Japan Hotel REIT Investment Corporation (TSE: 8985)

2024 ESG ReportJapan Hotel REIT Investment Corporation
Japan Hotel REIT Advisors Co., Ltd.
https://www.jhrth.co.jp/en/
March 29, 2024

Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Contents
Editorial Policy
Message from Management
Corporate Profile

Sustainability Management

Materiality

1
2
2

Sustainability Policy
Sustainability Promotion System
ESG Assessment by Third-Party Institutions

3
4
5

JHR's Materiality
Process to Define Materiality

7
8

Stakeholder Engagement

Initiatives for Environment

Initiatives for Society

Governance

Editorial Policy
Japan Hotel REIT Investment Corporation (JHR) and its asset managementcompany Japan Hotel REIT Advisors Co., Ltd. (JHRA) are promoting initiatives
relating to the environment (E), society (S), and governance (G) with the aimof improving unitholder value in the medium to long term. This report has
been published for the purpose of reporting on the approach to ESG adopted
by JHR and JHRA and related initiatives to investors and other stakeholders.

9

Basic Policy
Environmental Target
Environmental Performance Data
Actual Cases of Initiatives for Environment
Initiatives for Climate Change

10
10
10
11
14

Basic Policy
Initiatives for Unitholders
Initiatives for Local Communities/Contribution to
Regional Revitalization (Cooperation with Lessees, etc.)
Initiatives for Hotels
Initiatives for Employees

19
19
19

Corporate GovernanceCompliance
Risk Management

25
29
32

Basic Policy
Green Finance Framework
Evaluation by External Organization
Basic Policy
Compliance of Eligible Criteria of Green Bonds
Use of Procured Funds
Management of Procured Funds
Reporting
Summary of the Issued Green Bonds

34
34
35
36
36
36
36
36
37

Period Covered by Report
This report is based on the fiscal year from 1 January 2022 to 31 December
2022, but it also includes details relating to other fiscal years.

Guidelines, etc. Used as Reference
GRI (Global Reporting Initiative) Standard

20
21

Inquiries about This ReportJapan Hotel REIT Advisors Co., Ltd.
Ebisu Neonato 4F, 4-1-18 Ebisu, Shibuya-ku, Tokyo

Green FinanceGreen Bonds

GRI Standards Comparison Table
Disclaimer

Phone: 03-6422-0530
URL: https://www.jhrth.co.jp/en/

38
43

ESG REPORT

1

Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

Governance

Message from Management

Corporate Profile

JHR's Sustainability Approach

Investment Corporation

Japan Hotel REIT Investment Corporation (JHR) and Japan Hotel REIT Advisors(JHRA), believing that sound management which enabling us to co-exist inharmony with society and the environment will contribute to improve
unitholder value over the medium to long term, are making efforts to enhancesustainability through consideration of ESG (Environment, Social, &Governance) issues.
JHR and JHRA established a Sustainability Policy in December 2017 and are
pursuing a series of measures relating to ESG, including reduction of ourenvironmental impact, consideration of all our stakeholders, etc.
In December 2021, in order to further enhance our ESG initiatives, we defined
our materiality and are promoting measures to address various issues.
Moreover, we believe that appropriate disclosure of these initiatives andbuilding a relationship of trust with our stakeholders will lead to JHR's growthover the medium to long term.

Executive Director

President & CEO

Japan Hotel REIT Investment Corporation

Japan Hotel REIT Advisors Co., Ltd.

Kaname Masuda

Hiroyuki Aoki

Green FinanceGreen Bonds

GRI Standards
Disclaimer

Corporate NameJapan Hotel REIT Investment Corporation

Location

Ebisu Neonato 4F, 4-1-18, Ebisu, Shibuya-ku, Tokyo

Representative

Kaname Masuda, Executive Director

Listing Date

June 14, 2006

Fiscal Period

12 months from January 1st through the end of December

Contact

Japan Hotel REIT Advisors Co., Ltd.

Asset Management Company
Company NameJapan Hotel REIT Advisors Co., Ltd.

Location

Ebisu Neonato 4F, 4-1-18 Ebisu, Shibuya-ku, Tokyo

Representative

Hiroyuki Aoki, President & CEO

Establishment

August 10, 2004

Capital

JPY300MM

Shareholders

SCJ One (S) Pte. Ltd.(*)
Kyoritsu Maintenance Co., Ltd.
ORIX Corporation

87.6%
10.3%
2.1%

Building Lots and Buildings Transaction Business Operator,
Governor of Tokyo (4) No. 83613
Discretionary Transaction Agent by Minister of Land,
Registration and Infrastructure, Transport and Tourism No. 38
LicensesFinancial Instruments Business Operator, Director-Generalof Kanto Local Finance Bureau No. 334
Member of The Investment Trusts Association, Japan
Member of The Japan Investment Advisers Association(*) SCJ One (S) Pte. Ltd. is a corporation belonging to SC Capital Partners Group.

ESG REPORT

2

Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Sustainability Management
Sustainability Policy●Monitoring and improvement of environmental performance in our●Initiatives for our officers and employees

portfolio

We establish work environment that allows diverse ways of working with

We promote monitoring environmental performance such as energy

work-life balance into consideration. We also consistently provide

consumption, etc. in our portfolio. Also, we share our goals with hotel

opportunities of professional education and training, with the aim to improve

lessees and operators, and strive to continuously improve environmental

abilities and skills of our employees and raise awareness on sustainability.

performance through optimizing operations and management as well as
through facility renovation, etc. Furthermore, we seek assessment from●Compliance as corporate citizens

third-party institutions where appropriate.

We comply with related laws and regulations as well as social norms, etc.

We take environmental risks into consideration to make investment decisions

and promote ethical and sincere business activities. Additionally, we strive toand to monitor operations of our portfolio.

reduce governance risks through respecting fundamental human rights at
our business and through establishing a proper compliance system.

●Promotion of comfortable, healthy, secure and safe hotels
We care safety, health and barrier-free access etc. of our hotels and●Improvement of transparency and engagement with our stakeholders

promote initiatives to have stronger resilience against natural disaster, etc.

We disclose financial information as well as ESG related information in a

We take safety, health and well-being factors into consideration upontimely and appropriate manner. We will sincerely listen to voices andmaking investment decisions and monitoring operations of hotels in our

opinions from our stakeholders through interactive communication, andportfolio.

utilize them to improve our initiatives.

●Promotion of ESG in value chains
We ask our hotels to understand and to cooperate on sustainability initiatives.
At the same time, we promote procurement of products and services withenvironmental and social considerations.
●Consideration for and contribution to local communities
We strive to contribute to the sustainable development of local community
through cooperation with hotel lessees and operators as well as
communication and collaboration with local residents and local governments
in surrounding communities where hotels are located.

ESG REPORT

3

Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Sustainability Management
Sustainability Promotion System
In order to carry out initiatives based on the Sustainability Policy in an ongoing,organized manner, JHRA has established ESG Promotion Committee anddeveloped the system shown below.

ESG Promotion Committee consist of management members and officers andemployees chosen from various groups involved in promoting ESG, with the
President & CEO acting as the Chief Executive and the Board Director & Headof Finance and Planning Division acting as the Operating Officer.
System Overview

Annual Schedule

ESG Promotion Committee
Contents

Members●Setting specific targets,considering measures●Assessing status of progress●Holding sustainability training

Frequency●In principle, held once
on quarterly basis●Proposing targets,considering measures●Verification of
implementation status

Frequency●As needed

Reporting

JHR Boardof
Directors

Decisionmaking andexecution
based on
JHRA'sapprovingauthorities

Jul.－Sep.

Oct.－Dec.

Check
Progress

Check
Progress

Check
Progress

Evaluating
implementation/
Setting targets fornext year

Frequency of Meetings and Trainings

Members●Operating Officer:
Board Director & Head of Financeand Planning Division●Compliance Office●Personnel & Administration Group●Planning Group●Public REIT Group●Finance Group●Accounting Group

ESG
Promotion
Committee

Apr.－Jun.

Implementation

Measures●Chief Executive:
President & CEO●Operating Officer:
Board Director & Head of Financeand Planning Division●Management members●ESG team members

ESG Team Meetings
Contents

Jan.－Mar.

Sharing

All officers
andemployees

FY2020

FY2021

FY2022

FY2023

ESG
Promotion
Committee

2

4

4

2

Trainings for
Officers andEmployees

1

3

3

1

ESG REPORT

4

Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Sustainability Management
ESG Assessment by Third-party Institutions
Acquisition of GRESB Real Estate Assessment

Acquisition of SMBC Environmental Assessment

The GRESB is an annual benchmarking program to evaluate Environment,"SMBC Environmental Assessment Loan" is a loan

Social and Governance (ESG) considerations of property companies and real

which SMBC set condition of loan based on

estate funds, established in 2009 primarily by major European pension fundassessment on status of environmental considerationsgroups which took the lead in Principles for Responsible Investment (PRI). The

by the corporation based on environmental

GRESB Real Estate Assessment is distinguished by its comprehensive

assessment standards developed independently by

evaluation of initiatives for sustainability of property companies, REITs and real

SMBC and the Japan Research Institute, Limited.

estate funds, not of individual properties.

JHR has received an "A" grade under the assessment

JHR participated in GRESB Real Estate

due to initiatives for environmental considerations.

Assessment from 2018 and has acquired

This grade is obtained in recognition of our"Green Star" for six consecutive years.

implementation of excellent initiatives for

JHR also selected for "Sector Leader" of
Asian Hotel Sector for four consecutive
years since 2020 as a participant withthe highest result.

environmental considerations in asset management.
In particular, the following factors are highly rated in the assessment.
• JHR and JHRA have formulated a Sustainability Policy which clearly states
their position of considering the environment and stakeholders such as local
communities in their asset management.
• As well as conversion to the LEDs in lightning fixtures and introduction ofwater-saving devices in our major hotels, JHR promotes initiatives to reduce
environmental impact alongside with lessees, including adding the Green
Lease clause in the fixed term lease agreements with the HMJ Group hotels(*),
the major hotel group of JHR.
• JHR actively promotes to acquire third-party certifications such as BELS
(Building-Housing Energy-efficiency Labeling System) to confirm credibility
and objectivity of initiatives for reduction of environmental impact inproperties owned by JHR.
(*) HMJ refers to Hotel Management Japan Co., Ltd. (a corporation in which SC J-Holdings Pte. Ltd. indirectly
holds 100% of the issued shares), and HMJ Group refers to HMJ and its subsidiaries (corporations in which
HMJ hold more than 50% of the issued shares). The same shall apply hereinafter.

ESG REPORT

5

Sustainability
Management

Stakeholder
Engagement

Materiality

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Sustainability Management
Timeline of Achievements
2017 December Establishment of Sustainability Policy

2018 FebruaryMarch2021 OctoberTwo properties—Hotel Nikko Alivila
and Mercure Okinawa Naha—became
the first J-REIT-owned hotels(*1) toacquire BELS(*2) evaluation
Received an "A" rating indicating
excellent environmentally friendly
management, in the SMBC
Environmental Assessment Loan(*3)

November JHRA stated its expression of support for the TCFD(*6) recommendations
DecemberHotel Nikko Alivila

September Participated in GRESB Real Estate

Assessment for the first time
Acquired "4-star" in GRESB rating2019 July

2020 April

Selected as "Sector Leader" of Asian
Hotel Sector
As a result of construction works tosave energy which carried out by
using procured funds through theissuing of green bonds, the Oriental
Hotel Fukuoka Hakata Stationacquired CASBEE "B+ (good)"building certification

2022 August

Okinawa Marriott
Resort & Spa(*4)

Identified JHR's materialities (key issues)
Released Initiatives for four disclosure themes recommended by TCFD

October

Acquired "4-star" in GRESB rating
Selected as "Sector Leader" of Asian Hotel Sector

2023 February

Formulated GHG reduction target(*7)(30% reduction by 2050 compared to FY2017(*8))

MarchReleased the ESG report(*9)

October

Acquired "4-star" in GRESB rating
Selected as "Sector Leader" of Asian Hotel Sector

2024 January
Oriental Hotel
Fukuoka Hakata Station

The Hilton Tokyo Odaiba became thefirst existing hotel to acquire a
CASBEE(*5) "B+ (good)" building
certification

November Acquired "4-star" in GRESB rating

2021 June

Mercure Okinawa Naha

Issued Hotel Green Bonds (nickname)and used the procured funds to carryout construction works to saveenergy at the hotels shown to theright

September Acquired "3-star" in GRESB rating

Acquired "4-star" in GRESB rating
Selected as "Sector Leader" of Asian Hotel Sector

February

Formulated the Green Finance Framework: Overall Evaluation of Green 1 (F)UAN kanazawa acquired BELS
evaluation

UAN kanazawa

MarchHilton Tokyo Odaiba

Oriental Hotel
Fukuoka Hakata Station

Borrowed Green Loans under the Green Finance Framework(*1) Based on research by JHRA based on public information.
(*2) BELS (Building-Housing Energy-Efficiency Labeling System) is a display system of energy conservation performanceof a building set by Ministry of Land, Infrastructure, Transport and Tourism.
(*3) "SMBC Environmental Assessment Loan" is a loan which SMBC set condition of loan based on assessment on statusof environmental considerations by the corporation based on environmental assessment standards developed
independently by SMBC and the Japan Research Institute, Limited.
(*4) Name of properties is as of the date when the construction works were implemented.
(*5) CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a method for evaluating and rating
the environmental performance of buildings. It is a system that comprehensively evaluates the quality of a building,including environmental considerations such as energy conservation, use of materials and equipment with low
environmental impact, as well as indoor comfort and landscaping.
(*6) TCFD is an abbreviation for Task Force on Climate-related Financial Disclosures.
(*7) Properties owned by JHR are managed by hotel lessees, etc. GHG emissions of JHR fall under Scope 3, Category 13,
Leased Assets (Downstream).
(*8) The GHG emissions (GHG emissions intensity) for FY2017 (Baseline fiscal year, April 2017 to March 2018) is 0.135(t-CO2/㎡)(*9) JHR published its first ESG report in March 2023 and plans to release subsequent reports annually every March.

ESG REPORT

6

Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Materiality
JHR's Materiality

Materiality

Believing that sound management enabling us to co-exist in harmony with society

Related SDGs(*)

Communication with • Building favorable relationships with all
stakeholders suchstakeholders, including unitholders, hotel
as localusers (guests), hotel lessees, hotel operators,
communities
business partners including property
management companies, local communities,
and officers and employees of JHRA
• Conducting tenant satisfaction surveys
continuously

and the environment will contribute to improved unitholder value over the medium
to long term, JHR is making efforts to enhance sustainability through considerationof ESG (Environment, Social, & Governance) issues.
From the dual standpoints of stakeholders'
expectations and impact on our business,

Ensuring safety/
peace of mind andpromoting wellbeing at hotels

JHR has defined our materiality (key issues),
in terms of ESG-related issues that are ofparticular importance to us, as shown below.
Moreover, we will revise the materiality as

Overview/Goals• Considering safety, health, well-being andbarrier-free access, etc. in hotels• Promoting initiatives to increase resilience tonatural disasters, etc.
• Consider from aspect of health, well-being,safety, and welfare when making investment
decisions and monitoring operations of hotels

Socialneeded, based on the changes in social
issues and needs due to change of the times.
Materiality
Tackling climatechangeOverview/Goals

Creating pleasant
workplaces

Related SDGs(*)• Continuously providing opportunities for
professional education and training with theaim of improving skills/abilities andenhancing sustainability-related awareness• Tracking environmental performance, such asenergy consumption• Continuous improvement of environmental
performance• Reducing energy-derived CO2 emissions
intensity by at least 1% per year for 5 years(term of first plan: April 2018 to March 2023)• Promoting acquisition of assessments (green
building certifications, etc.) by third-party
institutions

Implementing
thorough corporate
governance

Environment
Reducing water
consumption andwaste• Reducing consumption of clean water byusing well water and reusing gray water asrecycled water• Promoting waste reduction and recycling• Establishing a work environment that enables
diverse working styles with work-life balancein mind• Complying not just with laws and regulations
but with social norms• Promoting ethical and honest businesspractices• Reducing governance risks by preparation of
a compliance system

Governance
Proactive
information
disclosure anddialogue• Timely, appropriate disclosure of not justfinancial information but also ESG-related
information• Two-way communication with stakeholders inorder to use their feedback/opinions in
improving various initiatives(*) The SDGs (an acronym of Sustainable Development Goals) are international goals aimed at creating a better and more sustainable world by 2030. The SDGs were adopted at a U.N. Summit in September 2015.
They consist of 17 goals and 169 targets.

ESG REPORT

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Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Materiality
Process to Define Materiality

JHR's Materiality Matrix

Step 1
Identification of socially important issues
Extensively identifying socially important issues
which expected by stakeholders through referring to
global ESG assessments and frameworks such as the

SASB Standards, GRI Standards, and Sustainable
Development Goals (SDGs), as well as the cases of
initiatives by other J-REITs, etc.

Step 2

Assessment/prioritization of socially
important issues (creation of matrix)
Assessing and analyzing the identified socially
important issues in terms of their importance tostakeholders and their impact to JHR, thenprioritizing them.

Step 3
Management-level discussion/validation/
definition of materiality
Validating the prioritized social issues at ESG
Promotion Meetings and defining materiality.
Reporting it to JHR's Board of Directors.

ESG REPORT

8

Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Stakeholder Engagement
JHR's business activities are carried out in collaboration

Approach to Stakeholders

with many stakeholders, and we recognize that fulfillingthe social responsibility required to our company isessential to conduct our sustainable business activities.
JHR and JHRA build favorable relationships throughcommunication with their various stakeholders,
including unitholders, hotel users (guests), hotel lessees,
hotel operators, business partners including property
managers, local communities, and officers andemployees of JHRA, and fulfill the social obligations
expected by each of them.

ESG REPORT

9

Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

Green FinanceGreen Bonds

Governance

GRI Standards
Disclaimer

Initiatives for Environment
Basic Policy

Environmental Performance Data

In response to effective usage of limited resources and aggravation of climate

April 2017 toMarch 2018(base year)

April 2020 toMarch 2021

April 2021 toMarch 2022

April 2022 toMarch 2023㎡

675,134.95

774,639.82

771,421.17

766,980.61%

100.0%

100.0%

100.0%

100.0%

MWh

272,863

191,943

215,826

248,349

MWh/㎡

0.40430.24780.27980.3238

MWh

－

－

－

7,669

%

100.0%

100.0%

100.0%

100.0%

tCO2

91,28662,253

68,63374,933

Unitchange issue, JHR and JHRA work on monitoring environmental performance,such as energy consumption, CO2 emissions, water consumption and amount

Total floor area
Data coverage ratioof waste generated, etc. and strive to improve them continuously.
EnergyEnvironmental Target
We have set targets to reduce GHG emissions intensity(*1) for long term until

Emissions intensity
Renewable energy
included above

EmissionsCO2emissions intensity) compared to FY2017(*2).
• To monitor and manage progress towards long-term target and tocomprehend the causes of variance in emissions at the "ESG Promotion

Usage
Data coverage ratio

2050.
• 30% reduction of GHG emissions per floor area in our portfolio (GHG

Usage

Water

Committee" of JHRA.

tCO2/㎡

0.13530.08040.08900.0977

Reduction ratecompared to base year

%

－

40.6%

34.2%

27.8%

Data coverage ratio%

100.0%

100.0%

100.0%

100.0%

2,683

1,364

1,570

2,175

0.00400.00180.00200.0028Emissions intensity

Usage
Emissions intensity(*1) The GHG emissions of JHR fall under Scope 3 emissions, Category 13: leased assets (downstream) because
the hotels in our portfolio are managed by lessees of hotels, etc.
(*2) The GHG emissions intensity for the baseline year, FY2017 (April 2017 to March 2018) was 0.135 (t-CO2/㎡).
Waste

thousand㎥
thousand㎥/㎥

Data coverage ratio

%

54.4%

67.8%

71.0%

71.4%

Emissions

t

3,743

3,111

3,179

4,461

t/㎡

0.01020.00590.00580.0081

Recycled amount

t

1,095

1,197

1,217

1,550

Recycle ratio

%

29.3%

38.5%

38.3%

34.7%

－

－

Verification
obtained

Verification
obtained

Verification
to beobtained

Emissions intensity

Independent third-party assurance report(*3) The data coverage ratio represents the proportion of the total floor space of properties for which data could
be obtained compared to the total floor space of properties owned during the subject period. The floor
space of properties acquired or sold during the subject period is calculated based on the proportionally
distributed floor space corresponding to the properties owned.
(*4) Properties owned by JHR are managed by hotel lessees, etc. and the above data is based on the data
provided by hotel lessees, etc.
(*5) Amount of CO2 emissions are calculated based on "Institution of calculation, reporting and disclosure ofamount of emissions by greenhouse effect gas" established by Ministry of the Environment.
(*6) Numbers may change due to revision of aggregation method.
(*7) The data for waste for the base year is a reference value compiled by the Asset Management Company.

ESG REPORT

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Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Initiatives for Environment
Actual Cases of Initiatives for Environment●Switching to LED lighting●Green Leases

We are striving to reduce electricity consumption by switching fromIn order to promote environmentally friendly initiatives in our portfolio, weconventional lighting to LED lighting at some of the hotels in our portfolio.

have signed green leases provisions such as providing energy data with thelessees of HMJ Group hotels, which is one of our major hotel groups. JHR
analyzes data of energy, etc. provided by hotels and considers renovation to
improve environmental performance and works to optimize operation offacilities management. In case of HMJ Group hotels, they can reduce utility
expenses through improvement of environmental performance.
Achievement of green lease provision (end of FY2023)
Oriental Hotel Hiroshima

Oriental Hotel Okinawa Resort & Spa

No. of Properties

Proportion of
Total Floor Area

20

60.9%

●Introduction of water-saving devices

We strive to reduce water consumption through installing water-saving
devices for a restroom, a tap in the kitchen, etc. to adjust water use amountproperly.

●Green Building Certifications by third-party institutions
In order to confirm the credibility and objectivity of our initiatives aimed at
reducing our environmental impact, we have obtained green building●Renewal of air conditioners
We reduce electricity consumption by installing inverter control devices on
air conditioners for better operational efficiency.
●Reuse of water
Several of our hotels reduce clean water consumption by using well waterinstead. Some of our hotels in Okinawa are working on to reduce clean

certifications from third-party institutions.
Achievement of certification from third-party institutions
Fiscal Year
No. of properties newly
acquired certifications
Cumulative ratio in portfolio(based on total floor area)

FY2020

FY2021

FY2022

FY2023

1

1

－

－

14.7%

17.2%

17.2%

16.5%

water consumption by reusing gray water as recycled water.

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Sustainability
Management

Materiality

Stakeholder
Engagement

Initiatives forEnvironment

Initiatives forSociety

Green FinanceGreen Bonds

Governance

GRI Standards
Disclaimer

Initiatives for Environment■CASBEE Certification for Buildings■BELS (Building-Housing Energy-efficiency Labeling System) Evaluation"Comprehensive Assessment System for Built Environment Efficiency (CASBEE)" is amethod for evaluating and rating the environmental performance of buildings. It is asystem to comprehensively evaluate the quality of buildings, including interior comfort andlandscape considerations, as well as environmental considerations such as energy
conservation and the use of materials and equipment with low environmental loads.
CASBEE for Buildings (Existing Buildings) is an evaluation method which targets buildings
with an operational record of at least one year after completion, and assesses buildings
based on annual performance of operations, deterioration of buildings and interior
environments. Assessment results by CASBEE are indicated in a scale with the following
five ranks: "S: Superior," "A: Very Good," "B+: Good," "B-: Slightly Poor," and "C: Poor."
See here for details of CASBEE
https://www.ibec.or.jp/CASBEE/english/index.htm

Oriental Hotel Fukuoka Hakata Station
Location
Acreage

4-23, Hakataeki Chuogai,
Hakata-ku, Fukuoka city,
Fukuoka
2,163.42 ㎡

Total Floor
Space

18,105.42 ㎡

Structures
and Stories

SRC/12 stories above groundwith 3 stories below ground

Building
Completion

July 1985

CASBEE for
Buildings(Existing
Buildings)
Rank B+ (Good)

Hilton Tokyo Odaiba"BELS" is a public valuation and display system under a guideline by the Ministry of Land,
Infrastructure, Transport and Tourism to evaluate the energy conservation performance ofeach building, which was launched in April 2014. A third-party institution verifies theenergy performance of a building by evaluating its primary energy consumption and labels
the performance of both new and existing buildings. The evaluation result is graded on fivescales based on energy performance (from one star "★" to five stars "★★★★★.")
See here for details of BELS (Japanese only)
https://www.hyoukakyoukai.or.jp/bels/info.html

Hotel Nikko Alivila
Location

Nakagami-gun, Okinawa

Acreage

65,850.05 ㎡

Total Floor
Space

38,024.98 ㎡

Structures
and Stories

SRC/10 stories above groundwith 1 story below ground

Building
Completion

April 1994

Mercure Okinawa Naha
Location

Naha city, Okinawa

Acreage

2,860.69 ㎡

Total Floor
Space

10,884.25 ㎡

Location

1-9-1, Daiba, Minato-ku,
TokyoAcreage

18,825.30 ㎡

Structures
and Stories

RC/14 stories above groundTotal Floor
Space

64,907.76 ㎡

Building
Completion

August 2009

Structures
and Stories

S/SRC with flat roof,
14 stories above groundand 1 story below ground

Building
Completion

January 1996

CASBEE for
Buildings(Existing
Buildings)
Rank B+ (Good)

Evaluation
Agent:
JAPAN ERI
CO.,LTD.

Evaluation
Agent:
JAPAN ERI
CO.,LTD.

UAN kanazawa
Location

Kanazawa city, Ishikawa

Acreage729.91 ㎡

Total Floor
Space

2,606.85 ㎡

Structures
and Stories

S with flat roof, 6 stories
above ground

Building
Completion

September 2017

Evaluation
Agent:
Center for Better
Living

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GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Initiatives for Environment●Investing in mixed-use buildings●Investing in urban redevelopment

We are investing in mixed-use facilities that fall within the scope of our asset
management, as stipulated in the Articles of Incorporation.
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)
High-rise hotel and office tower within
ACTIVE-INTER CITY HIROSHIMA, a mixeduse facility comprised of hotels, offices, andcommercial facilities located next to JR
Hiroshima Station.

Mercure Yokosuka
High-rise hotel within Bay Square Yokosuka
Ichibankan in Yokosuka city. Bay Square

We are investing in urban redevelopment projects.
Oriental Hotel Fukuoka Hakata Station
Hotel located next to the JR Hakata Station
Chikushi Exit rotary and connected to the
Hakata Station subway station via an

underground passage. In the vicinity of
Hakata Station, a station-front plaza
redevelopment project is under way, forwhich we carried out renovation work
including for a corridor extending from theunderground passage to the abovegroundentrance/exit.

Yokosuka Ichibankan is a landmark mixed-

used facility consist of hotel, Yokosuka Arts
Theatre, Yokosuka Industrial Community
Plaza, etc.

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Disclaimer

Initiatives for Environment
Initiatives for Climate Change
Our (JHR) Awareness of Climate Change
In 1992, "United Nations Framework Convention on Climate Change (hereinafter
called "Convention")," with the ultimate goal of stabilizing the concentration ofgreenhouse gases in the atmosphere was adopted, and it was agreed to takeaction against climate change worldwide. Based on the Convention, the Conferenceof the Parties to the United Nations Framework Convention on Climate Change(hereinafter called "COP"), was held every year since 1995. At COP 21 in 2015, all
196 countries, including developed and developing countries, which are membersof the Convention, adopted the "Paris Agreement", which sets a common reduction
target (strive to limit global warming to well below 2℃ and make additional effort
to limit it to 1.5℃). As a result, recognition and initiatives of tasks for climatechange became more concrete.
Japan has also been actively working on climate change issues and announced in2020 that Japan will reduce greenhouse gas emissions to virtually zero by 2050
(hereinafter called "Carbon Neutral Declaration") based on the Paris Agreement.
Carbon neutrality is also positioned as a basic principle in "Act on Promotion of
Global Warming Countermeasures," and it is expected to accelerate
decarbonization initiatives, investments, and innovation as well as to further
promote decarbonization initiatives utilizing renewable energy in local areas anddecarbonization management by companies.
JHR believes that the climate change action, which are being discussed as a global
initiative, are not restrictions on economic growth but are key to generate a major
shift in industrial structure and strong growth through drastically transforming the
economy and society, encouraging investment and improving productivity.
Therefore, JHR recognizes that properly identifying, assessing, and managing the"risks" and "opportunities" caused by climate change is essential to enhancing
business resilience and ensuring our sustainability, and has positioned action toclimate change as one of our materialities (key issues).

Expression of Support for the TCFD Recommendations
by the Asset Management Company
TCFD is the "Task Force on Climate-related Financial Disclosures" established by
the Financial Stability Board (FSB) in 2015 to encourage companies to disclose
appropriate information and to encourage investors and others to makeappropriate investment decisions, and recommended disclosure themes within theframework in its final report in 2017.
Based on the recognition that "climate change will cause dramatic changes in thenatural environment and social structure and is important issue that will have asignificant impact on the management of investment corporations," JHRA, which isasset management company of JHR, judged that it is important to promote
disclosure based on the TCFD recommendations and expressed its support for the
TCFD recommendations in November 2021.
At the same time, JHRA joined the TCFD Consortium, an organization of Japanesecompanies that support the TCFD recommendations.
Through the activities of the TCFD Consortium, JHRA promotes the study ofeffective information disclosure and initiatives to link the disclosed information toappropriate investment decisions by financial institutions, etc., while striving to
expand appropriate information disclosure of JHR.
<Disclosure framework of TCFD>
Recommended
Disclosure Themes

Description(Summary)

Governance

Strategy

Risk Management

Metrics and Targets

The organization's
governance aroundclimate-related risks
and opportunities

The actual andpotential impacts ofclimate-related risks
and opportunities on
the organization's
businesses, strategy,
and financial
planning

The processes usedby the organization
to identify, assess,and manage
climate-related risks

The metrics andtargets used toassess and manage
relevant climaterelated risks andopportunities

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Disclaimer

Initiatives for Environment
Initiatives for Four Disclosure Themes Recommended by TCFD
●Governance●Strategy

JHR has established the following governance structure to address climate-

In order to examine the impact of climate-related risks and opportunities on

related risks and opportunities.

the JHR's business, strategy and financial plan, we conducted scenario
analysis using the 1.5℃ and 4℃ scenarios. In the scenario analysis, we refer• The Chief Executive Officer for climate-related issues shall be the President,
who is the Chief Executive Officer for sustainability promotion.

to the Fifth Assessment Report published by the IPCC (Intergovernmental
Panel on Climate Change of the United Nations) and World Energy Outlook• The Executive Officer responsible for management of climate-related issues

2020 published by the IEA (International Energy Agency) to analyze theshall be the Managing Director, head of Finance and Planning Division, who

impact on JHR's business by measures such as Japanese government's

is the Executive Officer responsible for management of sustainability"Carbon Neutral Declaration" in mind for the transition of the social economy

promotion.

to decarbonization and the increasingly serious and frequent occurrence of• The ESG Promotion Committee shall consider specific goals and measures,

natural disasters due to the progress of climate change.

cooperate in implementing measures, and monitor progress for the
purpose of promoting sustainability, including environmental considerations.
The ESG Promotion Committee consists of the Chief Executive Officer, theExecutive Officer, management members and ESG Team Meeting members.
• The ESG Promotion Committee shall determine and implement mattersrelated to action to climate change, including identification and assessmentof climate change impacts, monitor progress in initiatives to manage risks
and opportunities, and the setting of metrics and targets.

Reference Scenarios
Scenario

Transition Risk

Physical Risk

1.5℃ Scenarios

NZE2050(IEA WEO2020)

RCP2.6(IPCC Fifth Assessment Report)

4℃ Scenarios

STEPS(IEA WEO2020)

RCP8.5(IPCC Fifth Assessment Report)(*) IEA is an abbreviation for International Energy Agency and IPCC is abbreviation for Intergovernmental
Panel on Climate Change.

For an overview of the responsible persons and the ESG Promotion
Committee above, please refer to "Sustainability Promotion System" within
Sustainability Management.

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Initiatives for Environment• Global Outlook based on Scenario Analysis

1.5℃ Scenarios:

4℃ Scenarios:

Various laws and regulations will be enforced to achieve a decarbonized society.

Enforcement of various laws and regulations to achieve a decarbonized society

Scenario with lower physical risks due to reduced greenhouse gas emissions

to be stagnant, and there is no significant change from the present state. The

compared to 4℃ scenarios, but higher transition risks toward a decarbonized

scenarios with high physical risk due to no reduction in greenhouse gas

society.

emissions compared to 1.5℃ scenarios, but low risk of transition toward adecarbonized society.

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Disclaimer

Initiatives for Environment• Climate-related risks and opportunities(short-, medium- and long-term climate-related risks andopportunities and financial impacts)<Financial Impact Based on Scenario Analysis>
Financial Impact
Risk and Opportunity
Factors

Category

Changes

1.5℃
4℃
Classification Short- Mid- Long- Short- Mid- Longterm term term term term term

For each of the 1.5℃ and 4℃ scenarios, we have evaluated the magnitude of
the financial impacts on JHR which will be caused by the identified risks andopportunities. For each scenario, we evaluated the impact in the years 2025
(short term), 2030 (medium term) and 2050 (long term) on a scale of large,

Transition Risks
Strengthening taxation on
GHG emissions through theintroduction of a carbon tax
Policy andLegal Risks Expansion and mandate oflabeling systems related toenergy efficiency andsustainability initiatives forbuildings

medium and small.
The accuracy of this assessment is not guaranteed, as it is a relative impact

Initiatives
andCountermeasures

Evolution and diffusion ofTechnology renewable energy andenergy-saving technologies

assessed based on a qualitative analysis and includes various factors such as
uncertain assumptions and unknown risks over the medium to long term. A
summary of the results is shown on the right table.
Marketand
Reputation

Increase in tax burden on GHG
emissions from properties undermanagement

Risks

Rise in expense of acquiring
environmental certification

Risks

Increase in expenses for
introducing new technology forequipment in properties undermanagement

Risks

Minor Minor

ModeMinor Minor Minor
rate

Deterioration of financing
conditions and increase infinancing costs due to delay inresponse to climate change

Risks

Minor Minor

ModeMinor Minor Minorrate• Switch to equipment with
ModeMajor Minor Minor Minor superior environmental
rate

performance• Consider introduction ofrenewable energy• Third-party verification ofMode- ModeMinor
Minor Minor Minor
aggregated environment data
rate rate(energy, GHG, water and waste)• Survey the latest technology andestimate the effect by introducing
equipment with the latest
technology•
Introduce water-saving devices,
Reduction of utility costs throughreduce sewage and wastewater
the introduction and replacement OpporMode- ModeMinor
Minor Minor Minor by introducing ECO-cleaning, andrate rateof equipment with high energytunities
use LED lights
saving performance• Disclose information with ESG
disclosure framework (TCFD,etc.). Set targets and implement
initiatives in line with government
OpporMode- ModeMinor
Minor Minor Minor policies
rate rate
tunities• Consider introduction ofrenewable energy• Promote energy saving throughDecrease in rents due toperiodic facility renovations andincreased costs for responding toconduct tenant satisfaction
the demands of hotel lessees, etc.
ModeMinor Minor Minor surveys
Risks Minor Minorrate
and hotel users (guests) and• Obtain environmental
deterioration of reputations due
certifications (SMBC ecoto non-response
certification, BELS and CASBEE)•
Issue green bonds, etc.
Increase market recognition andOpporMode- ModeMinor
Minor Minor Minor
market competitiveness as anrate rate
tunities
eco-friendly property

Changes in the investment
attitude and investment andIncrease funding volume andfinancing decisions oflower funding costs bymarket participants
responding to and appealing toinvestors who are concerned
about environmental issues

Change in demand fromhotel lessees and hotel
guests (avoiding properties
that are less climateresponsive)

Minor

Physical Risks

Physical
Risks

Chronic

Damage to property caused Increase in repair and insuranceby typhoons and other wind costs, loss of sales opportunities
damageand lower occupancy rates

Risks

Minor Minor Minor Minor Minor

Floods of nearby rivers and Increase in repair and insurance
rainfall inundation caused by costs, loss of sales opportunities
torrential rains, etc.
and lower occupancy rates

Risks• Prepare BCP manuals, andconduct disaster training• Mitigate damage by strengthening
Mode- facilities
Minor Minor Minor Minor Minor

Increase in demand for air
conditioning due to increase
Increase in utility costs, as wellin extreme weather
as maintenance and repair costs
conditions such as extremely
hot and cold weather

Risks

Minor Minor Minor Minor Minor

Moderate • Check hazard maps

rate

Mode- • Promote energy savings throughratefacility renovation(*) "Transition Risks" and "Physical Risks" are as follows.
"Transition Risks": Business impacts arising from the social economy's transition to a low-carbon, decarbonized economy- Policy and legal risks : Risks arising from tightening of regulations to promote decarbonization through policies and regulations- Technology risks: Risks associated with the development of new low-carbon and decarbonization technologies and their mainstreaming- Market risks: Risks related to markets, such as energy price volatility and changes in demand for services- Reputational risks: Risks associated with a deterioration of reputation among stakeholders, including customers, the public,
employees, and investors"Physical Risks": Business impacts resulting from progress of climate change and shifts from traditional climate patterns and phenomena- Acute physical risks : Risks arising from sudden weather phenomena such as typhoons and floods- Chronic physical risks : Risks arising from long-term changes in climate patterns that may cause rising sea level or chronic heat waves

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Initiatives for Environment●Risk management• Premise of risk management(Identification and assessment of risks)

At JHRA, which is entrusted with asset management of JHR's assets, ESG
Promotion Committee mainly plays a central role. ESG Promotion Committee
identifies and assess climate-related risks as well as consider and decide businessstrategies to manage risks and countermeasures as one of the ESG issues. The
processes of identification and assessment are as follows.
1. Under the direction of the executive officer responsible for management ofclimate-related issues, an internal ESG team (hereinafter called "ESG Team"),which formulates goals, studies measures, and monitors their implementation
status with respect to ESG-related issues, identifies and assess climate-relatedrisks to JHR.
2. ESG Team identifies and assess climate-related risks based on the classificationof "Transition risks" and "Physical risks" and report the results (progress) at the
ESG Promotion Committee.
3. ESG Promotion Committee deliberates on climate-related risks and prioritizedmeasures to manage climate-related risk which judged to be corresponded aspriority based on the results of the ESG Team's identification and assessment ofclimate-related risks, including their potential to materialize and their financial
impact and other factors. In addition, when climate-related opportunities arereported, the team prioritizes them within the business strategy.
For an overview of ESG Promotion Committee and ESG Team, please refer to"Sustainability Promotion System" within Sustainability Management.
• Management of climate-related risks
The processes for managing the assessed climate-related risks are as follows.
1. The executive officer responsible for management of climate-related issues will
instruct the ESG team to formulate an action for the key climate-related risk
factors that ESG Promotion Committee has decided to prioritize correspondence.
2. Depending on its content, the action formulated by ESG team will be decided andimplemented based on the necessary decision-making system within the asset
management company including ESG Promotion Committee.
3. Regarding the action decided on, ESG team summarizes the status of the
progress and the impact by the action, and reports to ESG Promotion Committee.
ESG Promotion Committee appropriately manages the risk through managementof progress of the action and provide instructions on the formulation of new
measures, etc. based on the report by ESG Team.
For an overview of Risk management, please refer to "Governance."●Metrics and targets
Based on the recognition that solving environmental issues represented by climatechange is one of the most important management issues for stable medium- andlong-term growth of the JHR, we are promoting low carbonization of our portfolio andenergy use efficiency through environmental and energy-saving measures.
• Greenhouse Gas (GHG) emissions
JHR has set a target to reduce GHG emissions intensity by 30% until 2050
(compared to FY2017) as a long-term goal.
Since the properties owned by JHR are managed by hotel lessees, etc. and their
GHG emissions fall under Scope 3, Category 13, Leased Assets (downstream), thesum of direct emissions from fuel consumption (Scope 1) at the properties andindirect emissions from consumption of purchased electricity, etc., which converted
final energy consumption into annual CO2 emissions (Scope 2) reported by thehotel lessees, etc. are used as GHG emissions for JHR.
The GHG emissions are calculated as follows.
1. Scope 1CO2 emissions are calculated by multiplying the calorific value of each type of fuel(gas, heavy oil, kerosene, etc.) burned on-site by the "carbon emission
conversion factor for each fuel type × 44/12."
2. Scope 2
Calculated only for electricity and the heat supplied from offsite sources (district
heating and cooling, etc.). CO2 emissions are calculated by multiplying eachconsumption by the emission factor for respective suppliers or by the emission
factor specified by the government.
• Others
JHR is striving to reduce GHG emissions and take the following environmental
measures and others at the properties it owns, aiming to build a portfolio that makereduction of environmental impact compatible with consideration of all stakeholders,
including hotel guests.
• We have a plan in place to eliminate the use of specified CFCs (CFC) andalternative CFCs (HCFC, HFC) in short period by identifying the refrigerants usedin the air-conditioning equipment of all properties owned by JHR.
• With regard to ODP and GWP, we aim to figure out the ODP and GWP of all
refrigerants used in our properties.
• Upon renewal of air conditioning equipment, we make selection of equipment withconsideration to ODP and GWP usage.

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Initiatives for Society
Basic Policy
JHR and JHRA endeavor to build sound relationships with our stakeholders
including unitholders, hotel guests, hotel lessees, hotel operators, business
partners including property managers, local communities, officers andemployees of the JHRA and others, and to fulfill our social responsibility
expected by each of them.

Initiatives for Unitholders●Proactive IR activities
General Meeting of Unitholders and Briefing for unitholders:
once in every two years
Financial Results Briefing for institutional investors:
twice a year (including mid-term Financial Result Briefing)
We proactively participate in conference for investors in Japan and overseas.

●Proactive information disclosure
We actively disclose information using various communication tools (Financial
Results Briefing, Asset Management Report and Press Release, etc.).
Moreover, we disclose business result of our major hotels through press
release every month.

Initiatives for Local Communities/
Contribution to Regional Revitalization(Cooperation with Lessees, etc.)
Considering the Health and Safety of Local Communities

Initiatives to cope with COVID-19• Provided 7 hotels to date as facilities for accommodation and care of patients• Introducing automatic check-in machines as a countermeasure to COVID-19 (Utilize DX –Digital Transformation)• Providing vaccinations to officers and employees of HMJ Group hotels (including part-timeand temporary staff) who want them, as well as their families• Providing hotel banquet rooms as workplace vaccination sites and group vaccination sites• Installing acrylic boards as a countermeasure for airborne droplets and installing
automatic thermometers

Supporting Cultural and Artistic Activities and Child-rearing
in Local Communities
Oriental Hotel Tokyo Bay
Setting forth a corporate policy as "Hotel which is friendly to Earth, local community and family”
Oriental Hotel Tokyo Bay proactively engages in events of local communities such as Shin-urayasu
festival and disaster preparedness to communicate withlocal residents. Oriental Hotel Tokyo Bay also supports art
and cultural activities in local community through hosting afree annual Christmas chapel concert and setting an
oriental gallery.
Moreover, the hotel is dedicated to support childcare suchas cooperation with after-childbirth support project of
Urayasu city and received first Kids Design Award as a hotel.

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Initiatives for Society
Preserving the Local Environment

Initiatives for Hotels

Hotel Nikko Alivila

Improvements to Hotel Employees' Work Environment

Hotel Nikko Alivila holds up "Eco-friendly

Introducing COVID-19 countermeasures and creating practical, relaxing back-of-house

resort." The hotel participates inareas where employees can work comfortably.

"Churaumi clean-up operation in Yomitan"
hosted by Yomitan Village in Okinawa
every year. Nirai Beach is located in frontof Hotel Nikko Alivila, which is famous for
its one of the best transparency in
Okinawa's main island. Hotel staffs clean

the beach every morning and implement
beach preservation activities. As a result of
these activities, laying of eggs, and natural
hatching by sea turtles are observed in thebeach. Hotel Nikko Alivila is a member of
the Sea Turtle Association of Japan.

Disaster Relief Donations
As a hotel asset management company that coexists with the local community, JHRA
makes disaster relief donations to be used for rescue and restoration activities in theaffected areas as follows:• The 2016 Kumamoto Earthquake (April 14, 2016)• The 2024 Noto Peninsula Earthquake (January 1, 2024)

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Initiatives for Society
Initiatives for Employees

Initiatives for Employee Health and Well-being

In order to maintain its professional expertise and continue performing stable asset
management, JHRA believes it must be a company at which highly motivated,
exceptional human resources are able to achieve excellent performance over the longterm. It provides an appealing, pleasant work environment where exceptional
employees remain highly motivated to enhance their quality and have incentives tocontinue working there in the medium to long term.

Initiatives for HR Development
Viewing human resources as its most important asset, JHRA supports employees'
career development by implementing various development programs that enable eachindividual to grow through their work while expressing their individuality and achieving
personal fulfillment.
●HR development (professional skills development)
With the aim of cultivating REIT and real estate management professionals, werecommend and support the acquisition of professional certifications such as ARES
(Association for Real Estate Securitization) Certified Master (an educational programthat systematically teaches practical, specialized knowledge in the real estate andfinance fields) for all officers and employees, and throughout the year, the company
covers the full cost of participation in training and seminars relating to practicalknowledge, industry trends, complying with laws, etc.
Certification Holders(as of December 31, 2023)• Real Estate Broker• Real Estate Appraiser• Certified Building Administrator• Official Real Estate Consulting Master• ARES Certified Master: 20 employees: 3 employees: 3 employees: 2 employees: 14 employees●HR development (general skills development)
In order to support efforts aimed at acquiring the specialized expertise andqualifications required to carry out the responsibilities of their position and improvetheir skills, we offer training programs conducted by external organizations to all
employees, as well as supporting expenses for personal development using theCafeteria Plan program.
●HR development (leadership development)
We regularly conduct various training programs aimed at acquiring the abilities andskills required at each level of the organization for the purpose of cultivating the next
generation of management and leader.
＜Examples of recent training programs＞• June 2023
: Implementation of training for management• October 2023 : Attendance at external training for female managers

With the purpose of ensuring employees' mental and physical health and establishing a
comfortable work environment, JHRA promotes work-life balance and initiatives toimprove mental and physical health and pursues initiatives to enhance job satisfaction.
●Establishment of Health Committee
Even though the size of our workplace does not oblige us to establish under the
Industrial Safety and Health Act, we have established a Health Committee with theaim of improving Standards of labor health for employees and maintaining andpromoting wellness. The committee, which meets once a month, reviews matters
including status of work by all employees and the well-being and safety of the work
environment, and after meetings, advice from an occupational health physician is
distributed to all employees.
●Encouraging regular health checks, flu shots, etc.
In general, we subsidize costs related to regular health checks/screenings once a
year and costs related to flu shots and we encourage employees to take health checkand vaccinations by these measures. Moreover, we implement a system that enables
those who desire it to consult with occupational health physician about mental healthissues as needed.
●Establishment of employee consultation service
For the purpose of protecting employees' human rights and strengthening
compliance management as well as for prevention, early detection, and correction of
conduct that violates laws and regulations, fraud, harassment, etc., we have set up
whistleblowing regulations that apply to all employees and established an employee
consulting service. We set the Compliance Office as an in-house contact point and an
external lawyer as an external contact point. Employees may report or consult with
consulting service anonymously.
●Consideration of human rights, diversity, and equality of opportunities
Our in-house regulations stipulate that acts of discrimination based on ethnicity,religion, gender, age, origin, nationality, etc., shall not be allowed. Through activities
such as compliance training, we promote respect for various perspectives and values
and pursue awareness activities to eliminate discrimination and harassment.

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Initiatives for Society●Preparation of environment where senior personnel can be active
We have introduced a re-employment system for employees aged 60 and over who
wish to continue working. We have established a labor environment where seniorpersonnel may remain active after the official retirement age by leveraging their work
experience and expertise.

●Preparation of office environment
Our offices are amply equipped with common spaces that promote communication
between employees, and spaces are also provided for individuals to rest.
Furthermore, we are taking steps to implement a comfortable work environment,such as hiring an external specialist company to perform periodic air cleaning
maintenance in order to ensure excellent air quality.

●Pension plans and fund installment program under NISA at workplace(Employee Stock Purchase Plan)
To help employees build up assets for the future and enjoy a comfortable standard ofliving after retirement, we have introduced a defined contribution pension plan
(401k) as well as a defined benefit pension plan and other measures.
Furthermore, with the purpose of maintaining officers' and employees' motivation forimproving unitholder value over the medium to long term by having the same
perspective as unitholders, we have introduced fund installment program under NISA
at workplace for all officers and employees, under which the company provides
contributions equal to a certain percentage of individuals' contributions as anincentive. We made possible to acquire investment units of JHR by officers andemployees under the program while paying attention to insider information.

●Implementation of various benefits(programs for all officers and employees)• Sick leave *Leave which may be taken separately from annual paid vacation• Length-of-service compensation program• Congratulatory/condolence payment program• Cooperating with welfare service providers• Flex hours, etc.

Communication with Employees
JHRA pursues a two-way dialogue between management and employees onmatters such as working styles and strives to create job satisfaction and makework more pleasant.
●Implementation employee satisfaction surveys
In order to build a more positive relationship between management and employees,
we conduct an employee satisfaction survey of all employees once a year (surveys
are conducted by an external organization once every three years). Based on thesurvey results, we examine and implement measures for improvement. Furthermore,
we strive to become a better company by facilitating bi-directional communication
between management and employees, which includes using employee suggestions
for enhancements gathered during workshops.
<Latest response rate>• FY2022: 100%
• FY2023: 100%

<Measures taken based on survey results>• Company-wide introduction of system applications to improve
work efficiency• Provision of laptops for working from home, portable equipment
for business trips, etc.
• Establishment of internal award system• Implementation of rank-based training, etc.

●Target management and personnel evaluation process
Superiors and their subordinates together review the status of the targets set by
employees at the start of the fiscal year and their performance during the year
through regular communication. At the end of the year, employees' achievement of
their targets, performance, and use of their skills are reviewed and a follow-up
meeting is held. We have instituted a PDCA process to develop the capabilities of ouremployees. In this process, we share improvement issues through interviews,
exchange ideas to move to the next step, and set goals for the next year and the
mid- to long-term. Moreover, in the process, all employees set ESG-related targets.
Under this process, we will implement fair personnel evaluations and ensure
employees are treated and assigned appropriately. In principal, these evaluations arereflected in the year-end bonuses for all employees and in the salary scales for the
next fiscal year.

●Individual meetings with top executive
As a venue for consultation and discussion about the details of individual employees'
assignment, career plan, workplace-related concerns, etc., top executive hold oneon-one meetings with all employees once a year. Top executive listen to employees'
voices and use them as a reference for the aim of supporting each employee's
personal fulfillment and creating a more pleasant work environment.

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Initiatives for Society
Basic Employee Data

Basic data on JHRA's employees is shown below.
●Data related to employees (as of the end of each fiscal year) (*1)
1. Basic data on employees

3. Health and safety of employees, etc.

Item

FY2021

FY2022

FY2023

Percentage of paid leave taken(*4)

57%

66%

65%

36 (73%)

Number of Health Committee
Meetings Held

12

11

12

13 (27%)

Number of interviews withindustrial physicians

21

8

6

Number of employees took parental
leave (Number of male employees
took parental leave)

0

3 (1)

0

Number of employees took
nursing leave

0

0

0

Number of occupational accidents

0

0

0

FY2021

FY2022

FY2023

36

41

49

Male

24 (67%)28 (68%)

Female12 (33%)

13 (32%)

Number of employees

By gender (ratio)

5 years 7 months 5 years 7 months 4 years 12 months

Average length of service
Number of seconded employee(*2)

1

1

1

2. Promoting of diversity
Item

FY2021

FY2022

FY2023

7

7

7

Male

6 (86%)

6 (86%)

6 (86%)

Female1 (14%)

1 (14%)

1 (14%)

12

13

14

Male

11 (92%)10 (77%)

11 (79%)Female1 (8%)

3 (23%)

3 (21%)

2

2

1

Number of directors(*3)

Item

(*1)
(*2)
(*3)
(*4)

Representative Director, part-time Directors and Auditors are excluded.
Seconded employees from non-sponsor-related parties for the training purpose.
Representative Director, part-time Directors and Auditors are included.
Exclude employees joined the company during the year.

By gender (ratio)
Number of employees in managerial
position (Head and Deputy Head ofGroup or above)
By gender (ratio)

Number of employees
over 60 years old

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Initiatives for Society
Initiatives under Impact of COVID-19
The COVID-19 pandemic has significantly impacted daily life, social activities,
and business, prompting reconsideration of how employees work andcommunicate. JHRA is striving to ensure employees' safety and peace of mind
in the context under the pandemic, and we have implemented various
initiatives aimed at making work more flexible and comfortable.
●Implementing a flexible work system
Flexible work system, recommending staggered commuting times, setting
and managing attendance rate, rotation system to work at office,establishing behavioral guidelines based on the pandemic situation,
recommending online meetings, etc.
●Changing office specifications

Introducing an online meeting system for all conference rooms, practicing
social distancing of seats while attending meetings, setting limits on thenumber of people using conference rooms, installing partitions, etc.
●Employee health management
Conducting regular PCR tests (voluntary), providing workplace vaccinations(voluntary), installing air purifiers and clinical thermometer, distributing
infection prevention gear (e.g., disinfectant spray, masks) to all officers andemployees, etc.
●Ensuring the well-being of working from home
Loaning laptops and cell phones, subsidizing the cost of buying monitors andheadsets, etc.
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GovernanceCorporate Governance
JHR's Governing Bodies
Based on the Act on Investment Trusts and Investment Corporations ("theInvestment Trusts Act"), organizational management of JHR is handled by theGeneral Meeting of Unitholders, which is comprised of unitholders, and theBoard of Directors, including one Executive Director (male) and three
Supervisory Directors (one male, two females), and an Accounting Auditor.
Executive Director and Supervisory Directors●Status and term of directors
The Executive Director executes the business of JHR, represents thecompany, and possesses the authority to perform any acts in or out of court
relating to the business of JHR.
The Supervisory Directors possess the authority to supervise the execution of
the Executive Directors' duties. They may request reports relating to thestatus of JHR's business and assets from not only the Executive Director but
also administrative agents, the asset management company, and the asset
custody company, and they may also conduct any investigations that are
required.
Executive Director and Supervisory Directors were elected by resolution ofgeneral meeting of unitholders and term of office is two years following their
appointment.

●Independence of directors
In order to secure high independency of Executive Director and Supervisory
Directors from JHRA and its sponsor-related parties, JHR elects person
without any relation with JHRA and its sponsor-related parties as its
Executive Director and Supervisory Directors since April 1, 2012.
In cases of vacancy of the position of Executive Director or a shortfall in thenumber of Executive Director as stipulated by laws and regulations,representative director of JHRA may temporarily take position of Executive
Director of JHR.

●Reasons for appointment of Directors and Board of Directors Meeting
attendance record
The directors were elected by a resolution of the General Meeting of Unitholders
based on the reasons below, with the condition that they must not conflict with anyof the reasons for disqualification stipulated in various laws and regulations, including
the Investment Trusts Act (Article 98, 100, and 200 of the Investment Trusts Act,
Article 244 of the Ordinance for Enforcement of the Investment Trusts Act). The
Executive Director and Supervisory Directors consist of third parties who have no
special interest with JHR.

Name

Reasons for Appointment

GenderBoard of Directors
Meeting Attendance
Record(*)

KanameMasudaPossesses high experience and knowledge as aprofessional of law with central focus on
corporate law. Familiar with unique mechanismand structure of a J-REIT through his practicalexperience and possesses considerable insightof management.

Male

88.2%
(15/17 meetings)

Supervisory
Director

TetsuyaMishiku

Expected to supervise investment corporation
management from various standpoints
including specific field based on the highexperience, knowledge etc. he has acquired asa legal expert with central focus on compliancerelated matters.

Male

82.4%
(14/17 meetings)

Supervisory
Director

MayumiUmezawa

Expected to supervise management fromvarious standpoints including specific field
based on the high experience and knowledge as
professional of accounting.

Female94.1%(16/17 meetings)

Supervisory
Director

Akiko
Tomiyama

Expected to supervise management fromvarious standpoints including specific field
based on the high experience and knowledge aslegal expert.

Female100%(2/2 meetings)

Title of
Officer

Executive
Director(*) Shows the attendance record at Board of Directors Meetings held during the 24th fiscal period (ended
December 2023).

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Governance
Remuneration of Directors●Remuneration of Executive Director and Supervisory Directors
As stipulated in JHR's Articles of Incorporation, the amount of remuneration
for the Executive Director and Supervisory Directors shall be determined by
the Board of Directors, with a maximum of 800,000 yen/month per person
for the Executive Director and a maximum of 500,000 yen/month per person
for the Supervisory Directors. The remuneration amount for each director is
as shown in the table below.
(Unit: thousands of yen)

Position

Name

Total Remuneration for Each
Position in the 24th Fiscal Period(Ended December 2023)

Executive Director

Kaname Masuda

6,600Supervisory Director

Tetsuya Mishiku

3,600Supervisory Director

Mayumi Umezawa

3,600Supervisory Director

Akiko Tomiyama

600●Remuneration of Accounting Auditor
The amount of remuneration for the Accounting Auditor shall be determinedby the Board of Directors, with a maximum of 30,000,000 yen per businessperiod. The remuneration amount for the Accounting Auditor is as shown in
the table below.

●Fees paid to JHRA
Since JHR is prohibited from hiring employees based on the provisions of theInvestment Trusts Act, it entrusts asset management to JHRA without hiring
any personnel.
In accordance with the asset management contract signed between the twoparties, JHR pays asset management fees to JHRA. The types of fees,
methods of calculating them, and total amounts are as shown below.
<Calculation Methods>
Fee Type

On the final day of March, June, and September in each business period and the fiscal year-end ofeach business period (the "calculation reference dates"), JHR shall pay the amount obtained by
Management multiplying its total assets by a rate it has agreed separately with JHRA, up to a maximum of 0.35%
fee 1
per annum, on a daily pro-rated basis for the number of days between the previous calculationreference date (which is not included) and the current calculation reference date (which is included),taking one year to be 365 days and rounding down to the nearest yen.
JHR shall pay the amount calculated by multiplying its NOI (Net Operating Income) for each business
Management
period by a rate it has agreed separately with JHRA, up to a maximum of 1.0%, rounded down to thefee 2nearest yen.
JHR shall pay the amount calculated by multiplying the amount obtained by dividing the total dividend
amount for a given business period before deducting management fee 3 by the total number ofManagement investment units issued as of the last day in December in that period (rounded down to the nearest
fee 3yen) by a coefficient that it has agreed separately with JHRA, up to a maximum of 43,000 (however,if the investment units were split, the figure will be 43,000 multiplied by the split ratio, and if theinvestment units were split multiple times, the same process will be repeated).

Acquisition
fee

If real estate related assets, etc. (this refers to assets indicated in Article 28-2 through 28-4 of the
Articles of Incorporation; the same applies hereinafter) are acquired, JHR shall pay the amountobtained by multiplying the acquisition price of the applicable real estate related assets, etc.
(excluding amounts corresponding to consumption tax, etc. (as defined in Article 39 of the Articles ofIncorporation; the same applies hereinafter) and expenses associated with acquisition) by a rate thatit has agreed separately with JHRA, up to a maximum of 0.75% (rounded down to the nearest yen).
However, if the applicable real estate related assets, etc. are acquired from sponsor-related parties,
the rate to be applied shall be reduced by 0.25% from the rate to be applied in the case of acquisition
from non-sponsor-related parties.

Dispositionfee

In the event of real estate related asset, etc. are disposed, JHR shall pay the amount obtained bymultiplying the disposition price of the applicable real estate related assets, etc. (excluding amounts
corresponding to consumption tax, etc. and expenses associated with disposition) by a rate that it has
agreed separately with JHRA, up to a maximum of 0.5% (rounded down to the nearest yen).
However, in the case of disposition of the applicable real estate related assets, etc. to sponsor-relatedparties, the rate to be applied shall be reduced by 0.25% from the rate to be applied in the case of
disposition to non-sponsor-related parties.

Mergerfee

In a merger carried out by JHR, if JHRA investigates and evaluates the holdings of the other party inthe merger and performs other merger-related tasks and assets belonging to the other party are thensucceeded by JHR as a result of the merger, JHR shall pay JHRA a merger fee based on the provisionsof the asset management contract signed between the two parties. The fee involved shall be the totalof the amount obtained by multiplying the appraisal value of the real estate related assets, etc.,
succeeded by JHR at the time of the merger by a rate agreed separately with JHRA (rounded down to
the nearest yen), up to a maximum of 0.25%, and the corresponding consumption tax on thisamount.

(Unit: thousands of yen)

Title

Company Name

Accounting Auditor

KPMG AZSA LLC

Remuneration for the 24th Fiscal Period(Ended December 2023)
29,550(*) Remuneration for the independent auditor includes fees of 3,300 thousand yen for preparing comfort
letters associated with the issuance of new investment corporation units.

Fee Calculation Method

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Governance<Fee Amounts>
Fee Type(Unit: thousands of yen)

22nd Fiscal Period(Ended December 2021)

23rd Fiscal Period(Ended December 2022)

24th Fiscal Period(Ended December 2023)

Management
fee 11,367,633

1,352,064

1,391,457

Managementfee 263,667

109,633

223,446

Management
fee 3

15,91029,627130,849

Sub total

1,447,210

1,491,325

1,745,752

Acquisition
fee

5,654

ー

250,326

Dispositionfee

56,500ーー

Merger
fees

ー

ー

ー

Total

1,509,365

1,491,325

1,996,078

Initiatives to Prevent Conflicts of Interest
JHRA believes that managing conflicts of interest in a strict manner is essential
to gain trust from the unitholders of JHR and has formulated a decision-making
process that is stricter than what is required by laws and regulations. In
particular, in addition to interested person, etc. stipulated by laws andregulations, JHRA stipulates that "sponsor-related parties" include JHRA's
shareholders, their subsidiaries, etc. and stipulates detailed standards andprocedures pertaining to transactions between "sponsor-related parties" andJHR.
JHRA stipulates that, in cases where JHR conducts prescribed transactions with"sponsor-related parties," resolution at a board of directors' meeting andresolution at JHR's board of directors' meeting are required in addition todeliberation and approval at the Investment and Operation Committee andCompliance Committee.

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GovernanceDecision-Making Process for Acquisition or
Disposition of Assets under Management
JHR's decision-making process for acquiring or disposing assets undermanagement is shown in the right chart.
With regard to transactions with "sponsor-related parties," JHR and JHRA haveset decision-making rules stricter than what is required by laws and regulations.
In order to manage conflicts of interest, we strive for compliance with "armslength rules" and transparency. Furthermore, if an asset under management isacquired from or sold to "sponsor-related parties," compensation to be paid to
JHRA will be reduced in accordance with provisions of the Articles ofIncorporation.
Beside such, all transactions with "sponsor-related parties," including theconclusion of lease contracts, amendment of lease contracts and ordering of
construction work, generally require the same decision-making process astransactions with "sponsor-related parties", along with attention paid to thefairness of the content by means of obtaining estimates from third parties and
such.

(注1)

(*1) The board of directors consists of third-party members who do not have any relationship with sponsorrelated parties.
(*2) JHRA stipulates that the compliance committee in principle requires an attendance of an outside specialist(attorney). The outside specialist is authorized to dismiss a proposal.
(*3) In case of acquisition or disposition of assets between JHR and a client whom JHRA advices, such client willbe treated as "sponsor-related parties". Moreover, JHRA stipulates that resolution on the said transaction at
Investment and Operation Committee needs an attendance of an external expert (real estate appraiser),who has dismissal rights of proposed resolution.

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GovernanceCompliance
Compliance Initiatives and System
To ensure appropriate asset management, sound and appropriate execution ofoperations, and protection of investors, JHR and JHRA have established a compliancerelated management system. JHRA has positioned thorough compliance and businessethics issues such as anti-corruption, as the most important management issues, andhave established a system for deliberation, decision-making, and management ofvarious compliance-related matters under the authority and responsibility of the Boardof Directors, the Compliance Committee, the President and Representative Director,
and the Compliance Officer, respectively. Specifically, we have developed a Code ofCompliance that stipulates basic policies for corporate ethics and behavioral guidelines
for officers and employees and strives to maintain and implement compliance, carry out
sincere and fair corporate activities, and ensure sound management based on selfdiscipline. Moreover, recognizing the importance of compliance, it has formulated aCompliance Manual, which stipulates standards of conduct for ensuring that complianceis implemented and achieved by officers and employees in day-to-day business
operations, and a Compliance Program, which provides a practical plan for
implementing compliance.

Anti-corruption Initiatives and Initiatives against Anti-social Forces
To prevent corruption and eliminate anti-social forces, JHRA ensures that all officers
and employees (including contract and temporary employees, etc.; the same applies
throughout this section) have a thorough understanding of related matters byconducting compliance training and other activities, as well as verifying implementationby conducting internal audits and administrative inspections, etc., each year.
●Anti-corruption initiatives
JHRA stipulates in its Code of Compliance, and Compliance Manual and Rules of
Employment that all its officers and employees are required to eliminate any mixtureof public and private affairs, and are prohibited from providing favors, benefits, etc.
to civil servants of Japan or other countries or persons deemed as such, in
accordance with Japanese and international laws. Furthermore, it stipulates thatregardless of whether business-related transactions take place, it is prohibited toprovide or accept favors, benefits, etc. that exceed the scope of courtesy based onsocially accepted conventions.

Specifically, in order to ensure the fairness of transactions, each officer and employee
is required to confirm and declare at the time of application for transactions that thetransaction does not unfairly benefit himself/herself or a third party.
Based on the internal audits, administrative inspections, and so forth that it has
conducted to date, JHRA has not found any favors or gifts that contravene therelevant laws. Moreover, there have been no violations of corruption-related laws oradministrative sanctions.
Also, there are no violations of laws and regulations nor administrative actions
charged by administrative bodies related to corrupt practices.
For details on internal audits, please refer to "Internal Audit" in Risk Management
below.
●Initiatives to eliminate anti-social forces
JHRA has formulated and published a "Basic Policy Against Anti-Social Forces" andstrives to maintain the trust of all stakeholders and ensure sound operations andappropriate management by observing the policy. Furthermore, an organizational
system has been established and implemented through the Code of Compliance
Committee and Regulations for Handling Anti-Social Forces which stipulate various
procedures for severing any ties involving dealings with anti-social forces and prohibit
providing payoffs to anti-social forces.
The following is an overview of the organizational system:• A compliance officer is in charge of handling anti-social forces and severing any newties with such forces and supervises JHRA's overall establishment of system.
• Each department acts as section responsible to handle initial reaction for anti-social
forces and supervises the handling of individual cases.
• The compliance officer reports to the Compliance Committee and Board of Directors
as needed with regard to the status of initiatives to sever and prevent ties with antisocial forces.
• The Compliance Committee and Board of Directors receive reports on the status ofinitiatives to sever and prevent ties with anti-social forces and grant approval for
JHRA's specific and general initiatives and policies toward anti-social forces
respectively as needed.

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GovernanceInitiatives Relating to Anti-money Laundering andCountering the Financing of Terrorism
In recent years, the importance of countermeasures to anti-money laundering andfinancing of terrorism (hereinafter referred to as "money laundering, etc.") as an issue
that needs to be addressed by both Japan and global society has been growing. In
collaboration with the relevant government ministries and agencies, financial
institutions, etc. have been striving to maintain sound financial systems by enhancing
their management systems for cutting off the flow of funds connected with criminals,
terrorists, etc. (i.e., money laundering).
Recognizing the importance of countermeasures for money laundering, etc., JHRA
complies with the relevant laws and regulations, including the Act on Prevention ofTransfer of Criminal Proceeds. Moreover, in accordance with the Guidelines for AntiMoney Laundering and Combating the Financing of Terrorism developed and publishedby the Financial Services Agency in February 2018 and a risk-based approach, JHRA
has established a risk management system that makes it possible to implement
appropriate measures in a timely manner.
JHRA has formulated Regulations Concerning the Implementation of Verification to
Execute Transactions, Etc. Based on the regulation, various verification procedures are
implemented and audit and other activities on the procedures are conducted by asupervising officer (compliance officer).

Establishment of Whistleblower System
With an aim to contribute to strengthening compliance management, JHRA has
established Regulation of Whistleblower. As such, JHRA has established a whistleblower
system that allows its officers and employees (including contract and temporary
employees) to report or discuss fraudulent acts.
"Regulation of Whistleblower" target any organizational or individual fraudulent acts
including any harassment (including cases where fraudulent acts may occur) as the
subject for reports or consultation (hereinafter called "Whistleblowing, etc."). Based on
the Whistleblower Protection Act and company regulation, the regulation stipulates
protection of whistleblower who reported or consulted (including prohibition ofdisadvantageous treatment, responding to anonymous reports, keeping the content
confidential and elimination of conflicts of interest, etc.) as well as procedures to findand correct reported fraudulent acts (including research method, disposition of those
who conduct fraudulent acts and following up with the whistleblowers).
Furthermore, in addition to assignment of Compliance Office as an in-house contact
point (the President and Representative Director is the internal contact point forreporting of fraudulent acts, etc. by officers and employees of the Compliance Office),
an external attorney who has no business relationship with JHRA is appointed as thereporting contact point in order to secure effectiveness of the whistleblower system.
The contact information of each contact point is made known to all officers andemployees through compliance trainings, and is explained to new employees inparticular during the compliance training provided at the time they join the company.
In the specific process to handle reports, etc., when contact point received a report,
etc., each contact point will consider the necessity of an investigation fairly, impartially,
and in good faith, and will promptly notify the whistleblower of the results of theconsideration and future actions against the case. And report the results of theinvestigation by the person in charge of the investigation to the whistleblower and theCompliance Committee.
If the investigation reveals fraudulent acts, corrective measures and measures toprevent recurrence are promptly taken, and the results of the corrective measures arereported to the Compliance Committee. Those involved in such fraudulent acts will beappropriately handled including punishment under the Rules of Employment etc., andreporting to administrative agencies, etc., if necessary.
Furthermore, even after the completion of the process, JHRA shall follow up sufficiently
to protect the whistleblower, for example, by confirming that the fraudulent acts inquestion have been resolved and that the whistleblower has not been subjected to any
disadvantageous treatment because of the reporting.

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Governance
Implementation of In-House Training
JHRA implements regular compliance training for all officers and employees(including contract and temporary employees, etc.; the same applies
throughout this section).
The Compliance Program stipulates that compliance training must be
conducted on a regular basis each year, and the status of progress and resultsof its implementation are reported to the Compliance Committee on semiannual basis.
The subject matter of compliance training will be determined based on who isparticipating (new hires all officers and employees, Investment Division officers
and employees, etc.), and JHRA fosters a stronger compliance culture byverifying and implementing training that focuses on more timely topics basedon trends of amendments to laws and regulations and the results of internal
audits, etc.
Training conducted in recent years is shown below.
FiscalYear

FY2021

No. ofTimes

15

Main Topics• Customer-oriented business conduct and transactions with conflict-ofinterest• JHRA's risk management system• Reporting, quick resolution, and recurrence prevention of clerical errors• Whistleblower system

FY2022

14• Case studies of violation of laws and regulations• Insider trading regulations• Appropriate management of personal information

FY202316• Management of conflict-of-interest transactions• Recent cases of administrative penalties related to conflicts of interest• Appropriate management of corporate information

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GovernanceRisk Management
Approach to Risk Management●Establishment of risk management system●Risk management system with focus on three lines of defense

JHRA, to which JHR entrusts asset management, has established a risk management

In recent years, led by financial institutions, publicly listed corporations, etc., risk

system for the purpose of ensuring sound management, performing appropriate risk

management systems that focus on a "three lines of defense"-based approach havemanagement as a financial instruments business operator, and fulfilling its obligations.

been developed. JHRA has also adopted this approach.
Specifically, as the "first line of defense," the groups implementing/executing tasks●Basic risk management policy

become the risk owners. Heads of groups/offices assess, supervise, and control risks

JHRA's Board of Directors has formulated a basic risk management policy based onthat occur in their tasks, as the risk management officers. Next, as the "second line

its management policy and strategic objectives and supervises the development of anof defense," the Compliance Office monitors risks and implements measures toappropriate risk management system. The basic risk management policy is ascontrol them. The compliance officer serves as chief risk management officer,

follows:

supervising overall risk management for JHRA and providing the required guidance
and oversight as the person in charge. Finally, in the "third line of defense," the1. In order to ensure sound management and fulfill its fiduciary responsibilities as avalidity of the processes created by the first and second lines of defense is evaluatedfinancial instrument business operator, JHRA strives to develop a risk management

and verified through internal audits and administrative inspections.

system based on recognition that appropriate management and control of risks

As JHR's asset management company, JHRA, based on the "three lines of defense"that occur in the course of its business operations are essential issues inapproach, remains aware that there are always intrinsic risks in its day-to-day

management.

business operations, and all officers and employees execute their duties while

2. In order to perform appropriate risk management, JHRA shall establish

recognizing that they play a role in risk management.

organizations that can exercise mutual check-and-balance, as well as provide
appropriate staffing, develop a training system, and implement appropriate
measures to prevent accidents.

●Risk management implementation processes
JHRA stipulates the risk management implementation processes and specific

3. Given that there are always intrinsic risks in day-to-day business operations, all ofprocedures in its Code of Risk Management and detailed rules relating to the code.

JHRA's officers and employees shall recognize that they need to play a role in risk

The risk management implementation processes consist of the seven items below,

management and implement operation with understanding of its importance.

with a risk management sheet used to comprehensively implement each process.
1. Development of annual risk management plan
2. Risk identification
3. Risk analysis/evaluation
4. Additional control planning/implementation
5. Finalization/approval of risk management sheet
6. Monitoring through internal audits and administrative inspections
7. Improvement of risk management status

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GovernanceInternal Audit

Crisis Management

Based on the Code of Internal Audit, JHRA conducts internal audits in order to

Recognizing that crises caused by natural disasters, various criminal activities,

verify and evaluate whether its risk management is functioning effectively.

system failures, and so forth may have a severe impact on JHR's management

Internal audits are conducted at least once per year, and JHRA has been

and asset management activities in the form of economic loss, significant

conducting them every year since its establishment.

obstruction of operations, etc., JHRA has formulated Code of Crisis
Management and Contingency Plans and implements various measures to●Scope and method of internal audits and improvement of designateditems

minimize damage and ensure employees' safety and peace of mind in theevent of a crisis.

JHRA's internal audits are performed for all organizations and operations.
Specifically, risks associated with all organizations and operations are●Major measures related to crisis management

assessed in an integrated manner by using the Risk Management Sheet.

• Creation of BCP (business continuity planning) manual

Then verification and evaluation is conducted based on the internal audit to• Implementation of BCP training (once every year)

determine whether the controls for those risks are functioning effectively.

• Introduction of safety verification system and implementation of simulation

Once the internal audit is completed, the compliance officer, who serves as

training (four times per year)

the chief controller of internal audit, reports the audit results to the President,• Distribution of emergency kit to employees

Compliance Committee, and the audited departments. Furthermore, if the• Storage of reserve supplies

internal audit deems it necessary, the results will also be reported to theBoard of Directors.
The chief controller of internal audit shall verify the status of improvements
to matters designated in internal audits with the audited departments andreport the results to the President and Compliance Committee. Moreover, if
the chief controller of internal audit deems it necessary, the results will also
be reported to the Board of Directors.

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Green Finance
Basic Policy
JHR manages its assets in consideration of "Environmental, Social andGovernance (ESG)" and, as part of its efforts, aims to achieve a sustainable
environment and society through the implementation of green finance.

Green Finance Framework
JHR formulated the Green Finance Framework in accordance with the Green
Bond Principles, Green Loan Principles, Green Bond Guidelines, and Green Loan
Guidelines in January 2024.
Use of Procured Funds
JHR will allocate the funds procured through the Green Finance to the following
three purposes that meet the Eligibility Criteria below: (1) for the acquisition ofgreen buildings or refinancing of the funds used for the acquisition, (2) for
renovation work, and (3) for the acquisition or installation of renewable energy
generation equipment.
●Eligibility criteria(1) Green building
Properties that have obtained or renewed certification from any of thefollowing third-party certification organizations or properties that intend toobtain or renew such certification:• DBJ Green Building Certification: 3-star, 4-star or 5-star ratings• CASBEE Certification (including Municipal CASBEE): B+, A or S rank
• BELS Certification: 3-star, 4-star or 5-star ratings (based on FY2016)• LEED Certification: Silver, Gold or Platinum• BREEAM Certification: Very good, Excellent or Outstanding(2) Renovation work
Renovation work that meets any of the following:• Renovation work that has the effect of reducing any of the following:
CO2 emissions, energy consumption, or water consumption by 30% in
real estate managed by JHR• Renovation work intended to improve one or more stars or ranks ofcertification by third-party certification organizations as defined in the
Eligibility Criteria 1(3) Renewable energy
Acquisition or installation of the following renewable energy power
generation equipment.
• Solar power generation• Onshore wind power generation (limited to equipment with output of lessthan 20kW)• Biomass power generation (limited to equipment where fuel is sourced
from its location or adjacent prefectures)
Process for Project Evaluation and Selection
JHRA's Finance Group and ESG Team will select project candidates for which
the procured funds will be used, and decisions will be made by the Investment
and Operation Committee, the Board of Directors and JHR's Board of Directors.
Management of Procured Funds
JHR will promptly allocate the total procured funds to projects that meet the
Eligibility Criteria.
JHR will set the maximum amount of the Green Finance as the total of thefollowing funds ("Eligible Green Debt Amount") and will manage the balance of
the Green Finance so that it does not exceed the Eligible Green Debt Amount:(1) The amount calculated by multiplying the total acquisition price of green
buildings owned by JHR that meet the Eligibility Criteria 1 by theinterest-bearing debt ratio (LTV) at the end of the fiscal period that canbe calculated at the time of confirmation(2) The expenditures required for renovation work that meets the Eligibility
Criteria 2(3) Funds for the acquisition and installation of renewable energy power
generation equipment that meets the Eligibility Criteria 3
Total acquisition price of green buildings: (1)Interest-bearing debt ratio to total assets: (LTV)
Expenditures required for renovation work: (2)+(3)Eligible Green Debt Amount: (1)×LTV+(2)+(3)JPY74.6Bn
40.8%－
JPY30.4Bn

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Initiatives forSociety

GovernanceGreen FinanceGreen Bonds

GRI Standards
Disclaimer

Green FinanceEvaluation by External Organization

Reporting

JHR has received the following evaluation from Japan Credit Rating Agency,●Fund allocation status reporting
The fund allocation status of JHR related to the Green Finance is as follows.
Green loan balance

JPY3.3Bn

Unallocated green loans

Ltd. (JCR) regarding the eligibility of its Green Finance Framework.
Evaluation
Agency－Evaluation Subject

Evaluation
Overall Evaluation<Green Loan>
Loan Name
Term Loan 101

JCR
Loan
AmountUnallocatedAmount

JPY3.3Bn－

Borrowing Date
March 29, 2024

Principal
Repayment Date

Collateral

March 29, 2030

Unsecured/
Unguaranteed

Green Finance
Framework

Green 1 (F)Greenness Evaluation(Use of Proceeds)

g1 (F)

Management, Operation andTransparent Evaluation

m1 (F)(*) For details, please refer to JCR's news release and website.
Website of JCR: https://www.jcr.co.jp/en/greenfinance/news/●Impact reporting
JHR will disclose the following information annually as long as the green
finance balance remains:
1. Reporting on green buildings• Name and number of properties, total floor area, certification type andcertification rank
• CO2 emissions (t-CO2), electricity consumption (MWh), and water
consumption (㎥) of all subject properties
2. Reporting on renovation work

Not applicable
3. Reporting on renewable energy
Not applicable

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Governance

GRI Standards
Disclaimer

Green Bonds
Basic Policy

ReportingAs part of the initiatives to enhance sustainability, JHR issued twelfth unsecured
investment corporation bonds of JHR (hereinafter "Green Bonds") in July 2019. JHR
and the Asset Management Company believe that the issuance of the Green Bonds andexpansion of fund procurement from investors interested in ESG investment will not
only lead to strengthen the financing base of JHR, but also it will contribute to the
expansion of the market of ESG investment.
* The Green Bonds were issued prior to the formulation of the above Green Finance
Framework, and its framework has been set forth separately.

Under the framework of the Green Bonds, JHR discloses the allocation status of thefunds procured by the Green Bonds and KPIs related to the effects on environmental
improvement once a year on the website until the redemption date of the Green Bonds.

Compliance of Eligible Criteria of Green Bonds
In order to meet the eligible criteria for the Green Bonds issued, JHR manages procured
funds and limits the use of funds as follows.

Use of Procured Funds
1. Part of funds to refinance renovation cost of Oriental Hotel Fukuoka Hakata Station(formerly Hotel Centraza Hakata)
Covers renovation cost which meet following criteria• Funds for investments and construction works of equipment which have effects to
reduce CO2 emissions such as air conditioners and electric facilities• Funds for investment and construction works of equipment which can contribute toenvironment other than reduction of CO2 emissions such reduction of water usage
2. Funds for construction works of renovation etc. of other hotels• Funds for renewal of air conditioner, etc. which can reduce CO 2 emissions atleast 10%

Management of Procured Funds
Among the proceeds procured by the Green Bonds, "1. Funds for repayment forrenovation cost of Oriental Hotel Fukuoka Hakata Station (1,600 million yen)" wasalready allocated to the repayment on July 31, 2019. On the other hand, "2. Funds forconstructions for renovation etc. of the other hotels (400 million yen)" was separately
managed by a leger and was held by cash or cash equivalents until they are all
allocated by the end of January 2021.

1. Each index after the renovation of Oriental Hotel Fukuoka Hakata Station
Water Consumption (㎥)Energy Consumption (MWh)CO2 Emissions (t-CO2)

31,709

2,815

1,097

(*) The figures above are the aggregated numbers from April 2022 through March 2023.

2. The allocation status of the funds and the usage of the proceeds
Name of Properties(*1)

DateJuly 2019 to
September 2019－
Oriental Hotel Fukuoka
Hakata Station

July 2019

Amount15(Unit: JPY MM)
CO2 Emissions
Reduction Rate(estimated)(*2)

Usage of the Funds

Cost of issuance of the Green Bonds, etc.

－

1,600

Repayment of the loans related to therenovation cost

(16.0%)

Okinawa Marriott
Resort & Spa

October 201929

Construction works for renewal of airconditioning system (renovation ofrestaurant)(46.4%)

Okinawa Marriott
Resort & Spa

October 201913

Construction works for converting to LED
lights (renovation of restaurant)(74.9%)

Okinawa Marriott
Resort & Spa

October 201910

HOTEL ASCENT FUKUOKA

May 2020

100

dormy inn Kumamoto

July 2020

74

Hilton Tokyo Bay

August 2020

57

Construction works for renewal of fan coilunits in guest rooms(27.2%)

Hilton Nagoya

January 2021

57

Construction works for renewal of elevators(20.0%)

Chisun Hotel Kamata

January 2021

15

Washington Hotel Plaza
Hakata, Nakasu
International Garden Hotel
NaritaJanuary 2021

13

January 2021

Total
Remaining amount

45

Construction works for renewal of washingand sterilizing equipment (renovation ofrestaurant)
Construction works for renewal of heatsource equipment
Construction works for replacement of air
conditioning equipment

Construction works for replacement ofcontrol panel for elevator
Construction works for renewal andmaintenance of fan coils
Construction works for renewal of outdoor
air conditioning equipment(44.6%)(10.2%)(12.8%)(18.1%)(33.2%)(16.0%)

2,026
ー(*1) Name of properties are the name when funds are allocated.
(*2) The figures of CO2 emissions reduction rates are estimated by the Asset Management Company based on expert reports.

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Green Bonds
Oriental Hotel Fukuoka Hakata Station
Construction works to save energy in large-scale renovations<Before><After>Summary of the Issued Green Bonds
Name

Twelfth unsecured investment corporation bonds of JHR(Pari passu covenants between investment corporation bonds are attached)(Green Bonds)(Nickname: Hotel Green Bonds)

Issue amount

JPY2.0Bn

Interest rate

0.400%/year

Issue dateJuly 31, 2019

Redemption dateJuly 31, 2024

Okinawa Marriott Resort & Spa (current Oriental Hotel Okinawa Resort & Spa)
Construction works to save energy in restaurant renovations (after renovation)<Entrance><Interior>

ESG REPORT37

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GRI Standards
Disclaimer

GRI Standards Comparison Table〈Universal Standard〉
Disclosure

Location or Reason for Omission

Page

GRI2: General Disclosures
1. The organization and its reporting practices
About JHR > Corporate Overview and History
About JHR > Asset Management Company
About JHR > Corporate Overview and History
About JHR > Asset Management Company

2-1

Organizational details2

2-2

Entities included in the organization's sustainability reporting

2-3

Reporting period, frequency and contact point

No cases experienced.

1

2-4

Restatements of information

No cases experienced.

No cases experienced.

2-5

External assuranceー

2-6

Activities, value chain and other business relationships

About JHR > Our Organizationー2-7

Employees

ESG > Initiatives for Society

23

2-8

Workers who are not employees

ESG > Initiatives for Society

23

2-9

Governance structure and composition

ESG > Governance

25

2-10

Nomination and selection of the highest governance body

ESG > Governance

25

2-11

Chair of the highest governance body

ESG > Governance

25

2-12

Role of the highest governance body in overseeing the management of impacts

ESG > Sustainability Management

4

2-13

Delegation of responsibility for managing impacts

ESG > Sustainability Management

4

2-14

Role of the highest governance body in sustainability reporting

ー

ー

2-15

Conflicts of interest

ESG > Governance

27

2-16

Communication of critical concerns

ESG > Governance

30

2-17

Collective knowledge of the highest governance body

ESG > Governance

31

2-18

Evaluation of the performance of the highest governance body

ー

ー

2-19

Remuneration policies

ESG > Governance

26

2-20

Process to determine remuneration

ESG > Governance

26

2-21

Annual total compensation ratio

ー

ー

2-22

Statement on sustainable development strategy

ー

ー

2-23

Policy commitments

ー

ー

2-24

Embedding policy commitments

ー

ー

2-25

Processes to remediate negative impacts

ー

ー

2-26

Mechanisms for seeking advice and raising concerns

ー

ー

2-27

Compliance with laws and regulations

ー

ー

2-28

Membership associations

ー

ー

2-29

Approach to stakeholder engagement

ESG > Stakeholder Engagement

9

2-30

Collective bargaining agreements

ー

ー

2

ー

2. Activities and workers

3. Governance

4. Strategy, policies and practices

5. Stakeholder engagement

ESG REPORT38

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GRI Standards Comparison Table〈Universal Standard〉
Disclosure

Location or Reason for Omission

Page

GRI3: Material Topics
8

3-1

Process to determine material topics

ESG > Materiality

3-2

List of material topics

ESG > Materiality

7

3-3Management of material topics

ー

ー

201-1

Direct economic value generated and distributed

Portfolio Summary

201-2

Financial implications and other risks and opportunities due to climate change

ESG > Initiatives for Environment

201-3

Defined benefit plan obligations and other retirement plans

ー

ー

201-4

Financial assistance received from government

ー

ー

202-1

Ratios of standard entry level wage by gender compared to local minimum wage

ー

ー

202-2

Proportion of senior management hired from the local community

ー

ー

203-1

Infrastructure investments and services supported

ー

ー

203-2

Significant indirect economic impacts

ー

ー

204-1

Proportion of spending on local suppliers

ー

ー

205-1

Operations assessed for risks related to corruption

ESG > Governance

29

205-2

Communication and training about anti-corruption policies and procedures

ESG > Governance

29

205-3

Confirmed incidents of corruption and actions taken

ー

ー

206-1

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

ー

ー

207-1

Approach to tax

ー

ー

207-2

Tax governance, control, and risk management

ー

ー

207-3

Stakeholder engagement and management of concerns related to tax

ー

ー

207-4

Country-by-country reportingーー〈Topic Standard〉
GRI200: Economic
201 Economic Performanceー
15-17

202 Market Presence

203 Indirect Economic Impacts

204 Procurement Practices
205 Anti-corruption

206 Anti-competitive Behavior
207 Tax

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GRI Standards Comparison Table〈Topic Standard〉
Disclosure

Location or Reason for Omission

Page

GRI300: Environmental
301 Materials

301-1

Materials used by weight or volume

ESG > Initiatives for Environment

10

301-2

Recycled input materials used

ESG > Initiatives for Environment

10

301-3

Reclaimed products and their packaging materials

ー

ー

302-1

Energy consumption within the organization

ESG > Initiatives for Environment

10

302-2

Energy consumption outside of the organization

ー

ー

302-3

Energy intensity

ESG > Initiatives for Environment

10

302-4

Reduction of energy consumption

ESG > Initiatives for Environment

10

302-5

Reductions in energy requirements of products and services

ー

ー

303-1

Interactions with water as a shared resource

ー

ー

303-2

Management of water discharge-related impacts

ー

ー

303-3

Water withdrawal

ESG > Initiatives for Environment

10

303-4

Water discharge

ー

ー

303-5

Water consumption

ー

ー

ー

ー

302 Energy

303 Water and Effluents

304 Biodiversity

304-2

Operational sites owned, leased, managed in, or adjacent to, protected areas and areas ofhigh biodiversity value outside protected areas
Significant impacts of activities, products and services on biodiversity

ー

ー

304-3

Habitats protected or restored

ー

ー

304-4

IUCN Red List species and national conservation list species with habitats in areas affected by operations

ー

ー

305-1

Direct (Scope 1) GHG emissions

ESG > Initiatives for Environment

10

305-2

Energy indirect (Scope 2) GHG emissions

ESG > Initiatives for Environment

10

305-3

Other indirect (Scope 3) GHG emissions

ESG > Initiatives for Environment

10

305-4

GHG emissions intensity

ESG > Initiatives for Environment

10

305-5

Reduction of GHG emissions

ESG > Initiatives for Environment

10, 18305-6

Emissions of ozone-depleting substances (ODS)

ESG > Initiatives for Environment

18

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions

ー

ー

306-1

Waste generation and significant waste-related impacts

ー

ー

306-2

Management of significant waste-related impacts

ー

ー

306-3

Waste generated

ESG > Initiatives for Environment

10

306-4

Waste diverted from disposal

ー

ー

306-5

Waste directed to disposal

ESG > Initiatives for Environment

10

308-1

New suppliers that were screened using environmental criteria

ー

ー

308-2

Negative environmental impacts in the supply chain and actions taken

ー

ー

304-1

305 Emissions

306 Waste

308 Supplier Environmental Assessment

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GRI Standards Comparison Table〈Topic Standard〉
Disclosure

Location or Reason for Omission

Page

GRI400: Social
401 Employment

401-1

New employee hires and employee turnover

ESG > Initiatives for Society

401-2

Benefits provided to full-time employees that are not provided to temporary or part-time employees

ー

23
ー

401-3

Parental leave

ESG > Initiatives for Society

23

402-1

Minimum notice periods regarding operational changes

ー

ー

403-1

Occupational health and safety management system

ー

ー

403-2

Hazard identification, risk assessment, and incident investigation

ー

403-3

Occupational health services

ESG > Initiatives for Society

21-22

403-4

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

ESG > Initiatives for Society

21-22

403-5

Worker training on occupational health and safety

ー

403-6

ESG > Initiatives for Society

403-8

Promotion of worker healthPrevention and mitigation of occupational health and safety impacts directly linked bybusiness relationships
Workers covered by an occupational health and safety management system

403-9Work-related injuries

402 Labor/Management Relations
403 Occupational Health and Safety

403-7

ー

ー

21-22

ー

ー

ー

ー

ー

ー

403-10 Work-related ill health

ー

ー

404-1

Average hours of training per year per employee

ー

ー

404-2

Programs for upgrading employee skills and transition assistance programs

ESG > Initiatives for Society

21

404-3

Percentage of employees receiving regular performance and career development reviews

ESG > Initiatives for Society

22

405-1

Diversity of governance bodies and employees

ESG > Initiatives for Society

21、23

405-2

Ratio of basic salary and remuneration of women to men

ー

ー

406-1

Incidents of discrimination and corrective actions taken

ー

ー

ー

ー

404 Training and Education

405 Diversity and Equal Opportunity

406 Non-discrimination
407 Freedom of Association and Collective Bargaining
Operations and suppliers in which the right to freedom of association and407-1
collective bargaining may be at risk
408 Child Labor
408-1

Operations and suppliers at significant risk for incidents of child labor

ー

ー

409-1

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

ー

ー

410-1

Security personnel trained in human rights policies or procedures

ー

ー

411-1

Incidents of violations involving rights of indigenous peoples

No cases experienced.

409 Forced or Compulsory Labor

410 Security Practices
411 Rights of Indigenous Peoples
No cases experienced.

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GRI Standards Comparison Table〈Topic Standard〉
Disclosure

Location or Reason for OmissionPage

413 Local Communities
413-1

Operations with local community engagement, impact assessments, and development programs

ー

ー

413-2

Operations with significant actual and potential negative impacts on local communities

ー

ー

414-1

New suppliers that were screened using social criteria

ー

ー

414-2

Negative social impacts in the supply chain and actions taken

ー

ー

415-1

Political contributions

ー

ー

416-1

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

ー

ー

416-2

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

ー

ー

417-1

Requirements for product and service information and labeling

ー

ー

417-2

Incidents of non-compliance concerning product and service information and labeling

ー

ー

417-3

Incidents of non-compliance concerning marketing communications

ー

ー

418-1

Substantiated complaints concerning breaches of customer privacy and losses of customer dataーー

414 Supplier Social Assessment

415 Public Policy
416 Customer Health and Safety

417 Marketing and Labeling

418 Customer Privacy

ESG REPORT42

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Disclaimer

Disclaimer
This material is prepared and provided solely for the purpose of providing
information and not to offer, solicit, or do business, etc. with specific products
including purchase of investment units, investment unit subscription rights, orinvestment corporation bonds of Japan Hotel REIT Investment Corporation("JHR") or any other particular products. If any discrepancy is identified
between this translation and the Japanese original, the Japanese original shallprevail.
This material is neither a disclosure document nor an investment reportrequired under or prepared pursuant to the Financial Instruments andExchange Act, Act on Investment Trusts and Investment Corporations andrelated government ordinances, Cabinet Office regulations, listing rules by
Tokyo Stock Exchange, Regulations of The Investment Trusts Association,
Japan, or other related rules and regulations.
This material contains forward-looking statements about financial conditions,operational results, and businesses of JHR, as well as plans and intentions of
JHR and its asset management company, Japan Hotel REIT Advisors Co., Ltd("JHRA"). Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results or performanceof JHR to materially differ from those expressed or implied forecasts. Those
forecasts are made based on JHR's present and future business strategies andassumptions relating to the political and economic circumstances surrounding
JHR in the future.
Every effort has been made to ensure the accuracy of the information
contained in this material. However, there can be no assurance that the
information is accurate, complete, appropriate or fair. The information may berevised or retracted without prior notice.

JHR mainly invests in real estate-related assets, primarily hotels which are
subject to change in values. Therefore, unitholders, holders of investment unit
subscription rights and investment corporation bonds may suffer losses due toeconomic conditions of the real estate market or securities market, economic
situations including interest rate environment, the nature of investment units,
investment unit subscription rights, and investment corporation bonds,
dependency on mechanisms and related persons of investment corporations,changes in legal systems related to real estate (include tax regulations,building regulations and others), damage caused to the real estate-related
assets by natural disasters, fluctuation in prices or profitability of the realestate-related assets, nature of the trust beneficiary rights under management,delisting of the investment units, or worsening financial position or insolvency
of JHR. For details, please refer to the Articles of Incorporation, Securities
Registration Statement, Annual Securities Report and Extraordinary Report, etc.
of JHR.
The contents of this material may not be copied or reproduced without ourprior permission.
Japan Hotel REIT Advisors Co., Ltd.
Financial Instruments Business Operator
Director-General of Kanto Local Finance Bureau No. 334
Member of The Investment Trust Association, Japan
Member of The Japan Investment Advisers Association

Regarding the offering and trading of investment units, investment unit
subscription rights or investment corporation bonds, financial institutions may
charge you pre-determined handling fees and other charges aside from theprice of the investment units, investment unit subscription rights or investment
corporation bonds. Since neither JHR nor JHRA handles the offering andtrading of investment units, investment unit subscription rights or investment
corporation bonds, please ask financial institutions for the amount, upper limit,
and calculation methods of such fees and other charges.
ESG REPORT43