat people from wide-ranging backgrounds will apply for positions in the
Company and develop their abilities through working at the Company.
* Persons who suspended working for childbirth, childcare, nursing care, or other life event

Rehiring after Retirement

The retirement age in the Company is 60, however, when an employee who hasreached the mandatory retirement age wishes to continue working, he or she cando so as we have established a system and workplace environment, utilizing theirwealth of experience and knowledge.

Work-Life Balance, and Balancing Work and Child Raising
TargetKPICreation of a work environment where employees can fully
demonstrate their abilities while maintaining work-life balance

Achievement of a 50% utilization rate of parental leave by male
employees (at least one employee taking parental leave)

As of Dec. 2022

100.0％(Reference)

We have formulated an action plan to create a work environment in which
employees can achieve work-life balance, and balance work and child raising,while fully demonstrating their abilities.
Period: April 1, 2022 - March 31, 2024 (2 years)
Target1

2

Measures
TargetMeasures

Target3
Measures

Proactively inform and educate employees about childcarerelated systems to make it easier for them to use such systems- Send messages from management regarding childcare-related
systems- Provide a guidebook on childcare-related systems for employees topublicize them within the company
Rate of eligible male employees taking childcare leave: 50%(including at least one male employee taking childcare leave)- Provide individual guidance to male employees whose spouses havegiven birth
Average overtime hours (in excess of legal working hours and on
statutory holidays): less than 45 hours per month; and average
overtime hours per year (in excess of legal working hours): lessthan 60 hours per monthTarget 3 is for regular employees- Distribute monthly reports to department heads to inform them of
the status of overtime work
- When an employee continues to work long hours, check theindividual situation and consider measures for improvement

You can also check our plan on “Action Plan for Balancing Work and Childcare Publication Site” (in Japaneseonly) in the “Support for Work-Life Balance” section on the Ministry of Health, Labour and Welfare’s website.

Promotion of Advancement of Women
TargetKPI

Further promote the advancement of women in the workplace, thereby
continuing to create groundbreaking innovations.

Raise the ratio of female employees in managerial posts to 20% (target
year: 2027)

As of Dec. 2022

14.3％

(Reference)

We aim to further promote the advancement of women in the workplace, thereby
continuing to create groundbreaking innovations.

Employer Action Plan based on the Law for the Promotion of Women's Activities
Period: April 1, 2022 - March 31, 2027 (5 years)
Implementation period
April 2022 -October 2022 April 2023 -October 2023 -April 2024 -Details of initiatives- Send messages from management on the importance of diversity andinclusion in organizational operations- Hold seminars on gender gaps for managers and female employees- Conduct an awareness survey on career development among female
employees- Based on the results of the awareness survey, conduct career seminars
for female employees to help them shape and realize their medium- tolong-term career image-S elect candidates for managerial posts, and have them formulate mediumto long-term career plans through interviews with their supervisors- Provide training programs for candidates for managerial posts- Hold a roundtable discussion between female managers and candidates
for managerial posts.
- Develop a talent pipeline and follow-up systems, such as a mentoring
system- Provide regular mentoring to female managers who have been promoted- I n departments with fewer female employees, the candidate pool for
managers will always include women, and when hiring, strategic recruitment
activities will be initiated with an awareness of gender diversity, such as
interviewing both male and female candidates as necessary

The status of women’s advancement in the Company is also available on the “Database of Companies Promoting
Women's Advancement”(in Japanese only) on the website of the Ministry of Health, Labour and Welfare.

Social

Basic Information

Human Capital Development
Basic Policy

J Communication with Tenants I

Top Commitment

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

Human rights

SocialGovernance

Data

Diversity, equity, and inclusion

J

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Human Capital Development

Health and Well-Being

Based on the concept that human resources are our most important asset, KJR Management supports autonomous career development by preparing various development programs so that each employee is able

to grow and achieve self-fulfillment through working at the company. As an organization consisting of diverse human resources with different backgrounds, we strive to spread its “Mission, Vision & Core Values” sothat employees with various specialties and different values can respect each other and utilize their individual strengths to achieve high performance.

Human Capital Development

Training for Managers

Compensation Program

enhancement of expertise, we have been implementing an

and leadership of managers and to train next-generationcompetitive compensation to attract, develop, and retain excellent human resources for our

For the purpose of proactive career development andWe take various measures to enhance people-management skills

internal recruitment system that allows employees to be

employees.

challenged by the duties of their choice, as well as regular

Newly-promoted managers who have subordinates for the first timetransfers by company order based on their own wishes. In

are required to attend a training program for managers by anaddition, to meet the diversified needs for training and support

external training organization. We also support our managers

for self-development, we have established a training system

actively in improving their skills by offering a leadershipthat allows employees to take courses at their own request.

development program, a workshop for appraisers, and a training

In addition to the development of various training programs

course for interviewers by external lecturers in addition to cafeteria-

and the system to support the acquisition and maintenance ofstyle training programs that employees can attend according toqualifications, we are also strengthening performance

their individual needs. In addition, we regularly provide a frontline-

management to support growth and regular career discussions

care training course on mental health for managers to support

with supervisors.

Nomination based training

Level based training

subordinates from a mental health perspective.
Business professional skills
training

Cafeteria Plan

Training for new and young
employees

External training institutions

Production, logistics and ISO
Trade, global and foreign
languages
PC skills
Business skills(Communication, thinking ,work, manners and selfmanagement)

ARES certified master
Real estatetransaction agent

Real estate appraiser
Real estate
consulting master
Certified building
administrator
Licensed seniorarchitect

Other(Choice every time)

Evaluator training andinterviewer training

New/youngemployee

Training for new and young
employees

Training for medium-career
employee and leadersMain course contents
Corporate panning
Personnel and labor relations
General affairs and legal affairs
Accounting, taxation, andmanagement accounting
Sales and marketing

In-house
training

Internal control, compliance,
IT security, harassment

Medium-career
employee

Training for medium-career
employee and leaders

Training for management,
executives, and managers

Selfdevelopment

Accounting, finance, tax, legal affairs,
information processing, various
qualifications, PC skills, English

Management

Training for management,
executives, and managers

Support for specified
qualifications

The company's compensation system is applied to all permanent employees. We seek to provide
stockholders and investors.

Based on the Total Compensation Approach, fixed pay is determined based on the Pay for Job

principle and variable pay is determined based on the Pay for Performance principle. Variable pay
reflects the performance of the company and appraisals of employees.

In addition, a long-term incentive system, in which pay is tied to the company's performance and theinvestment unit prices of managed funds, has been introduced for senior-level employees. The systemseeks to avoid outflows of excellent human resources and achieve stable management of the company
and to create growth of medium- to long-term funds from the viewpoint of investors and to motivate
and reinforce consciousness for performance improvement of the Company.

Compensation that employees receive is determined according to their relative achievements andcontribution levels compared to the individual targets linked to the organizational targets including
ESG-related targets, the embodiment of the corporate philosophy, and expected roles.

Support for Acquiring Further Qualifications

The company encourages acquisition of certifications for the development of professional
human resources in the real-estate finance business and covers at least a portion of thenecessary costs and offers training opportunities.

In particular, we actively support the acquisition of professional certifications by the

Association for Real Estate Securitization (ARES), of which the Company is a regular member.

When an employee becomes an ARES Certified Master of the Association, the Company covers
the entire fee for the examination (first time only) and for maintaining the certification. The

Company also encourages employees to participate in training courses and seminars for those
who already have certification.

The Company also covers at least a part of the cost required for training, examination, andCompany

maintenance of certifications related to work. Many employees tackle the challenges ofacquiring certifications.

SocialHealth and Well-Being

Basic Information
J Communication with Tenants I

Top Commitment

J Building resilience I

Sustainability Strategy

J Communication with Local Communities I

Key Issues and Initiatives
Social Bonds I

Environment

J Creating a Positive Impact I

SocialHuman rights

GovernanceDiversity, equity, and inclusion

Data

J

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Human Capital Development

Health and Well-Being

The Compnay considers its employees to be its most important management resource and essential for carrying out its activities. We are actively working to create conditions where each and every employee can perform their work in a lively
manner and to cultivate them accordingly. In addition, we regularly conduct employee opinion polls with the aim of building an even better company.

Work Environment

The Company is working to ensure that all employees can work with peace of mind and to improve the benefits it
provides to them.

Heath of Employees

Besides meeting the legal requirements in Japan for employee health and safety, including
labor and risk management, The Company emphasizes the prevention of excessive workand understanding the appropriateness of working hours, and is enhancing its system for
managing working hours through an original monitoring framework. In addition to anemphasis on measures aimed at reducing overtime, we require employees to take longterm leave and are taking steps to increase the rate that paid leave is used.

Percentage of paid leave used
Actual78.3％

Work Environment

The office space is designed to provide an environment in which employees can work comfortably and actively. Natural lightenters the work space through windows and plants have been arranged throughout this new, bright office. In addition,individual booths have been set up in consideration of the current work style that combines office and telework.

in Fiscal Year 2021

(Target to achieve at least 70%)

Moreover, we provide various wellness programs to maintain and improve the mental and physical health of our employees and theirfamilies. We have also established the in-house Health Committee comprising employees representing each division and the Human
Resources Department. The committee meets once a month to exchange opinions on working conditions alongside industrial
physicians and to gain health-related insight. Through these initiatives, we are supporting employees in the preservation of their health.
- Working time monitoring system- Check and report on deviation in working
hours (every month)- Report on long working hours to secure
health (professional employees/once perhalf month)- Annual paid leave(15 to 20 or 25 days granted, depending on
the length of employment (the number ofdays granted by law is 10 to 20 days))- Mandatory acquisition of long-term
consecutive leave- Health checkup/complete medical checkup- Influenza immunization shot
- Various counseling services (EAP) byexternal experts- Health consultations by industrial
physicians/health nurses- Health Committee- Conducting of stress checks

Bright office with plantings

In-office cafeteria

Individual booths reflecting current
working style

We have upgraded communal spaces to promote communication with fellow co-workers and have incorporated rest areas
where employees can relax and refresh themselves. We also conduct environmental checks periodically to provide
comfortable working conditions for employees.

Diversity in Work Styles

The Company has created an environment that allows its employees to work in ways thatsuit their respective lifestyles and the characteristics of their duties. Toward themaintenance and realization of flexible working styles, it abolished the upper limit on thenumber of teleworking days and has introduced measures such as a flextime system,working from home and paid leave in units of hours. Expecting that its employees willachieve a better work-life balance and increase productivity, the Company is working tocreate systems that enable diverse human resources to play an active role.

- Flextime system- Working from home (satellite offices
available)- A variety of special leave programs,
including family care special paid leave- Acquisition of paid leave in units of hours

Improving Employee Benefits

In addition to completely supplying a social insurance system, we have introduced an original retirement pension system, haveentered into general welfare group term life insurance, group long-term income compensation insurance, member welfare services,a congratulatory and condolence payments system and ESOP (Employee investment unit ownership system) and other systems.

Office that actively incorporates natural light

Regular air quality inspections

Furniture that is adjustable to various healthconscious configurations

Code of Ethics

The Company hereby sets forth the Code of Ethics which constitutes the Corporate Ethics Charter and Code of Conduct for
Officers and Employees, for the purpose of operating sound business based on high ethical standards, establishing social

Governanceconfidence and contributing to social development.

Corporate Ethics Charter- Contribution to Society and Securing Confidence- Compliance with Laws and Regulations/Various Rules- Information Disclosure and Ensuring Operational- Maintenance of Fair Relationship- Earning Investors’ Satisfaction

Transparency, Maintaining Sound Management- Compliance with Laws and Regulations and Social Norm
- Respect for Employees

37
39
40

J

Corporate Governance I

Compliance / Anti-Corruption
Risk Management

Code of Conduct for Officers and Employees- Responsible Performance of Business- Maintenance of Order of Workplace- Distinction between Public and Private Matters

Governance

Basic Information

Corporate Governance

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment
J

SocialGovernanceCorporate Governance I

J

Data

37

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Compliance / Anti-Corruption

Risk Management

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Governance of JMF

JMF has one or more executive directors and two or more supervisory
directors (at least one more than the number of executive directors).
The organization of JMF consists of one executive director, two supervisory
directors, the Officers Meeting, plus an accounting auditor, in addition to theGeneral Meeting of Unitholders, which is comprised of investors.

Governance of IIF

IIF has one or more executive directors and two or more supervisory directors(at least one more than the number of executive directors).
The organization of IIF consists of one executive director, three supervisory
directors, the Officers Meeting, plus an accounting auditor, in addition to theGeneral Meeting of Unitholders, which is comprised of investors.

JMF Board of Directors

IIF Board of Directors

Executive Director

Executive Director

Masahiko Nishida

Male

Experience and expertiseElected as deemed to be qualified to execute the duties as an executive director of JMF
based on his expertise in accounting and long experience as a supervisory director of JMF.

Kumi Honda Female

Experience and expertiseElected as deemed to be qualified to execute the duties as an executive director of IIF
based on her expertise in legal and long experience as a supervisory director of IIF.

Supervisory Directors

Masaharu Usuki

Male

Experience and expertiseElected as deemed to bequalified to supervise
executive directors' activities
from the viewpoint of afinance and treasury expert.

Osamu Ito

Supervisory Directors

Male

Experience and expertiseElected as deemed to bequalified to supervise
executive directors' activities
from the viewpoint of a legal
expert.

Yutaka Usami

Male

Experience and expertiseElected as deemed to bequalified to supervise
executive directors' activities
from the viewpoint of an
accounting expert.

Koki Ohira

Male

Experience and expertiseElected as deemed to bequalified to supervise
executive directors' activities
from the viewpoint of a legal
expert.

Asset Management
Entrustment/Supervision

Fumito Bansho

Experience and expertiseElected as deemed to bequalified to supervise
executive directors' activities
from the viewpoint of a legal
expert.

Asset Management
Entrustment/Supervision

Each of the investment corporations entrusts their asset management to the Company as their asset

manager, and the Company is committed to upholding its fiduciary duty to the investment corporations.

Male

Please refer to page 38 for more details on how it manage.

Governance

Basic Information

Corporate Governance

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment
J

SocialGovernanceCorporate Governance I

Data

J

Compliance / Anti-Corruption

Decision-making Process

Conflicts of Interest

from the Investment Committee and the Senior Advisory Board/Board of Directors in accordance with the Guidelines for theof interest do not arise from the management of assets at JMF and IIF and the discretionary

In the course of making decisions regarding the acquisition, disposal, or operation and management of assets, approval is obtained
Investment Committee, Rules of the Senior Advisory Board (the “Senior Advisory Board Rules”) and the Rules of the Board of Directors.
Furthermore, in the course of making decisions regarding investment policies and standards, operation and management policies andstandards, budget, and financing of each investment corporation, the Investment Committee makes decisions, and a proposal issubmitted to the Senior Advisory Board for approval in accordance with the Senior Advisory Board Rules. If a transaction constitutes ainvestment and investment advisory business such as private real estate fund management.

1Compliance Committee must first adopt resolutions before the Investment Committee makes decisions (excluding transactions that
addition, if a transaction to be executed involves the acquisition, disposal, or lending of securities or real estate between any

investment corporation and a related party of the like of the Asset Manager as stipulated in Article 201(1) of the Investment Trust Act

2(“ITA”), then, subsequent to the Compliance Committee adopting a resolution and the Investment Committee adopting a resolution,

each Investment Corporation’s consent must, by the time the transaction is executed, be obtained based on the approval of the Boardof Directors of each Investment Corporation, except in certain cases in which it is determined that the transaction will have a minor
impact on each Investment Corporation’s assets.
（*1）

Asset
management
section(Proposal)

（*2）

（*3）

Compliance
Committee（*3）

Investment
Committee

（*2）

（*2）

（*2）
Senior Advisory
Board

（*2）

Board ofDirectors

Approval/decision（*4）

Board of Directors （*4）
of each Investment
Corporation

Consent of each
investment
corporation(*1) For matters relating to the acquisition, disposal, and the like of assets in which a single transaction is in an amount of less than JPY 8 billion, the Investment Committee’s approval is obtained.
(*2) With regard to investment policies and standards; operation and management policies and standards; budget; financing; and the acquisition, disposal, and the like of assets for which a single
transaction is in an amount of not less than JPY 8 billion and less than JPY 60 billion, approval of the Investment Committee and of the Senior Advisory Board is obtained. In addition, with regard to theacquisition, disposal, and the like of assets for which a single transaction is in an amount of not less than JPY 60 billion, approval of the Board of Directors is obtained.
(*3) For matters relating to transactions with stakeholders, in addition to the procedures stipulated in *1 and *2 above, approval is obtained from the Compliance Committee. However, if the transaction
constitutes a Minor Transaction, approval of the Compliance Committee is not required.
(*4) F or matters relating to transactions with related parties or the like as defined in Article 201-2(1) of the ITA, in addition, approval of the Board of Directors of each Investment Corporation and the consent
of each Investment Corporation based on such approval is obtained. However, if a transaction is determined to be a transaction that will have a minor impact on each Investment Corporation’s assets
under the Ordinance for Enforcement of the ITA, approval of the Board of Directors of each Investment Corporation and consent of each Investment Corporation based on such approval is not required.

Risk Management

The Company has implemented a management system as described below to ensure that conflicts

transaction between stakeholders stipulated in the Regulations for Transactions with Stakeholders of the Asset Manager, themeet certain minor requirements as stipulated in the Regulations for Transactions with Stakeholders, (“Minor Transactions”)). In

38

I

3

Separation of asset management divisions and support structure
We have established the Metropolitan Division and the Industrial Division as divisions that are
engaged in asset management of JMF and IIF, respectively, and the Private Solutions Division as
the division that is engaged in supervising businesses, including the discretionary investment andthe investment advisory business for private real estate funds or similar, thereby clarifying asset
management responsibilities.

Securing of independence in investment decision-making

Decisions made on asset management of each investment corporation are examined solely fromthe perspective of whether or not such decisions are appropriate as decisions made by theMetropolitan Division, the Industrial Division, or the Private Solutions Division, without taking
into consideration the situation of other divisions of the investment corporations.

Rules on preferential investigation rights pertaining to investment information
With regard to information on sales of real estate obtained by the Company, we have establishedrules concerning determinations as to which division, the Metropolitan Division, the Industrial
Division, or the Private Solutions Division, should conduct investigations in preference to theother divisions.

Establishment of a system to eliminate antisocial forces
To preempt violence from antisocial forces, clarify how we will respond as an organization andensure that we will never have any relations or dealings with antisocial forces and use them, we
also provide the “Basic Rules around How to Deal with Antisocial Forces” which stipulates that
we will take a resolute attitude as an organization to antisocial forces, including coordinatingwith external specialized institutions, as our basic principle. Each division of the Company is

expected to confirm in advance that counterparts to transactions, etc. are not considered as

antisocial forces, to report any questionable acts or behaviors when they are expected directly
or indirectly to the Head of the Compliance & Risk Management Office and the President, andreview social risks thoroughly to make a decision of whether the transaction can go ahead ornot, in accordance with the Basic Rules as per their respective operations manuals for eachdivision that are provided separately.

Governance

Basic Information

Compliance / Anti-Corruption

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment
J

SocialGovernanceCorporate Governance I

Data

J

Compliance / Anti-Corruption

Compliance Basic Policy

Anti-Corruption

laws and regulations, and has established a compliance system with the intention of conducting sincere and fair corporate activities and ensuring

Corporate Ethics Charter and the Code of Conduct for Officers andWe define compliance not only as compliance with laws and regulations, but also as voluntary efforts to adapt to broader social expectations behindsound management based on self-discipline.

Compliance System and Its Practices
In accordance with the Compliance Rules, we haveestablished the Compliance Committee and theCompliance & Risk Management Office to develop a
company-wide cross-sectional compliance system.

Compliance Committee
The Compliance Committee, chaired by the Head of theCompliance & Risk Management Office, who is also an executive
officer, is comprised of senior management and outside
attorneys, and meets once every two months in principle.
Compliance Program
We formulate a compliance program each fiscal year,
which is a practical plan for achieving compliance.
Compliance ManualWith the Core Values set out in our corporate
philosophy as the broader concepts, the Compliance
Manual provides the appropriate approach and codeof conduct that all officers and employees (directors,
auditors, and employees including contract workers
and temporary employees) should adopt in thevarious situations that we face as an asset
management company for real estate funds.

Strengthening Compliance
All officers and employees of the company pledge tocomply with the Code of Conduct, etc., by submitting
a compliance pledge form according to thecharacteristics of their positions every year. In
addition, self-assessments are conductedsemiannually to check the status of each department
in management of compliance-related matters.

39

I

Risk Management

In April 2001, we established the Code of Ethics, which consists of the
Employees, with the purpose of ensuring sound management based onhigh ethical standards, ensuring that the Company continues to earn theRole of the Board of Directors in Compliance
The Board of Directors decides on the compliance program and other basic matters related to thepromotion of company-wide compliance, and receives reports on the status of compliance promotion.

Code of Ethics
Our Code of Ethics consists of the Corporate Ethics Charter and the Code of Conduct for Executives andEmployees. In addition to compliance with laws, regulations, and social norms, the Code of Conduct
stipulates standards that must be observed, such as maintaining fair relationships and distinguishing
between public and private matters.
Compliance Training
In addition to mandatory compliance training at the time of joining the Company, we conduct
compliance training for all executives and employees including seconded employees, contract
employees and temporary staff, four times a year, as well as a total of seven quarterly e-learning
sessions on internal control.

Whistle-Blowing and Reporting
We have established an internal inquiry counter for all executives and employees as well as ourbusiness partners in order to receive consultations and reports regarding violations of laws andregulations, information management violations, various types of harassment, human rights, and theworking environment. In addition, we have designated the internal inquiry counter of KKR & Co. Inc.,and an external law firm as an external point of contact for these matters, for consultation andreporting, and have secured a route for external consultation and reporting. There is no time limit for
any of the contact points, and reports can be allowing anonymous reporting at all inquiry counters. It isconsidered that the system will protect whistle-blowers from disadvantageous treatment inaccordance with the Whistleblower Protection Act and our Whistle-Blowing Rules.
For details, please refer to Remedial Measures in Human Rights on P32

Please click here

for contact information.

Responding to Compliance Violations
For the purpose of accurate and fair treatment in the event of finding an act or a possibility of violationof laws and regulations and the Articles of Incorporation, etc. or for preventing occurrence of such anact, the Administrative Incident Handling Rules set forth specific actions.

trust of society, and contributing to the development of society.

Through the Corporate Ethics Charter and the Code of Conduct for

Officers and Employees, all officers and employees strive to practicecorporate ethics as their own on a daily basis and to be widely

recognized by society as a company with high corporate ethics.

[the Code of Ethics]- Contribution to Society and Securing Confidence- Earning Investors’ Satisfaction- Information Disclosure and Ensuring Operational Transparency, Maintaining
Sound Management- Compliance with Laws and Regulations and Social Norm
- Respect for Employees[the Code of Conduct for Officers and Employees]- Compliance with Laws and Regulations/Various Rules- Responsible Performance of Business- Maintenance of Fair Relationship- Maintenance of Order of Workplace- Distinction between Public and Private Matters

In accordance with the Code of Ethics, we prohibit bribery of public
officials and their equivalent, and entertainment and gifts that go
beyond the bounds of socially accepted standards for our business
partners. The Compliance Manual and the Regulations Concerning
Entertainment, and Internal Meetings set forth in detail, and thegeneral policy is not to receive any entertainment or gifts. In principle,
when receiving gifts or entertainment from business partners, it isnecessary to obtain prior approval. The implementation status of theprocedures is monitored by the Compliance & Risk Management Office
and reported to the Compliance Committee once in every six months.
In addition, we signed up to the UN Global Compact (UNGC) in 2016,
and endeavors to strengthen corporate governance against corruption
through supporting the UNGC’s ten principles.

Governance

Basic Information

Risk Management

Top Commitment

Sustainability Strategy

Key Issues and Initiatives

Environment
J

SocialGovernanceCorporate Governance I

Data

J

40

I

Compliance / Anti-Corruption

Risk Management

We committed to the thorough implementation of these risks under the following organization structure.

Structure on Risk Management

Internal Audits

We believe that implementing risk management will ensure the continuity and

Key Risks
to be Managedstable development of our business. Being fully aware of our public mission andsocial responsibility in conducting asset management, we carry out necessary risk
management, and we also conduct necessary risk management of the investment-Investment
management risk

management business appropriately. We conduct sound and appropriate-System risk

corporations to strive to protect investors and operate the investment-Clerical work riskbusiness management, based on our management policy and strategic goals.

-Reputation risk
-Conduct risk

With regard to the risks arising as part of that management, we have established

an income and risk management system in line with the management policies ofeach of the investment corporations and based on the strategic goals, and we

We have has established the Internal Audit Office, which is independent of any department, to conduct audits once every

three years for each department, based on the internal audit plan established for each fiscal year. We believe that internal
audits contribute to the achievement of management goals, not only by finding and pointing out problems in business

operations, including compliance, but also by evaluating the internal control systems of each department, and proposing
methods of improvement, etc.

Details about the implementation of internal audits based on the Internal Audit Rules are specified in the detailed rules oninternal audits. When the audited department receives any instruction or proposal for improvement through the internal
audit, it prepares an improvement response plan, implements the improvement measures, and reports the results to theInternal Audit Office.

manage the system so that risk is appropriately controlled.
4

3

1

Risk Management
Committee

Investment
Committee

Board of Directors

Standing members

Head of Compliance & Risk
Management Office(Chairman), President, Head ofeach Division, Head of
Strategic Planning OfficeSecretariat

Compliance & Risk
Management OfficePutting
togetheropinions

ReportMaking Decision

2

President & Representative
Director, Chief Officer for
Risk Management
ReportAudit the adequacy and effectivenessof the risk management

51Section for making proposals

Head of Metropolitan Division,
Industrial Division or Private
Solutions Division

Secretariat

President & Representative Director, Chief Officer for Risk Management

3

Investment Committee

Strategic Planning OfficeInternal Audit Office6

7

Risk Management Officer

Compliance & Risk Management Office

Head of each Division and Officer

Monitoring, etc.

Control over overall risk management, receive periodic andad-hoc reports, and determine a material risk management
policy.

2

Committee members

President (Chairman), Full-time
Director, Executive Officers, Headof Compliance & Risk Management
Office, external estate appraisersand other persons nominated by
the chairman

Board of Directors

45Internal Audit Office6Compliance & Risk Management Office7

Risk Management Officer

President & Representative Director: Supervision of the overallrisk management, etc.
Chief Officer for Risk Management: Execute necessary measures
to properly manage risks
Examines, discusses and makes decisions regarding overall risks
affecting the portfolio as a whole (e.g.acquisition, disposal andmanagement of assets by the investment corporations,investment policy and standards, management policies andstandards, budgets, funding, etc.)
Risk Management Committee

When required, identifies, examines and formulates responses
and policies for matters that pose major risks (excluding thosematters that are dealt with by the Investment Committee)

Planning and implementation of internal audit
・Accumulating risk information through, but notlimited to, the management of operational
accidents and the review of the approval
documents
・Plans and makes proposals concerning risk
management for the company as a whole・Monitors, evaluates and analyzes the extent towhich risk management is in place andfunctioning
・Runs the Risk Management Committee・Person responsible for managing major risks,etc. in his/her department
・Reports the state of risk management to the
Risk Management Committee

Data

Basic Information

ESG Data

Top Commitment

Sustainability Strategy

Environment
GHG emissions

Scope 1 (direct emissions) （t-CO ）2

Scope 2 (indirect emissions)（t-CO ）2

Scope 1+2

（t-CO2）Per unit(t-CO2/㎡)

Scope 3（t-CO2）

Energy consumption

(MWh)Energy consumption per unit (kWh/㎡)
Fuel consumption (fuel only) 
Fuel consumption per unit (MWh)(kWh/㎡)

Water Use (Thousand ㎥)

Total waste

(t)

(㎥/㎡)

2016/2

2017/2

2018/2

2019/2

2020/22021/22022/2

23,230228,985
252,215－0.10
413,471164.17
125,639
49.88
2,605
1.02
42,321

23,767225,272
249,039－0.10
432,473170.68
126,779
50.03
2,691
1.05
37,58023,126
216,142
239,269－0.09
423,783
159.24
133,907
50.32
2,615
0.98
30,151

20,515202,521223,036－0.09
399,940
163.52
118,587
48.49
2,541
1.04
24,456

6,238
32,65838,896－0.08
394,471155.75
117,223
46.28
2,621
1.04
29,486

5,608
29,88435,492
267,9380.09
400,765
133.28130,452
43.38
2,811
0.90
20,737

5,135
24,63329,768244,347
0.08
386,950132.06
123,172
42.04
2,914
0.99
26,5462022/22022/8* Each figures before 2020/2 are simply adding up the values of the former Japan Retail Fund Investment Corporation and the former MCUBS MidCity Investment Corporation.

10.9

Percentage of renewable energy consumption to the entire portfolio electricity consumption (%)

Governance

Masahiko Nishida
Executive Director

Attendance at Officers Meetings

2022/213 meetings*1(100%)

2022/816 meetings(100%)

11.5

Masaharu Usuki
Supervisory Director

2022/213 meetings(100%)

Supervisory Director

2022/816 meetings(100%)

2022/2

6 meetings*2(100%)

2022/816 meetings(100%)*2 Mr. Osamu Ito was appointed as Supervisory Director in November 2021.

See JMF website

SocialGovernanceCompliance training(times)Number of improper conduct/corruption-related cases exposed

(times)

Improper conduct/corruption-related fines, penalties, and settlement costs

Total number of employees*1

Other thanfull-time
employees

Total workforce*1

(%)

Diversity of employees*1

(%)

Women in managerial posts*1

(%)

(yen)

(times)(yen)

2020/3400
002021/3400
002022/3

4
0
0
0
0

Men

Men

Women
Men

Women

Women
Under 30 years old

30 to 50 years old

50 years old or older
Men

Number of new hires 
*2

Women

Percentage of New hires*2

(%)

Rate of taking childcare leave*2

(%)

Training attendance rate*1, *4

(%)

Health checkup rate*2

(%)

(%)

Men

Women
Men

Women
Men

Women

Satisfaction survey response rate (%)

Results of In-house research*1 Excludes executives and temporary staff*3 As of December 31, 2020,

J

Data

41

I

2020/3

87
55
2
0
61.8
38.2
25.7*34.0*380.5*315.5*3－－89.5*310.5*3
－
－
－
－
64.7
100.0
94.0

2021/3

93
55
2
0
63.3
36.7
17.2
4.0
80.0
16.0
16
3
84.2
15.8
50.0

No eligible employees

90.6
95.9
68.5
100.0
93.0

ESG Data I

2022/3

97
55
3
0
64.5
35.5
12.1
5.2
74.2
20.6
14
3
82.4
17.6
0.0
100.0
88.0
87.0
78.3
100.0
94.5

*2 Excludes executives, seconded employees, and temporary staff*4 Excluding internal training by our departments

Employees 154 staff members (excluding part-time directors, seconded employees, and temporary staff)
ARES certified masterfor SASB Index.

Number of improper conduct/corruption-related cases that resulted in punishment/dismissal

Full-time
employees

Real-estate transaction specialists

for GRI Guidelines.

Total amount of political donationsSocialRate of taking paid leave*1

Osamu Ito

*1 Mr. Masahiko Nishida attended the Officers Meetings 7 times as a Supervisory Director, and 6 times as an Executive Director.
See JMF website

Environment

J

J

Water use per unit 

Key Issues and Initiatives

First-class architects

68
89
9

Real estate appraisers

11

Lawyer1

CMA
CPA

Tax accountants
MBA*As of December 31, 2022

4
6
3
1

Data

Basic Information

ESG Data

GHG emissions

Scope 1 (direct emissions) （t-CO ）2

Scope 2 (indirect emissions)（t-CO ）2

Scope 1+2

（t-CO2）Per unit(t-CO2/㎡)

Scope 3（t-CO2）

Energy consumption

(MWh)Energy consumption per unit (kWh/㎡)
Fuel/gas consumption

(MWh)Fuel/gas consumption per unit (kWh/㎡)
Water use per unit(Thousand ㎥)(㎥/㎡)

Volume of non-hazardous waste

(t)

Recycling rate

(%)

Volume of hazardous waste(t)

2015/122016/122018/1

2019/1

2020/12021/12022/1

218
7,588
7,806
－
0.11
138,913194.35
7,633
10.68
363
0.51
2,376
210
－

588
8,337
8,925
－
0.09
125,801
177.46
12,435
17.54
362
0.51
3,505
94
33.2

429
6,599
7,028
－
0.08
139,627
159.02
12,997
14.80
543
0.61
5,827
105
31.6

0
2,694
2,694
－
0.08
146,045157.7912,977
14.02
549
0.59
6,403
104
32.1

0
2,564
2,564
－
0.07
151,381134.05
11,241
9.95
532
0.47
5,422
33
45.2

9,133
11,412
20,545
117,7110.11
190,541147.9465,296
50.70
656
0.51
6,176
163
45.1

25,75816,28242,040140,7240.12
236,215156.70163,548108.50
916
0.61
7,676
293
41.9

Switching to electricity procured from renewable energy in IIF’s directly managed properties* Excludes properties where tenants manage electricity.

Governance

Kumi Honda

Executive Director

Attendance at Officers Meetings

2022/72023/1

2 properties (approx.80%)

Yutaka Usami

Supervisory Director

2022/72022/12023/1

Koki OhiraSupervisory Director

2022/72023/113 meetings 12 meetings 13 meetings 12 meetings 12 meetings 12 meetings(100%)(100%)(100%)(100%)(92%)(100%)* Mr. Fumito Bansho was appointed as Supervisory Director in October 2022.
See IIF website

See IIF website

Sustainability Strategy

Key Issues and Initiatives

Environment

SocialGovernance

J

Data

42

I

J

Environment

Water UseTop Commitment

2022/73 properties (approx.94%)

Fumito Bansho
Supervisory Director

2022/7－*2023/1

6 meetings(100%)

Compliance training(times)Number of improper conduct/corruption-related cases exposed

(times)Number of improper conduct/corruption-related cases that resulted in punishment/dismissal
Improper conduct/corruption-related fines, penalties, and settlement costs

Social(yen)(times)(yen)

2020/3400
002021/3400
002022/340
0
00

Full-time
employees

Total number of employees*1

Other thanfull-time
employees

Total workforce*1

(%)

Diversity of employees*1

(%)

Women in managerial posts*1

(%)

(%)

Rate of taking childcare leave*2

(%)

Training attendance rate*1, *4

(%)

Health checkup rate*2

(%)

(%)

Satisfaction survey response rate (%)

Results of In-house research

Women
Men

Women

Under 30 years old

30 to 50 years old

50 years old or older
Women

Percentage of New hires*2

Rate of taking paid leave*1

Men

Men

Women

Men

Number of new hires 
*2

Men

Women
Men

Women
Men

Women

2020/3

87
55
2
0
61.8
38.2
25.7*34.0*380.5*315.5*3－－89.5*310.5*3
－
－
－
－
64.7
100.0
94.0

2021/3

93
55
2
0
63.3
36.7
17.2
4.0
80.0
16.0
16
3
84.2
15.8
50.0

No eligible employees

90.6
95.9
68.5
100.0
93.0

2022/3

97
55
3
0
64.5
35.5
12.1
5.2
74.2
20.6
14
3
82.4
17.6
0.0
100.0
88.0
87.0
78.3
100.0
94.5

*1 Excludes executives and temporary staff *2 Excludes executives, seconded employees, and temporary staff*3 As of December 31, 2020, *4 Excluding internal training by our departments

Employees 154 staff members (excluding part-time directors, seconded employees, and temporary staff)
ARES certified masterfor SASB Index.

Total amount of political donationsI

Real-estate transaction specialists

for GRI Guidelines.

ESG Data I

First-class architects

68
89
9

Real estate appraisers

11

Lawyer1

CMA
CPA

Tax accountants
MBA*As of December 31, 2022

4
6
3
1

Disclaimer• This document may contain information such as statements on future performance, plans, management targets, and strategies. Such statements with regard to the future arebased on current hypotheses and assumptions about future events and trends of the business environment. However, these hypotheses and assumptions are not necessarily
correct. Actual results may vary significantly due to various factors.

• Unless otherwise specified, this document was created based on Japanese generally accepted accounting principles.

• Japan Metropolitan Fund Investment Corporation (JMF), Industrial & Infrastructure Fund Investment Corporation (IIF), and KJR Management (KJRM) shall not be liable for any
errors, inaccuracies, loss or damage, or for any actions taken in reliance thereon, or undertake any obligation to publicly update the information contained in this document
after the publication date thereof.

Asset Management Company: KJR Management

Building Lots and Buildings Transaction Business License: Governor of Tokyo (5) No. 79372

Discretionary Transaction Agent License: Minister of Land, Infrastructure, Transport and Tourism, Certification No.58
Financial Instruments Business Operators: Kanto Local Finance Bureau(FIBO) No.403
Member of The Investment Trusts Association, Japan
Member of Japan Investment Advisers Association

Member of Type II Financial Instruments Firms Association

Editorial Policy

KJR Management and Japan Metropolitan Fund Investment Corporation and Industrial & Infrastructure Fund Investment Corporation under management are actively engaged inpractices that promote sustainability within the J-REIT industry, information on which they disclose to stakeholders. For this term, information pertaining to sustainability
published on the websites of each management company and investment corporations has been consolidated in this document, ESG Report 2023, in order to provide a clear

explanation of our initiatives. ESG Report 2023 serves as an informative tool for stakeholders with a high level of interest in sustainability and therefore makes reference to GRI
standards and SASB standards (real estate). Going forward, we hope to gather opinions from those who read this report in order to further improve subsequent reports. In
addition, we hope that this report can be used as an effective means to maintain a dialogue with our stakeholders.
Month of issuance: February 2023
The GRI Guidelines

Contact Informationand SASB Index

Frequency of updates: Once annually

Reference guidelines: GRI standards

will be posted at the end of March 2023 on website.

Tel: +81-3-5293-7000 (main)

E-mail: contact-us@kjrm.co.jp

SASB standards (real estate)Tokyo Building
7-3, Marunouchi 2-chome, Chiyoda-ku
Tokyo 100-6420, Japan“Always Create New Value for People, the Community, and the World”

Through real estate investment management, we create new demand in our society and new value that exceed people’s expectations.

https://www.kjrm.co.jp/english/