Investment in the city

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021
Asset Management Company
Mori Building Investment Management Co., Ltd.

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

Message from
the Management

About Us

Policy andStrategyE：
Environment
Initiatives

Sustainability
Management

S：
SocialInitiatives

G：
GovernanceInitiatives

Contents

Data

Find A Page

2

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021
About US2

3 Basic Policy
4 Company Data
5

Message from the Management

6

Policy and Strategy
6 Investment Policy
8 Management Policy

Sustainability Management

9

Contents

9 Approach and System
10 Important ESG Issues (Materiality)
12 KPIs/Targets
13

E : Environment Initiatives

13 Environment Management System (EMS)
14 Green Building Certification and External Assessment
16 Climate Change
24 Resource Recycling (Water and Waste)
26 Increasing Greenery and Biodiversity
27

S : Social Initiatives

27 Stakeholder Engagement
28 Initiatives with Employees
33 Initiatives with Tenants and Local Communities
36 Actual Results of Urban Redevelopment Projects
39 Selection and Management Policies of the PM Company
42 Initiatives with Investors
43

G : Governance Initiatives

43 Corporate Governance
47 Compliance and Corporate Ethics
49 Risk Management
Asset Management Company

Mori Building Investment Management Co., Ltd.

50 Data
50 GRI Standards Comparison Table

Editorial Policy
This report describes all efforts of MHR and its asset manager Mori Building Investment
Management Co., Ltd. (MIM) to contribute to realizing a sustainable society and to
maximize unitholder value over the medium to long term. The contents of this report havebeen approved by MHR’s executive director and the chairperson of MIM’s Sustainability
Committee, and have been reported to and confirmed by MHR’s board of directors andMIM’s board of directors.

Reporting Period
April 2020 – March 2021 (includes some recent activities after this period)

Scope
Mori Hills REIT Investment Corporation
Mori Building Investment Management Co., Ltd.

Reference Guidelines◦GRI (Global Reporting Initiative) “Sustainability Reporting Standards”*This report has been prepared in accordance with the Core option of the GRI Standards.

◦Ministry of the Environment’s “Environmental Reporting Guidelines (2018)”◦ISO26000 “Guidance on Social Responsibility”◦Task Force on Climate-Related Financial Disclosures (TCFD) “Final Report:
Recommendations of the Task Force on Climate-Related Financial Disclosures”

IssuedOctober 2021 (last: November 2020, next: October 2022)

Contact
Department: Financial Department TEL: +81-3-6234-3234
Mori Building Investment Management Co., Ltd.

Disclaimer
This report contains forward-looking statements. These statements are based on judgments
made in accordance with information available at the time each document was prepared, andare not guarantees of future performance.

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

About Us

Message from
the Management

Policy andStrategy

Sustainability
Management

E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

Contents

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Data

3

Basic Policy

Investment in the city
MHR aims to further enhance the profitability and asset value of its portfolio through growth created by making
targeted investment in the “City,” while paying close attention to the competitiveness of the “City” concentrating on
central Tokyo, and on the portfolio’s ability to create value.
“City” in MHR’s definition is not merely a geographic location with an aggregation of buildings, but a “space”
with multiple uses, such as for work, residence, recreation, rest and study that integrates various economic andcultural activities of the people that gather there. MHR believes that the provision of all urban elements will result in
people, products and information concentrating and merging to generate new business models and lifestyles.
MHR recognizes its Sponsor, the Mori Building Group, (Mori Building Co., Ltd. being its core company), as being
uniquely positioned to realize investments in the “City.” By optimally utilizing the comprehensive strengths of theMori Building Group, which has completed successive large-scale redevelopments in central Tokyo, MHR aims toacquire scarce, premium properties and to enhance the asset value of its portfolio.
MHR has entitled select projects with the “Hills” designation -- such as “Roppongi Hills,” “ARK Hills,” “Omotesando
Hills” and “Toranomon Hills,” which are creative, large-scale redevelopments assembled, constructed, and managed
over a long period of time by the Mori Building Group. “Hills” represents a brand for large-scale projects that havecreated compact cities, combining office and residential spaces and that embody the Mori Building Group’s ideas forurban development with “safety and security,” “environment and greenery” and “culture and art” as keywords.
MHR aims to achieve steady growth of its portfolio and to maximize unitholders’ value by making selective
investments that mainly target areas and properties that are believed to lead the lifestyle and work style of the 21st
century as exemplified by the “Hills” brand, in other words, through “investment in the city.”

Investment in the city
Investment strategy
Construction ofan urban portfolio centeredon premium properties[Portfolio composition policy]

Taking full advantage ofthe Mori Building Group's
comprehensive expertise[Growth strategy]

Investment focusing on in premium properties
Investment focusing on mixed-use urban spaces

Pipeline support from Mori Building Group
Leveraging the Mori Building Group’s
property management skills

Enhancing the value of operating assets

Maximizing unitholders' value

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

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Message from
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Policy andStrategy

Sustainability
Management

E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

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Data

4

Company Data
Company data
Name

Structure of Investment Corporation
Mori Hills REIT Investment Corporation

Representative

Hideyuki Isobe, Executive Director

Address

12-32 Akasaka 1-chome, Minato-ku, Tokyo

Contact

Mori Building Investment Management Co., Ltd.
Tel:+81-(0)3-6234-3234

Fiscal period

Six months ending in January and July of each year

Dates ofrecordEnd of January and end of July of each year

MORI HILLSREIT INVESTMENTCORPORATION

（B）

（D）

General Administratorof Accounting

Mitsubishi UFJ Trust and Banking Corporation

General Meetingof Unitholders
（C）

（E）

Board of Directors
Executive Director

Mori Building Investment Management Co., Ltd.

Address

12-32 Akasaka 1-chome, Minato-ku, Tokyo 107-6011

EstablishedMarch 1984

Paid-in
capital

200 million yen

Shareholder

Mori Building Co., Ltd. (100%)

Business
licenses

Registered Residential Property Transaction Manager, Governorof Tokyo (4) Real Estate License no. 81587
Discretionary Transaction Agent, Minister of Land, Infrastructure
and Transportation License no.41
Registered as a financial instruments business, Kanto Local
Finance Bureau registration no. 408

Investment Corporation
Bond Fiscal AgentMUFG Bank, Ltd.
The Norinchukin Bank

Hideyuki Isobe

Supervisory Director Masakuni Tamura

Corporate
nameAdministrative Agent for
Unitholders’ Register,Special AccountManagement Institution

Sumitomo Mitsui Trust Bank, Limited

Reiwakaikeisha Tax Corporation

Asset Manager Overview

Supervisory Director Koji Nishimura
Supervisory Director Miyako Ishijima
Supervisory Director Emi Kitamura

Support Company Brand
Licensing Company

President & CEO

Hideyuki Isobe

Director

Kojiro Segawa

Director(External)

Toshio Takano

Auditors

AuditorAtsushi Suginobu

Telephone+81-(0)3-6234-3200

Fax+81-(0)3-6234-3201

Directors

Asset Custodian
General Administrator
of Operation of
Administration Organization

Accounting Auditor

（F）

（J）

Property Manager

Ernst & Young Shin Nihon LLC
Mori Building Co., Ltd.

Mori Building Co., Ltd.
（G）
（H）

（A）

Asset Manager（I）

Mori Building Investment
Management Co., Ltd.

（A）Asset Manager Agreement（B）Asset Custodian Agreement /General Administrator of Operation of
Administration Organization Agreement（C）General Administrator of Accounting
Agreement（D）Investment Unit Administration
Agency Agreement / Special AccountManagement Agreement（E）Fiscal Agency Agreement（F）Brand License Agreement（G）Support Agreement（H）Informal Information Agreement（ I ）Advisory Agreement（J）Property Management Agreement

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

About Us

Message from
the Management

Policy andStrategy

Sustainability
Management

E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

Contents

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Data

5

Message from the Management

Under the Basic Policy of “Investment in the city,” MHR contributes to the creationand development of cities and solving of social issues.
Social Role and Responsibility of Mori Hills REIT
Investment Corporation
Mori Hills REIT Investment Corporation (MHR) and Mori
Building Investment Management Co., Ltd. (MIM), theasset manager, aim to contribute to the creation anddevelopment of cities by providing investment opportunities
in high-quality urban assets to investors while maximizing
unitholder value through investment focused on thecompetitiveness and ability to create value of the “City,” asstated in the Basic Policy and Company Mission of MHR
and MIM.
Society today is faced with various challenges, andcompanies are expected to contribute to solving theseissues as they conduct business activities. We believe thatworking on these issues will in fact lead to increasing ourcompetitiveness.
MHR and MIM aim to contribute to the realizationof a sustainable society and maximization of unitholder
value in the medium to long term by focusing on ESG(Environmental, Social and Governance) initiatives andinvesting in high-quality urban assets while striving to
improve various social issues.
Promotion of sustainability-related operations requires
initiatives that involve the whole supply chain. We will
pursue joint initiatives with various stakeholders while
sharing values with them.

Identification of Materiality
In order to realize the Basic Policy and the Company
Mission, it is indispensable to take actions after sufficiently
understanding social change and demand. As such, MHR
has identified materiality after a series of discussions
on important issues to be addressed by referring to the
Sustainable Development Goals (SDGs), the shared rules
for and the goals to be achieved by the international
community in the twenty-first century, and such.
Social issues including climate change not only cause
problems in people’s daily life but also have a significant
impact on MHR’s business activities. The impact of ESG
initiatives by a company on the valuation and value of thecompany has grown every year.
As companies are expected to execute initiatives forthe development of a sustainable society leveraging theirbusiness characteristics and strengths, MHR focuses its
efforts on investing in real estate with excellent measures
for BCP and climate change to make further improvements
in day-to-day management operations. In addition, thefunds invested by MHR for property acquisition are utilized
by sellers such as Mori Building and other developers tocarry out new high-quality development. Such creates a
positive cycle by allowing further urban development andeventually solving social issues. These activities also leadto improvement in environmental issues and the creationof new industries in addition to enhancement of security
and safety of tenants and the community. We believe thatfurther promotion of such initiatives will result in the growthof MHR as well as contribute to society and our clients.

Most Recent Efforts
Turning to our recent ESG efforts, for the environment(“E”), MIM endorsed the TCFD’s recommendations in May
2020, began creating frameworks and analyzing scenarios,
deepened its scenario-based analyses in 2021 andpublished an overview of its results. We continue to work
to reduce greenhouse gas emissions in order to achieve
the government’s goal of carbon neutrality by 2050, always
considering potential new efforts and target-setting.
As to our efforts on social (“S”) initiatives, while placing
importance on the “International Bill of Human Rights”
and “Declaration on Fundamental Principles and Rights at
Work” of the International Labour Organization (ILO), as
well as the “Guiding Principles on Business and Human
Rights” of the United Nations, we have implemented
various initiatives emphasizing human rights and diversity
for our employees and also made efforts to further improve
the workplace environment by conducting employee
satisfaction sur veys using third-party organizations.
Because high-quality performance of employees is thesource of business activities, we regard talent development
and other such initiatives as crucial. Furthermore, despite
being faced with the COVID-19 pandemic, a global crisis,
we will press ahead with business activities responding tochanges in lifestyles and behaviors anticipated in the futureby accurately grasping situations while striving to manageand operate owned properties with an aim to continue
economic activities albeit prioritizing the safety of tenants
and local residents at the same time.
With regard to governance (“G”) initiatives, in order tocontribute to the realization of a sustainable society andmaximize unitholder value over the medium to long term,
we believe it is absolutely imperative to remain a company
that is trusted by society. We have worked on building fairand effective corporate governance and made efforts toenhance internal control through thorough compliance andrisk management. In April 2021, MHR increased its numberof directors to five and its ratio of women to 40% andcontinues to build a diversity-oriented structure.
We have also increased our ESG-related KPIs andtargets and will continue to work consistently to achieve
them while actively having dialogues with stakeholders in
an aim to utilize a diversity of opinions in our management
and business activities.

For Sustainable Growth and Development
Recognizing that efforts on solving social issues throughbusiness activities will enhance corporate value, we intend
to press ahead with initiatives by emphasizing dialogue
with stakeholders and sharing values with them.
We will promote and further a variety of ESG initiatives
and, with an eye on trends in development of international
ESG disclosure standards, step up our own information
disclosure.
I would like to ask for your continued support.

Hideyuki Isobe
Executive Director,
Mori Hills REIT
Investment Corporation

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

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Investment Policy■ Portfolio Composition Strategy

Investment Focusing on Premium Properties

Investment Focusing on Mixed-use Urban Spaces

MHR seeks to maintain the exceptional level of quality of its portfolio while aggressively
expanding. To that end, MHR has established a high standard for “Premium Properties”
which are to comprise at least 50% of the portfolio.
Premium properties = Located mainly in the central five wards of Tokyo (especially
Minato-ku) + Large scale + High-grade specifications

MHR believes combining all of work, residence, recreation, rest and study in one
area enhances customer satisfaction and asset value. MHR’s investments focus ondevelopments and properties in a mixed-use environment. Based on knowledge-based
and information-based society, MHR believes the accumulation of people, goods andinformation in one area with a mixed use function would lead to further value creation andvarious synergies.

Premium Properties

50

Focus on premium properties
Office buildings% or more

Office building focus

Tokyo's five central wards focus

Office building

Tokyo's five central wards
and their vicinity

50% or more

50% or more(Tokyo metropolitan area:
80% or more)

Residential
properties

Earthquake-resistance focus

Accumulation of people,
goods, and information

Investment focused on
properties' earthquake
resistance, the safety of the area,
disaster countermeasures, etc.

* Ratios are based on the acquisition price. * Tokyo area : Tokyo, Kanagawa, Chiba, Saitama

New value creationin the city

Premium Properties
Principal Use

More time and space created byproximity of work and housing

Retail facilities

Location

Scale
2

Office buildings

Tokyo's five central wards and their vicinity

Gross floor area of 10,000 m or more per buildingStandard leasable floor area of 1,000 m2 or more

Residential
properties

Tokyo's five central wards (primarily in the“three-A” areas) and their vicinity

Gross floor area of 2,000 m2 or more perbuilding

Urban evolutionary
cycle

Department stores, downtown shopping centers, large specialty stores & retail complexes, etc.
Flourishing areas in Tokyo's five central
wards and their vicinity
Retail facilities

Gross floor area of 10,000 m2 or more per building

Street front luxury brand shops, etc.
Exclusive, well-known destinations suchas the Ginza area and the Aoyama andOmotesando area

Various personal
interactions, goods
exchanges andinformation sharing

Gross floor area of 1,000 m2 or more per building

Furthermore, for properties with type of use other than those mentioned above, whether such properties are considered premium properties
will be decided after considering their unique characteristics and use. However, land with leasehold will be considered premium properties
when the location and buildings on land with leasehold satisfies the conditions for premium properties.
* Tokyo's five central wards: Minato, Chiyoda, Chuo, Shinjuku and Shibuya ward
* Three-A area: Akasaka and Roppongi area, Aoyama and Harajuku area and Azabu and Hiroo area

The cycle spreads to the surroundings areas,
resulting in further value creation

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

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Investment Policy■ Growth Strategy

Taking Advantage of the Mori Building Group's Comprehensive ExpertiseMori Hills REIT's core of the growth strategy is the proactive and maximum utilization of thereal estate related know-how that the Mori Building Group has cultivated through property
development, large-scale redevelopment, and property management operations.

Mori Building Investment Management Co., Ltd.

Support Agreement
MHR and MIM have signed a support agreement with Mori Building Co., Ltd.
◦First negotiating right on sales of Mori Building properties◦Provision of third party property information◦Other necessary support such as staffing

Advisory Agreement
MIM has signed an advisory agreement with Mori Building Co., Ltd.

Mori Hills REIT Investment Corporation

External growth support

Internal growth support◦Provision of research-related functions◦Provision of advisory and auxiliary functions concerning property acquisition andasset management

Property Management Agreement
Leverage Mori Building Co., Ltd.'s PM capabilities

First negotiating right on salesof Mori Building properties

New tenant leasing

Provision of third party property information

Management of existing tenants

Brand License Agreement

Provision of real estate related know-how

Leverage Mori Building Co., Ltd.'s brand power and support functions

Provision of real estate related know-how

Maximum use of overall strength
Property Management Agreement

Advisory Agreement

Brand License Agreement

Development capabilities

Management & maintenance capabilities

Information gathering capabilities

Mori Building Co., Ltd.

Brand strength

External growth strategy
Mori Building Co., Ltd

Real estate market,
third parties, etc.

Support Agreement

Property
information

Sale of Mori Building
properties
Information on sale of properties
owned by third parties

Preferential
negotiating rights
Third party property
information

Information through Asset Manager's own network

Mori Hills REIT Investment Corporation

Mori Building Investment
Management Co., Ltd(Asset Manager)

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Management Policy■ Operation and Property Management Policy
In order to secure stable income from the portfolio in themedium to long term as well as maintain and grow asset
value, MHR shall enhance satisfaction for the tenants of
the real estate relating to the operating assets and obtain
their trust in the medium to long term, and conduct its
asset management operations in a rational, efficient anddeliberate manner.

Leasing Management
Understanding of the market and the setting ofappropriate terms
MHR shall maintain an understanding of the market relevant to
the real estate relating to the operating assets by thoroughly
analyzing the current conditions and future trends of supply
and demand by geographic area and property use, with aparticular focus on the characteristics, tenant needs andtenant trends at competing properties. In addition, MHR shallset the most appropriate rent and other terms after thoroughly
understanding the characteristics of the real estate relating
to the operating assets, including location, convenience ofaccess to public transportation, customer mix and property
age, as well as relative competitiveness in the market.

Attracting new tenants
Taking into consideration the “Understanding of the market
and the setting of appropriate terms” set forth above, MHR
shall consider the approach for attracting new tenants,
and shall conduct appropriate marketing accordingly.
Appropriate proposals shall be made to address potential
new tenants’ various needs, including adjusting theschedules of moving in, ascert aining the required
facilities, adding new equipment and conducting interiorrenovations. In addition, rent levels shall be determinedbased on an overall determination of the potential tenant’s
creditworthiness, the ratio of the rent revenue to the overall
portfolio and type of lease agreement (length of term andwhether the term is fixed or not).

Tenant relations
MHR shall use its best efforts to provide appropriate
responses and proposals by understanding tenant concerns
and level of satisfaction with respect to the environment,
cleanliness, aesthetics, safety, security and disastercountermeasures, as well as any inclinations towards
expanding, reducing or changing their rented space,through daily communication and questionnaire survey(biennial). MHR shall recognize that high tenant satisfaction
leads to a higher valuation in the real estate market for thereal estate relating to the operating assets, as well as toattracting new tenants, and this point shall be appropriatelyreflected in the “day-to-day facility operation management”
and “large-scale repairs and renovations”. Regarding
renewal or extension of lease agreements, MHR shallcarefully consider the importance of this as a negotiation
point to ensure stable earnings, and shall make appropriate
proposals by understanding tenants’ disposition. In addition,
when a tenant moves out, appropriate negotiations on
terms shall be conducted with a view to future tenants andtaking into consideration contract terms, and appropriate
renovation shall be undertaken.

Leasing schemes
Based on an overall consideration of the conditions ofeach real estate property relating to the operating assets,stability of rent revenue and efficiency of operational
management, MHR shall make appropriate use of different
leasing schemes such as direct leases with tenants, passthrough master lease agreements and fixed rent master
lease agreements.

Direct Lease
Rather than adopting a master lease, the fiduciary trust or
MHR directly leases to the end tenant.

Master Lease
The fiduciary trust or MHR leases to the master lessee,
who in turn leases to the end tenant.

◦Pass Through Master Lease
In this type of master lease, the rent paid by themaster lessee and the rent paid by the end tenant
are always the same amount.
◦Fixed Master Lease
In this type of master lease, the master lessee pays
a fixed amount regardless of the amount paid by theend tenant to the master lessee.

Day-to-Day Management of Facility Operations
In addition to the facility management that is legally requiredof owners, MHR shall endeavor to conduct necessary facility
management in order to increase tenant satisfaction, and tomaintain and improve the physical, functional, and aesthetic
quality of the real estate related to the operating assets. In
addition, in order to strengthen the long-term platform forprofitability of the real estate related to the operating assets andimprove sustainability, MHR shall evaluate cost performance,
ensure that operations and costs are appropriate, introduce thelatest technology, and conduct rational and efficient operating
management based on the asset management plan.

Large-scale Repairs and Renovations
MHR shall do its best to avoid the deterioration of thephysical, functional, and aesthetic quality of the real estate
relating to the operating assets that results from aging. As
appropriate, large-scale repairs and renovations shall be
conducted to add new functions and designs in order tostrengthen the competitiveness of the real estate relating tothe operating assets. The necessary items and timing of suchlarge-scale repairs and renovations shall be listed in advance
per property, and shall be conducted rationally, efficiently, anddeliberately according to the asset management plan andasset management funding plan, after consideration of factors
such as their balance within the overall portfolio, as well as
their priority, evening-out of costs, and impact on existing
tenants, while also factoring in sustainability.

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Approach and System

Sustainability
Management

Policy and Approach
Mori Hills REIT Investment Corporation (MHR)
and Mori Building Investment Management Co.,
Ltd. (MIM), the asset manager, aim to contributeto the creation and development of cities by
providing investment opportunities in high-quality
urban assets to investor s while maximizing
unitholder value through investment focused on
the competitiveness and ability to create valueof the “City,” as stated in the Basic Policy andCompany Mission of MHR and MIM.
Society today is faced with various challenges,
and companies are expected to contribute tosolving these issues as they conduct businessactivities. We believe that working on these issues
will in fact lead to increasing our competitiveness.
MHR and MIM aim to contribute to therealization of a sustainable society andmaximization of unitholder value in the medium
to long term by focusing on ESG (Environmental,
Social and Governance) initiatives and investingin high-quality urban assets while striving to
improve various social issues.
Promotion of sustainability-related operations
requires initiatives that involve the whole supply
chain. We will pursue joint initiatives with various
stakeholders while sharing values with them.

Program which is established every fiscal year.
In principle, the Committee shall meet four times
a year and shall formulate policies and the content of
the Sustainability Promotion Program, monitor progresso f p r o g r a m s , d e l i b e r a t e va r i o u s s u g g e s t i o n s f r o mdepartments, etc. in light of social conditions and theoperating status of MHR.
The President & CEO approves the policies andpromotion programs, constantly monitors the thoroughpromotion of sustainability, and establishes and maintains asustainability promotion structure as a responsible party inpromoting sustainability.
Moreover, sustainability-related efforts shall be reported on
periodically to the Board of Directors of both MHR and MIM.
Each Board oversees the status of initiatives for important
issues related to ESG and the status of compliance and risk
management.

Initiatives throughout the Entire
Supply Chain
Promotion of sust ainabilit y operations, whether
environmental or social, requires initiatives that involve thewhole supply chain. We believe that joint initiatives withvarious stakeholders with aligned values are necessary.
By actively stimulating interactive communication withstakeholders such as tenants, local residents, property
management companies and with our sponsor Mori
Building, and by aligning our values, we aim to contribute to
the realization of a sustainable society.

Sustainability Promotion System

Sustainability

Our operations connected to sustainability will be promoted
primarily by the Sustainability Committee to be establishedby MIM.
The Chairperson of the Committee shall be the President& CEO while all directors and some Administration staff
shall comprise the committeepersons. Various initiatives
will be implemented based on the Sustainability Promotion

P39 Selection and Management Policies of the PM Company

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10Important ESG Issues (Materiality)

MHR identified ESG materiality in 2020 through the following process. It referenced theSustainable Development Goals (SDGs)*1 adopted by the UN in 2015 as global targets.

STEP 1 Issue Selection
Referring to the SDGs*1, ISO 26000*2, the GRI Standards*3, ESG evaluation organizations, and the
GRESB evaluation criteria, etc., 56 issues were selected for consideration.

STEP 2 Issue Importance Evaluation

Depiction of Evaluating the Importance of Issues (Critical Issue Matrix)
Importance to stakeholders

Materiality Identification Process

Areas to respondto with priority(Materiality)

Issues with high importance have been
designated as “areas to respond to with priority”
and identified as materiality(See the next page for MHR's materiality)

Areas identified
as issues
Importance to MHR

The issues selected in step 1 were then evaluated and prioritized through the two perspectivesof “importance to MHR” and “importance to stakeholders,” and a proposal of important issues (a criticalissue matrix) was prepared.

SDG Efforts

STEP 3 Confirmation of Validity
The validity of these proposed important issues was then confirmed by comparing them with important
issues of other companies in the same industry, key indicators of ESG evaluation organizations, andthe SASB*4 standards, in addition to exchanging options with external consultants.

STEP 4 Identification of Important Issues
Following deliberation concerning the validated proposed important issues at the Sustainability
Committee established at MIM, important issues related to ESG were identified for MHR.

*1 The SDGs (Sustainable Development Goals) are 17 goals included in the Agenda 2030 for Sustainable Development which was adopted by
the United Nations Sustainable Development Summit held in September 2015.
*2 ISO 26000 is an international standard for organizational social responsibility published in 2010 by the International Organization forStandardization (ISO).
*3 The GRI Standards is an international standard related to sustainability reporting established in 2016 by Global Reporting Initiative (GRI),
an international non-profit organization.
*4 SASB (Sustainability Accounting Standards Board) is a U.S. non-governmental organization that proposes standards for sustainability
information disclosure for companies. SASB develops sector-specific and industry-specific sustainability accounting standards (SASB
standards) for companies for when they disclose sustainability information to investors.

In order to further promote ESG-focused management, MHR has identified materiality toprioritize and made clear highly relevant SDG targets.
It aims to contribute to achieving a sustainable society by strengthening its
response to SDG and other social issues while maintaining and improving its businesscompetitiveness.

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

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Message from
the Management

Policy andStrategy

Sustainability
Management

E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

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Important ESG Issues (Materiality)

MHR’s materiality

Materiality

E

SocialG
Governance

Main related SDGs

Related Information◦Reduce greenhouse gas emissions and promote energy saving at
owned properties◦Use of renewable energy◦Participate in Japan Climate Initiative◦Support the TCFD recommendations◦Promote energy savings(such as introducing the energy saving technologies)◦Expand use of renewable energy

P16-23◦Coexist with nature◦Promote greenery and take measures against heat island◦Protection of biodiversity

P23,
P26

◦Response to sustainability certifications◦Various initiatives to obtain Green Building certifications
and make improvements◦Implement training regarding Green Building

P14-15◦BCP measures (disaster prevention and building resilience)◦Tenants' health, comfort and convenience◦Enhance BCP Measures◦Strengthen emergency management systems
and implement general disaster-readiness training◦Initiative for barrier-free access◦Due diligence when acquiring real estate◦Conduct Tenant Satisfaction Survey

P8
P33-34
P36-38◦Respect for human rights◦Promote diversity◦Create an appropriate environment for a whistleblower system◦Implement human rights and diversity training (including LGBT)◦Create a pleasant working environment for womenP28-29◦Talent development◦Provide personnel evaluations and feedback from diverse perspectives
including compliance and ESG initiatives◦Provide various course-based training and qualification acquisition systems

P30-31◦Promote a healthy and comfortable work environment
and improve employee's work/life balance◦Increase employee's satisfaction◦Promote paid holiday acquisition and overtime work reduction◦Maintain systems for employee safety and health management◦Implement health checks ◦Conduct Employee Satisfaction Survey

P31-32◦Mutual communication with Stakeholders(See P27 “Stakeholder Engagement”)

P27◦Strive for fair and effective corporate governance◦Adhere to compliance and corporate ethics◦Prevent conflict-of-interest transactions◦Identify risks and manage responses◦Respond to requests for ESG information disclosure◦Implement evaluation of the effectiveness of the board of directors◦Conduct compliance training including fraud prevention◦Regularly expose risks, as well as monitor and respond to risks appropriately◦Enhance ESG information disclosure on the website◦Issuance of ESG Report

P43-49Environment

S

Main Initiatives

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KPIs/Targets
KPIs/Targets
MHR has identified key issues relating to ESG (materiality) and set key performance indicators (KPIs) and targets for each issue.
By regularly tracking and analyzing our performance in relation to these targets and implementing any measures that are required, we aim to resolve issues with the goal of achieving asustainable society while maximizing value for our investors in the medium to long term.
Materiality

E
Environment

S

G

TargetInformation of Achievements◦Response to sustainability certifications◦Green building certification(Short-term) Maintain a certified property rate of 90% or more (by 2024, based on acquisition price)(Long-term) Maintain a certified property rate of 90% or more (by 2030, based on acquisition price)

Green Building
Certification◦Reduce greenhouse gas emissions◦Promote energy saving at owned properties◦Reduction greenhouse gas emissions (vs. 2013)(Short-term) 25% reduction (by 2024, based on intensity)(Long-term) 30% reduction (by 2030, based on intensity)

Climate Change◦Use of renewable energy◦Usage of renewable energy(No quantitative target : item to be verified)◦Coexist with nature◦Green ratio (key facilities)(No quantitative target : item to be verified)ー◦Reduction water use (vs. 2013)

10% reduction (by 2030, based on intensity)ー◦Recycling rate

75% or more (by 2030)◦Talent development◦Training hours ◦Subsidy system for qualifications(No quantitative target: item to be verified)◦Increase employee's satisfaction◦Employee satisfaction survey (by third-party organizations)Overall satisfaction level: 3.5 or more per year (max. = 5.0)

◦Diversity-related training for all employees

Once a year

◦Promote diversity

SocialItem◦Ratio of female managers(No quantitative target : item to be verified)◦Human rights training(No quantitative target : item to be verified)◦Number of cases reported on labor issues, discrimination and harassment(No quantitative target : item to be verified)◦Promote a healthy and comfortable work
environment and improve employee's work /life balance◦Health check participation rate

100% every year

◦Paid leave usage rate

85% or more every year

◦Overtime hours

Less than 15 hours per month (annual average)◦BCP measures(disaster prevention and building resilience)◦Portfolio PML

Maintain less than 1.0%

◦General disaster-readiness training◦Tenants' health, comfort and convenience◦Tenant satisfaction survey

Twice a year
. Office: once every 2 years . Residential: once every year

◦Respect for human rights◦Mutual communication with stakeholders◦IR-Activities and HP external evaluation(No quantitative target: item to be verified)◦Strive for fair and effective
corporate governance◦Ratio of female executives

Maintain 30% or more

◦Board meeting attendance rate

(No quantitative target: item to be verified)◦Compliance training(No quantitative target: item to be verified)◦Fraud / corruption-related(No quantitative target: item to be verified)◦Number of cases of whistleblowing(No quantitative target: item to be verified)

Governance◦Adhere to compliance and corporate ethics

Increasing Greenery
and Biodiversity
Resource Recycling(Water and Waste)

Initiatives with Employees

Initiatives with
Tenants andLocal Communities
Initiatives with Investors
Corporate
GovernanceCompliance andCorporate Ethics

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Environment Management System (EMS)

Environment
Initiatives

In order to move toward the realization of a sustainable society, MIM builds and operates its own Environmental Management
System (EMS) to continuously address various environmental issues.
MIM operates and reviews EMS through the “Sustainability Committee” which is responsible for planning, framing,
promotion and management of sustainability initiatives in general.

Organizational chart of Sustainability Promotion

Outline of Environmental Management System

MHR’s Board of Directors

Environment Management System
1-1. Company Mission and Environmental Policy and Position
2-1. Purpose and Operation of Environmental Management
System (EMS)
2-2. Sustainability Promotion System
3-1. Priority Activities and Environmental Performance Targets
3-2. Sustainability Promotion Program
4-1. Talent Development/Capacity Development
4-2. Communication with Inside and Outside
5-1. Monitoring/Measuring/Analyzing and Recording ofEnvironmental Performance
5-2. Review of Sustainability Promotion Program and EMS

ReportMIM’s Board of Directors
ReportPresident & CEO (Chairperson)
Report / Monitor

Sustainability Committee

Conceptual diagram of PDCA cycle

Reporting to MHR and MIM's Board of
Directors at least twice a year
Revise by
Review of environmental management
management
system and sustainability promotion
programParticipation in GRESB real estate survey
Confirmation of environmental performance

Environment

Disclosure of environmental
performance on website

Check /
Correct

Setting priority activities
Setting environmental performance targets

Plan

Implement /OperatePlanning sustainability promotion
programPM's efforts for reduction of greeenhouse gas
Various reports based on the Tokyo Metropolitan
Government's Ordinance on Environmental Protection
Progress confirmed by the Sustainability Committee
Employee awareness and education throughin-house training and external training

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Green Building Certification and External Assessment
Policy and Approach

Green Building Certification

MHR aims to contribute to the realization of asustainable society and maximization of unitholder
value in the medium to long term by investing in highquality urban assets while striving to improve various
environmental and social performance levels.
MIM ob tains a thir d-part y sus tainabilit yevaluation in order to better understand its own
achievement level and uses this as a benchmark forfurther improvement.
MIM has established the following objectives
and is taking action to acquire Green Building
Certifications.

Objective and Performance of Green Building Certificates Coverage Ratio

90%
90%

Long-range
objective（year 2030）

Maintain over

Short-range
objective（year 2024）

Maintain over(in acquisition price)(in acquisition price)

Performance

Performance (reference)(As of August 2, 2021)(As of August 2, 2021)

93.5%(in acquisition price)* Excluding Laforet Harajuku (Land)84.1%(in leasable floor
area)

80.0%

Acquisition of Highest Rank in CASBEE Real
Estate Certification System

Acquired Highest Rank in DBJ
Green Building Certification

Th e C o m p r e h e n s i ve As s e s s m e n t Sys t e m fo r B u i l t
Environment Efficiency (CASBEE) was established under
the leadership of the Ministry of Land, Infrastructure,
Transport and Tourism to appropriately identify and evaluate
profit-oriented real estate such as office buildings which are
well managed and have high environmental performanceand value.
CASBEE Real Estate Certification System evaluates
five categories, namely “energy and greenhouse gases,”“water,” “resource use and safety,” “biodiversity and site”
and “indoor environment,” considering indices that arecommon around the globe such as LEED, an international
environmental certification system.
MHR acquired rank S (the highest rank) ratings for
Roppongi Hills Mori Tower, ARK Mori Building, Toranomon
Hills Mori Tower, Atago Green Hills MORI Tower andHolland Hills Mori Tower and a rank A (the quasi-highest
rank) ratings for Koraku Mori Building and Akasaka TameikeTower.

DBJ Green Building Certification
Pr o g r a m wa s l a u n ch e d by D B J
in April, 2011 for the purpose of
supporting the properties whichgive proper care to environment andsociety (Green Building).
The program evaluates, certifies
and supports properties which arerequired by society and economy. It
makes comprehensive assessmentof properties, while evaluating various
factors which range from properties’env ir o nmen t al fe a tur e s t o t heircommunication with stakeholders,such as disaster prevention and proper
ARK Hills South Tower
care for surrounding communities.
ARK Hills South Tower acquired certification ranking of“Properties with exceptionally high class environmental &social awareness,” the sub-highest rank.

CASBEE-Certified Portfolio Buildings

CASBEECASBEE

Rank S

Rank A

★★★★★

★★★★

(in number ofproperties : 8/10
properties)

Roppongi Hills
Mori Tower

ARK Mori
Building

Toranomon
Atago Green Hills Holland Hills
Hills Mori Tower MORI Tower
Mori Tower

Koraku Mori
Building

AkasakaTameike Tower

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Green Building Certification and External Assessment

Approach to Green Building of Uncertified
Properties
MHR promotes energy-conservation through initiatives suchas replacement of LED lighting in common areas and repair
work of air-conditioning at Roppongi First Plaza, Roppongi
View Tower and Akasaka Tameike Tower (residential).
MHR also makes active efforts to reduce environmentalloads through proper separation and disposal of waste.
Roppongi View Tower: Renovation of common area with LED lighting

Before renovation

External Assessment
Acquired the highest evaluation of “5 Stars” in
GRESB Rating
I n t h e 2 0 2 1 G R E S B Re a l E s t a t e
As s e s s m e n t , M H R r e c e i ve d a “ 5St ars” in GRESB Rating , which isbased on GRESB Overall Score andits quintile position relative to global
participants. It also won a “Green Star”
designation for the tenth consecutive
year by achieving high performanceboth in “Management Component” that evaluates policies
and organizational structure for ESG promotion, and“Performance Component” that assesses environmental
performance and tenant engagement of properties owned.
GRESB is an annual benchmarking assessment tomeasure ESG (Environmental, Social and Governance)
integration of real estate companies and funds, as well as
the name of organization which runs the assessment. It
was founded in 2009 by a group of major European pension
funds who played leading roles in launching Principles for
Responsible Investment (PRI).

After renovation

Green Building Training and Qualifications
MIM regularly conduct training for all employees to improveknowledge and understanding of green buildings.
Furthermore, MIM encourages its employees to takethe following qualifications and lecture classes and assists
with the expenses in order to improve the management's
ability to help society mitigate the current burdens being
placed on the environment.
◦CASBEE-AP for Real Estate◦Energy Management Finished Trainee on the Energy
Saving Law◦ Introductory Seminar of “Tok yo Cap-and-Trade
Pr o g r a m ” f o r N e w l y A s s i g n e d M a n a g e r s a n dMembers in Charge

S：
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G：
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Climate Change
Policy and Approach
Greenhouse gas emissions have been increasing
steadily and it is believed that global warming willaffect long-term changes to the climate and in fact isalready causing various types of abnormal weather.
Working to reduce greenhouse gas emissions
and engaging in other measures against global
warming will contribute to easing the impact
on the climate. Moreover, providing real estate
properties with excellent functionality in terms ofaddressing these challenges is likely to engender
more positive opinion and stronger support
from tenants and this will lead to the enhanced
competitiveness of the portfolio.
MHR and MIM will aim to match compact
cities compounded with multifaceted urban
functions together with the various high energyefficient systems to realize cities with excellent
environmental efficiency.
Through comprehensive and high-quality
management of these urban areas, we willcontinue our efforts to reduce carbon emissions
and engage in initiati ves to counter global
warming and climate change.

Objective and Performance of Reduction Greenhouse Gas Emissions

CO2

30%
25%

Long-range
objective（year 2030）(intensity basis : vs year 2013)

Short-range
objective（year 2024）(intensity basis : vs year 2013)

Performance（year 2020）

32.6%

reduction(intensity basis : vs year 2013)

reduction

External Initiatives
The Japan Climate Initiative (JCI)
Mori Building Investment Management Co., Ltd. (MIM),
which is MHR's asset management company, joined theJapan Climate Initiative (JCI) in October 2020, supporting
its founding declaration. As a member of JCI, MIM aims
to realize the decarbonized society envisioned by the Paris
Agreement by taking in the experiences of companies, local
governments, and others who have implemented climatechange initiatives with a pioneering spirit and putting theminto practice.

The Investment Trusts Association, Japan (JITA)
JITA, of which MIM is a member, formulated the AssetManagement Business Declaration 2020, which statesthat its social mission is to support the realization ofa sustainable society with a high quality of life while

addressing social issues such as climate change throughinvestment activities. MIM’s views are aligned with thoseof JITA, and we are striving to tackle climate change byinvesting in and operating environmentally friendly realestate.

Support for / Response to the TCFD
Recommendations
M I M a n n o u n c e d i n M ay 2 0 2 0 i t s s u p p o r t fo r t h e
recommendations issued in June 2017 by TCFD (TheFinancial Stability Board’s Task Force on Climate-related
Financial Disclosures) , which was established by The
Financial Stability Board (FSB).
MIM will press ahead with risk management and initiatives
for climate change based on the recommendations and carryout information disclosure.

TCFD-Based Information Disclosure Table
TCFD Recommendation Summary[Governance]
Disclose the organization’s
governance around climaterelated risks and opportunities

Describe the board’s oversight of climate-related risks and opportunities
Describe management’s role in assessing and managing climate-related risks andopportunities

Disclose the actual and potential
impacts of climate-relatedrisks and opportunities on theorganization’s businesses,
strategy, and financial planning

Describe the climate-related risks and opportunities the organization has identified
over the short, medium, and long term
Describe the impact of climate-related risks and opportunities on the organization’s
businesses, strategy, and financial planning
Describe the resilience of the organization’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario[Risk Management]

Describe the organization’s processes for identifying and assessing climate-related risks[Strategy]

Disclose how the organization
identifies, assesses, andmanages climate-related risks

reduction[Metrics and Targets]
Disclose the metrics andtargets used to assess andmanage climate-related risks
and opportunities

Describe the organization’s processes for managing climate-related risks
Describe how processes for identifying, assessing, and managing climate-related risks
are integrated into the organization’s overall risk management

MHR’s Disclosed Information & Location
P5 Message from the Management
P9 Sustainability Management
P18 Governance-Promotion and Supervisory SystemP19-21
Strategy -Climate-Related Scenario
Analysis-

P9 Sustainability Management
P18 Risk Management-Climate Change Risk Management-

Disclose the metrics used by the organization to assess climate-related risks andopportunities in line with its strategy and risk management process

P14 Objective and Performance of Green
Building Certificates Coverage Ratio
P16 Objective and Performance of Reduction
Greenhouse Gas Emissions

Disclose Scope 1, Scope 2 and, if applicable, Scope 3 greenhouse gas (GHG) emissions and the related risks

P17 Carbon Dioxide Emission and Intensity

Describe the targets used by the organization to manage climate-related risks andopportunities and performance against targets

P14 Objective and Performance of Green
Building Certificates Coverage Ratio
P16 Objective and Performance of Reduction
Greenhouse Gas Emissions

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Climate Change

Indicators and Targets -Reduction Greenhouse Gas EmissionsWe set the targets of a 25% reduction by 2024 and a 30% reduction by 2030 in CO2 emission intensity for the total calculated floor area of MHR and MIM’s offices and properties owned by MHR(with 2013 as the baseline year). The targeted intensity is for the total of Scope 1 and Scope 2. The amount of CO2 emission decreased temporarily in 2020 due to the decline in the number ofworkers and visitors as a result of the spread of COVID-19.
Carbon Dioxide Emission and Intensity

Energy Usage and Intensity

Figures, with certain exceptions, are verified and validated by an independent third party. Scope 1 is entirely CO2.

[Boundary] Offices of MHR and MIM and properties owned by MHR (Cover rate: See the table below)[Boundary] Offices of MHR and MIM and properties owned by MHR (Cover rate: See the table below)（t-CO₂）50,000■ Scope 1 ■ Scope 2 ■ Scope 3

106.3（Kg-CO₂/m2）■ Scope 1 (t-CO₂)

120

103.7

101.0

40,00030,000 29,150

Intensity

29,33731,89495.9
31,251

100
81.5
28,94380
60

20,00040

10,000
0

2017

2018

2019

FY2017FY2018FY2019FY2020

1,487

1,626

1,843

1,767

1,718

■ Scope 2 (t-CO₂)

18,321

18,376

19,285

18,952

16,151■ Scope 3 (t-CO₂)

9,341

9,335

10,776

10,531

10,624

Intensity (Kg-CO₂/m2)

106.3

103.7

101.0

95.9

81.5

Verification / Guarantee rate (％)

80.7

78.9

77.4

77.4

77.7

Cover rate (%)

86.8

87.0

87.4

87.6

87.8

* Carbon dioxide emissions are calculated based on the “Manual for Calculating and Reporting
Greenhouse Gas Emissions” by the Ministry of the Environment and the Ministry of Economy,Trade andIndustry.
* Intensity is calculated by dividing the carbon dioxide emissions (Scope1.2) by the calculated total floor
area. The intensity in the baseline year (2013) is 120.9kg-CO2/m².
* For Scope 3, the calculation target was expanded in accordance with the above manual starting in 2020.
The figures for 2019 and before were changed in accordance with the new standard.

20
2016

FY201602020（FY）

Scope 3 Emissions by Category [Boundary] Offices of MHR and MIM and properties owned by MHR
category(Unit：t-CO₂)

FY2016FY2017FY2018FY2019FY2020

1. Purchased goods & services

2,090

2,318

2,583

2,686

2,677

2. Capital goods

2,493

2,036

2,891

2,606

3,632

3. Fuel-and-energy-related activities (not included in scope1 or scope2)

4,065

4,198

4,490

4,366

3,810

4. Upstream transportation & distribution

1

1

0

0

0

5. Waste generated in operations

680

771

831

862

495

6. Business Travel

4

3

7

3

0

7. Employee commuting

4

5

5

5

6

* Calculated based on the “Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain” by the Ministry for the Environment.
In the case of categories not included above, either there is no emission source, or they were included in the calculations for Scope 1 and 2.

■ Electricity ■DHC ■ City gas（GJ）300,000

200,000

1.02

1.02

190,452

197,588

Intensity（GJ/m2）

1.2

1.01
212,904

0.96
208,5310.84
184,556 0.8

100,000

0

0.4

2016

0
2020（FY）

2017

2018

2019

FY2016FY2017FY2018FY2019FY2020■ Electricity (GJ)

111,729

114,819

123,286

124,251

108,796■ DHC (GJ)

48,88650,15952,65848,83741,302■ City gas (GJ)

29,83732,60936,95935,44334,456

Intensity (GJ/m2)

1.02

1.02

1.01

0.96

0.84

Verification /Guarantee rate (%)

80.7

78.9

77.4

77.4

77.7

Cover rate (%)

86.8

87.0

87.4

87.6

87.8

* The energy usage of city gas is calculated by multiplying the amount of city gas used by
the unit calorific value specified in the “Manual for Calculating and Reporting Greenhouse
Gas Emissions” by the Ministry of the Environment and the Ministry of Economy,Trade andIndustry.
Also, intensity is calculated by dividing the energy usage by the calculated total floor area.

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Climate Change

Governance -Promotion andSupervisory SystemAs to initiatives concerning climate change, the Sustainability
Committee established in MIM plays a central role in
conducting risk management, drawing up policies andprograms, monitoring progress and such.
The Sustainability Committee, chaired and supervisedby the president of the asset manager and comprised of
all general managers and some general affairs department
employees, aims to promote company-wide measures.
Furthermore, the Boards of Directors of MHR and MIM
biannually receive reports on risk management and progressstatus of programs concerning climate change from theSustainability Committee, and together they supervise allrisks by reviewing the effects of risk management processes
and giving directions for new actions as necessary.

Matters reported at the Boards of Directors
The REIT (MHR)’s board of directors’ meeting (fourth of
fiscal period ending July 2021) and asset manager (MIM)’s
board of directors’ meeting (second of FY 2021) reported
on climate change-related risk management and progress in
the reduction of greenhouse gas emissions and discussed
future measures.

the impact of those risks and opportunities on the businessof MHR and MIM, we analyzed scenarios to see whether
we needed to revise our strategy, and exposed particularly
important risks based on likelihood, timing and financial
impact assessment.
Based on the results of this analysis, the Sustainability
Committee will formulate plans and programs and monitor
progress to step up current measures.

Adaptation to Public Policy/Regulations（t-CO2）35,00030,000Standard
emissionamount(30,988)

30,988(Reduction requirement)△15,5%

25,00020,00019,60919,031

19,920

2015

2016

2017

Reduction

21,691

21,131 requirement
line(26,181)2018

2019（FY）

15,00010,000Internal Carbon Pricing
We have set an internal carbon price (10,000 yen/t-CO 2)that we use as a reference for investment decisions andenergy-saving construction and that connects to preventing
global warming and climate change.
When considering investing in a new property, we apply
our internal carbon price to the property’s CO2 emissions
to calculate income and expenditure and use this as areference for appraisal and investment decisions.
Furthermore, when the amount of CO 2 emissions
reduced by energy-saving renovations (HVAC replacement,
LED conversion, etc.) is clear, we apply our internal carbon
price to that amount as a reference to decide whether toundertake these renovations.

Risk Management-Climate Change Risk Management-

Adaptation to Public Policy/
Regulations

MHR has established a project team for climate changerelated risks led by the President & CEO of MIM as amanagement structure independent from company-widerisk management, and the top leadership takes it uponthemselves to actively supervise the entire company with abroad, long-term perspective.
After supporting the TCFD’s May 2020 recommendations,
we once again identified the risks and opportunities for MHR
presented by climate change. That fall, along with grasping

MHR and MIM support the climate change policies
established by Tokyo Metropolitan Government for Tokyo
where our offices and the properties owned by MHR are
located, and we are working to reduce greenhouse gases
based on the Environment Ordinance to Ensure Tokyo
Citizens’ Health and Safety.

5,000
0

Standard
emissionamount* Aggregate figures for offices obliged to reduce emissions under the Tokyo Government’s
Cap-and-Trade Program, which makes it mandatory for large-scale facilities to reduce theirgreenhouse gas emissions (this applies to all office properties except Holland Hills Mori
Tower).
For some of the owned properties, the figure was calculated by multiplying the total by the
proportion for which MHR holds ownership rights.

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Climate Change

Strategy -Climate-Related Scenario AnalysisObjectives of Scenario Analysis

Analysis Scope and Preconditions

Th e o b j e c t i ve s a r e t o g r a s p t h e f u tu r e r i s k s a n dopportunities for MHR and MIM presented by climatechange-related extreme weather and heightened social
demands for climate change countermeasures as wellas to verify the effectiveness of current climate change
c o u n t e r m e a s u r e s a n d , a s n e e d e d , u t i l i ze t h e m i nformulating future strategies.
In accordance with the TCFD’s recommendations, wehave analyzed both the 2°C and 4°C scenarios, aiming toensure resilience in varying weather conditions and social
environments and achieve sustainable business growth.

Risk
type

Transition
risks

Physicalrisks

Driving Forces

Analysis Procedure[Region]
Limited to central Tokyo where MHR’s investment
properties are located[Scope] Entire supply chain from fundraising and property
acquisition to tenant management[Period] Now to 2050 (short-term: now to 2025, mediumterm: 2026-2030, long-term: 2031-2050)

1.Discuss the climate-related risks and opportunities
mapped out by the TCFD and identify factors likely tosignificantly impact the business of MHR and MIM
2.Map out and grasp the 2°C and 4°C scenarios based on
adopted scenario forecasts for the risks and opportunities
identified in 1
3.Calculate the financial impact of the forecasts in 2
on MHR and MIM (qualitative analysis where lack of
information makes quantitative calculation difficult)4.Consider measures based on the results of 3

Main Scenarios[2°C scenario]
RCP2.6 (IPCC AR5)、IEA SDS (IEA WEO2019 and 2020)[4°C scenario]
RCP8.5 (IPCC AR5)、IEA STEPS (IEA WEO2019 and 2020)*IPCC AR5: Fifth Assessment Report of the United Nations Intergovernmental Panel on
Climate Change
IEA: International Energy Agency SDS: Sustainable Development Scenario
STEPS: Stated Policy Scenario WEO: World Energy Outlook

Risk

Financial Impact andPeriod Maximizing
2°C Scenario◦Increased pricing on GHG emissions

Increased carbon tax burden◦Taxation on owned properties for their GHG
emissions due to carbon tax◦Mandates on and regulation of existingproducts and services

Increased investment in repair work and facilities to respond to regulations◦Strengthening of standards for energy conservation(zero-energy building, ZEB) of buildings andintroduction of regulations on total emissions◦Substitution of existing products andservices with low-carbon options◦Changing consumer behavior and preferences

Reduced demand for properties that perform
poorly in energy conservation◦Increased number of tenants who emphasize energy
conservation due to increased environmental awareness◦Increased stakeholder concerns or negative
feedback

Increases in fund-raising costs◦Buildings that do not save much energy lose
value as ESG investors multiply◦Increased severity of extreme weather events
such as typhoons and floods

Increases in repair costs for damages to owned
properties and degradation of existing assets◦Damage and destruction to owned properties
due to typhoons or floods◦Rising mean temperatures

Increases in utility costs◦Increases in utility costs

MediumLong-term

Opportunities and Countermeasures

Reference Information

4°C Scenario
ー

Small

Small

Mediumterm

Mediumterm

Small

Small

Long-termLong-term

Small

Small

Long-termLong-term

Small

Small

Long-termLong-term

Small

Small

Long-termLong-term

Reduce GHG emissions◦Increase percentage of renewable energy◦Introduce energy-saving equipment and energy management system

P22-23
Promotion of Energy Saving

Reduce utility costs◦Renovation to meet building energy-saving
standards (ZEB)◦Invest in facilities

P22-23
Promotion of Energy Saving

Increased demand for highly energy-saving
properties◦Acquire Green Building Certifications◦Disclose environmental performance information

P14-15
Green Building Certification

Lower fundraising costs◦Increase ESG evaluation rating◦Conduct green financing-◦Own highly resilient properties◦Take appropriate measures based on flood risk
assessment-◦Introduce energy-saving technology andincrease the green ratio◦Work with tenants to save energy

P22-23
Promotion of Energy Saving/Promotionof Greenery and Heat Island Measures

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Climate Change

2°C Scenario World: Low-Carbon Society (as of 2050)
Analysis Results
The 2°C scenario presents significant transition risks particularly if Japan introduces a high carbon tax to reduce CO2 emissions and MHR’s property management costs increase due to taxes onproperties’ CO2 emissions and renovations to meet stricter energy-saving standards and other environmental regulations. Stricter regulations will also impact tenants’ office selection, reducing
demand for properties that save less energy than their peers. Furthermore, if we own a large number of such properties, the cost to raise funds from investors and lenders could also increase.
In preparation for a transition to the low-carbon society of the 2°C scenario and its accompanying risks, MHR has mainly acquired its portfolio of highly energy-saving properties and those withhigh-level green building certifications to maintain competitiveness, and actively updates facilities on a continuous basis, so we deem these risks to have a limited impact on business.

Government

Weather
Generally, stay the same

Aggressive climate change policy◦Little change in typhoon frequency◦Little change in Japan’s flood frequency◦Slight rise in utility fees due totemperature increase◦Introduction of high carbon tax◦More government promotion of ZEBs,
stricter energy-saving standards

Investors / lenders

MHR

Increased ESG investment / lending

Limited increase in energy-saving investment◦Demand for more corporate ESG reporting◦Lower fundraising costs for owners of highly
energy-saving properties◦Some increase in investment to meet energysaving standards but limited◦Increase in carbon tax burden◦Steady demand for highly energy-saving properties

Clients (tenants)
Focus on energy saving in
office selection◦More tenant demand for highly energy-saving
properties

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Climate Change

4°C Scenario World: Intensification of Natural Disasters (as of 2050)
Analysis Results
The 4°C scenario forecasts increased renovation costs due to intensifying extreme weather and increased utility costs due to higher average temperatures.
Because MHR invests in highly energy-saving, resilient properties located in areas with low flood risk, we deem these risks to have a limited impact on business.

Government

Weather
Increase in extreme weather frequency

Passive climate change policy◦Increase in strong typhoon frequency◦Doubling of Japan’s flood frequency,
increase in risk of property flooding◦Rise in utility fees due to temperature increase◦No introduction of additional carbon tax◦Limited government promotion of ZEBs,
energy-saving standards

Investors / lenders
Increase in importance of physical risk
◦Little change in demand for corporate ESG
reporting◦Lower fundraising costs for owners of highly
resilient properties

MHR

Clients (tenants)

Limited natural disaster countermeasures /energy-saving investment

Focus on disaster response in
office selection◦Some property repair costs, operating loss, etc.
but limited◦Limited investment to meet energy-saving
standards◦Steady demand for highly resilient properties◦More tenant demand for highly resilient properties

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Climate Change◦Building Energy Management System

Promotion of Energy Saving
Introduction of The Energy Saving Technologies◦High-efficiency Air-conditioning System LOBASLOBAS (Low-carbon Building and Area Sustainability) is an
air conditioning system that optimally combines multiple
energy-conser ving technologies, including the use of
medium-temperature chilled water and low-temperature
warm water, and heat collection using heat pumps (turbo
chillers).
Based on an electrical system, it is expected to conserve
energy by approximately 40% compared to conventional
methods.
3

Cooling
tower

2

12℃

Heat exchanger
39℃
Waste heatTurbochiller12℃

Turbo
chiller13℃

Turbochiller

5℃

2

37℃
Heat
exchanger
Cylindrical vertical
thermal storagetank (2,200m³)

Flat connected
multi-level dipping
weir heat storagetank (2,000m³)

5℃

Heat recovery
turbo chiller 45℃
Waste heat

Boiler45℃(medium-temperaturechilled water)
Sensible heat

6℃
(general chilled water)

Cylindrical vertical
thermal storagetank (1,600m³)

Flat connected
multi-level dipping
weir heat storagetank (900m³)

Toranomon Hills S-BEMS(general chilled water)
0utdoor air latent
heat treatment
Heat
exchanger

Heat
exchanger

At buildings adopting grid ceiling lighting fixtures, MHR
has a method for leaving the lighting fixtures and changing
only the light sources to LED, for the purpose of improving
energy conservation performance, prolonging equipment
life, and conserving resources.
This removes the need for ancillary work (restoration
work and removal of sprinkler heads, air outlets, emergency
lighting, sensors etc.) when changing light sources, greatly
simplifying construction and conserving resources.
MHR is also undert aking the switch to LEDs at
Roppongi Hills Mori Tower, ARK Mori Building, and otherbuildings.

Mori Building's past BEMS

offices(low-temperature
warm water)
Sensible heat
13℃

Heat
exchanger◦Switching Grid Lighting to LED

Comparison of BEMS and S-BEMS

Hotel
Sharedresidential areas
Commercial facilities
Conference rooms

FunctionTurbochiller1

Building Energy Management System (BEMS) is a systemthat enables energy-conserving operations by assessing
energy usage conditions and indoor environments inbuildings. Energy usage conditions are checked in realtime through centralized management. Accumulating andanalyzing data also enables the elimination of excess andwasteful use of energy.
At Toranomon Hills Mori Tower, MB have implemented
Smart-BEMS (S-BEMS) which, in addition to existingf u n c t i o n s , h a s f u n c t i o n s fo r c l a r i f y i n g c r i t e r i a fo r
determining normal and abnormal measured values, further
increasing the efficiency of data analysis.

Basic functions

Extended functions

Further extended functions

Assessment ofenergy consumption

Heat source and airconditioning system
performance evaluation

Toward easier-touse BEMS

By building overall,by energy type,by equipment item,by application etc.
Creation ofreporting documents
Daily, monthly,
annual, regular,
and other reports

44℃(general warm water)Long-term data storage

Energy-conserving
control performance
evaluation
Energy-conserving
simulation function
Indoor comfort
evaluation
Equipment COP,
pump WTF,
air conditioner
ATF evaluation*

Decision functions
Setting of decision
criteria for each
evaluation item
Listing of decision
results (OK/NG)❶ Existing fixtures(fluorescent lights)❷ Lamps, ballasts etc.

❸ Installation of LED units❹ Attach louver, switch to LED

Collected data diagnosis
Abnormal datadetection function
Data communication
status monitoring
Objective❶ Air-conditioning system using medium-temperature chilled and lowtemperature warm waterAir-conditioning method separating sensible heat and latent heat treatment using
13°C medium-temperature chilled water and 37°C low-temperature warm water.
❷ Heat recovery heat source system
Use of waste heat from the turbo refrigerator cooling water, and adoption of heatrecovery turbo chillers.
❸ Large-scale thermal storage tank system
Combination of a large-depth (approximately 30m) cylindrical vertical thermal
storage tank and a flat connected multi-level dipping weir heat storage tank
(6,700m³ in total)

Assessment of normalenergy consumption

Discovery of latent
faults Checking
and optimization of
automatic control

Clarification ofdecision criteria* COP : Coefficient of Performance WTF：Water Transportation Factor
ATF：Air Transportation Factor

Building Management System to Measure Energy
Efficiency
MHR has introduced a system that measures and manages
energy efficiency by measuring and monitoring energy
usage at all office properties it owns.

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Climate Change

Green Lease
Tenant’s energy consumption through the usage of air
conditioning, lighting, etc. has a considerable impact on an
office building’s environmental performance.
Close collaboration with our tenants is a key factor inachieving optimal energy efficiency.
MHR holds an environmental countermeasure council
once or twice a year depending on the office building.
The council generates a report on the efforts to improvesustainability and raises awareness for power saving
methods.
As a reference for tenants to draw specific measuresfor conservation of energy, MHR has provided, at all officeproperties it owns, “WEB cloud services” as a tool to maketenants’ energy usage visible.
(Properties with the service as a percentage of all
owned properties: 98% based on acquisition price)
In addition to these efforts, MHR is further deepening
relationships with tenants by introducing “green leases”
which ser ve to align financial incentives and securecommitments from both parties.
MHR is gradually expanding this approach since theintroduction of the first green lease in ARK Hills South
Tower.

Promotion of Greenery and Heat Island Measures
As part of initiatives to adapt to climate change, MHR has
promoted greenery.
MHR aims to increase the “green ratio” by proactively
undertaking the landscaping of open spaces and rooftops.

Heat Island Measures
Spaces where trees have been planted have various
elements that provide coolness, such as the water-retention
effect of the ground supporting the trees, transpiration of
the leaves and shading from direct sunlight.
It is said that these spaces help to relieve the heatisland phenomenon.
Thermal images from aerial photographs clearly show
this effect as MHR-owned properties such as Roppongi
Hills, ARK Hills and Atago Green Hills have more “blueareas” that represent a lower surface temperature thantheir surroundings due to having many plants on site.

Mohri Garden at Roppongi Hills

Transition of Green Power Generation
As part of measures against global warming, solar power
generation systems have been installed at Roppongi Hills
and Toranomon Hills for effective use of unused and naturalenergy.
The power generated is used in lighting, etc. within thefacilities.

ARK Hills/ARK Hills Sengokuyama Mori Tower/Toranomon Hills/Atago Green Hills

The roof top of Suntory Hall at ARK Hills

Green Ratio of Major Development Projects (2019)

Change in Renewable Energy-Based Power Generation（MJ）

12,00010,000
8,000
6,000
4,000
2,000
0

10,294

3,140
2016

10,961Name

11,236

4,342

2017

2018

2019

2020（FY）

Completion

Green ratio (%)

ARK Hills

1986

43.3

Atago Green Hills

2001

51.9

Roppongi Hills

2003

30.1

Toranomon Hills

2014

30.4

(Reference) All of Minato-ku

21.8

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Resource Recycling (Water and Waste)
Policy and Approach
Depletion of water and various resources andthe environmental impact caused by waste isa problem that is growing in concert with theworldwide population increase and economic
development. Moreover, pollution of soil, water
quality and the air caused by chemical substances
is becoming an increasing important social issue.
Ignoring these matters will jeopardize thewelfare of people as well as social capital, and willlead to the loss of society’s trust in the companies
from which the causes originate.
Therefore, we believe that it is the company’s
responsibility to take initiative.
MHR and MIM promote the 3R acti vities(reduce, reuse and recycle) for water resources,
waste, materials and such to reduce the burden
on the environment.
We aim for the formation of recycling-oriented
cities as well as observe environment-related laws
and regulations, and thorough measures against
pollution.

Effective Use of Water Resources
We are targeting a 10% reduction by 2030 in water consumption intensity for the total calculated floor area of MHR and
MIM’s offices and properties owned by MHR (with 2013 as the baseline year). The amount of water consumption decreased
temporarily in 2020 due to the decline in the number of workers and visitors as a result of the spread of COVID-19.

Objective and Performance of Reduction Water Use
Long-range
objective（year 2030）

10%reduction(intensity basis :vs year 2013)* According to “Aqueduct 3.0 Country Rankings”
Performance（year 2020） by World Resources Institute (WRI), the Tokyo
area, where MHR’s properties are located, hasbaseline water stress (BWS) of less than 40%
reductionand is not categorized as an area with high(intensity basis : vs year 2013)
water stress.

34.7%

Adoption of Water-Efficient Equipment
We are working to reduce our water consumption byintroducing water-efficient equipment when carrying out
upgrading work at office properties owned by MHR. Waterefficient toilets (6 L per flush) were also installed in thewashrooms at Toranomon Hills Mori Tower at the time of
construction.

Use of Rainwater and Gray water
MHR has promoted effective use of water resources
at properties it owns by storing and recycling rainwatercollected from buildings throughout the area.
MHR also uses waste water (non-sewage and relatively
low contamination) as gray water (non-drinkable for generaluse) such as flush water for toilets and other applications
for effective use of water resources.

◦ The number of properties using rainwater andgraywater: 6 properties◦Properties with use of rainwater and graywater as apercentage of all owned properties: 77% based on
acquisition price

Trends of Water Intake Data and Intensity[Boundary] Offices of MHR and MIM and some properties owned by MHR■Rain Water ■City water（thousand m3 ）Intensity（m3/m2）

400
300
200

1.6

1.12

1.11

216

208

1.17

1.14

247

248

1.2
0.79
174

100
0

0.8
0.4

2016

0
2020（FY）

2017

2018

2019

FY2016FY2017FY2018FY2019FY2020■ Rain Water
3（thousand m ）

4

4

5

7

6

■ City water
3（thousand m ）

204

211

241

240

167

1.11

1.12

1.17

1.14

0.79

Cover rate (%)

86.8

87.0

87.4

87.6

87.8

Gray water
3（thousand m ）

47

53

58

58

28

3

2

Intensity (m /m )* Intensity is calculated by dividing the amount of water use by the calculated total floor area.

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Resource Recycling (Water and Waste)

Promotion of Recycling

Anti-Pollution Measures

3R in Managing Office Building
MHR’s properties which are managed by MB aim tosignificantly increase the recycling rate of all properties
managed by MB by promoting the recycle of paper waste
at offices as well as the garbage recycling of retail facilities.

Transitions of Waste Emission, Intensity and Recycling Rate
[Boundary] Offices of MHR and MIM and some properties owned by MHR■Incineration ■Recycle（t ）Intensity（kg/m2）2,000

8Objective and Performance of Promotion of Recycling
Long-range objective
over（year 2030）

75%

5.6

1,500
1,000

1,056

5.7
1,108

5.7

5.6

1,199

1,224

6
3.4

4

748

Performance（year 2020）

52.6%

We are targeting a recycling rate of at least
75% by 2030 at MHR and MIM’s offices andproperties owned by MHR.

500
0

2

2016

2018

2019

FY2016FY2017FY2018FY2019FY2020■ Incineration (t)

498

543

595

604

354

■ Recycle (t)FOCU S[Example] Improvement of separated
collection method
In order to promote the recycling of paper waste, weare creating awareness among tenants by improving
garbage separation and collection methods at offices
and creating a “Recycle Hand-Book.”

0
2020（FY）

2017

558

565

603

619

393

Intensity (kg/m2)

5.6

5.7

5.7

5.6

3.4

Recycling rate (%)

52.9

51.0

50.3

50.6

52.6

Cover rate (%)

86.8

87.0

87.4

87.6

87.8

* Intensity is calculated by dividing the amount of waste emission by the calculated total
floor area.

MHR and MIM thoroughly observe environmental laws
and regulations concerning environmental pollution andhazardous substances.
In MIM’s “Management Guidelines,” we list the usage
and management status of harmful substances suchas “chlorofluorocarbons, PCBs, asbestos, etc.” as due
diligence items at the time of acquisition of real estate,
stipulating the accurate understanding of the existenceof these substances and their status of management aswell as making this an element to consider in deliberating
acquisitions.
In addition, if hazardous substances are found in theproperties owned by MHR, appropriate processing andprocedures in accordance with laws and regulations shallbe maintained and the substances shall be handled strictly
so that they are not leaked or released.

Violations of Environmental Laws
and Regulations
At MHR and MIM, there have been no cases in which
punitive measures have been imposed due to a violationof environmental laws and regulations and no cases inwhich violations have been raised by conflict resolution
mechanisms (as of August 30, 2021).

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Increasing Greenery and Biodiversity
Policy and Approach

Biodiversity

While human livelihood and corporate activity
is supported by the various blessings of nature,
today, the planet’s green environment andbiodiversity are rapidly slipping away.
Efforts to maintain greenery and biodiversity
will allow us to sustain the blessings of naturefor future generations. In terms of the Investment
C o r p o r a t i o n’s b u s i n e s s a c t i v i t i e s , t h i s w i l lbe expressed as providing our tenants with
comfortable office and residential spaces thatare in tune with nature. This leads to enhanced
competitiveness of our portfolio.
MHR and MIMwill create surface
m i c r o e nv i r o n m e n t s w h e r e h u m a n s l i v e i nharmony with nature and shall provide spacest h a t e x c e l i n b i o d i v e r s i t y a n d a r e r i ch i nvibrant greenery. We will also foster people’s
environmental communities through these spaces.

Promotion of Greenery

Atago Green Hills
Inheriting the rich natureand history of the Seishoji Temple and Mt. Atago,
Atago Green Hills was bornwith the aim of creatinga n e t wo r k o f g r e e n e r yconnecting Shiba Park andother surrounding green Atago Green Hills
areas.
By preserving sloped green areas as much as possible
and raising saplings from the seeds of the trees there, wehave inherited the region's vegetation. MB placed green
paths along the slopes so people can enjoy nature while
minimizing the impact on plants and animals.

Roppongi Hills

Mohri Garden at Roppongi Hills

Green Ratio of Major Development Projects (2019)
Completion

Green ratio

ARK Hills

1986

43.3

Atago Green Hills

2001

51.9

Roppongi Hills

2003

30.1

Toranomon Hills

2014

30.4

(Reference) All of Minato-ku

Toranomon Hills
Realized appr oximately
6,0 0 0 m² of lush green
space on artificial groundby utilizing the MultiLevel Road System, abreakthrough system thatallowed for the constructionof an architectural structure Toranomon Hills
above the road of Ring Road No. 2.
At Toranomon Hills, which acquired AAA (the highest
rank) in the JHEP certification (*) for creating a stream andlush greenery in consideration of biodiversity, a diverse
environment composed of flowers, plants and trees ofnative species, water area, etc. has been established andserves as an oasis in the city where seasonal flowers,
plants and trees can be enjoyed and as a place for birds andinsects to nestle.
* This program quantitatively evaluates and certifies and certifies initiatives contributing
to the preservation and restoration of biodiversity. It is developed and operated by the
Ecosystem Conservation Society-Japan.

MHR aims to increase the“green ratio” by proactively
undertaking the landscaping of
open spaces and rooftops.

Name

Initiatives for protection of biodiversity are carried out in a systematic manner at all properties owned by MHR.

21.8

Diverse technologies andideas are given life in thecreation of distinctive
greenery. To communicate
the histor y of the land,
trees and an Edo periodgarden were preserved in
the development of Mohri Rooftop garden(Roppongi Hills)
Garden.
On the rooftop of Keyakizaka Complex, MB built a rice
paddy where local residents can enjoy rice planting andharvesting, and make effective use of the paddy as thenecessary weight for a ‘Green Mass Damper’ seismic
control system.

ARK Hills
MB created a largescale rooftop green areaat ARK Hills, the private
sector's first large-scale
redevelopment. MB
planted over 40,000 trees
in a green area exceeding
2 0 % o f t h e g r o u n d s , Sakurazaka
including the rooftop of Suntory Hall.
The 150 Yoshino cherry trees planted along peripheral
roads are now a famed spot for cherry blossom viewing.
In 1997, MB planted flowers in year-round green areas, andtoday continue evolving these into place for feeling thecharms of the seasons and interacting with greenery.

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Stakeholder Engagement

Social Initiatives

Stakeholder Engagement
MHR conducts its business activities by engaging with various stakeholders including its employees, tenant and local
communities, property management (PM) companies, and unitholders. MHR aims for sustainable growth by proactively
communicating with its stakeholders to understand and respond to their expectations and requests.
Stakeholders
Employee(MIM)

Tenants
and Local
Communities

PM Company

Investors

SocialRelationship with MHR

Main Initiatives Based on Expectations and Requests

Engagement Methods

Create a working environment
in which a diverse workforce,
which is the source ofcorporate competitiveness,flourishes◦Enhance Talent Development
Program◦Promote a comfortable work
environment and improve
employee's work / life balance◦Create a workplace culture that
respects human rights and diversity◦Personnel evaluation and feedback(twice a year)◦Conduct of various training◦Employee's satisfaction surveys(once a year)◦Grievance Reporting system (as needed)

Secure a competitive
advantage by creating an
attractive environment for
tenants and local communities
by providing safe, convenient,and comfortable spaces◦Enhance BCP measures including
building resilience and disaster
responses◦Provide properties thatconsider the health, comfort
and convenience of tenants◦Interact and communicate withlocal communities◦Review owned properties
and portfolio PML (as needed)◦Large-scale disaster training at
Roppongi Hills (twice a year)◦Tenants' satisfaction surveys(every other year)◦Hold events such as Hills Marche .
Hills Machi-Iku project◦Roppongi Clean-Up (once a month)

Maintain a competitive
advantage at MHR’s properties
through shared values onsustainability and collaboration◦Collaborate on climate change
measures including upgrading facilities
and implementing green leases◦Adhere to complianceand corporate ethics◦Confirmation of sustainability systems
and policies in writing (twice a year)◦Feedback interviews (once a year)◦Conduct investor relations◦Enhance ESG information
disclosure◦Obtain sustainability certifications◦Conduct financial results briefings
for institutional investors (twice a year)◦Participate in institutional and private
investor conferences (once a year each)◦Conduct individual investor relations
meetings with institutional investors(140 times in fiscal 2020)

Stable fund-raising based ontrust and increased unitholder
value in the medium to longterm

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Initiatives with Employees
Policy and Approach
Problems concerning human rights and labor
are critical global concerns, and in Japan therectification of long working hour s and thepromotion of women and elderly people havebecome significant social issues as the labor force
shrinks alongside a declining birthrate and an
aging population.
We b e l i e v e t h a t e m p l o y i n g d i v e r s e a n d
excellent human resources and supporting thecontinued development of their abilities is notjust a source of competitiveness for the company
but also the duty of the company towards its
employees.
MHR and MIM respects human rights and it isour policy to not discriminate against employees
based on their beliefs, religion, age, gender,
origin, mental and physical disabilities, etc.
We will work to establish a diversity-oriented
working environment where our human resources
can be effective.
We will introduce multifaceted systems andmeasures so that each and every employee withdiverse lifestyles and values can maximize theirabilities and grow their career in a healthy andsafe manner.

Related training programs
FY2019FY2020

Number of Total hours / Number of Total hours /times (days) employee times (days) employee
Human rights /diversity training

1

1

1

0.7

Bullying /harassment training

1

1

1

1

Promoting Respect for Human Rights
and Diversity
Respect for Human Rights
We have set the following human rights policy at Mori
Building Investment Management Co., Ltd., the AssetManagement Company.
In addition, we make sure that all executives andemployees are informed of the policy by regularly holding
training covering each theme in compliance training, etc.
We have set a policy to respect human rights and notdiscriminate people based on their belief, religion, age,gender, place of birth or mental or physical disability.
Also, we believe that the creation of a work environment
focusing on diversity and where diverse human resources
can be active will lead to the improvement of businessperformance and contribution to social development andare pursuing formation of such environment.
Moreover, the policies and action principles regarding
labor issues stipulated by MIM will also be prepared inlanguages other than Japanese, as necessary, and we plan
to spread understanding on them in a thorough manner.

Human rights policy
We support the respect for human rights based on the “International Bill of Human Rights,” “Declaration on Fundamental Principles
and Rights at Work” of the International Labor Organization (ILO), and “Guiding Principles on Business and Human Rights” of theUnited Nations, and make efforts to put it into practice.
The policy applies to all executives and employees. In addition, we also request our business partners to support the policy andrespect human rights.
1.Prohibition of discrimination
We eliminate various forms of discrimination based on race, religion,
gender, age, sexual orientation, physical disability, nationality, etc.
2.Prohibition of harassment
We do not allow any form of harassment that inflicts physicaland mental pain to others, including sexual harassment, power
harassment, maternity harassment, paternity harassment and careharassment.
3. Approval of freedom of associationand collective bargaining rights
With regard to the freedom of association and collective bargaining
rights, we comply with laws and regulations as well as support andrespect such rights.
4. Prohibition of forced labor
We do not allow forced labor against the will of workers throughviolence, intimidation, etc.
5. Prohibition of child labor
We respect the rights of children and do not allow child labor.

6. Payment of wage exceeding the amount of minimum wage
and compliance with the “equal pay for equal work” principle
We pay wages exceeding the minimum wage stipulated in laws
and regulations as well as make wage payments that will lead tothe improvement of living standard by also taking into considerationcommodity price. In addition, a fee system complying with the “equalpay for equal work” principle will be applied.
7. Reduction of excessive working hours
We comply with laws and regulations including the labor-managementagreement on overtime work (36 Agreement) and strive to cut
overtime work and control excessive working hours.
8. Health and safety of workers
We comply with laws and regulations and develop a working
environment where workers can work in good health and safety.
9. Respecting Regional Communities
In addition to respecting the rights of adult residents and children andprotecting human rights in regional communities, we are working
to make these communities more dynamic by promoting local
recruitment and procuring goods and services from local companies.

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Initiatives with Employees

Grievance Reporting and Response to Labor Issues

Promoting Women’s Participation

We have established a confidential reporting system thatenables all employees (including part-time and contractors)
to report when they are subjected to an act by a third party
that violates the human rights policy, regulations and action
principles including discrimination and harassment, or when
they have various other complaints and dissatisfaction.
The submitting party shall report details to the General
Manager of the Administration Department, the complianceofficer, or the president. If the General Manager of the
Administration Department or the compliance officer is notifiedof such details, they shall report such to the president, discuss
the issue with related parties, and respond in a prompt manner.
The individual who has caused the problem shall be subject todisciplinary action, including dismissal, demotion and pay cut, ortransfer to another position, etc. depending on the content.
In addition, we have also established a “whistleblowing
system” that enables employees to report directly
to outside attorneys acts that may violate laws andregulations, internal rules, action principles, and othercorporate ethics. The system is official and anonymousand provides legal protection under the Whistleblower
Protection Act. In the event of whistleblowing , theInvestigation Committee with members appointed byexternal lawyers will conduct necessary investigations andcountermeasures in accordance with MIM’s “Whistleblower
Protection Regulations” by considering the confidentialityof the whistleblower and the privacy of the concerned
parties. We prohibit retaliatory actions such as detrimental
treatment and harassment due to whistleblowing andtake appropriate measures to protect whistleblowers andto make “Whistleblower Protection Regulations” works
properly. Appropriate measures will be taken so that thework environment will not deteriorate after whistleblowing.
Furthermore, in order to prevent occurrence ofproblems and to take proper measures in the case ofsuch occurrence, training for managers and employees isconducted regularly.

We are aiming for a workplace environment where each
employee can fully demonstrate their individuality andabilities and we are working on creating a pleasant working
environment for women.
A child-care leave system and flexible working hours areprovided and we promote active use of a short-time work
system and paid holidays.

Number of cases of response to labor issues, discrimination and harassment reported
FY2016FY2017FY2018FY2019FY2020

0

0

0

0

0

◦Implementation of training on diversity for all
employees〔Target: once a year〕◦Realization of improvement in the ratio of female
managers (No quantitative target: need to be
confirmed)

have we experienced any merger or acquisition activity andaccompanying restructuring.
In addition, MIM has concluded Labor-Management
Agreements (36 Agreements) on overtime work with
employees, and strives to support employees’ well-being
and improve labor productivity by managing working hours
appropriately.
Personnel Data ◦Percentage of full-time employees among all employees: 100%
(All of the following periods)

FY2016 FY2017 FY2018 FY2019 FY2020
Number of executives andemployees

21

22

22

21

22

Male

15

16

16

15

16

Employment system for the elderly

Female

6

6

6

6

6

In order to train young employees and improve corporate
vitality by utilizing abundant knowledge and experience,
we have introduced a system to reemploy employees whowish to continue working among those who reached theretirement age until the age of 65.
Reemployed workers are able to use the same leavesystem and flextime system as those of general employees.

Number of retired employees

2

1

6

4

1

Ratio of retired employees (%)

9.5

4.5

27.3

19.0

4.5

Ratio of female officers andemployees (%)

28.6

27.3

27.3

28.6

27.3

Number of female managers

0

0

0

0

1

Ratio of female managers (%)

0

0

0

0

16.7

Number of female
executives

0

0

0

0

0

Ratio of female executives (%)

0

0

0

0

0

Percentage of employeeswith disabilities (%)

0

0

0

0

0

Merger or acquisition

0

0

0

0

0

Layoffs

0

0

0

0

0

LGBT
We aim to create a workplace environment where everyone
deepens their underst anding on LGBT and diverse
personnel will be able to play an active role without facing
discrimination. We hold training on LGBT regularly as part ofour training programs for human rights and diversity.
(FY 2019: once)

Labor-Management Relations / Collective
Bargaining Agreement
In its Working Rules, etc., MIM acknowledges basic laborrights such as freedom of association and the right tocollective bargaining, and we support and respect thoserights.
Although note that at this time no labor union has been
formed at MIM, labor-management relations remain positive,
and we have never implemented large-scale dismissals, nor* Number of executives and employees as of the beginning of the fiscal period.
* The ratio of retired employees is the figure calculated by dividing the number of retired
employees by the number of officers and employees.
* The ratio of female officers and employees is the figure calculated by dividing the numberof female officers and employees by the number of officers and employees.
* The ratio of female managers is the figure calculated by dividing the number of female
managers by the total number of managers.
* The percentage of employees with disabilities is the figure calculated by dividing thenumber of employees with disabilities by the total number of employees.

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Initiatives with Employees

Talent Development Policy / Program
Policy and Approach
In order to realize MIM's company mission (“MIM is
dedicated to the creation and development of major
metropolitan cities and MIM will provide investment
opportunities in high-quality urban assets to investors bothin Japan and overseas as a leading professional in the realestate investment fund business.”), MIM believes that
it is essential to attract and retain a diverse and capable
workforce and to continuously support their career growthand self-development.
To cultivate human resources with flexible thinking
and high ethical standards together with a high degree ofexpertise, mainly in real estate and finance, MIM introduces
essential knowledge and skills through on-the-job-training(OJT) and conventional training.
In addition, in order to improve staff effectiveness,to clarify company issues and to constantly improve
management methods, MIM conducts a semi-annual staff
assessment program - “Personnel Assessment and Feedback”
as a core component of our talent development strategy.

Talent Development Program
To allow employees to step up and grow steadily andcontinuously improve their capabilities as an employeeof the Asset Management Company of a J-REIT, MIM
established a clear image of “a position to aim at eachhierarchy” with “assumed image and eligibility requirement”.
In addition, MIM constructed a series of programs torealize that growth.
Model of talent development policy❶ On-the-Job-Training(OJT)❷ Training❸ Personnel evaluationand feedback❶ On-the-Job-Training (OJT)The basic principle of OJT within MIM’s human resource
development strategy is to establish appropriate goals andwork habits in the course of daily business operations, tocommunicate core job specific support, and to improve theoverall knowledge and ability of each person.

AssistantManager

Total time per
employee

11.8

hours

❸ Personnel Evaluation, Feedback and Variable

Pay Compensation

MIM believes that feedback is an essential process topromote the fulfillment of each employee’s talents andpotential. MIM seeks to concretely convey the problems
and remedial measures discovered during business activities
through a process of regular communication with employees.
Personnel evaluation consists of “performance evaluation”
which evaluates the degree of achievement for goals set
semi-annually, and “capability evaluation” which is conductedfrom various perspectives that evaluate the complianceadherence and the efforts towards ESG Evaluation.
Managers providing the evaluation and the director in
charge discuss the feedback thoroughly beforehand in order todeliver precise, objective and actionable guidance to employees.
By clarifying the improvement points on an individual
basis, MIM intends to improve employees’ ability.
E m p l oye e s a r e p r o m o t e d b a s e d o n p e r s o n n e levaluation. Variable pay compensation is rewarded annuallybased on satisfying clearly defined criteria.

GeneralManager

Real estate / financial training Various ability improvement training
IR training
Leadership training for
General Managers
Next-generation
management training
Subsidy System for Qualifications

Main Training
Category

Contents

Compliance,
ESG training

The training is conducted to improve knowledge andability of various themes that are fundamental to society,such as compliance, environment, human rights, diversity,
etc. to handle the business as a member of society.

Real estate/ financial
training

A lecturer explains the latest real estate and financial
market trends along with future prospects, etc. byutilizing various data and facilitating a question-andanswer session and group discussion.

Various ability
improvement
training

This training utilizes external organizations based on experienceto improve various abilities (logical thinking ability, explanation
capability, etc.) linked to personnel evaluation items.

Investor
Relations (IR)training

IR is recognized as an important task for a listed
investment corporation. Therefore, MIM provides a
lecture to selected members of senior managementon presentation skills and the model answers for
anticipated questions.
To prepare for IR activities, MIM conducts drills tomaster necessary skills through a simulated IR meeting.

Leadershiptraining for
GeneralManagers

The leader's ability to oversee each department
creates an extremely large influence on theperformance of the entire company, therefore, MIM
conducts the training session for General Managers
about “Managerial knowledge as a leader”, “Labor
management”, “Plan formulation, task setting andexecution" and “Guidance training of subordinates”.
These training includes the use of external
institutions to deepen knowledge and understanding
and make use of it in business execution.

Next-generation
management
training

With the CEO acting as a lecturer and a facilitator, theGeneral Managers brainstorm the prospects for various
management tasks and economic and financial scenarios.

Training programs and subsidy system
MIM also has a subsidy system for various training andqualification based on experience and linked to personnel
evaluation aspects.

SeniorManagerCompliance, ESG training❷ Study and Training
MIM conducts training in accordance with the roles andabilities of employees to acquire the knowledge and skills
necessary for further life-long, career growth.
MIM also has a subsidy system for qualification acquisition.
(Refer to “Training programs and subsidy system”)
Employee capacity
development training time(fiscal 2020)

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Initiatives with Employees

Employee capacity development training time

Benefits and work/life balance

FY2020
Numberof times(days)

Total
hours /
employee

Averagenumber ofparticipating
employees

Compliance training

3

3

21.3

ESG training

2

1.9

21.0

Real estate training

3

3

20.0

Financial training

2

1.8

20.0

Investor Relations (IR) training

3

4

4.0

1

1

1.0

4

4

5.8

Leadership training for
General Managers
Next-generation management
training

Average number of days per employee (days)

11.8

Average time per employee (hours)

11.8

We focus on employee benefits and work-life balance, andmake the following efforts for all employees (including parttime and contractors).

Survey of employee satisfaction

Subsidy System for Qualifications
In order to improve employees' skills as professionals in thereal estate fund business, MIM subsidizes the expense foracquiring licenses and qualifications by public and privateorganizations necessary for work.
The target is all employees (including part-time andcontractors).
Number of employees receiving subsidy
FY2016FY2017FY2018FY2019FY2020

15

17

14

13

14

MIM conducts an employee satisfaction survey once a
year for all MIM’s employees to realize a more comfortableworkplace environment by understanding the employees’
awareness of work and the current situation of theworking place. Also, since FY 2020, the surveys have been
conducted by third-party research organizations.
MIM anonymously collects responses to questions suchas “Sympathy for management philosophy”, “Meaning andchallenge of work”, “Human relationships and atmosphereat the working place” etc. MIM provides feedbacks on the
results to all employees and strives to enhance degree ofsatisfaction by implementing new policies.
Overall satisfaction score (5-point scale)〔Target: 3.5 points or more every year〕
FY2018FY2019FY2020

FY2021

3.5

3.5

4.0

4.2

* Since FY 2020, the surveys have been conducted by third-party research organizations.
* In FY 2018 and FY 2019, the surveys were conducted in-house and responses averaged on a
5-point scale.

We constantly take into consideration the pervasive
social dynamics while at the same time making thoroughefforts to improve work efficiency.
◦Paid holiday acquisition rate
〔Target: 85% or more every year〕◦Overtime working hours〔Target: less than 15 hours per month〕
Promotion of paid holiday acquisition and overtime work reduction
FY2016FY2017FY2018FY2019FY2020

Paid holiday
acquisition rate (%)

95.1

100

100

90.1

89.1

Monthly overtime
hours worked /employee(hours)

11.3

7.7

8.3

7.8

10.7

Child-care Leave System
MIM is promoting compatibility between employees'
child-care and work by providing leave systems etc. for
employees' childcare.
◦Child-care leave systems◦Child-care leave allowance◦Spouse maternity leave system
The number of employees who took childcare leave

Employee Stock Ownership Plan (ESOP)

Breakdown of qualifications held by employees as of theend of March 2021 is as follows:
Qualifications held by employees (as of the end of March 2021)
ARES Certified Master

9

Real Estate Appraiser

3Real Estate Transaction Agent

9

Certified Building Administrator

2

Certified Public Accountant

4Chartered Member of Securities Analysts Association of Japan1

MHR established the “Employee Stock Ownership Plan
(ESOP)” by aligning interests of MHR’s investors and MIM’s
employees aiming to improve unitholders' value over the
medium to long term, and to improve welfare benefits for
MIM’s employees.

Promotion of paid holiday acquisition andovertime work reduction
We promote the acquisition of paid holidays and the
reduction of overtime in order to improve employee's work/
life balance and be cognizant of employee's health.

The numberof employees
who tookchildcare
leave

FY2016FY2017FY2018FY2019FY2020

Male

1

0

0

0

0

Female

2

2

2

1

0

Percentage of employees returned to work during
above period (%)

100

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Category

Contents

Special Leave
SystemIn addition to annual paid holidays, MIM offers a
special leave system (Season vacation system).
MIM offer an Expired annual paid holidays reserve
system.

Child-care
Short-timeWork System

Employees living with and raising children until
the end of the third year of elementary school canshorten their daily working hours.

Care Leave
System

Employees are able to take care leave for family
members in need of nursing care.

Flexible timesystem

We have established a system that allows each
employee to flexibly set the time of start and endof work within a certain range according to theirconvenience and particular lifestyle needs.

Safety and Health Management
Safety and health management regulations are set up anda plurality of qualified persons such as hygiene promotersand fire and disaster prevention managers are placed in
the company to establish a system for employee safety
and health management with regular inspections at normal
times and ensuring safety when there are emergencies.

Health Checks
We conduct health checks once a year which cover morethan the number of items legally required.
In addition, the MB Group has a system that allows
employees to consult with resident health care professionals
on diagnosis results and mental health, etc. at all times.
◦Percentage of having health checks〔Target: 100% every year〕

Percentage of having health checks

Percentage of having
health checks (%)

FY2016FY2017FY2018FY2019FY2020

100

100

100

100

100

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Initiatives with Tenants and Local Communities
Policy and Approach
Currently, more than half of the world population
lives in cities. Therefore, the importance of cities isincreasing more than ever.
In order to build a sustainable city, we believethat it is necessary to prepare an environment thatis safe, resilient and rich in many aspects.
We consider the protection of human life
and assets from the impact of climate change,
environmental pollution and large earthquakes
as a social issue. In addition, we believe thatthe protection of socially vulnerable people inlocal areas, respect for their rights and efforts onregional revitalization are also an issue in urban
redevelopment and operation.
Safe and tough office buildings and residenceswith rich environments and a local community
are attractive to tenants, and establishing thesekinds of environments will provide competitive
advantages to our business activities.
MHR and MIM aim to provide safe, convenientand comfortable spaces to our tenants.
We will enhancing hard aspects such as
earthquake resistance performance and emergency
power supply as well as soft aspects such asadministrative structure for disasters and especially
focus on BCP (Business Continuity Plan).
Also, we intend to enhance our relationshipwith local communities while cooperating withthem.
In addition to respecting the rights of adultresidents and children and protecting humanrights in regional communities, we are working
to make these communities more dynamic bypromoting local recruitment and procuring goods
and services from local companies.
For our human rights policy, please see “Promotion of Respect for Human Rights and Diversity” on p. 28.

BCP Measures
We promote the enhancement of BCP measures fromvarious viewpoints so that tenants can use office andresidential spaces safely and comfortably even when there
are disasters.

Seismic Damping and Seismic Isolation
Most of the properties owned by MHR have the highest
level of seismic performance such as with wall dampers
and vibration dampers in the buildings. MHR has the lowest
portfolio PML among all listed J-REITs.

◦Portfolio PML〔Target: maintain less than 1.0% for every fiscal period〕
Portfolio PML
27th fiscal period
ended January 31,
2020

28th fiscal period
ended July 31,
2020

29th fiscal period
ended January 31,
2021

30th fiscal period
ended July 31,
2021

0.93%

0.93%

0.91%

0.91%

* PML (Probable Maximum Loss) refers to the probable maximum loss ratio expected to result
from an earthquake. A smaller figure indicates superiority in earthquake-resistance.

Earthquake Countermeasures to Match The Characteristic of The Building
MB, which developed the properties
owned by MHR, has various quakeresist ant engineering st andards
and various structural methods are
selected according to development
advantages and space usage.

Oil dampers (516 units installed)
These exert an effect incontrolling vibration fromstrong wind or even major
earthquakes, by absorbing
the energy of vibration
through fluid resistance.

◦Toranomon Hills Mori Tower

To r a n o m o n H i l l s M o r i To w e r
employs three types of vibration
control device, brake dampers, andunbounded braces.
These achieve advanced antiseismic performance allowing
continuity of business without major
damage, even of a major earthquakeon par with the Great Hanshin-Awaji
Earthquake or The Great East Japan
Earthquake.
B y a d o p t i n g s u ch v i b r a t i o ncontrol devices, Toranomon Hills
M o r i Towe r h o l d s J S C A ( Ja p a n
Structural Consultants Association)“Special Glade” seismic resistance
performance.

Brake dampers* (620 units installed)
The frictional force of thebraking material converts
the vibration energy into
frictional heat, lessening
damage to the building.
* Has properties similar to those of steel dampers

Unbonded braces (steel dampers)(82 installed in the building)
These braces use a soft
steel that has the ability tostretch, and is effective inabsorbing energy when an
earthquake occurs.

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Initiatives with Tenants and Local Communities

Emergency Electric Power System and Disaster
Supplies

FOCUS

Among MHR’s properties, Roppongi Hills Mori Tower isequipped with a private power generation system with its
own energy plant, and most of the other properties also
have high-performance emergency power supply functions.
MB, which manages and maintains MHR’s properties,
handles various stockpiles necessary for times of disastersuch as stockpiling food for approximately 270,000 meals,
blankets, medicine and portable toilets for each facility, allof which is the largest scale in the private sector. These areprepared for each facility.

Stable Supply of Power from An Independent
Power Station: Roppongi Hills
Roppongi Hills uses its own energy plant (speciallydesignated power supply business facility) to supply
electrical power to the area.
Because this plant uses city gas (medium pressure gas)as the fuel, it is not affected by power restrictions on theuse of electricity and is able to provide an extremely stablesupply of electricity power.
The use of a power supply with triple redundant safety
allows us to construct a power supply system with highreliability exceeding that of ordinary S-class building.

Response to barrier removal

Emergency Management Systems
MB, which manages and maintains MHR’s properties, will
shift into a disaster response organization structure when an
earthquake hits.
MB will quickly launch recovery operations and strive tosupport the day-to-day activities and business continuity oftenants.
In addition, MB has established several housing units for
its staffs to enable them to serve as disaster-response person
within the business area of a 2.5 km radius from Roppongi Hills.
About 100 residents are positioned as disaster-response
persons and undergo preparation for potential disasters on
regular basis and periodically conduct special training.
Also, general disaster-readiness training is conducted twicea year throughout the company and disaster-response persons
are required to participate in personnel training six times a year
on a permanent basis.
◦General disaster-readiness training〔Target: twice a year〕
General disaster-readiness training
FY2019FY20202

1

Disaster readiness night watch(on station 365 days a year)

Roppongi Hills
Loop Road 7

Privatearea

2.5 km radius

Disaster-readinesspersonnel housing
Total: Approx. 100 units

System of disaster-response person in case of emergency

Power grid

Uninterrupted(Continuous)
backupPower company(grid power)

Generator

Kerosene

Power station

Provides power in the case of emergencies
when the supply from city (medium-pressure) gas
and power companies is interrupted

Distance from major stations of owned
real estate properties: walk
* Based on the acquisition price（As of August 2021）

4-minute 10.7%

3-minute
17.8%

5-minute 0.5%

Directlyconnected
46.5%

2-minute
19.2%

MHR conducts tenant satisfaction surveys once every two years
in office buildings and once a year in most residential properties.
The survey content starts with general matters such as
location and image to matters related to facilities and other hard
aspects as well as soft aspects such as management systems.
The thoughts of the tenants are used as a reference inour property management.
◦Tenant satisfaction surveys〔Target: office once every two years, residence once a year 〕

Power-distribution
equipment

City (medium-pressure) gas(TOKYO Gas)

In the due diligence
conducted whencarrying out real estate
investment, we focus
on accessibility to public
transportation and havestipulated that in theacquisition criteria, realestate properties shall bewithin walking distancefrom major stations.

Tenant Satisfaction Surveys

Employees living within a 10 km radius(approximately 500 persons)Shared(Common) area

Access to public transportation

1-minute 5.3%

10 km radius

Roppongi Hills Mori Tower

We conduct risk assessment every year for all real estate
properties we own. In such risk assessment, we assess theperformance of our responses to the removal of barriers
and make necessary efforts.

Tenant satisfaction surveys
Mori Building’s General Disaster-readiness Training

OfficeResidence

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Initiatives with Tenants and Local Communities

Childcare Support Facilities
Childcare support facilities increase tenant office worker
convenience and employee satisfaction as well as add value
and building activity. MHR’s Roppongi Hills and Ark Hills
have childcare support facilities with abundant greeneryand an international character, contributing to the promotionof work-life balance of tenant staff.

Local Communities
We aim to foster a rich environment for the local
community through various communication activities.
As community investments in MHR’s properties such as
Roppongi Hills and ARK Hills, events and activities are held
like the Hills Marche and Hills Machi-Iku Project in which
local people can participate.

Hills Marche
ARK Hills has been holding the Hills Marche every Saturday
since autumn 2009 based on the idea of “enriching city
living by considering the important element of food,”
attracting about 3,000 people each time.
Living in the city proposes a new life style of urbanlife where you encounter high-quality cooking ingredientsgathered from various place of production and, as a result,people living in the city have a connection with people
living in places of production.It is this kind of new lifestylethat the event offers a glimpse at.

In the bustling atmosphere, many agricultural products
are distributed from farm producer to consumer and a richcommunication is nurtured through the joy of interaction
between nearby residents and the producers.

Hills Machi-Iku Project
Hills Machi-Iku Project is a project that provides experiential
l e a r n i n g o p p o r tu n i t i e s i n w h i ch ch i l d r e n c a n th i n kabout comfortable urban life with the three themes ofenvironment, safety and culture, which are the priorities
of MB in city planning. It began in 2007 as a venue forlearning at each Hills complex, and now has over 1,000
participants every year.
In the Environmental Tour that is held as a part ofthe project, visitors obser ve Roppongi Hills’s watertreatment facility while learning about the importance ofwater resources in urban life through the Water Secret
Exploration Tour and learning about the urban environment
as they enjoy nature by visiting ARK’s rooftop garden, which
is not usually open to the public, through the Hills Green
Exploration Tour.
In addition to participating through public openings,
we also contribute to the education of children in local
communities by using this project to provide them withlearning opportunities as part of extracurricular studies ofnearby elementary schools.

Donation to NPO
MIM has donated to the Japan Committee for UNICEF, apublic interest incorporated foundation, every year since2020 with the hope of protecting the innate rights ofchildren across the globe and for healthy and peacefuldevelopment.
Officers and employees of MIM are also called on tocontribute, and MIM combines the collected funds together
with its own contribution as a company to be donated.
Total donation amount to date:

719,945

yenChildren's rights
We agree with and support the “Children's Rights andBusiness Principles” of UNICEF.
With regard to “7. Respect and support children's
rights in relation to the environment and to land acquisition
and use,” we realized “improvement of safety in local
areas,” “participation of local residents in redevelopment
projects as right holders,” and “environmentally friendly
development with future potential including the reduction ofgreenhouse gas” at various properties including Roppongi
Hills owned by MHR.

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Actual Results of Urban Redevelopment Projects
Urban Site Investment Criteria
MHR and MIM aim to realize the update and reasonable
use of urban functions through urban redevelopment andcontribute to public welfare.
MHR and MIM are proactively conducting investment
in high-quality urban assets, taking into consideration theenvironment and safety, which thereby leads to urban
regeneration and regional revitalization.
The representative properties owned by MHR are
introduced as follows.

Roppongi Hills: Facility Plan and Concept

planned development site, and the height difference
between the site and the residential district where lowrise residences centering on wooden houses on the south
side concentrate and stand in line was once more than 15
meters.
The residential district was formerly an area with anarrow one-way road where vehicles and people could
barely pass each other and also had issues related todisaster prevention as fire trucks could not enter the area.
In addition, although Roppongi 6-Chome intersection
Roppongi 6-Chome Crossing is a place where inter-regional
trunk roads become merged, only the tunnel on the south
side had been developed and it was not connected on flatground.

Facility Plan
Roppongi Hills is a multipurpose city combining “living,working, playing, resting, studying and creating” in an areaof approximately 11.6 hectares, based on the concept of a
“Tokyo cultural center.”
It contains offices, residences, retail facilities, cultural
facilities, a hotel, a cinema complex, a broadcasting centerand more.
Fusing art and intelligence, Roppongi Hills is known as
the “Artelligent City.”
It attracts people from around the world, and theexchanges between different cultures generate new culture
and information.
* Roppongi Hills is the biggest private-sector urban redevelopment project in Japan. Afterthe Roppongi 6-chome district was designated a “redevelopment inducement area” by
the Tokyo Metropolitan Government in 1986, it took the involvement of approximately 400
landowners and 17 years to complete.

Concept◦Status before development

Roppongi Hills is located on the south side of Roppongi
6-Chome Crossing where Roppongi-dori Street and Ring
Road No. 3 become merged, and the planned development
site is an area with approximately 11 hectares (excluding
Roppongi Hills Gate Tower) surrounded by Roppongi-doriStreet, Ring Road No. 3 and TV Asahi-dori Street.
The site of TV Asahi extends from the center of the

Before redevelopment

After redevelopment◦Infrastructure maintenance of Roppongi Hills

In this redevelopment project, we intended to improve
the wide-area transportation network by developing a sideroad connecting Ring Road No. 3 (Azabu-Juban side) andRoppongi-dori Street on flat ground, which was not realized
until now.
In addition, we established a pedestrian deck similar
to a plaza (66 Plaza) at the upper part of the side road,extended the existing underground crosswalk anddeveloped the current intersection.
66 Plaza is connected to the passageway extending
to Roppongi Station on the Hibiya Line via an escalator
at adjacent Metro Hat and improves the convenience of
the users of the station as well as separates pedestrians
and vehicles at Roppongi 6-Chome Crossing and has also
secured the continuity of the townscape from Roppongi to
Nishi-Azabu.
66 Plaza has a three-layer structure in which the level

below it is used as an entrance and exit of the side roadand the vehicle road within the site and the level further
below it as Azabu Tunnel.
This is method behind this structure is unique, adopted
in urban redevelopment projects and said to be realized
for the first time by planning road construction andconstruction work on both sides of the road in an integrated
manner and executing construction at the same time.
Keyakizaka-dori Street, the main street in the area, runs
across the area in an east-west direction and connects TV
Asahi-dori Street and Ring Road No. 3.
It was developed as a street space where Zelkova trees
stand in line along the street and has a substantial widthof 24 meters including the portion with a setback of wall
surface at the site on both sides of the street.
We created a pedestrian space offering comfort anddesigned it based on the image of the streetscape by
integrally developing roads and structures along the road.
In addition, we developed an exclusive lane for
automobiles within the site (Mori Tower 1F/Center Loop),established entrances and exits for parking lots, a carriage
porch, a taxi bay and a bus stop on the exclusive lane
for automobiles and reduced the impact on surrounding
roads as well as sought to secure safety by separatingpedestrians and vehicles.

Roppongi 6-Chome Crossing
near Ring Road No.3

Loop Roadway

Ring Road No.3 near Mohri Garden

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Actual Results of Urban Redevelopment Projects

Roppongi Hills: Special Initiatives
GreeneryWe are creating a garden-like environment for the entire
city by allocating the space at ground level that we createdby making high-rise buildings to city streets, promenades,
green areas, and parks, and also by adding green areas to
the rooftops of buildings.

Disaster Prevention Facilities
1. Urban infrastructure maintenance
Before the development, the road within the area wasnarrow and steep, in addition to an obstacle in the passageof emergency vehicles.
We sought to improve convenience by establishing newroads such as Roppongi Keyakizaka-dori Street with a widthof 16 meters and length of approximately 390 meters andRoppongi Sakurazaka as well as connecting Ring Road No.
3 and Roppongi-dori Street on flat ground.
2. Specified electricity business facilities
Electricity for maintaining urban functions is an essential
element and is indispensable to maintain the functions of
the city and conduct restoration activities in the event ofdisasters.
At Roppongi Hills, we are enhancing the reliabilityof supply by establishing an energy plant that supplies
electricity and heat source within the area.
Power generation facilities constantly generate powerby using urban gas, but this system also enables power
generation using stocked kerosene in addition to back up ofelectricity companies.
3. Maintenance of water supply equipment
We installed water supply equipment for firefighting withan area of 100 m³ at a total of 8 locations near the area
along the newly established ward road to provide support
in the event of disasters within the area or in surrounding
areas.
In addition, we developed the Mohri pond that existed
even before the development and also secured a route thatenables fire pump cars to approach the pond.

4. Maintenance of Emergency wells
We are drilling an emergency well at a location near Mohri
Garden and a location facing Roppongi Sakurazaka thatcan maintain minimum life functions if water supply issuspended in the event of a disaster.
5. Maintenance of emergency toilets
We are developing manholes, etc. to enable the establishmentof two portable toilets at Sakurazaka Park (park provided by
Minato Ward) for use by people who evacuate to the area usein the event of a disaster.
The drainage pipe from the manhole has an earthquakeresistant structure including the connecting part of sewer
pipes and the main sewer pipe.
6. Preparation of stockpile warehouses
We are developing a warehouse space with an area ofapproximately 380 m² on the first basement floor of
Roppongi Hills Mori Tower and a stockpile warehousewith an area of approximately 200 m² on the south side of
Roppongi Sakurazaka.

Operation System(Emergency Wells)

Drain (Emergency Wells)

Operation Drill (Emergency Wells)

7. Disaster prevention monitoring system for the area
For large buildings alone, 11 buildings centering on 3 superhigh-rise buildings stand in line at Roppongi Hills, andthe basement floors and lower floors of the buildings areconnected in each block, forming a single town.
Furthermore, they are connected to Roppongi Stationon the Tokyo Metro Hibiya Line and north-side adjacent
Roppongi Hills North Tower via an underground passage,
and have connections with facilities in the surrounding area.
We established a disaster prevention monitoring
system for the area to make it possible to share informationand secure safety in the event of a town-wide disaster.

Community
In recent times there have been concerns that interaction
and connections between people in the heart of Tokyo
have been getting weaker, and the approaches of area
management and town management have been gaining
more attention. Like other conscious entities, Roppongi
Hills has been emphasizing activities for “the whole city.”
We inaugurated the Roppongi Hills Self-governing
Association to promote horizontal cooperation among thevarious people who come to the complex, cooperate withthe town councils in the vicinity, and further promote urban
development as the core of community activities. The selfgoverning association has inherited the infrastructure of the
Roppongi 6-chome Area Redevelopment Association, which
had led the urban redevelopment project for 17 years, andwas launched to newly welcome the residents living in thiscomplex and the shops and businesses, etc. located here.
Objectives of the self-governing association are tostrengthen security for the entire complex, including
disaster prevention and crime prevention measures, andto form an open-minded community that is only possible
in a multipurpose city like Roppongi Hills, where people ofdifferent nationalities, occupations, and ages can actively
participate in community activities.

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Actual Results of Urban Redevelopment Projects

Public Art

FOCU S
Roppongi Hills: Main activities

1.Roppongi Hills Earthquake drills
It is a comprehensive disaster prevention drill held for the purpose of reducing the scale of damage as much as possible
in the event of a disaster.
The emergency wells, emergency supplies and building structure within Roppongi Hills can be checked, and handson training such as first-aid treatment will be conducted.

2.Roppongi Hills Spring Festival / Summer Festival
It is a festival held in spring and summer by Roppongi Hills Self-governing Association.
The Spring Festival is held when cherry blossoms start blooming.
The cherry blossoms at Mohri Garden and the row of young trees along Sakurazaka will be illuminated andcommercial facilities within Roppongi Hills and TV Asahi will set up stalls at Mohri Garden.
The Summer Festival is an event held at the same time as the Azabu-Juban Festival.
A raised platform will be set at Roppongi Hills Arena, and commercial facilities within Roppongi Hills and TV Asahi will
set up stalls.
These festivals continue as community events that the residents' association “creates, participates in, and enjoys.”

3.Roppongi Clean-Up
Roppongi Clean-Up, an activity continuously held mainly by the Environmental Beautification Working Committee of theself-governing association on the third Saturday of every month.
About 100 people participate every time in this volunteer cleanup work, which started with the will to “clean the cityof Roppongi,” and they engage in the event with enthusiasm and enjoy making the city of Roppongi clean.
Participants from various facilities at Roppongi Hills including the tenants of residences as well as the staff offacilities and retail stores within Roppongi Hills, office workers, cleaning staff and students of Hollywood University ofBeauty & Fashion proactively participate in the event, and this network is spreading to places outside Roppongi Hills
such as neighboring high schools and the Rotary Club.

Emergency Drills

Roppongi Hills Summer Festival

Roppongi Clean-Up“Roppongi Hills Public Art & Design Project” was launchedto supply a key element in realizing the grand vision of
Roppongi Hills as a cultural center in Tokyo.
For this large-scale project with the ambitious themeof creating a new and much-needed cultural center inthe heart of the city, over twenty world-class artists anddesigners were specially commissioned to create works to
be placed at sites around the community.
Transcending the boundary between art and design,
the exquisite yet functional works are shaping the creative
landscape of this cultural center.

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Selection and Management Policies of the PM Company
Policy and Approach
In the real estate leasing business, the PM company
is a stakeholder as well as the most important
supplier to MIM, and MIM believes it is essential toshare sustainability values with the PM company topromote sustainable business practices.
For the purpose of operating and managing theassets we own, MHR has selected a PM company
that agrees with our sustainability-related policies
and also possesses the systems and expertise
required to implement them in practice.
In order to share our values with the PMcompany, MIM reviews the systems, policies andother activities related to sustainability twice a year
by written notice.
In addition, MIM evaluates the PM company
with an external evaluation agency once a year
to share and raise awareness through feedback
interviews and compliance exchange meetings
with the PM company.
In addition to these efforts, with respect tothe environmental performance of assets undermanagement, various measure such as additional
environmental countermeasure construction work
are examined and monitored based on reports
from the PM company.
External relative environmental performance
evaluation is also carried out through the GRESB
real estate evaluation and other review processes.
MIM outsources global warming
countermeasures for office properties to the PMcompany for a fee, and makes full use of theenvironment-related know-how cultivated by the
PM company.
MIM works with the PM company to maintainand improve the environmental performance of
MHR’s properties.

Selection and Management Policies of
the PM Company
In order to achieve its operating management objectives,
MHR shall entrust the task of operating management to
PM companies based on the criteria listed below, and shallendeavor to build a close relationship and cooperative
system with the PM companies.

Entrusting PM to PM companies
MHR shall entrust the implementation of various measures
regarding the real estate related to the operating assets,
as well as the making of proposals with respect thereto,
to PM companies as necessary. When a master lessee
arrangement is utilized for the tenant lease of real estate
relating to the operating assets, the PM company may bedesignated as the master lessee.

Selection criteria for PM companies
MHR shall select PM companies that understand theInvestment Corporation’s investment policies and operating
management policies for the assets relating to theoperating assets, and can conduct operations based on ashared understanding with MHR, with the following criteria
in mind:◦operational history◦financial condition◦organizational system◦knowledge and experience regarding the geographic
area and market of the relevant real estate◦ depth of knowledge of the relevant real estate andrelationships with tenants◦ability to attract new tenants◦ reporting capabilities with respect to the relevant
real estate◦level of fees and compensation◦ policies and systems, as well as ability to makeproposals and provide execution, regarding
sustainability

In addition to the above, when one of the following criteria
is satisfied, Mori Building Co., Ltd. may be selected as the
PM company.
◦It is determined that Mori Building Co., Ltd. has thebest understanding of the operational management
details of the property, such as having planned
or developed the property or having conducted
property management at the real estate property.
◦ E c o n o m i e s o f s c a l e a n d e ff i c i e n t o p e r a t i o n a lmanagement can be expected based on the fact thatMori Building Co., Ltd. already conducts property
management for multiple properties within the samegeographical area as the real estate property.
◦ It is determined that appointing Mori Building Co.,
Ltd. would be effective and appropriate based on
its strong information network and sales staff toattract new tenants or its management capabilities
regarding the relevant real estate property.

Supervision of PM companies
MHR shall, in principle, receive reports from the PMcompany once a month regarding the items listed below
to gain an understanding of the operating management
status of the real estate related to the operating assets,
analyze variances in results from the asset management
funding plan, and based on the foregoing, take appropriate
measures with regard to the PM company.
◦status of rent collection from tenants◦status of expenses◦status of tenants moving in and out◦status of facility management (maintenance of facilities
and equipment, status of maintenance and repair
construction and execution plans for the following
month)◦status of complaints and requests from tenants, andresponses thereto◦ rent market trends for the geographical areasurrounding the real estate relating to the operating
asset

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Evaluation of PM companies
The term for entrusting property management operations
shall, in principle, be the same as the term of the trust
agreement (in the case of holding the real estate throughtrust beneficiary rights) or the master lease agreement(in the case of a master lease arrangement). However,the property management agreement shall allow for earlytermination at MHR’s discretion, and MHR shall evaluate
the operations of the PM company at least once a year inaccordance with the points listed below. As a result of such
evaluation, if it is determined that the PM company does
not satisfy the selection criteria, MHR shall terminate thePM agreement and appoint a different PM company. As
necessary, as a result of the evaluation MHR shall endeavor
to raise the standards of the PM company's administrative
capabilities through appropriate instruction. Also, theterms and conditions of the propert y managementagreement shall be reviewed as necessary in order to seek
rationalization of fees and costs.
◦status of leasing management◦status of building operation and management◦status of construction management◦status of accounting and finance support operations◦status of reporting◦status of sustainability management◦status of other operations

Policy on real estate portfolio
management for employees andcontractors
With regard to the management of the real estate portfolio,
we pay consideration to our employees as well as assess
ESG initiatives in the selection of contractors.
As for social aspects, we check efforts on “health andsafety” and “fair wage” of employees in particular.

Policy andStrategy

Sustainability
Management

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Initiatives with Investors
Policy and Approach
Instead of pursuing short-term performance
shortsightedly, we aim to improve unitholders'value over the medium to long term byformulating strategies and policies whileassessing changes in society and the economic
environment in order to communicate sufficiently
with unitholders and to share a common direction
for the road ahead.
It is the policy of MHR and MIM to make fair
and accurate disclosure of information in a timely
manner that contributes to investment decisions.
We communicate policies and management
conditions to unitholders to establish a long-term
relationship based on trust while actively seeking
bi-directional communication by incorporating
the opinions of unitholders into our businessactivities.

IR Policy
Disclosure Policy（1）In managing assets, MHR shall always make timely, accurate and fair disclosure from the standpoint of investors.
（2）In order to be able to provide timely, accurate and fair disclosure pursuant to Clause 1, MHR shall establish andmaintain a system for collecting information that needs to be disclosed.
（3）With respect to the information collected pursuant to Clause 2, as necessary MHR shall consult outside experts andmake timely decisions regarding the need for disclosure, as well as contents and timing.
（4）All information that is required to be disclosed pursuant to the Act on Investment Trusts and Investment Corporations,
the Financial Instruments and Exchange Act or other applicable laws and regulations or by Tokyo Stock Exchange, Inc.
and The Investment Trusts Association, Japan, etc. shall be disclosed in the required format.
（5）All information that is important for investment decisions by investors shall be made on a voluntary and proactive
basis.
（6）If entering into forward commitments in connection with the acquisition of a property, MHR shall make appropriate
disclosure in accordance with applicable laws and regulations, etc.

IR Activities

Timely Disclosure Flow
Recognition of information subject to timely disclosure
Information on financial results, information on decisions and events, etc.
Preparation of disclosure materials by the department in charge(Investment Department / Asset Management Department / Financial Department /Accounting Department / Administration Department)

Conveying of information to the department in charge of disclosure
Consideration by the compliance officer and confirmation by experts
Tokyo Stock Exchange, attorneys, audit corporations, certified tax accountants, etc.
Disclosure procedures by the department in charge of disclosure
Decision on timely disclosure by the president & CEO of the asset management company

Report on the Management Structure and System of the Issuer ofReal Estate Investment Trust Units and Related Parties

https://www.mori-hills-reit.co.jp/en/ir/library/Investment/tabid/293/Default.aspx

Information disclosure
TDnet and the MHR website

The following is MHR’s IR schedule.
◦End of fiscal periods: January and July
◦Announcement of financial results (financial reports):
March and September◦ Briefing session on financial results: March and
September◦ Delivery of asset management reports: April andOctober

Financial reports, Presentation materials, Semiannual reports,
etc. are uploaded on the MHR website as appropriate.
For detailed IR activities, please see “ Investor Relations– IR Library – Report on the Management Structure andSystem of the Issuer of Real Estate Investment Trust
Units and Related Parties – 2. Management Structureand System of the Investment Corporation and the AssetManager – (3) Policies on Transactions Involving Conflicts ofInterest.”

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Initiatives with Investors

Improvement of IR Tools

External Assessment

Semiannual Reports

All Japanese Listed Companies' Website Ranking

The semiannual reports is sent to investors each period and presents the accounts andstatus of assets under management in the “legal pages” as well as the “optional pages”
which provide easy-to-understand summaries.

Nikko Investor Relations Co., Ltd. announces a valuation of websites of all listedcompanies by investigating the degree of information disclosure based on objective
evaluation items from its unique perspective.

Presentation Materials
The presentation material summarizes accounts and the status of assets undermanagement and are used for meetings with analysts and institutional investors after theannouncement of financial results.

Press Releases
In addition to the timely disclosure required as a listed investment corporation, we
disclose information that is deemed useful to investors.

“AAA Website” in 2020

“AAA Website” in 2019

“AAA Website” in 2018

“AAA Website” in 2017

“AAA Website” in 2016

“AAA Website” in 2015

Home Page
We post diversified information including the outline and policy of MHR, status ofassets under management and latest press releases in a timely fashion and an easy-tounderstand manner.

Result of IR-Activities
We conduct various IR activities to explain management situations and policies tounitholders in order to establish a bidirectional communication with unitholders, obtaining
feedback and utilizing their perspectives in our management.
IR Activities in 2020
Briefing session on financial results with institutional investors

2 times

Conference with institutional investors

1 timeIndividual meetings with institutional investors

Internet IR Award
Daiwa Investor Relations Co. Ltd. evaluates and grades the websites of all listedcompanies based on objective evaluation from its unique perspective and selects thosecompanies which have created especially excellent IR websites and used them in theirinformation disclosure and communication activities in an effective manner.

140 times
Internet IR“Grand Prize”
in 2018

Internet IR“Grand Prize”
in 2016

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Corporate Governance

GovernanceInitiatives

GovernanceSocialPolicy and Approach
In order to contribute to the realization ofa sustainable society, we aim to maximize
unitholder value over the medium to long term.
We believe that it is absolutely imperative toremain a company that is trusted by society.
By firmly acknowledging this belief, MHR andMIM work on building fair and effective corporate
governance and stri ve to enhance internal
control through thorough compliance and risk
management based on an appropriate complianceand internal control structure.

Disclosure Materials for Financial Results

https://www.mori-hills-reit.co.jp/en/ir/library/tabid/209/Default.aspx

Corporate GovernanceIn addition to a general meeting of all unitholders, MHR’s
governance structure consists of one executive director,
four supervisory directors, the board of directors and an
accounting auditor as required by the Act on Investment
Trusts and Investment Corporations.
The executive director undert akes executive
management and represents MHR. The super visor y
directors oversee the executive director's performance ofthe position’s duties.
The board of directors is comprised of the executive
director and the supervisory directors and makes important
decisions regarding the execution of MHR’s duties, suchas approval of the executive director's execution of MHR’s
important duties and approval of financial statements.
The executive director reports to the supervisory directors
from time to time regarding the status of asset management,compliance and risk management and other matters.
Each supervisory director oversees the execution ofduties by the executive director through the reporting on
investigation requested by the supervisory directors.
The Accounting Auditor performs the audit of financial
statements etc. of MHR and reports to the supervisory
directors in the event of discovering any serious actions
in violation of laws and regulations or actions violating theproper execution of duties by the executive director.
For details on the following, please see “Investor
Relations – IR Library – Securities Reports – 1. MHR’s
Outlook – (4) MHR’s Organization – 1) MHR’s Governance.”◦General Meeting of Unitholders◦Executive Director, Supervisory Directors and Boardof Directors◦Accounting Auditor◦ Supervisory organization, personnel and procedures
through internal controls and Supervisory Directors◦ Coordination between supervision through internal
controls/Supervisory Directors and Accounting Audit◦Status of MHR’s management structure for related entities

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Corporate GovernanceManagement Profiles (as of June 30, 2021)
Name

Brief Profile
April 1993
May 2002
June 2002
November 2003
April 2005
October 2005

Executive
Director

Hideyuki
Isobe

July 2007
November 2007
April 2008
June 2010
April 2011
April 1977
September 1985
October 1986
February 1990
September 1990
April 1997
April 2004

Supervisory
Director (The chairperson of
the Board of Directors)

Masakuni
TamuraFebruary 2006
January 2018

June 2018
October 2020

Koji
Nishimura

Mitsui Construction Co., Ltd.
Seconded to Mitsui Trust Bank, Ltd. (presently, Sumitomo
Mitsui Trust Bank, Ltd.), Real Estate Department
Sigma Planning Institute, Inc.
Registered as Real Estate Appraiser
Sigma Planning Institute, Inc., Director
ARC Brain, President (current post)
Meikai University, Faculty of Real Estate Sciences, Departmentof Real Estate Sciences and Meikai University, Graduate
School of Real Estate Sciences, Part-Time Lecturer
Mori Hills REIT Investment Corporation, Supervisory Director(current post)
Japan Medical Solutions Co., Ltd., Director (current post)

Name

Brief Profile
April 1990
April 1990
September 2015
September 2020
April 2021
June 2021

0Supervisory
Director

Registered as attorney
Joined Kizawa Fujiwara Law Offices (presently, Hashimoto
Sogo Law Offices)
Member of Housing Dispute Examination committee in Tokyo
Bar Association (current post)
Opened Ishijima Law Office (current post)
Mori Hills REIT Investment Corporation, Supervisory Director(current post)
Vice Chairperson of Committee on Housing Dispute Settlement
Agencies in Japan Federation of Bar Associations (current post)

EquityOwned

0

MiyakoIshijima
April 1987

0Supervisory
Director

Emi
Kitamura

December 1990
September 1995
December 1998
August 1999
October 2005
September 2010
June 2013
May 2017
April 2021

Joined Yasuda Trust & Banking Co., Ltd.
(presently, Mizuho Trust & Banking Co., Ltd.)
Registered as Real Estate Appraiser
Joined Mimura Tax & Accounting
Registered as Certified Public Accountant
Registered as Certified Public Tax Accountant
Mimura Tax & consulting, Partner
Mimura Tax & consulting, Representative (current post)
Miyairi Valve Mfg. Co., Ltd. Auditor (current post)
TSUNAGU GROUP HOLDINGS Inc. Auditor (current post)
Mori Hills REIT Investment Corporation, Supervisory Director(current post)

0(Note) Executive Director and Supervisory Director may be officers of corporations other than those listed above, but none of them has any interest in MHR.

April 1992
April 1992
April 2004
November 2004
December 2014
April 2017

Supervisory
Director

Mitsui Fudosan Co., Ltd.
MBA from Wharton School, University of Pennsylvania
Colony Capital Asia Pacific
Mori Building Urban Fund Management Co., Ltd.
(presently, Mori Building Investment Management Co., Ltd.)
Mori Building Investment Management Co., Ltd, General
Manager of Business Development Division
Mori Building Investment Management Co., Ltd, General
Manager of Investment Department
Mori Building Investment Management Co., Ltd., General
Manager of Investment Advisory Department
Mori Building Co. Ltd., General Manager of Finance Planning
Department, Finance Division
Mori Building Co. Ltd., General Manager of the Business
Development Department, Finance Division
Mori Building Investment Management Co., Ltd.
President & CEO (current post)
Mori Hills REIT Investment Corporation, Executive Director (current post)

EquityOwned

Registered as attorney
Joined Matsuo Law Offices
Chuo University Faculty of Law, Full-time Lecturer (current post)
Matsuo & Kosugi, Partner (current post)
Seraku Co., Ltd., External Director (current post)
Mori Hills REIT Investment Corporation, Supervisory Director(current post)
Ocean Network Express Holdings,Ltd. Auditor (current post)
Plus Alpha Consulting Co., Ltd., External Director (current post)

Independence of supervisory directors
and chairperson of the Board of Directors
Four supervisory directors are independent directors pursuant to the Act on Investment
Trusts and Investment Corporations.
The chairperson of the Board of Directors is Masakuni Tamura, Supervisory Director.
0

Policy on gender diversity concerning director composition
The policy is to support and respect gender-diversity-oriented approaches and we aim to
make the percentage of female directors 30% or more.
Current percentage of female directors：

40％

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Corporate GovernanceCriteria for Electing Directors

Director Pay, Director Equity Policy

Directors of MHR are elected based on the following criteria and on the condition that they
are not disqualified per the stipulations in the Act on Investment Trusts and Investment
Corporations, and related laws.
Directors are appointed as a result of the resolution of a General Meeting ofUnitholders.

Directors of MHR may not buy or sell investment units of MHR in order to prevent insider
trading as stipulated in the Insider Trading Management Regulations of MHR.

Criteria for Electing Directors

Director Pay

Title

Name

Reasons for Election

Status ofAttendance in 29th
fiscal period ended
January 31, 2021

Executive
Director

Hideyuki
Isobe

Mr. Isobe was elected with the expectation that he would
be able to undertake business management as Executive
Director based on his knowledge and experience, etc. in thereal estate financing business from a broad perspective.

6/6 times(100%)

Supervisory
Director
Masakuni(The chairperson
Tamuraof the Board of
Directors)

Mr. Tamura was elected with the expectation that he would
be able to oversee the Company’s management based on his
knowledge and experience, etc. as a Real Estate Appraiser
from a broad perspective.

6/6 times(100%)

Supervisory
Director

Koji
Nishimura

Mr. Nishimura was elected with the expectation that he would be
able to oversee the Company’s management based on his knowledge
and experience, etc. as a lawyer from a broad perspective.

6/6 times(100%)

Supervisory
Director

MiyakoIshijima

Ms. Ishijima was elected with the expectation that she would be able
to oversee the Company’s management based on her knowledge andexperience, etc. as a lawyer from a broad perspective.

-

Supervisory
Director

Emi
Kitamura

Ms. Kitamura was elected with the expectation that she would
be able to oversee the Company’s management based on her
knowledge and experience, etc. as an expert of accounting,tax, and real estate from a broad perspective.

-(Note) Ms. Ishijima and Ms. Kitamura were appointed Supervisory Director on April 16, 2021.

Evaluation of the Effectiveness of MHR’s Board of Directors
Self-evaluation is conducted once a year to identify issues and lead to improvement in theeffectiveness of MHR’s Board of Directors.
In the evaluation implemented in May 2021, the evaluation was generally high, andthe effectiveness of MHR’s Board of Directors is secured. On the other hand, onboarding
program to the new directors and close communication between the board members wererecognized as issues for further improvement. Reflecting the self-evaluation this time, MHR
will continue to strive to further improve the effectiveness of MHR’s Board of Directors.

Title

Name

Main Concurrent Position

Total amount of compensationin 29th fiscal period ended
January 31, 2021
(thousand yen)

Executive
Director

Hideyuki
Isobe

Mori Building Investment Management Co., Ltd.,
President & CEO-

Masakuni
TamuraARC Brain, President

2,100

Koji
Nishimura

Matsuo & Kosugi, Partner, Attorney

2,100

MiyakoIshijima

Ishijima Law Office, Representative-

Emi
Kitamura

Mimura Tax & consulting, Representative-

Supervisory
Director(Note 1) Executive Director Isobe also serves as the President & CEO of MIM and does not receive remuneration as Executive Director of MHR.
(Note 2) Ms. Ishijima and Ms. Kitamura were appointed Supervisory Director on April 16, 2021.

Auditor
AuditorContinuing Auditor Tenure

Ernst & Young ShinNihon LLC

From February 2006 to the present

Auditor’s Remuneration
26th fiscal period
ended July 31,
2019

27th fiscal period
ended January
31, 2020

28th fiscal period
ended July 31,
2020

29th fiscal period
ended January
31, 2021

Fees in relation to the Audit
and Attestation Services

12,700 thousand
yen

12,700 thousand
yen

12,700 thousand
yen

12,900 thousand
yen

Fees in relation to the nonAudit Services

0 yen

0 yen

0 yen

6,300 thousandyen

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Corporate Governance

Structure of Asset Management for the Investment
Corporation
MHR entrusts the management of its assets to its asset management company. The
following is the organizational structure of MHR’s asset management company.
General Meetingof Shareholders
Corporate Auditor
Board of Directors

President and CEO

Investment Committee

Investment Dept.

AssetManagement Dept.

Financial Dept.

Compliance Committee

Accounting Dept.

Administration Dept.

Compliance Dept.

For a summary of each process, please see “Investor Relations – IR Library – Securities
Reports – 1. MHR’s Outlook – (4) MHR’s Organization – 2) MHR’s Operational Structure.”

Status of MIM’s Board of Directors’ Meeting
Title

Name

Status of Attendance at the Board of
Directors’ Meeting in Fiscal Year 2020

President & CEO

Hideyuki Isobe

11/11 times (100%)

Director

Kojiro Segawa

11/11 times (100%)

Director

Toshio Takano

11/11 times (100%)

AuditorAtsushi Suginobu

11/11 times (100%)

Internal Audit Structure
MIM has set up its Internal Audit Regulations and the General Manager of ComplianceDepartment works as Internal Audit Manager under President & CEO. Internal audits shallbe conducted every year targeting operations of all departments while also receiving
support through outsourcing to outside specialized institutions, after formulating theinternal audit plan encompassing a broad range of items including corporate ethics.
If problems are found, the Internal Audit Manager will give recommendations andinstructions for improvement to the relevant departments, and the results of the audits
will be reported to the directors of MIM.

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Compliance and Corporate Ethics

From the viewpoint of securing the trust offinancial mark ets and indi vidual investor s,
financial institution business operator s are
required to have a management attitude thatemphasizes compliance. MHR and MIM recognizethat failure to ensure compliance is as anextremely serious risk factor and could diminish
our public confidence and business base.
By firmly acknowledging this fact, MHR
and MIM strictly adhere to various laws andregulations in order to fulfill our public obligations
and to faithfully and fairly engage in corporate
activities as a basic principle of management.
MHR and MIM strive for thorough compliance,
holding a high ethical sense in our operations.

Status and efforts for compliance withlaws and regulations
The team at MIM, with the board of directors at thetop, along with the President & CEO, the ComplianceDepartment, the Compliance Officer and the Compliance
Committee determine and verify various matters concerningcompliance in accordance with their respective authorities
and responsibilities.
MIM has established a “Compliance Manual” whichstates the compliance-related principles, as well as internal
regulations to control major risks related to compliancesuch as prevention of transactions involving conflictsof interest and blocking of relations with anti-social
forces. MIM strives to prevent problems by maintaining
and thoroughly informing all executives and employees
through periodic training etc. In addition, MIM introduced
monitoring and consultation systems such as internal
audit and internal reporting procedures to find and correct
problems proactively.
The status of these efforts is reported to the board of
directors and utilized for periodic risk assessment.

Process to Counter Transactions Involving Conflicts of Interest
Supervisory directors

Approved by MHR’s
Board of Directors

Executive director(In the case of an acquisition from any related party)

Reject or pass back the proposal.

Policy and Approach

Deliberation and resolution
at MIM’s Board of Directors

Outside director

In-house director andpart-time director (Note)

Deliberation and resolution
at the Compliance Committee

Outside expert

Other committee
members

Deliberation and resolution
at the Investment Committee

Outside expert

Other committee
members

Review by the Compliance Officer

Selection of investment grade Properties and preparation ofan original proposal by the Investment Department(Note)The Director (Part-time) is unable to participate in the resolution of the Board of Directors
since this individual will be considered a board member of a related party when acquiring
asset from a related party.

Process to Counter Transactions
Involving Conflicts of Interest

Initiatives Against Transactions
Involving Conflicts of Interest

For details, please see “Investor Relations – IR Library– Report on the Management Structure and Systemof the Issuer of Real Estate Investment Trust Units andRelated Parties – 2. Management Structure and System of
the Investment Corporation and the Asset Manager – (3)Policies on Transactions Involving Conflicts of Interest.”

MIM shall perform its business in good faith and with thedue care of a prudent manager for MHR in line with the
purpose of the investment management business, andis well aware that failure to ensure thorough compliance,
especially inappropriate transactions or transactions
involving conflicts of interest with the sponsor company
group, may undermine investors’ trust in the securities
markets, the corporate management base of MHR andMIM.
Therefore, MIM will use its efforts to prevent any
negative impact from transactions involving conflicts ofinterest and carry out strict compliance as above.

Report on the Management Structure and System of the Issuer ofReal Estate Investment Trust Units and Related Parties

https://www.mori-hills-reit.co.jp/en/ir/library/Investment/tabid/293/Default.aspx

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Compliance and Corporate Ethics

Blocking relations with Anti-Social
Forces
MIM provides a statement on “severing all ties, including
business ties, with anti-social forces” in its “basic rules on
response to anti-social forces.”
Accordingly, MIM endeavors to develop an internal
structure, such as assigning a person responsible foroverseeing and managing responses to anti-social forces
and a person responsible for preventing unjust demands,
and also periodically ensuring that all officers andemployees are thoroughly informed of how to respond toanti-social forces, etc. through in-house training, etc.

Preventing Fraud and Corruption
MIM has formulated a “Compliance Manual” that sets
forth the corporate ethics standards such as principles ofcompliance-related behavior, strict compliance with various
laws and regulations including banning bribery, banninginsider trading, prohibiting acts that may cause conflictsof interests such as corporate entertainment, gifts andacceptance of benefits that gives rise to public suspicion or
distrust.
When a compliance violation or fact of doubt ofsuch is recognized, it is prescribed to report that matter
immediately to the Compliance Officer, and when thecompliance officer deems it necessary in compliance withlaw regulations, and other rules, the matter will be reported
to the president of MIM and the compliance committee for
execution of appropriate measures.
With regard to these prohibited acts, under the systemwith the president of the asset manager being the person
ultimately responsible for compliance and the Compliance
Officer being the person responsible for overseeing
compliance, we regularly conduct sessions on prevention of
fraud and corruption and other corporate ethics standards
to familiarize all employees including contract employees
and part-timers with these issues and have establisheda monitoring and consultation system incorporating aninternal auditing and whistleblowing system which is official
and anonymous and allow whistleblower to report directly
to external attorneys for prevention of problems as well as
early detection and correction.
In addition, regarding “transactions with new companies”
and “transactions with intermediary agents,” which are
determined as being high-risk in risk assessment, MHR
will notify to and confirm with the counterparty mutually
MHR’s policy to prevent fraud and corruption, as wellas conduct checks regarding anti-social forces, insider
information management structure, etc. in due diligence ofthe counterparty. Furthermore, in its internal auditing, MHR
develops a system to confirm if there are any suspicious
points in accordance with the items clarified at the risk
assessment.
Compliance Record
FY2016FY2017FY2018FY2019FY2020No. of compliancesessions held

4

4

4

3

3

Total amount of political
donations [yen]

0

0

0

0

0

No. of cases of exposure
related to fraud andcorruption

0

0

0

0

0

No. of cases ofpunishment/dismissal
related to fraud andcorruption

0

0

0

0

0

Reconciliation cost ofpenalties/punishment
related to fraud andcorruption [yen]Whistleblower System
We have established a Whistleblower Protection System
which is official and anonymous and allows all employeesof MIM (including contract employees, part-timers, etc.)
and all employees of its business partners (including
contract employees, part-timers, etc.) to report directly to
external attorneys regarding acts that violate laws, internal
rules, action principles and other acts that may be contrary
to corporate ethics etc.
We strive to thoroughly inform all officers andemployees to prevent, to detect and to correct problems at
an early stage.
In the event of whistleblowing, the Investigation
Committee with members appointed by external lawyers
will conduct necessary investigations and countermeasuresin accordance with MIM’s “Whistleblower Protection
Regulations” by considering the confidentiality of thewhistleblower and the privacy of the concerned parties.
Whistleblowers are provided legal protection under the
Whistleblower Protection Act, and we prohibit retaliatory
actions such as detrimental treatment and harassment due
to whistleblowing and take appropriate measures to protect
whistleblowers and to make “Whistleblower Protection
Regulations” works properly.
Appropriate measures will be taken so that the work
environment will not deteriorate after whistleblowing.
Number of reports and outline of corrective measures

0

0

0

0

0

FY2016 FY2017 FY2018 FY2019 FY2020
Number of reports andcorrective measures

0

0

0

0

0

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Risk Management
Policy and Approach
There are various risks in corporate activities.
When these risks materialize it may lead to a
decline in business performance and a decreasein social confidence.
MHR and MIM are well aware that various
risks in business execution may undermine ourcorporate value.
We identify risks according to changes inpublic perceptions and the business environment
as well as implement appropriate monitoring andresponses to prevent and minimize damage at thetime of occurrence of incident.

Risk Management Structure

Information Security

MIM has established Risk Management Regulations.
The Board of Directors oversees the development ofrisk management policies and the development of an
appropriate risk management system.
In addition, MHR’s Board of Directors will periodicallyreceive reports from MIM and supervise risk management
overall.
The practical operation will be carried out with theCompliance Officer of MIM being the supervisor and theGeneral Manager being responsible for risk management ofeach department.
We will identify various risks related to the tasks
involved, including ESG risks, management risks, financial
risks, administrative risks and system risks, and monitor
the appropriate level of each risk.
Furthermore, the Compliance Officer periodicallyreports the status of risk management to MIM’s Board of
Directors and MHR’s Board of Directors where necessary
measures are confirmed and the effectiveness of the risk
management process is reviewed.

Leakage of information will compromise the trust of thecompany and it will be a great inconvenience to various
stakeholders including our unitholders.
MIM has est ablished Information Management
Regulations and has adopted steps to prevent the leakage
of information to implement appropriate management of
information handled in business. The Information Manager
makes efforts to strengthen information security bymonitoring usage and strengthening systems.

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GRI Standards Comparison Table[General Disclosures]◦GRI Standards 100 series (items in common)

Policy andStrategy

Sustainability
Management

E：
Environment
Initiatives

S：
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Contents

Data◦This report was prepared in accordance with the GRI Standards Core option.

Core option disclosures are indicated by ☆.

Disclosure Title
GRI 102: General Disclosures
2016

G：
GovernanceInitiatives

References

Organizational profile
102-1 ☆

Name of the organization

P4 Company Data102-2 ☆

Activities, brands, products, and services

P6-7 Investment Policy
Portfolio List (https://www.mori-hills-reit.co.jp/en/portfolio/list/tabid/186/Default.aspx)

102-3 ☆

Location of headquarters

P4 Company Data

102-4 ☆

Location of operations

P4 Company Data

102-5 ☆

Ownership and legal form

P4 Company Data

102-6 ☆

Markets served

P6-7 Investment Policy

102-7 ☆

Scale of the organization

P4 Company Data

102-8 ☆

Information on employees and other workers

P29 Personnel Data

102-9 ☆

Supply chain

P6-7 Investment Policy

102-10 ☆

Significant changes to the organization and its supply chain

Not applicable102-11 ☆

Precautionary Principle or approach

P9 Approach and System
P13 Environment Management System (EMS)
P49 Risk Management102-12 ☆

External initiatives

P16 External Initiatives / Support for / Response to the TCFD Recommendations

102-13 ☆

Membership of associations

P4 Company Data

102-14 ☆

Statement from senior decision-makerP5 Message from the Management102-15 ☆

Key impacts, risks, and opportunities

P19-21 Strategy -Climate-Related Scenario Analysis-

Strategy

Ethics and integrity
102-16 ☆

Values, principles, standards, and norms of behavior

P3 Basic Policy
P47 Status and efforts for compliance with laws and regulations

102-17

Mechanisms for advice and concerns about ethics

P48 Whistleblower System

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GRI Standards Comparison Table[General Disclosures]◦GRI Standards 100 series (items in common)

Core option disclosures are indicated by ☆.

Disclosure Title
GRI 102: General Disclosures
2016

References

Governance102-18 ☆

Governance structure

P43 Corporate Governance102-19Delegating authority

P9 Sustainability Promotion System
P46 Structure of Asset Management for the Investment Corporation

102-20Executive-level responsibility for economic, environmental,
and social topics

P9 Sustainability Promotion System

102-21

Consulting stakeholders on economic, environmental, andsocial topics

P27 Stakeholder Engagement102-22Composition of the highest governance body and its
committees

P44 Management Profiles

102-23Chair of the highest governance body

P44 Management Profiles

102-24

Nominating and selecting the highest governance body

P45 Criteria for Electing Directors

102-25

Conflicts of interest

P47 Initiatives Against Transactions Involving Conflicts of Interest

102-26

Role of highest governance body in setting purpose, values, and strategy

P9 Sustainability Promotion System

102-27

Collective knowledge of highest governance bodyー102-28

Evaluating the highest governance body’s performance

P45 Evaluation of the Effectiveness of MHR’s Board of Directors

102-29Identifying and managing economic, environmental, and social impacts

P10 Important ESG Issues (Materiality)

102-30Effectiveness of risk management processes

P18 Risk Management -Climate Change Risk ManagementP49 Risk Management102-31

Review of economic, environmental, and social topics

P9 Sustainability Promotion System

102-32Highest governance body’s role in sustainability reporting

P2 Editorial Policy

102-33

Communicating critical concerns

P49 Risk Management102-34Nature and total number of critical concerns

P48 Whistleblower System

102-35

Remuneration policies

P45 Director Pay, Director Equity Policy

102-36

Process for determining remuneration

P45 Director Pay, Director Equity Policy

102-37

Stakeholders’ involvement in remunerationー

102-38Annual total compensation ratioー102-39Percentage increase in annual total compensation ratioー

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GRI Standards Comparison Table[General Disclosures]◦GRI Standards 100 series (items in common)

Core option disclosures are indicated by ☆.

Disclosure Title
GRI 102: General Disclosures
2016

References

Stakeholder engagement102-40 ☆

List of stakeholder groups

P27 Stakeholder Engagement102-41 ☆

Collective bargaining agreements

P29 Labor-Management Relations / Collective Bargaining Agreement102-42 ☆

Identifying and selecting stakeholders

P27 Stakeholder Engagement102-43 ☆

Approach to stakeholder engagement

P27 Stakeholder Engagement102-44 ☆

Key topics and concerns raised

P27 Stakeholder Engagement

Reporting practice102-45 ☆

Entities included in the consolidated financial statements

Disclosure Materials for Financial Results(https://www.mori-hills-reit.co.jp/en/ir/library/tabid/209/Default.aspx)

102-46 ☆

Defining report content and topic Boundaries

P2 Editorial Policy

102-47 ☆

List of material topics

P10-11 Important ESG Issues (Materiality)

102-48 ☆

Restatements of information

Not applicable

102-49 ☆

Changes in reporting

Not applicable

102-50 ☆

Reporting period

P2 Reporting Period

102-51 ☆

Date of most recent report

P2 Issued

102-52 ☆

Reporting cycle

P2 Issued

102-53 ☆

Contact point for questions regarding the report

P2 Contact

102-54 ☆

Claims of reporting in accordance with the GRI Standards

P2 Editorial Policy* This report was prepared in accordance with the GRI Standards Core option.

102-55 ☆

GRI content index

GRI Content Index

102-56 ☆

External assurance

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-Find A Page

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GRI Standards Comparison Table[Material Items] Material items are indicated by ★
The correlation between the five priority issues identified by MHR and the GRI Standards’ material items is organized as follows.
In addition to the material items, the GRI Standards Index includes some related items.
Material Issues

E

S

G

Material Aspects in GRI Standards◦Reduce greenhouse gas emissions and promote energy saving
at owned properties◦Use of renewable energy

302 : Energy
305 : Emissions◦Coexist with nature

304 : Biodiversity
307 : Environmental Compliance◦Response to sustainability certifications

417 : Marketing and Labeling◦BCP measures (disaster prevention and building resilience)◦Tenants' health, comfort and convenience

413 : Local Communities
416 : Customer Health and Safety◦Respect for human rights◦Promote diversity

405 : Diversity and Equal Opportunity
406 : Non-discrimination
407 : Freedom of Association and Collective Bargaining◦Talent development

404 : Training and Education◦Promote a healthy and comfortable work environment
and improve employee's work/life balance◦Increase employee's satisfaction

401 : Employment
403 : Occupational Health and Safety◦Mutual communication with Stakeholders(404 : Training and Education)(406 : Non-discrimination)(413 : Local Communities)◦Strive for fair and effective corporate governance◦Adhere to compliance and corporate ethics◦Prevent conflict-of-interest transactions◦Identify risks and manage responses◦Respond to requests for ESG information disclosure

205 : Anti-corruption
419 : Socioeconomic ComplianceG：
GovernanceInitiatives

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GRI Standards Comparison Table[Material Items] Material items are indicated by ★
◦ GRI Standards 200 series (Economic topics)
Disclosure Title

References

Economic PerformanceGRI 201: Economic Performance 2016

201-1

Direct economic value generated and distributed

Financial Highlights(https://www.mori-hills-reit.co.jp/en/finance/highlights/tabid/202/Default.aspx)

201-2

Financial implications and other risks and opportunities due toclimate change

P19-21 Strategy -Climate-Related Scenario Analysis-

201-3

Defined benefit plan obligations and other retirement plans

Disclosure Materials for Financial Results(https://www.mori-hills-reit.co.jp/en/ir/library/tabid/209/Default.aspx)

201-4

Financial assistance received from government

Not applicable

202-1

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

ー

202-2

Proportion of senior management hired from the local
community

ー

203-1

Infrastructure investments and services supported

P36-38 Actual Results of Urban Redevelopment Projects

203-2

Significant indirect economic impacts

P36-38 Actual Results of Urban Redevelopment Projects

204-1

Proportion of spending on local suppliers

Our spending on suppliers is 100% on domestic suppliers.

103-1

Explanation of the material topic and its BoundaryMarket PresenceGRI 202: Market Presence 2016

Indirect Economic Impacts
GRI 203: Indirect Economic Impacts 2016

Procurement Practices
GRI 204: Procurement Practices 2016
★Anti-corruption

GRI 103: Management Approach 2016

GRI 205: Anti-corruption 2016

103-2

The management approach and its components

103-3

Evaluation of the management approach

P47-48 Compliance and Corporate Ethics

205-1

Operations assessed for risks related to corruption

P48 Preventing Fraud and Corruption

205-2

Communication and training about anti-corruption policies andprocedures

P48 Preventing Fraud and Corruption

205-3

Confirmed incidents of corruption and actions taken

P48 Preventing Fraud and Corruption

206-1

Legal actions for anti-competitive behavior, anti-trust, andmonopoly practicesーAnti-competitive Behavior
GRI 206: Anti-competitive Behavior 2016

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GRI Standards Comparison Table[Material Items] Material items are indicated by ★
◦ GRI Standards 200 series (Economic topics)
Disclosure Title

References

Tax
GRI 207：Tax 2019

207-1

Approach to tax

ー

207-2

Tax governance, control, and risk management

ー

207-3

Stakeholder engagement and management of concerns related
to taxー

207-4

Country-by-country reportingー[Material Items] Material items are indicated by ★
◦ GRI Standards 300 series (Environmental topics)
Disclosure Title

References

Materials
GRI 301: Materials 2016

301-1

Materials used by weight or volume

Not applicable

301-2

Recycled input materials used

Not applicable

301-3

Reclaimed products and their packaging materials

Not applicable

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

302-1

Energy consumption within the organization

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-

302-2

Energy consumption outside of the organization

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-

302-3

Energy intensity

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-

302-4

Reduction of energy consumption

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-

302-5

Reductions in energy requirements of products and services

P22 Promotion of Energy Saving★Energy

GRI 103: Management Approach 2016

GRI 302: Energy 2016

P16-23 Climate Change

55

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E：
Environment
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S：
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G：
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Contents

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Data

GRI Standards Comparison Table[Material Items] Material items are indicated by ★
◦ GRI Standards 300 series (Environmental topics)
Disclosure Title

References

Water and EffluentsGRI 303: Water and Effluents 2018

303-1

Interactions with water as a shared resource

P24 Resource Recycling (Water and Waste)

303-2

Management of water discharge-related impacts

ー

303-3

Water withdrawal

P24 Effective Use of Water Resources

303-4

Water discharge

ー

303-5

Water consumption

ー

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

304-1

Operational sites owned, leased, managed in, or adjacent to, protectedareas and areas of high biodiversity value outside protected areas

P26 Biodiversity

304-2

Significant impacts of activities, products, and services on biodiversity

P26 Biodiversity

304-3

Habitats protected or restored

P26 Biodiversity

304-4

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

Not applicable

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

305-1

Direct (Scope 1) GHG emissions

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-

305-2

Energy indirect (Scope 2) GHG emissions

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-305-3

Other indirect (Scope 3) GHG emissions

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-305-4

GHG emissions intensity

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-305-5

Reduction of GHG emissions

P17 Indicators and Targets -Reduction Greenhouse Gas Emissions-305-6

Emissions of ozone-depleting substances (ODS)

ー

305-7

Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions

ー★Biodiversity

GRI 103: Management Approach 2016

GRI 304: Biodiversity 2016

P26 Increasing Greenery and Biodiversity★Emissions

GRI 103: Management Approach 2016

GRI 305: Emissions 2016

P16-23 Climate Change

56

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

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Message from
the Management

Policy andStrategy

Sustainability
Management

E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

Contents

Data

GRI Standards Comparison Table[Material Items] Material items are indicated by ★
◦ GRI Standards 300 series (Environmental topics)
Disclosure Title

References

Waste
GRI 306: Waste 2020

306-1

Waste generation and significant waste-related impacts

P24-25 Resource Recycling (Water and Waste)

306-2

Management of significant waste-related impacts

P24-25 Resource Recycling (Water and Waste)

306-3

Waste generated

P25 Promotion of Recycling

306-4

Waste diverted from disposal

P25 Promotion of Recycling

306-5

Waste directed to disposal

P25 Promotion of Recycling

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

307-1

Non-compliance with environmental laws and regulations

P25 Violations of Environmental Laws and Regulations

308-1

New suppliers that were screened using environmental criteria

ー

308-2

Negative environmental impacts in the supply chain and actions takenー★Environmental Compliance

GRI 103: Management Approach 2016

GRI 307: Environmental Compliance 2016

P13 Environment Management System (EMS)

Supplier Environmental Assessment
GRI 308: Supplier Environmental Assessment 2016

[Material Items] Material items are indicated by ★
◦ GRI Standards 400 series (Social topics)
Disclosure Title

References★Employment

GRI 103: Management Approach 2016

GRI 401: Employment 2016

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

P28-32 Initiatives with Employees

401-1

New employee hires and employee turnover

P29 Personnel Data

401-2

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

P31-32 Benefits and work / life balance

401-3

Parental leave

P29 Promoting Women’s Participation

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MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

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E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

Contents

Data

GRI Standards Comparison Table[Material Items] Material items are indicated by ★
◦ GRI Standards 400 series (Social topics)
Disclosure Title

References

Labor / Management Relations
GRI 402: Labor / Management Relations 2016

ー

402-1

Minimum notice periods regarding operational changes

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach403-1

Occupational health and safety management system

ー

403-2

Hazard identification, risk assessment, and incident investigation

ー

403-3

Occupational health services

P31-32 Benefits and work/life balance

403-4

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

ー

403-5

Worker training on occupational health and safety

P31-32 Benefits and work/life balance

403-6

Promotion of worker healthP31-32 Benefits and work/life balance

403-7

Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships

P31-32 Benefits and work/life balance

403-8

Workers covered by an occupational health and safety
management system

ー

403-9

Work-related injuries

ー403-10Work-related ill health

ー

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

404-1

Average hours of training per year per employee

P30-31 Talent Development Policy / Program

404-2

Programs for upgrading employee skills and transition assistanceprograms

P30-31 Talent Development Policy / Program

404-3

Percentage of employees receiving regular performance andcareer development reviews

P30-31 Talent Development Policy / Program★Occupational Health and Safety

GRI 103: Management Approach 2016

GRI 403：Occupational Health and Safety 2018

P28-32 Initiatives with Employees★Training and Education

GRI 103: Management Approach 2016

GRI 404: Training and Education 2016

P28-32 Initiatives with Employees

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MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

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Policy andStrategy

Sustainability
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E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

Contents

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Data

GRI Standards Comparison Table[Material Items] Material items are indicated by ★
◦ GRI Standards 400 series (Social topics)
Disclosure Title

References★Diversity and Equal Opportunity

GRI 103: Management Approach 2016

GRI 405: Diversity and Equal Opportunity 2016

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

405-1

Diversity of governance bodies and employees

P29 Personnel Data
P44 Policy on gender diversity concerning director composition

405-2

Ratio of basic salary and remuneration of women to men

ー

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

406-1

Incidents of discrimination and corrective actions taken

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

407-1

Operations and suppliers in which the right to freedom of
association and collective bargaining may be at risk

P29 Labor-Management Relations / Collective Bargaining Agreement408-1

Operations and suppliers at significant risk for incidents of child labor

P29 Grievance Reporting and Response to Labor Issues

409-1

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

P29 Grievance Reporting and Response to Labor Issues

410-1

Security personnel trained in human rights policies or procedures

ー

411-1

Incidents of violations involving rights of indigenous peoples

ーP28-32 Initiatives with Employees
P44 Policy on gender diversity concerning director composition★Non-discrimination

GRI 103: Management Approach 2016

GRI 406: Non-discrimination 2016

P28-32 Initiatives with Employees

P29 Grievance Reporting and Response to Labor Issues★Freedom of Association and Collective Bargaining

GRI 103: Management Approach 2016

GRI 407: Freedom of Association and Collective
Bargaining 2016

P28-32 Initiatives with EmployeesChild LaborGRI 408: Child Labor 2016
Forced or Compulsory LaborGRI 409: Forced or Compulsory Labor 2016
Security Practices
GRI 410: Security Practices 2016
Rights of Indigenous
GRI 411: Rights of Indigenous Peoples 201659

MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

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Policy andStrategy

Sustainability
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E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

Contents

Data

GRI Standards Comparison Table[Material Items] Material items are indicated by ★
◦ GRI Standards 400 series (Social topics)
Disclosure Title

References

Human Rights Assessment

GRI 412: Human Rights Assessment 2016

412-1

Operations that have been subject to human rights reviews or
impact assessments

ー

412-2

Employee training on human rights policies or procedures

P28-29 Promoting Respect for Human Rights and Diversity

412-3

Significant investment agreements and contracts that include
human rights clauses or that underwent human rights screening

ー

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

413-1

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

P35 Local Communities

413-2

Operations with significant actual and potential negative impacts
on local communities

Not applicable

414-1

New suppliers that were screened using social criteria

ー

414-2

Negative social impacts in the supply chain and actions taken

Not applicable

415-1

Political contributions

P48 Preventing Fraud and Corruption

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

416-1

Assessment of the health and safety impacts of product andservice categories

P33 BCP Measures
P34 Response to barrier removal / Tenant Satisfaction Surveys

416-2

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

Not applicable★Local Communities

GRI 103: Management Approach 2016

GRI 413: Local Communities 2016

P33-38 Initiatives with Tenants and Local Communities

Supplier Social Assessment
GRI 414: Supplier Social Assessment 2016
Public Policy
GRI 415: Public Policy 2016
★Customer Health and Safety

GRI 103: Management Approach 2016

GRI 416: Customer Health and Safety 2016

P33-38 Initiatives with Tenants and Local Communities

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MORI HILLS REIT INVESTMENT CORPORATIONESG REPORT 2021

About Us

Message from
the Management

Policy andStrategy

Sustainability
Management

E：
Environment
Initiatives

S：
SocialInitiatives

G：
GovernanceInitiatives

Contents

Data

GRI Standards Comparison Table[Material Items] Material items are indicated by ★
◦ GRI Standards 400 series (Social topics)
Disclosure Title

References★Marketing and Labeling

GRI 103: Management Approach 2016

GRI 417: Marketing and Labeling 2016

103-1

Explanation of the material topic and its Boundary

103-2

The management approach and its components

103-3

Evaluation of the management approach

417-1

Requirements for product and service information and labeling

P14 Green Building Certification

417-2

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

ー

417-3

Incidents of non-compliance concerning marketing
communications

ー

418-1

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

ー

103-1

Explanation of the material topic and its BoundaryP14-15 Green Building Certification and External Assessment

Customer Privacy
GRI 418: Customer Privacy 2016
★Socioeconomic Compliance
GRI 103: Management Approach 2016

GRI 419: Socioeconomic Compliance 2016

103-2

The management approach and its components

103-3

Evaluation of the management approach

419-1

Non-compliance with laws and regulations in the social andeconomic area

P47-48 Compliance and Corporate Ethics

P48 Preventing Fraud and Corruption

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61